Information Systems Flashcards
1
Q
How is IT impacting business?
A
Spurring creation of new businesses
EX: amazon
Increased buyer and supplier and customer relationships
2
Q
3 ways digital differs from traditional markets
A
Digital mainly exchange digital products/services
Competitive dynamics differ
IT plays a big role
3
Q
Nature of digital products/services
A
Many bundled options
Increasing consumption of digital products/services
High initial, low variable costs (ebooks, music)
4
Q
Examples of digital firms
A
Groupon, FB, Paypal
5
Q
2 types of digital markets
A
Hybrid and pure
Many firms can be both types at once
6
Q
Hybrid market
A
Value stream (end to end business process) has been standardized Physical products/services--Amazon
7
Q
Pure digital market
A
Entire value stream is digital
Ex: google
8
Q
Digital economies
A
Arise in digital markets
Long tail, network and 2 side network effects
9
Q
Long tail effect
A
Can capture the long tail of the market
Niche areas
Can accommodate the 80% that offer 20% of value
Pareto rule
10
Q
Supply side factors of long tail effect
A
Lower inventory stocking costs
Cheaper promo/ads–FB ads
Cheaper production/replication
No geographic constraints
11
Q
Demand side factors of long tail effect
A
SEO
Recommendation systems
Viral effect
12
Q
Network effect
And 2 implications
A
Value grows with network growth
Ex: FB
Critical mass–when momentum is unlikely to be disrupted by a new entrant
Winner takes all–firms can capture more of the market than a traditional marketplace would allow
EX: gmail,
13
Q
How to get positive network effect
A
Customer is excited about digital product
Negative WOM is devastating
Exploit WOM
Using complements
14
Q
2 side network effect
A
When digital site is in the middle
EX: Google caters to customers–us and advertisers
Ex: adobe
Also uses critical mass
15
Q
2 types of positive network effects
A
Same side–the more people adopt, the more benefit to that side: FB messenger
Cross side effect–Audible, the more listeners, the more publishers want to have their books on there
Book example is adobe for both
16
Q
Negative network effect examples
A
Job site–the more applicants, the less likely your application will get picked up
17
Q
1 vs 2 side network effects
A
2 sided are pure info brokers–paypal
1 side–ownership changes hands twice, EX: P&G sells to Walmart who sells to consumer
Some firms are both like Amazon
18
Q
Platform mediated markets
A
Firms compete by offering customers similar platforms and trying to get the most number of customers
Easiest to get customers if entry is free
19
Q
4 features of winner takes all
A
Platform has extreme positive network effects
Participants don’t want to switch
Platform gets the majority of new customers
Platform gets accelerated flow of competitors customers
20
Q
Information System Definition
A
Computer based system designed to accomplish business objectives
21
Q
7 elements of IS
A
Business objective Business process Data People Computer hardware Computer software: applications and systems
22
Q
Data, info and knowledge distinctions
A
Data–captured attributes of objects and events–formed by individuals aware of it’s definition–stored by databases and archives–exchanged explicitly
Info–data that can be interpreted–formed by individual interpretation–exchanged implicitly
Knowledge–exists across people–formed by individual and group learning–stored in people’s minds–exchanged tacitly or explicitly
23
Q
5 primary IS types
A
Transaction processing–capture and store data about objects and events
Info reporting–retrieve data to produce specified reports
Decision support–retrieves data for manipulation by individuals on an ad hoc basis
Automated decision–imbeds decision rules so decisions can be made automatically and without human interaction
Communication support–support person to person interaction
24
Q
Automated decision system examples
A
POs sent when inventory hits certain level
Automatic release of work schedules
Fraud detection
Forecasting
25
Exception report
A report generated when a certain condition is met
| EX: a defect report generated when defects reach an established level
26
Decision support system examples
Determining need and location for new facility, if should develop a new market, employee benefits packages
27
Automation
Removal of human use
| Pros: cost and error reduction, increased cycle time, productivity and responsivness
28
2 early adopters of IT examples
American airlines and Merrill lynch
29
Chameleon like nature of IT
Firms can all have same tech but use it differently
| EX: RFID
30
Which leads strategy: business or IT
Mainly business leads and IT follows
