Business Driven Information Systems

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Business Driven Information Systems

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SECTION 1.1

INFORMATION SYSTEMS IN BUSINESS

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INFORMATION TECHNOLOGY’S ROLE IN BUSINESS

• Information technology is everywhere in business

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INFORMATION TECHNOLOGY’S

ROLE IN BUSINESS

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INFORMATION TECHNOLOGY’S

ROLE IN BUSINESS

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INFORMATION TECHNOLOGY’S

ROLE IN BUSINESS

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INFORMATION TECHNOLOGY’S

ROLE IN BUSINESS

• Organizations typically operate by functional areas or functional silos

• Functional areas are interdependent

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INFORMATION TECHNOLOGY BASICS

• Information technology (IT)

• Information technology is an important enabler of business success and innovation

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INFORMATION TECHNOLOGY BASICS

•Management information systems (MIS)

• MIS is a business function, similar to Accounting, Finance, Operations, and Human Resources

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INFORMATION

•Data

• Information

•Business intelligence

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IT RESOURCES

• People use

• Information technology to work with

• Information

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IT CULTURES

• Organizational information cultures include: Information-functional culture Information-sharing culture Information-inquiring culture Information-discovery culture

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THE GAP BETWEEN BUSINESS PERSONNEL AND IT PERSONNEL • Business personnel possess expertise in functional areas such as marketing, accounting, and sales

• IT personnel have the technological expertise

• This typically causes a communications gap between the business personnel and IT personnel

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MEASURING IT’S SUCCESS

• Questions executives should ask regarding IT systems Is the internal IT operation performing

satisfactorily? Should I outsource some or all of the IT

operations? How is my outsourcer performing? What are the risk factors to consider in an

IT project?

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MEASURING IT’S SUCCESS

• Key performance indicator (KPI)

• Metrics are detailed measures that feed KPIs

• Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionals

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EFFICIENCY AND EFFECTIVENESS METRICS

•Efficiency IT metric

•Effectiveness IT metric

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BENCHMARKING – BASELINING METRICS

•Benchmarks

•Benchmarking

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THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

• Efficiency IT metrics focus on technology and include: Throughput Transaction speed System availability Information accuracy Web traffic Response time

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THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

• Effectiveness IT metrics focus on an organization’s goals, strategies, and objectives and include: Usability Customer satisfaction Conversion rates Financial

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THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

• Security is an issue for any organization offering products or services over the Internet

• It is inefficient for an organization to implement Internet security, since it slows down processing, however, to be effective it must implement Internet security

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THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

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SECTION 1.2

BUSINESS STRATEGY

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IDENTIFYING COMPETITIVE ADVANTAGES

• To survive and thrive an organization must create a competitive advantage Competitive advantage

First-mover advantage

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IDENTIFYING COMPETITIVE ADVANTAGES

• Organizations watch their competition through environmental scanning Environmental scanning

• Three common tools used in industry to analyze and develop competitive advantages include: Porter’s Five Forces Model Porter’s three generic strategies Value chains

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THE FIVE FORCES MODEL – EVALUATING BUSINESS SEGMENTS

•Porter’s Five Forces Model

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BUYER POWER

• Loyalty program

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SUPPLIER POWER

•Supply chain

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SUPPLIER POWER

•Business-to-Business (B2B) marketplace

Private exchange

Reverse auction

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THREAT OF SUBSTITUTE PRODUCTS OR SERVICES

•Switching cost

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THREAT OF NEW ENTRANTS

•Entry barrier

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RIVALRY AMONG EXISTING COMPETITORS

• Although competition is always more intense in some industries than in others, the overall trend is toward increased competition in just about every industry

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THE THREE GENERIC STRATEGIES

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VALUE CREATION

•Business process

•Value chain

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VALUE CREATION

Value Chain

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VALUE CREATION

• Value chains with Porter’s Five Forces

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