CHAPTER 6 : VALUING ORGANIZATIONAL INFORMATION

CHAPTER 6 : VALUING ORGANIZATIONAL INFORMATION

ORGANIZATIONAL INFORMATION

• When addressing a significant business issue, employees must be able to obtain and analysis all the relevant information so the y can make the best decision possible.
• Information granularity refers to the extent of detail within the information.
• Successfully collecting, compiling, sorting and finally analysing information from multiple levels in varied formats, exhibiting different granularity can provide tremendous insight into how an organization is performing.

THE VALUE TRANSACTIONAL & ANALYTICAL INFORMATION

• Transactional information : Encompasses all of the information contain 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 tasks. 

THE VALUE OF TIMELY INFORMATION

• Real-time information : Immediate or up-to-date information.
• Real-time systems : Real-time information in response to query requests.

UNDERSTANDING THE COST OF POOR INFORMATION

• Using the wrong information can lead to making the wrong decision.
• It also cost time and even reputations.
• Inability to accurately track customers, which directly affects strategic inititatives such as CRM and SCM.
• Difficulty identifying the organization's most valuable customers.
• Inability to build strong relationship with customers which increases buyer power.

PRIMARY SOURCES OF LOW QUALITY INFORMATION

• 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, inaccurate and errors.

CHAPTER 5 : ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES.

CHAPTER 5 : ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES.

ORGANIZATIONAL STRUCTURE 

An organizational structure defines how activities such as task allocation, coordination and supervision are directed toward the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.

IT ROLES & RESPONSIBILITIES

• Chief Information Officer (CIO)
• Chief Technology Officer (CTO)
• Chief Security Officer (CSO)
• Chief Privacy Officer (CPO)
• Chief Knowledge Office (CKO)

CHIEF INFORMATION OFFICER (CIO) 

- Oversees all uses of IT and ensure the strategic alignment of IT with business goals and objectives.

CHIEF TECHNOLOGY OFFICER (CTO) 

- Ensuring the throughput, speed, accuracy, availability and reliabiality of IT.

CHIEF SECURITY OFFICER (CSO)

- Ensuring the security of IT systems.

CHIEF PRIVACY OFFICER (CPO)

- Ensuring the ethical and legal use of information.

CHIEF KNOWLEDGE OFFICE (CKO)

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

THE GAP BETWEEN BUSINESS PERSONNEL & IT PERSONNEL

Business personnel - Possesses expertise in functional areas.

IT personnel - Technological expertise.

IMPROVING COMMUNICATIONS.

ORGANIZATIONAL FUNDAMENTALS - ETHICS & SECURITY

- Ethics and security are two fundamental building blocks that organizations must base their business.

- Enron & Martha Stewart along with 9/11 have shed new light on the meaning of ethics and security.

ETHICS

- The principles and standards that guide behaviour toward other people.

SECURITY

- Organizational information is intellectual capital and it must be protected

CHAPTER 4 : MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

MEASURING INFORMATION TECHNOLOGY'S SUCCESS

Key performance indicator - Measures that are tied to business drivers.

EFFICIENCY & EFFECTIVENESS

Efficiency IT Metric - Measures the performance of the IT system including throughput, speed and availability.

Effectiveness IT Metric - Measures the impact IT has on business processes and activities including customer satisfaction, conversion rates and sell through increase.

BENCHMARKING

A process of continuously measuring system results, comparing those results to optimal sysrem performance and identifying steps and procedures to improve system performance.

EFFICIENCY IT METRICS

• Throughput - The amount of information that can travel through a system
• Transaction speed - The amount of time a system takes to perform a transaction
• System availability - The number of hours a system is available for users
• Information accuracy - System generates the correct results when executing same transaction
• Web traffic - Includes a host of benchmark 
• Response time - The time it takes to respond to user interactions 

EFFECTIVENESS IT METRICS

• Usability - The ease with which people perform transactions and find information
• Customer satisfaction - Measured by such benchmarks as satisfaction surveys
• Conversion rates - The number of customers an organization touches for the first time
• Financial - Return on investment, cost benefit analysis and break-even analysis

THE INTERRELATIONSHIPS OF EFFICIENCY & EFFECTIVENESS IT METRICS

METRICS FOR STRATEGIC INITIATIVE

Web site metrics 

• Abandoned registrations - Number of visitors who start the process of completing a registratio and then abandon the activity.
• Abandoned shopping carts - Number of visitors who create  a shopping cart and start shopping and then abandon the activity before paying the merchandise.
• Click-through - Count the number of people who visit a site, click on an ad, are taken to the site of the advertiser.
• Conversion rate - Percentage of potential customers who visit a site and buy something.
• Cost-per-thousand - Sales dollars generated per dollar of advertising.
• Page exposures - Average number of page exposures to an individual visitor.
• Total hits - Number of visits to a web site, many of which may be by the same visitor.
• Unique visitors - Number of unique visitors to a site in a given time.

SUPPLY CHAIN MANAGEMENT METRICS

• Back order - An unfilled customer order. A back order is demand against an item. 
• Customer order promised cycle time - The anticipated or agreed upon cycle time of a purchase order.
• Customer order actual cycle time - The average time it takes to fill a customer's purchase order.
• Inventory replenishment cycle time - Measure of the manufacturing cycle time plus the time included to deploy the product to the appropriate distribution center.
• Inventory turns (inventory turnover) - The number of times that a company's inventory cycles or turn over per year.

