Slide 5-6 Flashcards
Management Ethical Challenges
- Lapses in management ethical and business judgment: • Enron/Arthur Anderson • Tyco • Martha Stewart
- Sub-prime loans and the failure of risk analysis • CitiBank
- Individual managers must take greater responsibility regarding ethical and legal conduct • Stiffer sentencing guidelines • Obstruction charges against firms
Definition of Ethics
Principles of right and wrong that individuals, acting as free moral agents, use to make choices to guide their behavior
Information systems and ethics • Information systems raise new ethical questions because they create opportunities for:
Intense social change, threatening existing distributions of power, money, rights, and obligations
• New kinds of crime
Basic concepts form the underpinning of an ethical analysis of information systems and those who manage them
Responsibility: Accepting the potential costs, duties, and obligations for decisions • Accountability: Mechanisms for identifying responsible parties • Liability: Permits individuals (and firms) to recover damages done to them • Due process: Laws are well known and understood, with an ability to appeal to higher authorities
Five key technology trends that raise ethical issues
Ability to do wrong and never be present in the place that’s impacted.
• Computing power doubles every 18 months( Increased reliance on, and vulnerability to, computer systems)
• Data storage costs rapidly declining (Multiplying databases on individuals)
• Data analysis advances ( Greater ability to find detailed personal information on individuals)
• Networking advances and the Internet (Enables moving and accessing large quantities of personal data)
Fair information practice
Set of principles governing the collection and use of information • Based on mutuality of interest between record holder and individual
• HIPAA
FTC Fair information practices principles
Notice/awareness
Choice/consent
Access/participation: Security
Enforcement
Internet challenges to privacy
• Cookies • Tiny files downloaded by Web site to visitor’s hard drive • Identify visitor’s browser and track visits to site • Allow Web sites to develop profiles on visitors • Web bugs • Tiny graphics embedded in e-mail messages and Web pages • Designed to monitor who is reading a message and transmitting that information to another computer on the Internet • Spyware • Surreptitiously installed on user’s computer • May transmit user’s keystrokes or display unwanted ads
Intellectual property
Intangible property of any kind created by individuals or corporations
Challenges to Intellectual Property Rights
Digital media different from physical media (e.g. books) • Ease of replication • Ease of transmission (networks, Internet) • Difficulty in classifying software • Compactness • Difficulties in establishing uniqueness
Three ways that intellectual property is protected
Trade secret: Intellectual work or product belonging to business, not in the public domain • Copyright: Statutory grant protecting intellectual property from being copied for the life of the author, plus 70 years • Patents: Grants creator of invention an exclusive monopoly on ideas behind invention for 20 years
Identity Theft
Dumpster diving Phishing Smishing
Company Policies with Respect to Privacy
Who owns the computer and data stored on it? What purposes the computer may be used? What uses are authorized or prohibited?
Notice/awareness
Web sites must disclose practices before collecting data
Choice/consent
Consumers must be able to choose how information is used for secondary purposes
Access/participation
Consumers must be able to review, contest accuracy of personal data
Security
Security: Data collectors must take steps to ensure accuracy, security of personal data
Enforcement
Must be mechanism to enforce FIP principles
What is customer relationship management
- Knowing your customer better than anyone else
* Customer relationship management (CRM) systems
Customer relationship management (CRM) systems
- Capture and integrate customer data from all over the organization
- Consolidate and analyze customer data
- Distribute customer information to various systems and customer touch points across enterprise
- Provide single enterprise view of customers
What is the business value in being customer-focused
Keep customers loyal
Anticipate their future needs
Respond to customer concerns
Provide top-quality customer service
Focus on customer value could?
Quality not price has become primary determinant of value
CRM Goals
Identify new markets for existing products or latent needs of existing customers Leverage existing relationships to grow revenue
Integrate activities to improve service
Assure consistent customer “experience”
CRM software package, more comprehensive packages have modules for:
- Partner relationship management (PRM)
* Employee relationship management (ERM
Most packages have modules for
- Sales force automation (SFA)
- Customer service:
- Marketin
Sales force automation (SFA)
Sales prospect and contact information, and sales quote generation capabilities; etc
Customer service
Assigning and managing customer service requests; Web-based self-service capabilities; etc.
