Module 3 from casa: productivity and innovation chapter 5 Flashcards
why do we need innovation?
In order to enhance productivity
productivity paradox
we see computers everywhere but in productivity statistics
3 different ways through which value of IT can be realized
• productivity (more or better output from same inputs)
• structure of competition
- IT can alter the way corporations compete
• benefits to the end customer- helps make processes more efficient
why is btm (business technology management) important for productivity and innovation?
it includes technologies that can enhance individual and organizational productivity across many industries
seen as an invisible industry sector
The need for students with combined technology and business skills has increased the need for educational programs that combine business and tech training
Universities across Canada are developing programs for BTM
why is btm seen as an invisible industry sector?
because it doesn’t produce direct output as other industries do
what does increasing efficiency mean?
business processes can be accomplished more quickly or with fewer resources and facilities (or both)
when is efficiency easy to measure?
once you have decided what measures are important
effectiveness
focus on doing the right things
doing the right things
how do information systems improve productivity?
by increasing efficiency
value chain
network of activities that improve effectiveness (or value) of a good or service
Made up of at least one and often many business processes
how do intermediaries in the value chain add value?
by adding to product or adding services to product
the more a company adds to a good or service in its value chain, the higher the price the company can charge for the final product
profit margin
the difference between price paid for¡ the product and cost to make it
the greater the margin, the greater the profit
what are the two types of activities that support the value chain?
primary activities
support activities
primary activities
directly adding value to product
installing
manufacturing
shipping
support activities
activities that support the primary activities
only add value indirectly
maintaining machines in factories
paying workers
keep track of mechanics hours
what does increasing the efficiency and effectiveness do to profit margin? how?
it increases the profit margin
the intensity of each force determines the characteristics of the industry, its profitability, and its sustainability
what does Porter’s five forces model determine?
determines the industry profitability
the int
what are Porter’s five forces?
Bargaining power of customers
Threat of substitutions
Bargaining power of suppliers
Threat of new entrants
Rivalry among existing firms
what do companies do with Porter’s model?
to be successful, they analyze the forces and choose how to respond to them
basically, they choose competitive strategies
what are the 4 types of competitive strategies to respond to Porter’s model?
be a cost leader
differentiate products
employ the cost or differentiation strategy across an industry
segmentation
what does porter ultimately believe when it comes to companies’ effectiveness?
how does it translate to information systems?
to be effective, a company’s goals, objectives, culture, and activities must be consistent with the strategies
all information systems must facilitate and be aligned with an organization’s competitive strategy
what are the 2 general types of technological innovations?
sustaining technologies
disruptive technologies
sustaining technologies
changes in technology that maintain rate of improvement in customer value
disruptive technologies
introduce a very new package of attributes to the accepted mainstream products
can a competitive advantage be so based that it creates a whole new industry?
yeeee
like with micro computers
diffusion of innovation
process by which an innovation is communicated through certain channels over time among members of a social system
what are the steps of the diffusion of innovation?
- knowledge
- persuasion
- decision
- implementation
- confirmation
diffusion of innovation
step 1: knowledge
first hear about innovation but lack info about it
diffusion of innovation
step 2: persuasion
become interested in innovation, find out more about it
diffusion of innovation
step 3: decision
consider pros and cons of adopting
make decision to Accept or Refuse
diffusion of innovation
step 4: implementation
use innovation and figure out whether to continue using it
diffusion of innovation
step 5: confirmation
use innovation to its full potential
what can competitive advantages be created by?
products/services
development of business processes
how can products and services create a competitive advantage’
by creating new ones
by enhancing existing ones
by differentiating them
how can business processes create competitive advantages’
making expensive for customers to switch to competitors, so they end up staying
looking suppliers by making it expensive for them to switch
creating entry barriers
establishing alliances with other organizations
what advantages does creating alliances with other business organizations do?
create standards
promote product awareness and needs
develop market size
reduce purchasing costs
provide other benefits
can the competitive advantages created by information systems be sustained?
it depends, because other companies copy them all the time turning them into commodities
but, sometimes companies need different information systems depending on their structure
where does long term competitive advantage with information systems lie?
in how a company and its people adopt the technology
Sustained competitive advantage from IT
requires companies to find a distinctive way to compete that will change over time
developing people and procedures that are well supported by the underlying technology
what are the components of business processes
activity
actors
role
business processes
a sequence of activities for accomplishing a function
example: taking orders at time Hortons
example: making a sandwich at Tim Hortons
activity of a business process
task within a business process
task involved in completing business process
ex: document collection necessary to accomplish an activity
actors in a business process
resources who are either humans or computers
they accomplish certain tasks in the process
role in a business process
category of activities in a business process that is performed by a particular actors
what are the three categories of processes
Strategic processes
managerial processes
operational processes
operational processes
commonplace, routine, everyday business processes
operation processes schedule the equipment, people and facilities
day to day tasks with structured processes focusing on efficiency
managerial processes
resource use
planning, assessing, and analyzing the resources used by the company in pursuit its objectives
whats the term of information systems used to facilitate managerial processes?