CUSTOMER RELATIONSHIP MANAGEMENT METRICS

• Sales metrics
• Service metrics
• Marketing metrics

CHAPTER 8 ACCESSING ORGANIZATIONAL INFORMATION - DATA WAREHOUSE

CHAPTER 8 ACCESSING ORGANIZATIONAL INFORMATION - DATA WAREHOUSE

1. HISTORY OF DATA WAREHOUSE

• In the 1990’s executives became less concerned with the day-to-day business operations and more concerned with overall business functions
•  The data warehouse provided the ability to support decision making without disrupting the day-to-day operations, because;

1.  Operational information is mainly current – does not include the history for better decision making.
2.  Issues of quality information.
3. Without information history, it is difficult to tell how and why things change over time.

2. DATA WAREHOUSE FUNDAMENTALS

•  A Data Warehouse is a logical collection of information-gathered from many different operational database - that supports business analysis activities and decision-making tasks.
• The primary purpose of a data warehouse is to aggregate information throughout an organization into a single repository in such a way that employees can make decisions and undertake business analysis activities.
• A Data Mart contains a subsets of data warehouse information.
  
• The Data Warehouse then send subsets of the information to data mart.
  
• Extraction, Transformation, and Loading (ETL) - process that extracts information from internal and external database, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.
  
  
  
  
  3. MULTIDIMENSIONAL ANALYSIS AND DATA MINING.

  • Database contains information in a series of two-dimensional tables.
    In a data warehouse and data mart, information is multidimensional, it contains layers of columns and rows.

  >  Dimension – A particular attribute of information.

  • A cube is the common term for the representation of multidimensional information.

  
  
  • Data Mining is the process of analyzing data to extract information not to offered by the raw data alone. It is known as 'knowledge discovery.
  • To perform data mining user needs data mining tools.

  1. Data Mining Tools use a variety of techniques to find patterns and relationships in large volumes in information and infer rules from them that predict future behaviour and guide decision making. 

  
  

  
  

  4. INFORMATION CLEANSING OR SCRUBBING.

  •  Information cleansing or scrubbing is a process that weeds out and fixes or discards inconsistent, incorrect or incomplete information.

  
  
  
  
  5. BUSINESS INTELLIGENCE
  

  • Business Intelligence refers to application and technologies that are use to gather, provide access to, and analyze data and information to support decision-making efforts. 
  • Enabling Business Intelligence

  1. Technology.
  2. People.
  3. Culture.

CHAPTER 3 : STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES.

Supply chain management.

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

Importance of supply chain management : 

1. Decrease the power of its buyer. 

2. Increase its own supplier power.

3. Increase switching cost.

4. Boost customer service.

5. Create entry barrier.

Customer Relationship Management (CRM)

Definition: Involve managing all aspects of a customer's relationship with an organization to increase customer's loyalty and retention an organization's profitability.

Importance of Customer Relationship Management

• Identify types of customers.

• Understand the needs of customer.

• Treat each customer as an individual.

BUSINESS PROCESS REENGINEERING

Definition : The analysis and redesign of workflow within an between enterprises.

Principles of Business Process Reengineering

Finding Opportunity Using BPR

BPR risks

• BPR requires 3rd order change.
• Very expensive to implement.
• BPR sees that operational processes are not glamorous or highly valued.

ENTERPRISE RESOURCE PLANNING (ERP)

Definition : Intergrates all department and functions throughout an organization into a single IT system so that employess can make decisions by viewing enterprisewide information on all business operations.

Importance of Enterprise Resource Planning

• ERP supports upper level management by providing information for decision making.
• ERP creates a more agile company that adapts better to change. ERP makes a company more flexible and less rigidly structured so organization components operate more cohesively, enhancing the business—internally and externally.
• ERP can improve data security. A common control system, such as the kind offered by ERP systems, allows organizations the ability to more easily ensure key company data is not compromised.
• ERP provides increased opportunities for collaboration. Data takes many forms in the modern enterprise. Documents, files, forms, audio and video, emails. Often, each data medium has its own mechanism for allowing collaboration. ERP provides a collaborative platform that lets employees spend more time collaborating on content rather than mastering the learning curve of communicating in various formats across distributed systems.

 1. Threat of Substitute products and 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 be on a market in which there are few substitutes of their product or services.       
  - Best practices of IT.        
 - Example, Electronic product – same functions different brands.

The Competitive Environment
Threat of Substitutes

• To the extent that customers can use different products to fulfill the same need, the threat of substitutes exists

• Example, electrical product – same function different brands

• Switching cost – costs can make customer reluctant to switch to another product or service

  2.Threat of new entrants.        
·High – when it is easy for new competitors to enter a market.        ·Low – when there are significant entry barriers to entering a market.       
 ·Entry barriers is a product or service feature that customers have come to except from organizations and must be offered by entering organization to complete and survive.       
 ·Best practices of IT.        
-Example, 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.

• The threat of new entrants forces top management to monitor the trends, especially in technology, that might give rise to new competitors.

• Example, new bank (online paying bills, acc. monitoring)

       3.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 suppliers 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: typically each firm has found its “niche”.

•  However, changes in management, ownership, or “the rules of the game” can give rise to serious threats to long term survival from existing firms

•  Example, the airline industry faces serious threats from airlines operating in bankruptcy, who do not the debts while slashing fares against those healthy airlines who do pay on debt. (MAS & AIR ASIA)

The Value Chains – Targeting Business Processes

• Supply Chain – a chain or series of processes that adds value to product and service for customer
•  Add value to its products and services that support a profit margin for the firm