Info System Notes - Setting the Stage

Chapter 1: Setting the Stage While technology is fundamentally transforming business environments, some firms are failing at digital transformation Social media- firms use for new product ideas, sales, & trust Internet of things- Physical objects w/ sensors, processing ability, software connect & exchange data w/ devices & systems over internet Search engine marketing- the practice of marketing a business using paid advertisements on the search engine result page Search engine optimization- process of improving your site to increase its visibility when people search for products or services MIS -reports are intended to summarize performance of the firm at a fairly concrete, product by product, region by region level. Decision Support System– It does not make decisions for us. Instead, It provides evidence on giving suggestions. Example mortgage Computer based information systems- single set of hardware, software, databases, telecommunications, people, and procedures that are configured to collect, manipulate, store, and process data into information Executive Support System- Help CEO’s and top management to address strategic issues and long-term trends, both in firm and in external environments. Transaction processing system (TPS)- An organized collection of people, procedures, software, databases, and devices used to record completed business transactions. (e.g., sales, receipts, cash deposits, payroll, credit decisions, flow of materials in a factory). Transaction- any business-related exchange, such as payments to employees, sales to customers, and payments to suppliers Senior Management- strategic level of an organization. A system provides top-level executives of a readily accessible, interactive format to get the overview of the entire organization's performance. Middle management- Scientists and knowledge workers Operational Management- collects and stores information about transactions, and controls some aspects of transactions Explicit → easier, Tacit → hard Chapter 3 Comparative advantage- company's ability to produce something more efficiently than a rival, which leads to greater profit margins. Imitation-resistant value chain- Developed a way of doing business that others will struggle to replicate, & in nearly every successful effort of this kind,technology plays a key enabling role. Value chain- Set of activities through which a product or service is created & delivered to customers - connected series of activities, each of which adds value or supports the addition of value to the firm's goods & services. an organization's value chain is the sum of its primary & support activities working together to create business value Economies of scale- the cost of an investment can be spread across increasing units of production or in serving a growing customer base — efficiency increases & costs decrease as production volume goes up. Fresh Direct methods- Farm to table freshness- It is what it means. Supply chain savings- network between a company & its suppliers to produce & distribute a specific product to the final buyer. Switching costs- costs associated w/ switching or changing from one product or service to another. Inventory turn-: It is the number of times the warehouse inventory is sold out & replenished during a given period. A higher figure means that a firm is selling products quickly. (197 time more than traditional grocers) Half the labor cost, Predictable shift hours. Straddling- Attempts to occupy more than one position, while failing to match the benefits of a more efficient, singularly focused rival Chapter 2 Resource Based view of competitive sustainable advantage- a firm achieves SCA when its resources & capabilities are → Four critical characteristics: Valuable, Rare, Imperfectly imitable, Non substitutable PRIMAY COMPONENTS OF VLAUE CHAIN Inbound logistics– These are all the processes related to receiving, storing, & distributing inpu Operations– These are the transformation activities that change inputs into outputs that are sold to customers. Outbound logistics– These activities deliver your product or service to your customer. Marketing & sales– These are the processes you use to persuade clients to purchase from you instead of your competitors. Service– These are the activities related to maintaining the value of your product or service to your customers, once it's been purchased. SECONDARY COMPONENTS Procurement(purchasing) – This is what the organization does to get the resources it needs to operate. Human resource management– This is how well a company recruits, hires, trains, motivates, rewards, & retains its workers. Technological development– These activities relate to managing & processing information, as well as protecting a company's knowledge base Infrastructure– These are a company's support systems, & the functions that allow it to maintain daily operations. (e.g., accounting) PORTER’S 5 FORCES Threat of substitute products: When a new product or service meets the same basic need in a different way, industry profitability suffers. Videoconferencing is a substitute for travel. Email is a substitute for express mail. Buyer power: Powerful customers can use their influence to force prices down or dem& more service at exiting prices. Control of suppliers or supplier power : How much power a business’s supplier has & how much control it has over the potential to raise its prices, which, in turn, lowers a business’s profitability. Competitive rivalry refers to the number of competitors & their ability to undercut a company. The barriers to entry are essentially what you have to overcome to actually gain access to the market Intensity of intra-industry competition- bffr bitch Sustainable competitive advantage- Financial performance that consistently outperforms industry averages. - Difficult to achieve due to the rapid emergence of new products & new competitors - Build competitive advantage- cut costs & prices, increase features & more value to customers - factors can lead to a SCA if: -it positively affects firm value (advantage) -not too many competitors (competitive) -can maintain it (sustainable) Operational effectiveness- Performing the same tasks