Lecture 8 - Monitoring & auditing AIS & Business value of AIS Flashcards
(!) Describe the balanced scorecard in general & its relation to AIS
General:
- Strategic planning & management system
- Align business activities to vision & strategy
- Integrating framework
- Improve in- & external communication
- Monitor performance against strategic goals
- Can link IT investment to strategic performance
- Leading & lagging indicators
- Give an overview
- Widely used
Critique:
- Weak link btw. strategy & performance measures
- Poor defined metrics
- Miss validate cause&effect
- Checklist exercise
- Lack management support
Relation to AIS:
- Separate tangible & intangible info tech: Computer vs. capability created by tech
- Hard to pinpoint IT´s impact: Many factors & complements
- Ref. Info capital
(!) Describe the learning & growth perspective in the BSC
General:
- Tangible & intangible infrastructure
- Improve process perspective
- Continuous improvement: Poss?
- Leading indicator: Future
Performance objective:
- How to invest to support continuous improvement of processes & relationships?
CSF:
- Invest in human-, org.- & info capital to improve processes
KPI´s:
- Spending level
- Change readiness
- Rating of software
__________
Human capital:
- Invest in people
- Right & skilled people
- Employee training
__________
Information capital:
General:
- Focus in AIS
- Invest in info
- Ensure info access
- Ensure ability to comm.
Computing hardware:
- Eg. Individual computers
Infrastructure:
- Eg. Comm. network
Applications:
- Eg. Accounting software
- Eg. DM software
Abilities:
- Employee use tech effective
___________
Organization capital:
- Invest in identity & culture
- Knowledge & align to strategic objectives
(!) Describe the process perspective in the BSC. Include different KPI´s & processes
General:
- Efficiency
- What firm must excel at
- Improve customer & financial perspectives
- Leading indicator: Future
Performance objective:
- How to deliver cust. value while operating efficient?
CSF:
- Make process that create value & profit
KPI´s:
- Quality: Ref. Cust. satisfaction
- Timeliness: Eg. Cycle or delivery time
- Outputs
- Process costs
- Throughput: Quantity
- Costs
__________
Operations management processes:
- Eg. Supply, prod. & risk management
Customer management processes:
- Eg. Selection & retention
- Eg. Grow markets
Innovation processes:
- Identity opportunities
- R&D & product design & dev. & product launch
Regulatory & social processes:
- Financial reporting
- Environment, safety & health
- Employment
- Community issues
(!) Describe the customer perspective in the BSC
General:
- Value proposition differ from competitors
- How customer see firm
- Meet cust. req. w. value proposition: Satisfaction
- Can facilitate sales growth
Performance objective:
- How to create cust. value for LT growth?
CSF:
- Create cust. value to get revenue
KPI’s:
- Market share
- New customer rate
- Repeat purchase rate
- Customer satisfaction: Lagging indicator
- On-time delivery
__________
Product attributes:
- Price
- Quality
- Availability
- Selection
- Function
Service attributes:
- Service level
- Effort of LT-relation
Brand image:
(!) Describe the financial perspective in the BSC
General:
- Confirm success of others
- Confirm investment success
- Confirm ability to deliver value to customers
- How firm look to shareholders
- Relate to firms LT growth & productivity
- Lagging indicator: Past
Performance objective:
- How to create shareholder value?
CSF:
- Demonstrate productivity & growth needed for shareholder value
KPI’s:
- ROA/ROE/ROS
- EPS growth rate
- Sales growth rate
- MVA
- CF
(!) Describe strategic mapping
- Assume cause & effect
- Identify relationships
- Targets for each element
- Ress. allocated to elements
- Monitor targets vs. actual
- Ress. reallocation where performance need improved
- Help identify contribution of IT to firm success
- Represent priorities
- CSF for each perspective
(!) Describe the nature of IT that can indicate initiatives
Function IT / FIT:
- Single function
- Assist executing discrete tasks
- Don’t req. complement
- Improve productivity of skilled workers
- Eg. Excel
___________
Network IT / NIT:
- Facilitate comm. & interaction
- Foster teamwork
- Don’t req. complement
- Little impact on work & DM
- Eg. Email
___________
Enterprise IT / EIT:
General:
- Restructure interactions
- In- & external
- Change processes & DM
- Req. complements: Teamwork, skilled workers, lvl of influence
- Eg. CRM or SCM
Firm cap.:
- Auto transactions: Uniform trans.
- Auto process management: Rules
- Process integration: No separate systems
- Customer service: Customized
- Performance monitoring & decision support: Sum info on KPI
Give an example of a strategy map
(!) Describe the BSC management process
(!) Describe the IT governance institute VAL IT framework & questions to ask
General:
- Structured framework for IT invest- & management
- Help create firm value from IT
- Align w. & complement COBIT
- Manage IT benefit over LC of costs
- Adjust for risk
- VAL deliver value, COBIT manage risk
- Define value from objectives: Similar to BSC
Three domains.
- Governance
- Portfolio management
- Investment management process
______________
Questions:
Doing right things?
- Invest. align w. objectives?
Doing them right?
- Invest. consistent w. current IT architecture & IT initiatives?
Doing them well?
- Do firms techical & firm ress. support investment?
Getting the benefit?
- Understand what invest. deliver?
- Clear metrics on invest. deliver expected benefits?
(!) Describe business model canvas elements & their impact on info technology
General:
- Describe essential business model elements
- Like strategy maps
- Nine blocks
- Focus on relationships
- Focus on customers
- Easy to understand
- No clear starting point
- Flexible
- KPI’s for each block
- Not originally for PMS: Less focus on financial measures
Value proposition:
- Start here
- Heart of model
- Attract & retain customers
- Eg. Quality, design & price
- Eg. Brand image
- IT: Improve understanding
- IT: Improve availability
- IT: Reduce price
- IT: Monitor quality
Customer segments:
- Groups intended to serve
- Eg. Mass or niché market
Distribution channels:
- Eg. Retail or website
- Eg. Wholeseller, partner or mix
Customer relationships:
- Preferences differ: AI, self-service or personalized
Revenue streams:
- Up front, subscription or license?
- IT: Make new streams
- IT: Increase revenue
Key activities:
- Req. business processes
- Source, make & deliver
- IT: Automate improve, manage & monitor
Key ressources:
- Tangible or intangible
- Eg. Financial, intellectual or HR
- IT: Enhance cap.
Key partners:
- Inputs for business to function
- Eg. Strategic alliances, joint venture & buyer-supplier rel.
- Allow economies of scale
- Allow risk reduction
- Give ress. access
- Also if outsourcing
- IT: share info
Cost structure:
- Lean or premium services
- Fixed or variable
- Affected by economies of scale & scope
- IT: Reduce
Relate AIS & IT to the BSC process & give some examples
Role of AIS/IT:
- Role in Implementing & managing
- Provide info for strategy formulation
- Help dev. & distribute budgets for strategy execution
- Collect data & convert to info: Assess performance vs. objectives. Ongoing management.
- Reduce costs, increase revenue & change business model
- Hard to pinpoint impact
Examples:
- Executive dashboards
- BI systems
- Business analytics
- Enterprise IT for transaction processing
- Budgeting systems
- Communication & collaboration systems
