CHAPTER SEVEN

CHAPTER SEVEN

 STORING ORGANIZATIONAL INFORMATION-DATABASE

Rational Database Fundamentals

Database maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouse).

Hierarchical Database Model – information is organized into a tree-like structure that allows repeating information using parent/child relationship such a way that it cannot have too many relationships.

Network Database Model – flexible way of representing objects and their relationships.

Relational Database model – type of database that stores information in the form of logically related two-dimensional tables.

ENTITIES AND ATTRIBUTES

An entity in the relational database model is a person, place, thing, transaction, or event about which information is stored.

A table in relational database model is a collection of similar entities.

Attributes also called column or fields, are characteristics or properties of an entity class.

KEYS AND RELATIONSHIPS

A primary key is a field (or group of fields) that uniquely identifies a given entity in a table.

The primary keys are important because they provide a way of distinguish each entity in a table.

A foreign key in the relational database model is a primary key of one table that appears as an attribute in another table and acts to provide a logical relationships between the to tables.

Relational Database Advantages

From a business perspective, database information offers many advantages, including :

INCREASE FLEXIBILITY

Handle changes quickly and easily.

Provide users with different views.

Have only one physical view.

The physical view of information deals with the physical storage of information on a storage device such as hard disk.

Have multiple logical views.

The logical view of information focuses on how user logically access information to meet their particular business needs.

INCREASE SCALABILITY AND PERFORMANCE

Only a database could “scale” to handle the massive volumes of information and the large number of users required for the successful.

Scalability refers to how well a system can adapt to increased demands.

Performance measures how quickly the system performs a certain process or transaction.

REDUCE INFORMATION REDUNDANCY

Redundancy is the duplication of information, or storing the same information in multiple places.

The primary problem with redundant information is that it is often inconsistent, which makes it difficult to determine which values are the most current or most accurate.

INCREASE INFORMATION INTEGRITY (QUALITY)

Information integrity – measures the quality of information.

Integrity constraint – rules that help ensure the quality of information
            - Relational integrity constraint
            - Business-critical integrity constraint

INCREASED INFORMATION SECURITY

Information is an organizational asset and must be protected

Databases offer several security features including:

Password – provides authentication of the user

Access level – determines who has access to the different types of information

Access control – determines types of user access, such as read-only access

Database Management System

A database management system (DBMS) is software through which users and application programs interact with a database.

The user sends requests to the DBMS and the DBMS performs the actual manipulation of the information in the database.

Two ways that users can interact with DBMS : (1) Directly and (2)  indirectly.

Interacting Directly and Indirectly with a Database through a DBMS

DATA-DRIVEN WEBSITES

The pages on website must change according to what a site visitor is interested to browsing.

A data-driven website is an interactive website kept constantly updated and relevant to the needs of customers through the use of a database.

Wikipedia - Data-Driven Website

Data-Driven Website Advantages

Integrating Information among Multiple Databases

Integration – allows separate systems to communicate directly with each other.

Forward integration – takes information entered into a given system and sends it automatically to all downstream systems and processes.

Backward integration – takes information entered into a given system and sends it automatically to all upstream systems and processes.

 A Forward and Backward Customer Information Integration Example

Building a central repository specifically for integrated information.

User can create, update, and delete customer information only in the central customer information database.

Integrating Customer Information among Database

CHAPTER SIX

CHAPTER SIX

 VALUING ORGANIZATIONAL INFORMATION

ORGANIZATIONAL INFORMATION

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

Levels, Formats, and Granularities of Organizational Information

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. Analytical information encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks.  

THE VALUE OF TIMELY INFORMATION

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

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

Transactional versus Analytical Information

THE VALUE OF QUALITY INFORMATION

Five Common Characteristics of High-Quality Information

The four primary sources of low quality information are:

-          Online customers intentionally enter inaccurate information to protect their privacy.

-          Different systems have different information entry standards and formats.

-          Call center operators enter abbreviated or erroneous information by accident or to save time.

-          Third-party and external information contains inconsistencies, inaccuracies, and errors.

Understanding the cost of poor information

-          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 nonexistent customers and no deliverable mail.

-          Difficulty tracking revenue because of inaccurate invoices.

-          Inability to built strong relationship with customers-which increases buyer power.

CHAPTER FIVE - ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES

CHAPTER FIVE - ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES

Organizational Structures

Employees across the organization must work closely together to develop strategic initiatives that create competitive advantages.

IT Roles and Responsibilities

Most organizations maintain position such as chief executive officer(CEO), chief financial officer(CFO), and chief operation officer(COO) at the strategic level. Recently, there are more IT- related strategic position such as chief information officer(CIO), chief technology officer(CTO), chief security officer(CSO), chief privacy officer(CPO) and chief knowledge officer(CKO).

The chief information officer(CIO) is responsible for :

-          Overseeing all users of information technology.

-          Ensuring the strategic alignment of IT with business goals and objectives.

 

What Concern CIOs the Most?

The chief technology officer(CTO) is responsible for :

-          Ensuring the throughput, speed, accuracy, availability and reliability of an organization’s information technology.