better than rivals. Everyone wants to be better, the danger lies in similarity & failure to innovate Commodity- When offerings are roughly the same, they are more commodity than differentiated. Fast followers problem- when you follow the rival & they come up something better & cheaper than them Strategic positioning- Performing different activities than rivals, or the same activities in a different way. Resource-based view of competitive advantage- businesses become highly competitive w/ advancing technology as work culture Viral marketing: seeks to spread information about a product or service from person to person by word of mouth or sharing via the internet or email. Scale advantages- A business's size is related to whether it can achieve an economy of scale—larger companies will have more cost savings & higher production levels Network effects- When the value of a product or service increases as its number of users exp&s. Affiliates- Third parties that promote a product or service in exchange for a cut of any sales. Non-Practicing Entities/Patent trolls- firms make money by acquiring patents, rather than bringing products & services to market Price transparency- Degree to which complete information is available. Information asymmetry- Decision situation where one party has more or better information than its counterparty. Sarbanes-Oxley Act- raises the executive & board responsibilities & ties criminal penalties to accounting & financial violations Chapter 7- Disruptive Technology Disruptive technologies come to market w/ a set of performance attributes that existing customers do not dem&; however, performance improves over time → these new innovations can invade established markets. - Attracts a limited audience, performance issues, & unproven practical application. Artificial intelligence- technology that allows computers to problem solve & reason as humans do - (e.g. robots, self-driving cars, home assistants) Blockchain- digital-ledger/electronic transaction via blockchain service (e.g., bitcoin & cryptocurrency) - Smartphones have replaced landlines, traditional cell phones & even computers for many people. Paying attention to the trajectory of fast/cheap technology advancement & new & emerging technologies is critical - Bitcoin An open source, decentralized payment system that operates in a peer-to-peer environment, w/out bank or central authority. - Cryptocurrencies- A digital currency in which transactions are verified & records maintained by a decentralized system using cryptography, rather than by a centralized authority Chapter 5 Bandwidth caps- limitations imposed by the ISP on the total amount of data traffic that a single subscriber can consume. Churn rate/attrition rate- rate at which customers leave a product or service. Congestion effect- when increasing numbers of users lower the value of a product or service. Channel conflict- Exists when a firm’s potential partners see that firm as a threat. Colocation facilities/colors- provide a place where the gear from multiple firms can come together & where the peering of Internet traffic can take place. Content availability- few titles, 12% of the firm’s long tail Content acquisition costs- costs associated w/ digital distribution; include the costs that a firm must pay to telecommunications providers that connect them to the Internet Co-opetition- is the idea that competitors can benefit by working together Customer relationship management- enables a business to manage its relationships w/ customers. w/ the growth of the web customers can easily comparison shop so treating customers better has become very important Components of Information systems- databases (telecommunications), hardware, software, people, & procedures Collaborative filtering- software that monitors trends among customers & uses the data to personalize the customer experience Competitive advantage- the ability of a firm to outperform its competitors in financial measures we want to use information technology to create a competitive advantage & sustain it Strategy- a set of decisions made to achieve competitive advantage Data asset- data that is expected to generate future revenues Data mining- more discovery driven finds hidden patterns, relationships in large databases & infers rules to predict future behavior - Data- stream if saw facts that are collected Decision fatigue- phenomenon, akin to congestion effects for attention, where consumers avoid selection decisions w/ an overwhelming number of choices. Decision support system- Adds an element of speed, flexibility, accuracy, reach, & richness to your information. Help address strategic issues & long-term trends, both in firm & in external environments. Can change parameters of data Non-routine decisions Looks at both internal & external data More flexible - allow for what-if analysis Disintermediation- removing an organization from a firm’s distribution channel, which collapses the path between supplier & customer. - Benefits: eliminates the need to share revenues w/ a third party & provides exclusive access to valuable consumer data assets Fixed costs- costs associated w/ your business's products or services that must be paid regardless of the volume you sell. - (e.g., buying land & building a car manufacturing plant) Fast Follower problem- exists when savvy rivals watch a pioneer's efforts, learn from their successes & missteps, then enter the market quickly w/ a comparable or superior product at a lower cost before the first mover can dominate First Sale Doctrine- ruling that states that a firm can distribute physical copies of legally acquired copyright-protected products Long tail- refers to an extremely large selection of content or products. This is a phenomenon where firms can make money by offering near limitless selection - a strategy that allows businesses to realize significant profit out of selling low volumes of hard-to-find items to many customers Legal & regulatory environment- involved in securing the digital distribution rights for all of the content that makes up a movie. ● Potential opportunities for revenue & expansion ● Potential partners ● Competitors & their motivation Management information system- Help w/ monitoring, controlling, decision making, & administrative activities. Organizes, processes, summarizes data, produces periodic reports Provides middle managers w/ report Marginal costs- costs associated w/ each individual unit produced - Marginal costs are (effectively) zero, but that’s for content owners. Objective of an IS- transform data into meaningful information -it is done by applying knowledge; like plugging information in, the more info used the more knowledge grows Operational effectiveness- performing the same tasks better than rivals perform them (lower cost) Strategic positioning- performing different tasks than your rivals, or performing the same task in a different way (higher value/revenue) Supply chain management- help firms better manage relationships w/ suppliers Transaction processing system- An organized collection of people, procedures, software, databases, & devices used to record completed business transactions Vertical integration- most of the operation ares in your control, little outsourcing Windowing- content is available to a given distribution channel for a specified time window ● an industry practice whereby content (usually a motion picture) is available to a given distribution channel for a specified time period or "window," usually under a different revenue model (usually ticket sale, license fee, etc). Horizontal- position yourself in "product space" away from competitors, used to appeal to a distinct group of customers Vertical- build a better product, products differ in quality Business drivers for today's information systems ● 1. globalization of the economy 2. electronic commerce & business 3. security & privacy 4. collaboration & partnership Quizzes Chapter 4: Zara 1. An information- hardware, software, data, procedures, & the people who interact w/ & impacted by the system- True 2. Contract manufacturers used by the apparel industry are often criticized because of poor working conditions 3. Zara differs from its competitors in converting ideas into products? Zara concepts appear in stores in 15 days compared to rival who receive new styles once a season 4. Many firms have developed & deployed innovative information systems. How has Zara ensure its systems will be used by staff? System used drives store success & as much as 70% of salaries are tied to sales performance 5. ROI- return on investment 6. The value of information is directly linked to how it helps decision makers achieve their organization’s cost reduction initiatives 7. Zara holds a competitive advantage over its rivals in spite of keeping large portions of its production process in-house 8. Fair factories Clearinghouse is a non-profit organization that shares audit information on contract manufacturers among 9. In an industry where nearly every major player outsources manufacturing to low-cost countries, Zara is highly vertically integrated, keeping huge swaths of tis production process in-house 10.Making seasonal apparel decisions is a challenge because it often involves making predictions on what customers will be interested in, months in advance of clothing appearing on store shelves True Chapter 2 1. A firm said to be straddling when it attempts to make the benefits of a successful position; maintaining its existing position 2. A firm’s financial performance that consistently outperforms its industry’s peerssustainable competitive advantage 3. A brand is a symbolic embodiment of all the information connected w/ a product or service 4. Benefits related to a firm’s size are referred to as scale advantages 5. Leveraging consumers to promote a product or service is known as viral marketing 6. Operational effectiveness refers to performing the same tasks better than rivals to perform them 7. Strategic positioning refers to performing different tasks than rivals or the same tasks in a different way 8. The set of activities through which a product or service is created & delivered to customers is known as a value chain 9. If a new entrant hopes to attract customers from established incumbent, the new entrant must ensure that the value they offer exceeds the incumbents’ value in addition to any perceived switching costs Chapter 7 1. Big firms fail to see disruptive innovations as a threat because they primarily focus on the bottom line 2. Identifying & nurturing potentially disruptive technologies = constant vigilance & relentless & broad environment true 3. Profit margins for disruptive innovations are usually worse than those for incumbent technologies True 4. Researchers at Deloitte Uni suggested that blockchain would improve financial transactions 5. Which of the following is a way to recognize potentially disruptive innovations? Seeking the opinions of venture capitalists, research academics, & passionate internal engineering staff 6. Disruptive technology- Initially underperforming incumbents, over time their performance attributes improve to the point where they invade establish markets 7. Firms that listen to existing customers & tailor offerings based on this input are far more likely to identify potentially disruptive technologies than those that experiment w/ products that existing customers do not demand False 8. What is blockchain expanding e-commerce in emerging markets 9. Define Miners- verification & time-stamping of transactions 10.How can a firm recognize potentially disruptive innovations? Paying attention Sum(A1:A4)add all Lower(A28)lowercase Sumif(A1:A11,“Gay”,B1:B11)- adding for all Gay’s in A Average(L9:L2)mean Trim(A32)- delete big spaces Net Profit → Revenues - Expense VAR.P(L9:L12)Variance Small(L9:L12,3)minimum Net Concentration Count(L9:L12)count Median(L9:L12)find median Substitute(A3,"L", "O", 2)- changes 2nd L to O Concatenate(A12,B12)- combine 2 cells Concatenate(A12, " ", B12)- combines 2 cells but w/ space Concatenate(LEFT(A24,3),RIGHT(A24,2))- combing left & right aspect of cells Left(A3,4)- separates the 4 digits of the left side = dumb_bitch → dumb Right(A3,5)- separates the 5 digits of the right side = dumb_bitch → bitch Vlookup([Sexuality],$R$3:$S$7,2,TRUE)- ([Who’s gay], LGBT table w/ rights, rights, round) = determines which person get rights Absolute- =(D3*$G$3)+D3 Relative =(D3*.06)+D3