Marketing
Capturing prospect and customer data, scheduling and tracking direct-marketing mailings or e-mail; etc.
CRM- Business value
- Increased customer satisfaction
- Reduced direct-marketing costs
- More effective marketing
- Lower costs for customer acquisition/retention
- Increased sales revenue (Market share, Wallet share) • • Reduced churn rate
Churn rate
- Number of customers who stop using or purchasing products or services from a company
- Indicator of growth or decline of firm’s customer base
Two Examples of CRM
Customer Loyalty at Harrah’s Entertainment
Enterprise resource planning definition
integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprisewide decisions by viewing enterprisewide information on all business operations
Enterprise resource planning (ERP)
- Suite of integrated software modules and a common central database.
- Collects and utilizes data from all operating functions of firm to support firm’s internal business activities.
- Information entered in one process is immediately available for other processes.
- Exception is departmental information systems to satisfy the unique requirements of tasks not shared across multiple business functions.
ERP Functionality
Built around thousands of predefined business processes that reflect best practices
• Finance/accounting: General ledger, accounts payable, etc. • Human resources: Personnel administration, payroll, etc.
• Manufacturing/production: Purchasing, shipping, etc.
• Sales/marketing: Order processing, billing, sales planning, etc.
To implemen ERP(Enterprise resource planning)
• Select functions of system they wish to use • Map business processes KPI’s to software processes
The connected corporation: purchasing, acct & finance, HR, Inventory, manufacturing, marketing and sales
At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system
Enterprise applications: challenges eg.
• Microsoft Dynamics NAV – ERP system at the Chester Zoo
Enterprise applications: challenges
- Purchase, customize and install application software.
- Implementation - may be 4 to 5 times the price of software
- Requires fundamental changes( • Technology changes • Business processes changes • Organizational changes)
- Creates switching costs, dependence on software vendors
- Requires data standardization, management, cleansing
Associated ERP Risk(cost)
software cost consulting fees process rework customization integration and testing training data warehouse integration and data conversion
Next generation enterprise applications
- Enterprise solutions / suites: (• Replacing stand-alone enterprise, CRM, SCM systems • Make these applications more flexible, Web-enabled, integrated with other systems)
- Open-source and on-demand applications • SaaS, Salesforce.com
- Service platform: Integrates multiple applications to deliver a seamless experience for all parties • Order-to-cash process
- Portals: • Increasingly, new services delivered through portals
Integrated accounting software programs function:
Process all types of accounting transactions
Transactions affecting general and special journals
Integrated accounting software programs modules:
Organizes transaction processing in modules
Provides links between modules
Include Accounts Receivable, Accounts Payable, Inventory, and Payroll
Information Needs of Small Business Owners
Cash Flows
Evaluating Profitability
Popular Software Packages
Microsoft Small Business Accounting
Quickbooks by Intuit
Peachtree Accounting
features of integrated accounting software programs
audit trails budgeting capability check and invoice printing e-commerce features financial analysis tools graphic reports inventory mngt recurring journal entries ability to handle multiple users and companies customizable financial reporting cash0based and accural-based options scalability (accommodates business growth) variance analysis (budget to actual)
Mid-range & large system accounting software utilization
Transaction processing needs grow
Volume and complexity
Popular Software Packages(Mid-range & large system accounting software)
Microsoft Dynamics Great Plains SAP Business One Epicor Sage software’s MAS 90, MAS 200, Everest, and Accpac
enterprice-wide accounting software solutions: Enterprise Resource Planning Systems (ERP)
Enterprise software and Business application suites Integrated program with central database
enterprice-wide accounting software solutions popular products
Microsoft Dynamics AX SAP All-in-One Oracle Sage MAS 50
Cost Considerations - Range from $2,000 to over $300,000
enterprice-wide accounting software solutions popular products features
Multi-currency transactions
Currency conversions
Various modules and interfaces (CRM, HR)
Deployment options (desktop, web-browser)
Hosted solutions
Selecting the right software:
Approach will vary:
1. Complexity of the business and software
2. Packaged software or custom system
Acquiring Software:
1. Utilization of value-added reseller (VAR)
2. Vendor consultants
