CHAPTER 6 : VALUING ORGANIZATIONAL INFORMATION

ORGANIZATIONAL INFORMATION

Organizational information comes at different levels and in different formats and "granularities".

Information granularities refers to the extent of detail within the information (fine and detailed or coarse and abstract). 

Employees must be able to correlate the different levels, formats, and granularities of information when making decisions.

THE VALUE OF TRANSACTIONAL  AND ANALYTICAL INFORMATION

Transactional information

• encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks.
  Example : withdrawing cash from an ATM, making an airline reservation, or purchasing stocks.

Analytical information

• encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks. 
• Analytical information includes transactional information along with other information such as market and industry information.
• Example : trends, sales, product statistics and future growth projections.

THE VALUE OF TIMELY INFORMATION

Real-time information = immediate, up-to-date information.

Real-time systems = provide real-time information in response to query request.



THE VALUE OF QUALITY INFORMATION

five common characteristics of high-quality information:

Low-quality information example :

Recognizing how low-quality information issues occur will allow organizations to begin to correct them. The four primary sources of low-quality information are :

1. Online customers intentionally enter inaccurate information to protect their privacy.
2. Different systems have different information entry standards and formats.
3. Call center operators enter abbreviated or erroneous information by accident or to save time.
4. Third-party and external information contains inconsistencies, inaccuracies, and errors.

UNDERSTANDING THE COSTS OF POOR INFORMATION

Bad information can cause serious business ramifications such as:

• Inability to accurately track customers, which directly affects strategic initiatives such as CRM and SCM.
• Difficulty identifying the organization's most valuable customers.
• Inability to identify selling opportunities and wasted revenue from marketing to nonexisting customers and nondeliverable mail.
• Difficulty tracking revenue because of inaccurate invoices.
• inability to build strong relationships with customers- which increases buyer power.

UNDERSTANDING THE BENEFITS OF GOOD INFORMATION

• high quality information improve the chances of making good decision.
• increase an organization's bottom line.
• high quality information to make solid strategic business decision.

                  ******** END OF CHAPTER 6 ********

                                     THANK YOU ")

CHAPTER 5 : ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES

Organizational Structure

• Employees across the organization must work closely together to develop strategic initiatives that create competitive advantages.
• Understanding the basic structure of a typical IT department including titles, roles, and responsibilities will help an organization build a cohesive enetrpridewide team. 

IT Roles and Responsibilities

• Information technology is a relatively new functional area, having been around formally in most organizations only for about 40 years.

Most organizations maintain positions such as:

• Chief Executive Officer (CEO)
• Chief Financial Officer (CFO)
• Chief Operations Officer (COO)

There are more IT-related strategic positions such as :

• Chief Information Officer (CIO)
• Chief technology Officer (CTO)
• Chief Security officer (CSO)
• Chief Privacy Officer (CPO)
• Chief knowledge Officer (CKO)

The chief information officer (CIO) is responsible for:

1. overseeing all uses of information technology 
2. ensuring the strategic alignment of IT with business goals and objectives.

the CIO often reports directly to the CEO. Broad functions of a CIO :

1. Manager = ensure the delivery of all IT projects, on time and within budget.
2. Leader = ensure the strategic vision of IT is in line with the strategic vision of the organization.
3. Communicator = advocate and communicate the IT strategy by building and maintaining strong executive relationships.

The chief technology officer (CTO) is responsible for:

1. ensuring the throughput, speed, accuracy, availability. and reliability of an organization's information technology.

The chief security officer (CSO) is responsible for:

1. ensuring the security of IT systems and developing strategies and IT safeguards against attack from ha

Chapter 4 : Measuring The Success of Strategic Initiatives

Measuring Information Technology's success

key performance indicators (KPIs)

• the measure that are tied to business drivers. Metrics are the detailed measures that feed those KPIs.
• Performance metrics fall into a nebulous area of business intelligence that is neither technology- nor business-centered, but this areas requires input from both IT and business professionals to find success.

Efficiency and Effectiveness

Benchmarking - Baseline Metrics

• is a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance. 

The Interrelationships of Efficiency and Effectiveness IT Metrics

• Efficiency IT metrics focus on the technology itself. 

• Effectiveness IT metrics are determined according to an organization's goals, strategies, and objectives.

The interrelationships between Effeciency and Effectiveness

Metrics for strategic initiatives

• A metric is nothing more than a standard measure to assess performance in a particular area.
• metrics are at the heart of a good, customer-focused management system and any program directed at continuous improvement.
• A focus on customers and performance standards shows up in the form of metrics that assess the ability to meet customer's needs and business objectives.