TPS (Transaction processing systems)
strategic processes
seek to resolve issues that have long range impact on the organization
these processes have broad scope and impact most of the firm
often made by executives
whats the term of information systems used to support strategic processes?
executive support systems (ESS)
what does an effective objective do?
helps achieve organizational strategy
seeks more output with the same inputs or the same output with fewer inputs
defined by management
must be properly communicated
efficiency
doing things right
the difference between effectiveness and efficiency
efficiency is doing things right, whereas effectiveness is doing the right things
what do inbound logistics do?
receives
stores
disseminates product input
procurement
operational process that acquires goods and services
what do the outbound logistics processes do?
collect, store and distribute products to buyers
concern the management of finished goods inventory and the movement of goods from that inventory to the customer
ex: sales process
service processes
Providing after sales and customer support
Includes track orders
customer support
customer support training
human ressources processes
asses the motivations and skills of employees
create job position
investigate employee complaints
staff, train, and evaluate personnel
technology development processes
designing, testing, and developing technologies in support of the primary activities
what is the first step in the OMIS model?
to specify and if possible improve the objectives for the process
what is the second step in the OMIS model?
specify and if possible improve how each objective is measured.
how are the best objective measures? what are measures?
reasonable
accurate
consistent
Measures, also called metrics are quantities assigned to attributes
they indicate performance of objective
key objective indicators
how are reasonable objective measures?
is a measure that is valid and compelling
how can organization use IS to improve processes?
improve the efficiency or effectiveness of the activities
improving the links among activities that are either in the same process or among activities in different process
is to improve control of the process
linkage
The impact of one activity on another activity
NON-IS process improvements
add more resources without changing structure
change the structure of the process without changing allocation of ressources
what does Six sigma do?
seeks to improve process outputs by removing causes of defects and minimizing variability to the process
AS IS diagrams
Diagrams of current process
OUGHT-TO-BE DIAGRAMS
Diagrams of suggested process improvements
how can IS also reduce process efficiency and effectiveness and limit its improvement
by storing data in multiple places
information silos
a condition that exists when data is isolated in separated information systems
or
a condition that exists when data is duplicated in various files and databases
Information silos can make process inefficient
Information silos can make processes ineffective
how can information silos make processes ineffective
anytime data is transcribed from one place to another or entered in two places, errors can occur
what is the most obvious fix to eliminate information silos
to store a single copy of data in a shared database and revising business processes to use that database
why do companies deliberately store data in separate databases which then creates information silos
organizational departments prefer to control the systems they use
they can save on costs when many processes in many departments all rely on the same IS
departmental IS are much more affordable
SOA (service oriented architecture)
new IS approach designed to make it easier to share data amongst process activities
a design in which every activity is modeled as an encapsulated service
in the Service Oriented Architecture, what governed the exchanges among services
standards
SOA service
a repeatable task that a business needs to perform
needs access to data to be efficient
encapsulation
The key term in SOA definition
hides details inside a container
what does encapsulation do in Networks?
used to allow devices to communicate containers of data without being concerned about the data inside
SOA standards
allows messages and data to be exchanged among services
eliminated the need for proprietary design and expanded the scope and importance of SOA
can improve the efficiency and Effectiveness of a process in the same ways an IS improves processes
SOA makes activities easier and hence less costly to access
why standardize business processes?
enforce policy
consistency
scalable for change
risk reduction
swim lanes of a business process
all of the activities in one role For one actor)
structure processes
formal activities that don’t change from day-to-day
ex: making a coffee at Tim Hortons (one way of doing it)
dynamic processes
informal activities that aren’t always done the same way
ex: a sales rep at future shop that changes approach with each client
whats the term of information systems used to support managerial processes?
Managerial Information Systems (MIS)
how does IT help business processes
improve activity
improve data flow
improve control
improve procedures
automation
bottleneck
when an activity slows down the whole process
