CHAPTER ONE OVERVIEW SECTION 1.1 – INFORMATION SYSTEMS IN BUSINESS Information Technology’s Role in Business Information Technology Basics Roles and Responsibilities in Information Technology Measuring Information Technology’s Success SECTION 1.2 – BUSINESS STRATEGY Identifying Competitive Advantages The Five Forces Model – Evaluating Business Segments The Three Generic Strategies – Creating a Business Focus Value Chain Analysis – Targeting Business Processes

INFORMATION TECHNOLOGY’S ROLE IN BUSINESS

INFORMATION TECHNOLOGY BASICS Information technology (IT) – a field concerned with the use of technology in managing and processing information When beginning to learn about information technology it is important to understand the following: Data, information, and business intelligence IT resources IT cultures

INFORMATION Data - raw facts that describe the characteristic of an event Information - data converted into a meaningful and useful context Business intelligence – applications and technologies that are used to gather, provide access to, and analyze data and information to support decision- making efforts

IT RESOURCES People use Information technology to work with

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

ROLES AND RESPONSIBILITIES IN IT Information technology is a relatively new functional area, having only been around formally for around 40 years Recent IT strategic positions include: Chief Information Officer (CIO) Chief Technology Officer (CTO) Chief Security Officer (CSO) Chief Privacy Officer (CPO) Chief Knowledge Office (CKO)

ROLES AND RESPONSIBILITIES IN IT Skills pivotal for success in executive IT roles 9

MEASURING IT’S SUCCESS Key performance indicator (KPI) – measures that are tied to business drivers Efficiency IT metric – measures the performance of the IT system itself including throughput, speed, and availability Effectiveness IT metric – measures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases Benchmarking – a process of continuously measuring system results, comparing results (benchmark values), and identifying improvements

THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

What is MIS? M I S

What is MIS? I P O

Information Age? What is information? Value of Information role of IT

What do businesses do? serving each customer’s unique needs serve customers mass customization serving each customer’s unique needs No matter what type of business a company is in, they must service the needs of their customers. Relatively new term, mass customization, indicates a process by which products and services can be tailored to the needs of individual customers. MCI mined their large data base to find calling patterns of their customers and is using that information to provide special plans to people based upon their calling habits.

Businesses must effectively use 3 key resources information technology people information If using the animation, this slide can be used to create some interactivity. As images are brought up, students can be asked what they signify. IT can be defined as a set of sophisticated tools. to serve each customer

Customer Moment Of Value Providing service: when the customer wants it time where the customer wants it location how the customer wants it form in a manner guaranteed to satisfy the customer perfect delivery Moment of Value is often abbreviated as MOV. Amazon philosophy: Customers want to do business all the time. Business no longer operate from 8 to 5 and capitalized on that fact. Ford makes cars in Asia in order to sell more cars in Asia. Location location location is a phrase typically associated with realtors especially when they are computed an appropriate selling price for a listing. The idea is that the most wonderful house in a terrible place won’t sell. But even an awful house in a wonderful area will sell. Some customers have the savvy or the money to fix up an awful house in a wonderful area. But, it takes years (if ever) to turn around an area no matter how nice the house. Dreyer’s Grand Ice Cream Inc. uses the philosophy that the flavors sell the ice cream. So they strive to provide the right ice cream flavor to the right market. All of these companies exhibit that all-important customer focus.

Role of IT To Know: time when customer’s moment of value occurs location of customer’s moment of value form of customer’s moment of value

right people right information right time KNOWLEDGE IT Helps Provide We want knowledge and knowledge comes from having information. IT is a set of tools that can help provide the right people with the right information at the right time. Goal: best decisions possible about the time, location and form of the customer’s moment of value. Gaining knowledge through information is the role of IT in today’s information –based business. IT is a set of tools that can be used to provide the right people with the right information at the right time. The goal is improved decision-making about the time, location and form of the customer’s moment of value. KNOWLEDGE

IT Operates in: the new business environment

Characteristics of New Business Globalization products from all over foreign competition trade blocs GATT EU NAFTA factors affecting globalization include: privatization, deregulation, improved worldwide transportation and telecommunications, the emergence of transnational firms and trade blocs. NAFTA has opened a market of 134,000,000 people in Chile, Canada and Mexico to US businesses. Is NAFTA a bug or a feature? like most things, there are aspects of each

Information – A Key Resource today’s economy: wants driven need more info large databases data warehouses knowing what people need isn’t enough because now they also buy what they want information is needed on what people’s wants are clip art is a stylized disk drive

E-Commerce hottest topic in business, today accelerated/enhanced by IT home shopping, banking, etc. EDI competitive scanning distributing info to prospective customers e-commerce is often called the new business horizon EDI – electronic data interchange Both e-commerce and EDI are discussed at length in Chapter 5.

Knowledge Worker Computing provides workers with: technology technology power software information technology knowledge another term used for knowledge worker is a “power user”

Characteristics of New Business globalization key resource: information e-commerce knowledge worker computing

Information Technology information processing tasks decision-making tasks shared information & decentralized computing innovation

Information-Processing Tasks capturing information conveying information creating information cradling information communicating information

Shared Information & Decentralized Computing access to all information by anyone through technology spread across the organization

Innovation do business in new ways create a competitive advantage

Information – A New Key Business Resource data information data that is related or summarized is transformed into information

Information Types internal external objective subjective specific operational aspects external outside environment objective quantifiable description subjective attempt at description of unknown

Information-Literate Knowledge Worker requisite skills: define what information is needed know how/where to get info understand what it means make appropriate decisions maintain ethical and legal standards knowledge workers outnumber others 4 to 1