| Some firms do visa versa when have superb IT competitive advantage EX: Walmart
31
Requirements of IT as a competitive advantage
Luck and good planning
32
Challenge of IT as a competitive advantage
Lack of good ideas for implementation
33
Business model definition
Strategic choices on how to create value and be profitable
34
4 elements of business models
Customer value proposition--target customers
Profitability model--how to be profitable
Resources needed--tangible and intangible
Business processes needed
35
Value disipline
Aligns requirements and customer expectations
36
3 types of value disiplines
Customers want: low cost, quality and convenience--firms use operational excellence EX: Walmart
Customers want: tailored items and will pay premium--firms use customer intimacy EX: Ritz, Kraft
Customers want: new, stylish products/services and will pay premium--firms use product leadership EX Apple
37
Operational excellence characteristics
Streamlined operations
Customer service
SC--like prolonged payments for suppliers, minimize days of sales in inventory
Optimize finances
38
Customer intimacy characteristics
Micro-segment the market
CRM
Good advertising/marketing
39
Product leadership characteristics
Customer focused products
Quick manufacturing
Good QA
40
4 strategic roles of IT
Automation
Control
Empowerment
Collaboration
41
IT for control
Pros: real time monitoring and event visibility and business rule automation
Catch problems before they are big
42
IT for emplowerment
Pros: data and info and knowledge distribution and access, business intelligence tools
Gives power to employees
43
IT for collaboration
Pros: complex business process execution, problem handling, business and product and business model innovation
44
Examples of business model innovation
Google--targeted ads--enabled by SEO
Walmart--EDLP--enabled by SC
FedEx--overnight shipping--enabled by tracking
45
Why is keeping IT competitive advantage difficult
built on readily available tech
follower learning advantages
competitors with better tech beat you
46
Sustaining IT competitive advantage
Create barriers like
Time it takes for others to get your IT
Resource barriers
Complementary resources
Project management--like how complex of an undertaking it is
Preemption barriers--like does it cost customer to switch to a competitor
47
Potential IT enabled business decisions
Ideas for use of IT in competitive advantage
48
2 categories of IT infrastructure
Organization (privately owned)
| Public--internet
49
2 types of IT infrastructure
Technical and business platforms
50
5 types of resources of IT infrastructure
Hardware
Design
Data
Human and social resource
51
Technical platforms
Foundation for business platforms
| Configuration of IT resources for a broad range of technical platforms
52
Business platforms
Configuration of IT resources for design and operation of business
53
2 types of IT resources
Local--used by specific organizational units
| Global--used across organizational units
54
Examples of IT resources
Storage devices
Data management systems
IP addresses
Database design
55
3 stages of IT evolutio
Local optimization--each area having a specific tech platform for itself
Tech standardization--using single tech standards across business functions
Process optimization--even more interconnected
All underlined by global shared service--
56
Challenges of tech standardization and process optimization
Perceived idea that IT spending is too high, taking action too late making change costly and time consuming
57
System Interface
Solution to integrating tech and process
Modifying platforms to understand data from each other
Only works with limited platforms
58
Global database
Solution to integrating tech and process
Redesign all for comprehensive system
Getting all sections to agree is difficult
Overhaul is complex, time consuming and expensive
59
Middleware
Solution to integrating tech and process
Uses a middleman software to convert data into understandable packages for each interface
Complex to implement but much cheaper
60
Enterprise resource planning (ERP) system
A pre-made package of IT that fit optimal global standards
This saved you from having to fashion your own IT
Components: enterprise database, software modules for global business processes, systems linked to ERP system
61
Preface for ERP
Y2K--programers used last 2 digits of years to identify data
62
Bolt On
A fix for configuring your IT with an ERP system
63
Key properties of ERP
Multifunctional--wide range of functions
Modular--easily tailored per business
Best practices--tailored for each industry
Extendible--connects to other IT through bolt ons
Integrated--global data storage