-          Ensuring the efficiency of IT system throughout the organization.

The chief security officer(CSO) responsible for :

-          Ensuring the security of IT system.

-          Developing strategies.

-          IT safeguards against attacks from hackers and viruses.

The chief privacy officer(CPO) responsible for :      

-          Ensuring the ethical and legal use of information within organizations.

-          Enable them to understand the often complex legal issues.

The chief knowledge officer(CKO) responsible for :

-          Collecting, maintaining, and distributing the organization’s knowledge.

-          Make it easy for people to reuse the knowledge.

 

Skills Pivotal for Success in Executive  IT Roles

The Gap between Business Personnel and IT Personnel

Business personnel possess expertise in functional areas such as marketing, accounting, and sales.

IT personnel have the technological expertise.

This typically causes a communications gap between the business personnel and IT personnel.

IMPROVING COMMUNICATION

Business personnel must seek to increase their understanding of IT.

IT personnel must seek to increase their understanding of the business.

It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel.

Organization Fundamentals – Ethics and Security

Ethics – the principles and standards that guide our behavior toward other people.

Privacy is a major ethical issue. Privacy is the right to be left alone when you want to be, to have control over your own personal possessions, and not to be observed without your consent.

Issues Affected by Technology Advances 

Primary Reasons Privacy Issues Reduce Trust or Business 

Security – How Much Will Downtime Cost Your Business?

PROTECTING INTELLECTUAL ASSETS

Organizational information is intellectual capital and it must be protected.

Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization.

Ebusiness automatically creates tremendous information security risks for organizations.

Sources of Unplanned Downtime

The Cost of Downtime

CHAPTER FOUR - MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

CHAPTER FOUR - MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

Measuring Information Technology’s  Success

It has become an important part of organizations’ strategy, competitive advantage, and profitability.

Key Performance Indicators (KPIs) are the measure that are tied to business drivers. Metrics are the detailed measures that feed those KPIs.

Efficiency And Effectiveness

Efficiency IT metrics measure the performance of the IT system itself including throughput, speed, and availability.

Effectiveness IT metrics measure the impact IT has on business process and activities including customer satisfaction, conversation rates, and self-through increase.

Benchmarking – Baseline Metrics

Benchmarking 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.

 

 Comparing efficiency IT and effectiveness IT metrics of Egovernment initiatives.

The Interrelationships Of Efficiency And Effectiveness IT Metrics

Efficiency IT metrics focus on the technology itself. It’s important to monitor and do not always guaranteed effectiveness.

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

Need to consider the issue of security while determining efficiency and effectiveness IT metrics.

When an organization offers customers the ability to purchase products over the internet it must implement the appropriate security.

Metrics For Strategic Initiatives

A metric is nothing more than a standard measure to assess performance in particular area. A focus on customer and performance standard shows up in the form of metrics that assess the ability to meet customer’s needs and business objectives.

Website Metrics

-          A company can use web traffic analysis to determine the revenue generated, the number of new customers acquired, any reductions in customer service call and so on.

A few metrics manager should be familiar with to help measure website access along with organization’s strategic initiatives are :

-          Abandoned Registrations

-          Abandoned Shopping Carts

-          Click-through

-          Conversation Rate

-          Cost-Per-Thousand(CPM)

-          Page exposure

-          Total Hits

-          Unique Visitors   

Supply Chain Management (CRM) Metrics

-          Help an organization understand how it’s operating over a given period.

Common supply chain management metrics:

1.       Back order

2.       Customer order promised cycle time

3.       Customer order actual cycle time

4.       Inventory replenishment cycle time

5.       Inventory turns

Customer Relationship Management (CRM) Metrics

-          Best practice is no more than seven (plus or minus two) metrics out of hundreds possible should be used at any given management level.

Business Process Reengineering (BPR) and Enterprise Resource Planning (ERP) Metrics

-          BPR and ERP are large, organization wide initiatiaves.

-          It is extremely difficult to measure

-          One of the best method is scorecard    

Balance Scorecard

-          A management system, in addition to a measurement system that enables organizations to clarify their vision strategy an translate them into an action. 

CHAPTER 3
STRATEGIC INITIATIVES FOR IMPLEMENTINGCOMPETITIVE ADVANTAGES

SUPPLY CHAIN MANAGEMENT (SCM)

Involve the management of information flows between and among stages in a supply chain to maximize total supply chain  effectiveness and profitability.

Components Of Supply Chain Management
Supply chain strategy : The strategy for managing all the resources required to meet customer demand for all products and services.
Supply chain partners : The partners chosen to deliver finished products,raw materials, and services including pricing, delivery, and payment processes along with partner relationship monitoring metrics.
Supply chain operation : The schedule for production activities including testing, packaging, and preparation for delivery. Measurements for this component include productivity and quality.
Supply chain logistics : The product delivery processes and elements including orders, warehouses, carriers, defective product returns and invoicing.

