MGT-INFORMATION BUSINESS TECHNOLOGY
CHAPTER 1:BUSINESS DRIVEN TECHNOLOGY
1)Information Technology’s impact on business operations in business functions receiving the greatest benefits from information technology for such as:-
>Customer Service(70%)
>Finance(51%)
>Sales and Marketing(42%)
>IT Operations(39%)
>Operations Management(31%)
>HR(17%)
>Security(17%)
2)Information Technology Project Goals for example:-
<Reduce costs or improve productivity(81%)
<Improve customer satisfaction or loyalty(71%)
<Create competitive advantage(66%)
<Generate growth(54%)
<Streamline supply chain(37%)
<Global expansion(16%)
3)Common departments in organization:-
<Accounting(provides quantitative information about the finances and including recording,measuring and describing financial information)
<Finance(deals with the strategic financial issues associated with increasing the value of the business while observe applicable laws and social respondsibilities)
<Operations Management(to manage systems or process convert or transform resources into good and service)
<Human Resources(includes the policies,plans and procedure for the effective management of employees)
<(selling good or service and focuses on increasing customer sales which increases company revenues.)
<Management Information systems(academic discipline covering the application of people,technologies and procedures.
4)Information Technology(IT)
<A field concerned with the use of technology in managing and processing information.
<An important enabler of business success and innovation.
5)Management information systems(MIS)
<A general name for the business function and academic dicpline covering the application of people,technologies and procedures to solve business problems.
<It is business function,similar to Accounting,Finance,Operations and Human Resources.
6)When beginning to learn about information technology it is important to understand:-
#data=raw facts that describe the characteristic of an event
#Information=data converted into a meaning ful and useful context.
#business intelligence=application&technologies that are used to support decision making
#It resources=plan goal of IT department must align with the plans and goals of the organization.
7)IT Culture have 4:-
A)Information Functional Culture
<Employees use information as a means of exercising influence or power over others.
<!For example,a manager in sales refuses to share information with marketing.This cause marketing to need the sales manager’s input each time a new sales strategy is developed.
B)Information Sharing Culture
<Employees across department trust each other to use information(especially about problems and failures) to improve performance
C)Information-Inquiring Culture
<Employees across department search for information to better understand the future and align themselves with current trends and new directors.
D)Information-Discovering Culture
<Employees across department are open to new insights about crisis and radical changes and seek ways to create competitive advantanges.
CHAPTER 2:IDENTIFYING COMPETITIVE ADVANTAGE
1) Competitive advantage(CA)
>A product or service that an organization customers place a greater value on than similar offerings fron a competitor.
>CA is temporary because competitors keep duplicate the strategy.
>The company should start the new CA.
2)Five Forces Model
-Michael Porter’s Five Forces Model is useful tool to aid organization in challenging
decision whether to join a new industry or industry segment:-
a.Buyer power
b.Supplier power
c.Threat of substitute products or service
d.Threats of new entrants
e.Rivalry among existing companies.
A)Buyer Power
<High-when buyers have many choices of whom to buy.
<Low-when their choices are few.
<To reduce buyer power and create competitive advantage,an organization musy make it more attractive to buy from the company not from the competitors.
<Best practices of IT- based(loyalty program in travel industry such as rewards on free airline tickets or hotel stays)
The Competitive Environment
Bargaining Power of Customers/Buyer power:-
>Customers can grow large and powerful as aresult of their market share.
>many choices of 2whom to buy from
>low when comes to limited items.
>E.g:-used loyalty programs(jusco card,tesco card is being a members to get the discount)
B)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 competitive advantage.
E.g:-B2B market place>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 lowerv birds.
C)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.
>An organization would like to be on a market in which there are few substitutes of their product or services.
>Besat practices of IT
>E.g:-Electronic product same function different brands.
The Competitive Environment
Threat of substitutes:-
>To the extent that customers can use different products to fulfil the same need,the threat
>E.g:-electronic product same function different brands.
>Switching cost is cost can make customer reluctant to switch to another product or service.
D)Threat of new entrants
High-when it is easy for new competitors to enter a market.
Low-when there are significant Entry Barriers(EB) to entering a market
EB is product or service feature that customers have come to expect from organizations and must be offered by entering organization to compete and survive.
Best practices of IT
E.g:- new bank must offers online paying bills,acc monitoring to compete.
