UNIT 2 : CHAPTER 6

Chapter 6: Valuing Organizational Information

The Business Benefits of High-Quality Information

New perspectives and opportunities can open when we have the right data that we can turn into information and ultimately business intelligence. Information is everywhere. When addressing a significant issues, employees must be able to obtain and analyze all relevant information so that they can make best decision.

Since information is comes from the different level, formats, and granularities the employees must be able to correlate it when making decisions. Information granularity mean to extent of detail within the information (fine and detailed or coarse and abstract).

Information Type: Transactional and Analytical

TRANSACTIONAL INFORMATION contain all the information within a single business process or unit of work. Its primary is to support daily operational task. Company need to capture and store transactional information to perform operational tasks and repetitive decisions as analyzing daily sales reports and production schedules to determine how much inventory to carry.

Level, formats and granularities of Organizational Information

ANALYTICAL INFORMATION encompasses all organizational information and its primary is to support the performing of managerial analysis tasks. This useful when making important decisions such as organization should build new manufacturing plant or to hire additional sales personnel.

Four Primary Traits

INFORMATION TIMELINESS

Timeliness is aspect of information depends on the situation. Some information can be relevant even that is a few days or weeks old but certain can be almost worthless. For 911 response centres, stock traders, and banks require up-to-second information but company as insurance and construction companies require only daily or even weekly information.

Real-Time Information mean up-to-date information or quickly. Its system provide real-time information in response to requests. Mostly company use this system to uncover key corporate transactional information.

INFORMATION QUALITY

Information inconsistency happen when same data element has different values while Information integrity issues happen when a system produces incorrect, inconsistent, or duplicate data. This can causes manager consider the system reports invalid and will make decision based on other source. 

Low-quality information including:

• Completeness                                  -    Customer’s first name missing.
• Another issues with completeness  -    Street address contains only a number 
• Consistency                                     -    Duplication of in the spelling of the last name.
• Accuracy                                         -    Inaccurate information because same number phone.

Four primary reason for low-quality information are:

• Online customers intentionally enter inaccurate information to protect their privacy.
• Different systems have different information entry standard and formats.
• Data-entry personnel enter abbreviated information to save time or erroneous information by accident.
• Third-party and external information contains inconsistencies, inaccuracies, and errors.

Understanding the Cost of Using Low-Quality Information

      Consequences that occur due to using low-quality information to make decision are:

• Inability to accurately track customers
• Difficulty identifying the organization’s most valuable customers.
•  Lost revenue opportunities from marketing to non-existent customer.
•  Difficulty tracking revenue because of inaccurate invoices.
• Inability to build strong relationship with customers.

                             Understanding the Benefits of Using High-Quality Information

      Improve the chances of making a good decision and directly increase an organization’s bottom line. It not automatically guarantee that every decision made going to be a good one, because people ultimately make decision and no one is perfect. But, information ensure that basic of the decision is accurate.

UNIT 1 : CHAPTER 5

Chapter 5:  Organiational Structure That Support Strategic Initiatives

MIS Department Roles and Responsibilities

1. Chief Information Officer (CIO)

Responsible for overseeing all uses of MIS and ensuring MIS strategically aligns with business goals. CIO always reports directly to the CEO (Chief Executive Officer).

Broad function include:

i.                    Manager

Ensure delivery of all IT project on time and within budget of the company.

ii.                  Leader

Ensure strategic vision of IT in line with strategic vision of the company.

iii.                Communicator

Advocate and communicate the IT strategy by building and maintaining strong relationship.

 2.  Chief Technology Officer (CTO)

Responsible for ensuring the speed, accuracy, availability, and reliability of MIS. CTOs have direct responsibility for ensuring the efficiency of IT systems through company. CTOs process all aspects of IT, including hardware, software, and telecommunications.

3. Chief Security Officer (CSO)

Responsible for ensuring security of business systems and developing strategies plus safeguard against hacker and viruses. CSO possess detailed knowledge of network and telecommunication because hacker found way into IT system through it.