64
Disadvantages of ERP
High cost
Disruption among firm when implementing
Difficult to realize full potential
Strategic implications of universal system
Depend on ERP vendor
Frequent and expensive new version releases
65
Advantages of ERP
```
Enterprise database
Timely data
Standardized and integrated data practices
Lower IT cost
Faster implementation of new IT systems
```
66
Alternatives to ERP
Firms use their own IT connected through Middleman
Finds IT systems and cobbles them together
To be successful with either method you must have strong IT capabilities
67
Political and financial issues with IT infrastructure
Political: who establishes IT standards, who is responsible for monitoring, how to enforce standards, how to determine exceptions
Financial: who pays
68
High vs. low IT investing for organizations
High investors have more turbulent business environments
Higher investors with high performance had 50% higher profit margins
Low investors with high performance had 20% higher profit margins than competitors
Meaning: high investment is not necessary if it doesn't fit your market
69
IT productivity paradox
Growing IT investment does not equal growing returns
70
2 factors of realizing IT investment
Organizations have lots of interconnected data and processes
Organizations have large stock of IT management capabilities
As more and more is digitized, tipping point is reached
71
4 IT investment targets and value drivers
IT ops and services: (improving). Value driver--performance price ratios, employee knowledge/skills
Business process efficiency: (by automating and rationalizing)--VD--IT strategic roles, business capabilities and first order learning
Business process effectiveness: VD--IT strat roles, business capabilities, first order learning and product market first order learning
Business model VD--IT strat roles, business capabilities, first order learning and product market second order learning, business process second order learning
72
Performance price ratios
Hardware and software betterment like more data storage, faster processing time etc.
73
Business process efficiency firm examples
FedEx, Walmart, Soutwest airlines, Dell
74
First order learning
Redefining business process without changing underlying core
75
Product market first order learning
Understanding customers expectations about the business
76
Second order learning
How 4 IT strategic roles can be implemented creatively
77
IT value pathway reasons
```
Respond to external parties
Upgrade IT assets
Respond to competition
Make business process improvements
Generate future business capabilities
Gain a competitive advantage
```
78
Mandated It value pathway
When you are forced to by an external party
79
IT mandate examples
Vendor hardware/software updates
Tax law
Privacy requirements
80
Technology renewal
Refreshing IT for performance advantage or various reasons
81
2 ways for tech renewal
Upgrade IT
| Tech overhaul
82
2 tactics to use IT as a comp advg
Building distinctive info capabilities and business processes
Differentiation
83
Options generating IT platform
Don't expect costs covered initially but can grow and adapt platform with time
EX: bank of america
84
Method for applying IT capabilities
Create a capability map which is in order of importance
Business model
Financial outcomes
Business capabilities
Business processes
Gives a rationale and logic for IT investment
85
Adaptive agility
Quick speed and response to competitors actions or changes in market
86
Entrepreneurial agility
Constant churn of new products
87
Operational domain
Efficient/effective handling of transactions in the business process
88
Analytical domain
Making sense of accumulated data
| AKA business analytics
89
Collaborative domain
Allowing individuals working on business decisions or processes to collaborate regardless of location
90
2 reasons for existence of industry value streams
Transaction cost theory
| Intermediation theory
91
Transaction cost theory
Make vs. buy decisions
| total cost=production + transaction costs
92
Examples of transaction costs
Bidding
Searching
Legal
Monitoring
93
Intermediation theory
Using an intermediary
| EX: you can't always buy from manufacturer but need to buy from a store
94
Value adding roles of intermediaries
Search efficiency--customers can find your product
Demand aggregation--collect orders from multiple parties
Create packages--bundles for specific needs
Guarantee transactions--handle complex process
Manage logisitics
95
Challenge of long and wide intermediaries
No consolidation of data=volatile demand (bullwhip)
96
Dealing with demand uncertainty
Vertical integration
Stock holding