A few of the more common financial ratios include :

1. Internal rate of return (IRR) = the rate at which the net present value of an investment equals zero.
2. Return on investment (ROI) = indicates the earning power of a project and is measured by dividing the benefits of a project by the investment.
3. Payback method = number of years to recoup the cost of an initiative based on projected annual net cash flow. 
4. Break-even analysis = determines the volume of business requires to make a profit a  the current prices charged for the products or services.

Most managers are familiar with financial metrics but unfamiliar with information system metrics. The following metrics

CHAPTER 3... Strategic Initiatives for Implementing Competitive Advantage

STRATEGIC INITIATIVES

# Organizations can undertake high-profile strategic initiatives including: 

• Supply Chain Management (SCM)
• Customer Relatiionship Management (CRM)
• Business Process Reengineering (BPR)
• Enterprise Resource Planning (ERP)

SUPPLY CHAIN MANAGEMENT 

• Supply Chain Management (SCM) - involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

4 BASIC COMPONENTS OF SUPPLY CHAIN MANAGEMENT :

* Wal-Mart and Procter & Gamble (P&G) SCM

SUPPLY CHAIN MANAGEMENT

• Effectiveness and efficient SCM system can enable an organization to:

CUSTOMER RELATIONSHIP MANAGEMENT

• CRM - involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability.
• Many organizations, such as Charles Schwab and Kaiser Permanente, have obtained great success through the implementation of CRM systems.
• CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprisewide level.

CRM OVERVIEW

REENGINEERING THE CORPORATION - book written by MICHAEL HAMMER and JAMES CHAMPY that recommends seven principles for BPR.

FINDING OPPORTUNITY USING BPR

• A company can improve the way it travels

CHAPTER 2... Identifying Competitive Advantage

WHAT IS COMPETITIVE ADVANTAGE??

A product or service that an organization's customers place a greater value on than similar offerings from a competitor. Unfortunately, competitive advantage(CA) is temporary because competitors keep duplicate the strategy. Then, the company should start the new competitive advantage(CA).

Michael Porter's Five Model is useful tool to aid organization in challenging decision whether to join a new industry or industry segment.

::PORTER'S FIVE FORCES MODEL::-->> Evaluating Industry Attractiveness

1. Rivalry among existing companies.( the power of competitors)
2. Buyer power (the power of customers to drive down prices)
3. Supplier power (the power of suppliers to drive up prices of materials)
4. Threat of substitute products or services (the power of customers to purchase alternatives)
5. Threat of new entrants (the power of competitors to enter a market)

1. BUYER POWER

• High - when buyers have many choices of whom to buy.
• Low - when choices are few.
• To reduce buyer power (and create CA), an organization must make it more attractive to buy from the company not from the competitors.
• Best practices of IT- based
  * Loyalty program in travel industry
  e.g. rewards on free airline tickets or hotel stays

::THE COMPETITIVE ENVIRONMENT::

Bargaining Power of Customers/ Buyer Power

• Customers can grow large and powerful as a result of their market share.
• Many choices of whom to buy from
• Low when comes to limited items
• E.g. Used loyalty program (jusco card, tesco card, -being a members to get the discount)

2. SUPPLIER POWER

• High- when buyers have few choices of whom to buy from.
• Low- when their choices are many.
  * Best practices of IT to create CA.
  * E.g. B2B marketplace - private exchange allow a single buyer to posts it needs and then open the bidding to any supplier who would care to bid.
  Reverse auction is an auction format in which increasingly lower bids.

3. THREAT OF SUBSTITUTE PRODUCTS & SERVICES

• High - when there are many alternatives to a product or service.
• Low - when there are few alternatives from which to choose.
• Ideally, an organization would like to
  

CHAPTER. 1 .. Business Driven Technology

Information Technology's (IT) Role in Business

* Information technology is everywhere in business.

IT Impact on Business Operations

1. Business functions receiving the greatest benefits from  IT.

- Customer Service                70%

- Finance                                 51 %

- Sales & Marketing               42%

- IT Operations                        39%

- Operations Management    31%

- HR                                         17%

- Security                                 17%

2. Information Technology Project Goals.

- Reduce Costs/ improve productivity             81%

- Improve customer satisfaction/ loyalty          71%

- Create competitive advantage                      66%

- Generate growth                                             54%

- Streamline supply chain                                 37%

- Global expansion                                           16%

3. Common departments in an organization

• Accounting
• Finance
• HR
• Marketing
• Management Information System (MIS)
• Operations Management
• Production Management
• Sales

* Organizations typically operate by functional areas or functional silos.

* Functional areas are interdependant (work together)

• Mkt (marketing)
• Operations 
• Logistics
• HR (human resources)
• Acc (Accounting) 
• Sales

Information Technology BASICS

Information Technology = A field concerned with the use of technology in managing &