Organisational Aspects Flashcards

1
Q

How does organisational strategy determine IS structure?

A

Industry Structure -> Competitive Strategy -> Value Chains -> Business Processes -> Information Systems

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2
Q

Porter’s Five-Forces Model for Industry Structure Analysis

A
  • Threat of new entrants (function of barriers to entry)
  • Bargaining power of buyers
  • Bargaining power of suppliers
  • Threat of substitutes
  • Internal rivalry among existing competitors
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3
Q

How does Industry Analysis determine Competitive Strategy

A

Two generic strategies:

  • cost
  • differentiation

Two generic scopes:

  • industry-wide
  • focus
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4
Q

How does competitive strategy determine value chain structure

A

Value Chain Structure includes all PRIMARY ACTIVITIES and SUPPORT ACTIVITIES. The margins of all of these activities are added up to arrive at the TOTAL MARGIN.

Primary activities include:

  • Inbound logistics
  • Operations/ manufacturing
  • Outbound logistics
  • Sales and Marketing
  • Customer Service

Support Activities include:

  • Technology (R&D etc.)
  • Procurement (raw materials)
  • HR (training, recruiting, compensation)
  • Firm infrastructure (accounting, legal, general management…)
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5
Q

How does the Value Chain determine business processes?

A

Goal: Analyse all value generating activities and fit them to the strategy:

  • cost: eliminate unnecessary cost drivers
  • differentiation: improve quality of service
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6
Q

Functional Information Systems and their downsides

A

IS are deployed for a specific function only, e.g. sales and marketing (Lead Generation), manufacturing (MRP), customer service (CRM), HR

Problems:

  • data duplication & inconsistencies across databases
  • disjointed applications
  • limited information and lack of integrated information
  • isolated decisions and thus inefficiencies
  • increased expenses
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7
Q

Integrated, Cross-Functional IS

A

As a solution to the downsides of functional IS, integrated IS integrate the activities of an entire business process!

By licensing a cross-functional software (e.g. SAP or Oracle ERP software), businesses benefit from the best-practice processes inherent in the software.

Organisations thus change their processes to fit with the Enterprise Application Solutions!

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8
Q

Challenges when transitioning to Integrated, Cross-Functional IS

A
  • many departments have to coordinate their activities
  • most organisations today possess a mix of functional and integrated systems
  • to compete successfully, all IS need to be integrated
  • all components of IS can prove a more or less difficult challenge
  • data quality dimensions also are issues
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9
Q

Customer Relationship Management (CRM)

A
  • suite of applications, a database, and a set of inherent processes
  • manages all interactions with customer through marketing, customer acquisition, relationship management, and churn/loss
  • supports customer-centric organisations
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10
Q

Enterprise Resource Planning (ERP) system

A
  • integrates all the organisation’s principal processes
  • primarily used by manufacturing companies
  • most successful vendor: SAP
  • Uses ONE SINGLE DATABASE to which a wide range of applications connect: sales, customer support, accounting, manufacturing, inventory, HR, …
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11
Q

Characteristics, benefits and challenges of ERP

A

CHARACTERISTICS:

  • provides cross-functional, process view of organization
  • formal approach based on formal business models
  • data is maintained centralised
  • large benefits but hard to implement; complex
  • often very expensive

BENEFITS:

  • efficient business processes
  • inventory reduction
  • lead-time reduction
  • improved customer service
  • greater real-time insight into organisation
  • higher profitability

CHALLENGES:

  • inherent processes may be different from existing ones
  • in most cases, organisations have to dopt to ERP inherent processes
  • such change will disrupt ongoing operations and disturb various stakeholders
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12
Q

ERP Implementation steps

A
  1. Determine current processes and ERP modules: model current processes “as-is”, identify relevant ERP blueprint processes
  2. move inconsistencies: compare “as-is” model to blueprint and adjust either the current situation or the ERP blueprint processes to correct misfits
  3. Implement ERP system: prepare detailed plan, train users, simulate and test, convert data, convert to new procedures, convert to ERP (full support of CEO and executive staff needed!!)
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13
Q

Beyond ERP

A

digital economy needs mobility, agility and flexibility, but ERPs move at a steady and slow pace!

Trends:

  • enterprise mobile apps
  • IoT and data driven process optimisation
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