4.Chief Privacy Officer (CPO)

Responsible for ensuring the ethical and legal use of information in the company. CPOs the newest senior executive position in IT.

5. Chief Knowledge Officer (CKO)

Responsible for collecting, maintain, and distributing company knowledge. The systems create repositories of company documents, methodologies, tools, and practices, and establish methods for filtering information. CKOs contribute directly to company’s bottom line by reducing the learning curve for new employees and employees taking on new roles.

 Skill Pivotal for Success in Executive IT Roles

The Gap between Business Personnel and IT Personnel

Business Personnel possess expertise in functional areas for example marketing, accounting and so forth but IT Personnel have technological expertise. For Business Personnel, they have their own vocabularies based on their experience and expertise while IT Personnel have own vocabularies consisting acronyms and technical terms. To improve, Business Personnel must seek to develop their understanding of IT and IT Personnel must understand the business if the organizational is going to determine which technologies can benefit the business. CIO must ensure effective communications between Business and IT Personnel.

 

Organizational Fundamentals – Ethics and Security

When behaviour of few individuals can destroy billion-dollar organizational because of a lapse in ethics or security, the value of highly ethical and highly secure organizational should be evident. 

ETHICS means principle and standards that guide our behaviour toward other people. 

PRIVACY means right to be left alone when you want to be, to have control over your own personal possessions, and not to be observed without our consent. The burden comes from the knowledge that each time employees make a decision regarding issues of privacy, the outcome could sink the company someday.

Issued Affected by Technology Advanced

Primary Reason Privacy Issues Reduce Trust for Business

Source of Unplanned Downtime.

 The Cost of Downtime.

Protecting Intellectual Assets

Information security means broad term encompassing the protection of information from accidental or intentional mis-use by the third parties. E-business automatically creates tremendous information security risk for a company.

UNIT 1 : CHAPTER 4

Chapter 4: Measuring the Success of Strategic Initiatives

PROJECT means temporary activity a company undertakes to create a unique product, service or result. METRICS are measurements that evaluate result to determine whether a project is meeting its goals. Two core metric is:

a.   Critical Success Factors (CFSs)
    Crucial steps companies perform to achieve their goals and objectives and implement their       

    strategies.

b.  Key Performance Indicators (KPIs)

    Quantifiable metrics company uses to evaluate progress toward critical success factor and it is far more specific than CFSs.

Efficiency and Effectiveness

Efficiency IT metric is measures the performance of the IT system itself including throughput, speed, and availability while Effectiveness IT metric is measures the impact IT has on business processes and activities including customer satisfaction.

Benchmarking-baselining metrics

Benchmarks means baseline values the system seeks to attain while benchmarking means a process of continuously measuring system results, comparing those result to optimal system performance, and identifying steps and procedures to improve system performance.

Efficiency IT metrics

Throughput                  -   

The amount of information that can travel through a system at any point.

Transaction speed        -   The amount of time a system takes too perform a transaction.

System availability      -   The number of hours a system is available for users.

Information accuracy   -   Extent to which system generates the correct results when executing the                                                 same transaction numerous times.

 Web traffic                   -   A host of benchmarks such as the number of page views, the number of                                                 unique visitors, and the average time spent viewing a web page.

 Response time             -   Time taken to respond to user interactions such as a mouse click.

Effectiveness IT metrics

Usability                           -        People perform transaction to find information which measures the                                                        number of clicks required to find desired information.

Customer satisfaction       -        Using survey to get customer satisfaction, percentage of existing                                                            customers retained, and increases in revenue dollars per customer.

Conversion rates               -        Popular metric for evaluating the effectiveness of banner, pop-up and                                                    pop-under ads on the internet.

Financial                           -        Return on investment, cost-projected revenues and costs including                                                        development, maintenance, fixed and break-even analysis.

Interrelationships of efficiency and effectiveness IT metrics

Security was an issues for any company offering products or service on internet. Its implement internet security, since it slows down processing.