The Competitive Environment
Threat of New Entrants:-
>Many threats come from companies that do not yet exist or have a presence in a given
Industry or market.
>It is top management to monitor the trends especially in technology,that might give rise to
New competitors.
>E.g:-new bank(online bills,acc monitoring)
E)Rivalry among existence competitors
High-when competition is fierce in a market
Low-when competition is more complacent
Best Practices of IT
Wal-mart and its supplier using IT enabled system for communication and track product at aisles by effective tagging system.
Reduce cost by using effective supply chain.
The Competitive Environment
Rivalry Among Existing Firms:-
>Existing competitors are not much of the threat is typically each firm has found its
“niche”.
“niche”.
>It is changes in management ownership or “the rules of the game” can give rise to serious
Threats to long term survival from existing firms.
>E.g:-the airline industry faces serious threats from airlines operating in bankruptcy,who
Do not pay on the debts while slashing fares against those healthy airlines who do pay on
Debt(MAS & AIR ASIA
The Three Generics Strategies:-
i)Cost leadership
*Becoming a low cost producer in the industry allows the company to lower prices to customer.
*Competitors with higher costs cannot afford to compete with the low cost leader on price.
ii)Diffrentiation
*Create CA by distinguishing their products on one or more features important to their customers
*Unique features or benefits may justify price differences and or stimulate demand.
*E.g:-i-care by Proton.
iii)Focused Strategy
*Target to a niche market
*Concentrates on their cost leadership or differentiation
>Supply Chain-a chain or series of process that adds value to product & service for customer.
>Add value to its oroducts and service that support a profit margin for the firm.
CHAPTER 3:STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES
1)Organization can undertake high-profile strategic initiatives including:
Supply chain management(SCM)
Customer relationship management(CRM)
Business process reengineering(BPR)
Enterprise resource planning(ERP)
i)Supply Chain Management(SCM)
-involves the management of information flows between and among stages in a supply chain
to
to
Maximize total supply chain effectiveness and profitability.
-4 basic components of include:-
a)Supply chain strategy>strategy for managing all resources to meet customer
demand.
demand.
b)Supply chain partner>partners throughtout the supply chain that deliver finished
products,raw materials and services.
c)Supply chain operation>schedule for production activities
d)Supply chain logistics>product delivery process
-Effective and efficient SCM systems can enable an organization to:-
#Decrease the power of its buyers
#Increases its own supplier power
#Increases switching costs to reduce the threat of substitute products or service
#Create entry barriers thereby reducing the threat of new entrants
#Increase efficiencies while seeking a CA through cost leadership
-Effective and efficient SCM systems effect on Porter’s Five Forces
Derceases=buyer power
= Threat of substitute products or service
=threat of new entrants
Increases =Supplier Power
ii)Customer relationship management(CRM)
Involves managing all aspects of a customers relationship with an organization to increases customer loyalty and retention and an organization profitability
Many organization such as Charles Schwab and Kaiser Permanente have obtained great success through the implemention of CRM sytems.
IT is just not technology but a strategy process and business goal that an organization must embrance on an enterprisewide level.
CRM can enable an organization to:-
>Indentify types of customers
>Design individual customer marketing campaigns
>Treat each customer as an individual
>Understand customer buying behaviours
iii)Business Process Reengineering
Business process=A standardized set of activities that accomplish a specific task such as processing a customer order
Business process reengineering(BPR)=the analysis and redesign of workflow within and between enterprises
-The purpose of BPR is to make all business process best-in-class
7 principles of business process reengineering
(1)Organize around outcomes not tasks
(2)Identify all the organization process and prioritize them in order of redesign urgency
(3)Integrate information processing work into the work that produces the information
(4) Treat geographically dispersed resources as though they were centralized
(5)Link parallel activities in the workflow instead of just integrating their results
(6)Put the decision point where the work is performed and build control into the process
(7)Capture information once and at the source
Finding opportunity using BPR
-the ways it travel the road by moving from foot to horse and then horse
-BPR look at taking a different path such as airplane which ignore the road complety
-types of change an organization can achieve along with the magnitudes of change and the potential business benefit.
iv)Enterprise Resource Planning
Integrates all departments and functions throughtout an organization into a single IT systems so that employees can make decision by viewing enterprisewide information on all business operations.
Keyword in ERP is “enterprise
ERP systems collect data across an organization and correlates the data generating an enterprisewide view.