Effective and efficient supply chain management systems can enable an organization to :

1. Decrease the power of its buyers.
2. Increase its own supplier power.
3. Increase switching costs to reduce the threat of substitute products or services.
4. Create entry barriers thereby reducing the threat of new entrants.
5. Increase efficiencies while seeking a competitive advantage through cost leadership.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Involves managing all aspects of a customer's relationship with an organization to increase customer royalty and retention and an organization's profitability.
Allows an organization to gain insights into customers' shopping and buying behaviors in order to develop and implement enterprise-wide strategies.

Typical CRM System :
Customers contact an organization through various means including call centers, web access, email, faxes and direct sales. A single customer may access an organization multiple times through many different channels.
It tracks every communication between the customer and the organization and provides access to CRM information within different systems from accounting to order fulfillment.

CRM Strategy :
There are many technical components of CRM, which is actually a process and business goal simply enhanced by technology.
CRM system can help an organization identify customers and design specific marketing campaigns tailored to each customer, thereby increasing customer spending.
Also allows an organization to treat customers as individuals, gaining important insights into their buying preferences and behaviors and leading to increased sales, greater profitability, and higher rates of customer royalty.

BUSINESS PROCESS REENGINREERING (BPR)

Business Process
A standardized set of activities that accomplish a specific task, such as processing a customer's 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 the best-in-class.

Seven Principles Of BPR

1. Organize around outcomes, not tasks.
2. Identify all the organization's processes and prioritize them in order of redesign urgency.
3. Integrate information processing work into the real 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.

ENTERPRISE RESOURCE PLANNING (ERP)

Integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make desicions by viewing enterprise wide information on all business operations.

How can ERP improve an organization business?
Many organizations fail to maintain consistency across business operations.
If a single department decides to implement a new system without considering the other departments, inconsistencies can occur throughout the company.
Not all systems are built to talk to each other and share data, and if sales suddenly implements a new system that marketing and accounting cannot use or is inconsistent in the way it handles information, the company's operations becomes siloed.
The issue ERP intends to solve is that knowledge within a majority of organization currently in silos that are maintained by a select few, without the ability to be shared across the organization, causing inconsistency across business operations.

PAST YEAR QUESTION

MARCH2012

QUESTION 2
Porter's Five Forces Model is a one of common tools used in industry to analyze and develop competitive advantages. List and describe each of the five (5) forces in Porter's Five
Forces Model.
(20 marks)

ANSWER

• BUYER POWER.

Buyer power is a power of the customers or buyers that the price they are willing to pay to get an item. Buyer power also is called purchasing power.
When the buyer power is higher than supplier power, it means, the suppliers have to compete with themselves because in this situation the buyers are force the suppliers drives prices down.
But, the suppliers also can reduce buyer power by switching costs.

•  SUPPLIER POWER.

Supplier power is the opposite with the buyer power.
It means, a power of the suppliers is higher than the buyers. What ever it is, the buyers should or have to pay the price to get an item.
The suppliers give a charges about the product or services that they are going to supplies including materials, labor and also services.
A supply chain consist of all parties involved, direct or indirectly, in the procurement of a product or raw materials.
When the supplier power is high, they can influence the industry by charging higher price, limiting quality or services and shifting costs to industry participants.
Frequently, the suppliers will charges the product or services in high cost when it reach at the end-product.
Because it including the charges to produce the product or services.

•  THREAT Of SUBSTITUTE PRODUCTS OR SERVICES

The threat of substitute products or services is high when they are many alternatives to a product or services.
In this situation, the buyers have many products or services to choose.
If the price one product is quite expensive, the buyer can choose another product which is have a similar characteristic with that product.

•  THREAT OF NEW ENTRANTS

The threat of new entrants is high when it easier for new competitors to enter the market. When new competitors is easy to entry the market, the organization in the market will feels threat by new competitors.

•  RIVALRY AMONG EXISTING COMPETITORS

Rivalry Among Existing Competitors is high when competition is fierce in a market. It is because all the competitors try to fight in a market to seek good attention from the buyers.

OCTOBER 2012

 QUESTION 1 

a) Explain four (4) organizational information cultures.
(10 marks)

ANSWER

• Information-Functional Culture : 

Employees use information as a means of exercising influence or power over others.

• Information-Sharing Culture : 

Employees across departments trust each other to use information (especially about problems and failures) to improve performance.

• Information-Inquiring Culture : 

Employees across departments search for information to better understand the future and align themselves with current trends and new directions.

• Information-Discovery Culture : 

Employees across departments are open to new insights about crises and radical changes and seek ways to create competitive advantages. 

 

 

QUESTION 2
a) Describe three (3) Porter Generic Strategies. Support your answer with example.
(12 marks)

 

•  BROAD COST LEADERSHIP

- To maintain low cost of production.
- The price be low.
- When the cost of production is low, so get offer the lower price to customer.
- Example : TESCO (shelf book)

•  DIFFERENTATION

- The products or services have particular difference.
- Certain or only few people purchase the product instead thinking of the price.
- Example : The customer bought because of the brands of the product. They does not matter or bother if the price is high.
- i-care PROTON

• FOCUSED STRATEGY

- There are low and high cost.
- If the suppliers produce particular product with low cost, they still champion on the market.
- Some of the buyer still search of the product with low cost of production.

- Example : BATA(low cost), RAFFELESIA jewellery(high cost)