Metrics for strategic initiatives

·         1. Web site metrics

ü    Abandoned registrations

ü      Abandoned shopping cards

ü      Click-through

ü      Conversion rate

ü      Cost-per-thousand

ü       Page exposures

ü      Total hits

ü       Unique visitors

·      2.    SCM metrics

ü      Back order

ü      Customer order promised cycle time

ü  Customer order actual cycle time

ü       Inventory replenishment cycle time

ü       Inventory turns

·       3.   CRM metrics

ü  Sales metrics

ü  Service metrics

ü  Marketing metrics

·      4.   BPR metrics

·     5.   ERP metrics

BPR and ERP metrics

The balance scorecard enables organizations o measure and manage strategic initiatives. By using the same metrics, will measures HR organization to see the success of organizations. Four points of measures activities:

•   Learning and goal perspective
•   Business process perspective
•  Customer perspective
• Financial perspective

UNIT 1 : CHAPTER 3

Chapter 3: Strategic Initiatives for Implementing Competitive                           Advantages

Customer-facing processes a.k.a. called front-offline processes, result in a product or service received by an company’s external customer. It including fulfilling orders, communicating with customers, and sending out bills and marketing information.

Business-facing processes a.k.a. called back-office processes which is invisible to the external customer but essential to the effective management of the business. They include goal setting, day-to-day planning, giving performance feedback and rewards, and allocating resources.

Auto Insurance Claims Processes Reengineering

Strategic initiatives

                                i.            Supply Chain Management (SCM)

                              ii.            Customers Relationship Management (CRM)

                            iii.            Business Process Reengineering (BPR)

                            iv.            Enterprise Resources Planning (ERP)

SUPPLY CHAIN includes all parties involved, directly or indirectly, in obtaining raw materials or a product. Supply Chain Management (SCM) is the management of information flows between and among stages in a supply chain to maximize total supply effectiveness and corporate profitability. It manage and enhance relationships with primary goal of creating a fast, efficient, and low-cost network of business relationships that take product from concept to market. It also create the integrations process and information linkages between all participants in the supply chain.

Basic component:

§  Supply Chain Strategies

Strategies to manage all resources to meet customer demand.

                    

§  Supply Chain Partner

Partner throughout the supply chain that deliver finished products, raw materials, and services.

§  Supply Chain Operation

Schedule for production activities.

§  Supply Chain Logistics

Product delivery process.

Supply Chain for a Product Purchased from Walmart

The Effective SCM Systems :

        i.             Decrease the power of its buyers.
      ii.            Increase its own supplier power.
    iii.            Increase switching cost.
    iv.            Reduce the threat of substitute’s product or services.
      v.            Create entry barriers by reducing threat of new entrants.
    vi.            Seeking a competitive advantage through cost leadership.

  Effective and Efficient Supply Chain Management's Effect on Porter's Five Forces

CUSTOMER RELATIONSHIP MANAGEMENT involve customer’s relationship with an organization to increase customer loyalty and retention. CRM is a strategy, process, and business goal. It allows an company gain insights into customers’ shopping and buying behaviours in order to develop and implement enterprisewide strategies. CRM can enable to:

        i.             Identify types of customers.
      ii.            Design individual customer marketing campaigns.
    iii.            Treat each customer as an individual.
    iv.             Understand customer buying behaviours.

Business Process Reengineering (BPR)

BUSINESS PROCESS is standardized set of activities that accomplish a specific task, for example processing a customer’s order. It transform a set of inputs into a set of outputs – goods or services. By understanding this process, the manager know how to envision the entire company operates. Workflow includes tasks, activities and responsibilities required to execute each step in business process.

BUSINESS PROCESS REENGINEERING (BPR) is analysis and redesign of workflow within and between enterprises. Company must proceed evaluate all business processes in its value chain to avoid the pitfall and protect its competitive advantages.

                                                                Three phase of CRM

7 principle for BPR

Finding Opportunity Using BPR

Pitfalls of BPR is fails to keep up with competitors.

ENTERPRISE RESOURCES PLANNING interates all departments and functions throughout an organization into a single IT system so the employees can make decision by viewing that information on all business operations.  Keyword in ERP is enterprise.

Enterprise Resource Planning System