Digitization--consolidating and sharing data
97
Digitizing workflows
ERP
SCM
CRM
98
Actions of digitized workflows for data and info
Exchange--move from one place to another
Push--move to multiple places from one place
Sense--see something occurred or is available
Access--retrieve from storage
Translate--convert from one form to another
99
2 ways of interconnecting data from one firm to another
Tight coupling--one or both systems are modified--highly intrusive, but effective
Loose coupling--use middleware, or both parties conform to some standards
Loose coupling also has costs and organizations need higher IT levels
100
Dis/advantages of tight coupling
Pros: single partner cost, less need to invest in IT, speed and responsiveness
Cons: intrusive, multiple partner costs, not adaptable
101
Dis/advantages of loose coupling
Pros: not intrusive, no multiple partner costs, adaptable
Cons: multiple partner costs, need to invest in IT, slow
102
2 goals of digitizing operational domain
Improve visibility of events and data
| Increase channel multiplicity
103
Channel multiplicity
Number of channels with which IT system can connect with others
Ways organization members can connect with each other
The more ways to communicate the better
104
Benefits of broad and deep operational visibility
Reduced costs
Improved quality
Improved speed and saved time
Faster adaptivness
105
Challenges of operational visibility
Hard to get employee inter-department cooperation
106
2 goals of digitizing analytical domain
Improving decision process
| Accumulating knowledge to use in decision process
107
Data mart
Small archive often for specific business functions
108
Business intelligence analytical tools
```
Ad hoc queries
Structured queries
Online analytical processing (OLAP)
Data mining
Heavily used by marketing division
```
109
Pros of digitizing collaboration
Save on travel
Hard to get everyone together at same time
Participants work best if close to their own peers
EX: rocket engine built this way
110
Digitized collaboration tool examples
Internet notebook--shared notebook
Electronic whiteboard
Project vault--data storage for everyone
Email, phone etc.
111
Wisdom of crowds
Using groups to confront uncertainty
| Prediction markets
112
Prediction markets
Using large group to form opinion for something with great uncertainty
113
4 cross firm value stream collaborations
Customer facing opportunities: all parts of value chain collaborate
Logistical opportunities: improvement
SC opps: improvement
Product and process design opps: improvement
114
3 trends amplifying benefitting from other firms who work with you
Accelerated development time
Cost effective for firms to connect virtuallyInternet has given rise to new opps
all leads to more outsourcing aka externalizing
115
3 main activity centers of firms
CRM
Ops
Innovation
116
Work bundling trend
more and more unbundled due to decrease in cost of doing so
117
Benefits of outsourcing
Econ of scale and scope
Tech expertise
Lower costs
Can switch ops easily
118
Negatives of outsourcing
No quality control
Slow
Loss of tech knowledge
too much dependance
119
On/Offshoure
Abroad or in home country
120
Alignment of strategic interest
The closure of partners you are, the more aligned you'll be
121
Tight or loose governance
How much control you have over supplier
Tighter indicates emphasis on quality and cost
Loose on innovation
122
Most commonly outsourced activities
IT
Software development
Application service (email)
123
Reasons for IT outsourcing
Ops efficiency and flexibility
Obsolescence risk reduction
Tech/knowledge acquisition
Gain Comp Advg
124
Value network
Close collaboration with certain partners
| Leads to benefits for both
125
Ways of SM impact
Act as a megaphone--distribute content
Magnet--attract customers
Monitor
126
Assumption of IT investment
It will be realised quickly and frustration comes when this doesn't happen
127
5 stages of IT implementation
1. approval and funding
2. configuration
3. installation and shakedown
4. lethargy--some skip this stage
5. onward and upward
Cash realization accelerates from shakedown stage
Low hanging fruit from stage 3
128
Reasons for adopting new IT
```
You are told to
You think it'll be useful
You think it'll be easy
Co-works speak of it favorably
Managers/supervisors speak of it favorably
```
129
5 elements of the nature of a firm
```
Why it exists
How its structured
Business processes
Employees education etc.
Tech that supports
```
130
2 Ways to facilitate organizational change
Firms are messy systems, not machines and shouldn't be treated as such
Connect with and encourage employees to care about change, don't fight with them on it
