MGT 300 - Chapter 6

VALUING ORGANIZATIONAL INFORMATION

Organizational Information

• Information is everywhere in an organization
• Employees must be able to obtain and analyze the many different levels, formats, granularities of organizational information to make decisions
• Successfully collecting, compiling, sorting, and analyzing information can provide tremendous insight into how an organization is performing

The Value of Timely Information

• REAL TIME INFORMATION - immediate, up to date information
• REAL TIME SYSTEM - provides real time information in response to query requests

The Value of Quality Information

❤ Business decisions are only as good as the quality of the information used to make the decisions

❤ You never want to find yourself using technology to help you make a bad decision faster

The Value of Quality Information

  

Characteristics of high - quality information include :

• Accuracy
• Completeness
• Consistency
• Uniqueness
• Timeliness

ACCURACY

☺ are all the values correct? For example, is the name spelled correctly? Is the dollar amount recorded properly?

CONSISTENCY

☺ Is aggregate or summary information in agreement with detailed information? 

• For example, do all total fields equal the true total of the individual fields?

UNIQUENESS

☺ Is each transaction, entity, and event represented only once in the information?

• For example, are there any duplicate customers?

TIMELINESS

☺ Is the information current with respect to the business requirements? For example, is information updated weekly,daily, or hourly?

Understanding the Costs of Poor Information

vThe four primary sources of low quality information include:

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

2.Information from different systems have different 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

vPotential business effects resulting from low quality information include:

§Inability to accurately track customers

§Difficulty identifying valuable customers

§Inability to identify selling opportunities

§Marketing to nonexistent customers

§Difficulty tracking revenue due to inaccurate invoices

§Inability to build strong customer relationships

Understanding the Benefits of Good Information

vHigh quality information can significantly improve the chances of making a good decision

vGood decisions can directly impact an organization's bottom line

                                               THE END CHAPTER 6

MGT 300 - Chapter 5

ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGY INITIATIVES

Organizational Structures
➤ Organizational employees must work closely together to develop strategic initiatives that create competitive advantages
➤ Ethnic and security are two fundamental building blocks that organizational must base their businesses upon

IT Roles and Responsibilities

👌 Information technology is a relatively new functional area, having only been around formally for around 40 years
✊ Recent IT-related strategic positions:

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

✌ Chief Information Officer (CIO) - oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives

✌ Broad CIO functions include :

• Manager - ensuring the delivery of all IT projects, on time and within budget
• Leader - ensuring the strategic vision of IT is in line with the strategic vision of the organization
• Communicator - building and maintaining strong executive relationships

IT Roles and Responsibilities

• Chief Technology Officer (CTO) - responsible for ensuring the throughput, speed, accuracy, availability and reliability of IT
• Chief Security Officer (CSO) - responsible for ensuring the security of IT systems
• Chief Privacy Officer (CPO) - responsible for ensuring the ethical and legal use of information
• Chief knowledge Officer (CKO) - responsible for collecting, maintaining, and distributing the organization's knowledge

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 COMMUNICATIONS

• 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

ORGANIZATIONAL FUNDAMENTALS-Ethnics and Security

➧ Ethics and security are two fundamental building blocks that organizations must base their businesses onto be successful

➧ In recent years, such events as the Enron and Martha Stewart, along with 9/11 have shed new light on the remaining of ethics and security

ETHICS

• ETHICS - the principle and standards that guide our behavior toward other people

Privacy is a major ethical issue

• PRIVACY - the right to be left alone when you want to be, to have control over your own personnel possessions, and not to be observed without your consent

➽ Issues affected by technology advances

• Intellectual property
• Copyright
• Fair use doctrine
• Pirated software
• Counterfeit software

1) INTELLECTUAL PROPERTY - Intangible creative work that is embodied in physical form

2) COPYRIGHT - The legal protection afforded an expression of an idea, such as a song, video game and some types of proprietary documents

3) FAIR USE DOCTRINE - In certain situations, it is legal to use copyrighted material

4) PIRATED SOFTWARE - The unauthorized use, duplication, distribution, or sale of copyrighted software

5) COUNTERFEIT SOFTWARE - Software that is manufactured to look like the real thing and sold as such

SECURITY

❤ Organizational information is intellectual capital it must be protected

❤ Information Security - the protection of information form accidental or intentional misuse by persons inside or outside an organization

❤ E-business automatically creates tremendous information security risks for organizations

     

                                             THE END CHAPTER 5

MGT 300 - Chapter 4

❤Measuring the Success of Strategic Initiatives 

Measuring Information Technology's Success

• key performances indicator - measures that are tied to business drivers
• Metrics are detailed measures that feed KPIs
• Performances metric fall into the nebolous area business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionals

Efficiency and Effectiveness

• Efficiency IT metric - measures the performance of the IT system itself 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 increases

➤ Efficiency IT metric focus on technology and include :

• Throughput
• Transaction speed
• System availability
• Information accuracy
• Web traffic
• Response time

Throughput

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

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

- The extent to which a system generates the correct results when executing the same transaction numerous times

Web traffic

- Includes 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

- The time it takes to respond to user interactions such as a mouse click

Effectiveness IT Metrics

⧪ Effectiveness IT metric focus on an organization's goals, strategies and objectives and include :

• Usability
• Customer satisfaction
• Conversion rates
• Financial

Usability

- The ease with which people perform transaction and/or find information. A popular usability metric on the Internet is degrees of freedom, which measures the number of clicks required to fing desired information
Customer satisfaction
- Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increase in revenue dollars per customer.
Conversion rates
- The number of customer an organization ''touches'' for the first time and persuades to purchase its products or services.
Financial
- Such as return on investment (the earning power of an organization's assets), cost-benefit analysis (the comparison of projected revenues and costs including development, maintenance, fixed, and variable), and break-even analysis (the point at which constant revenues equal ongoing costs)

The Interrelationships of Efficiency and Effectiveness IT Metrics

⧭ security is an issue for any organization offering products or services over the internet

Metric for Strategy Initiatives

❤ Metrics for measuring and managing strategic initiatives include :

• Web site metrics
• Supply chain management (SCM) metrics
• Customer relationship management (CRM) metrics
• Business process reengineering (BPR) metrics
• Enterprise resource planning (ERP) metrics

Web Site Metrics

☺Web site metrics include :

• Abandoned registrations
• Abandoned shopping carts
• Click-through
• Conversion rate
• Cost-per-thousand
• Page exposures
• Total hits
• Unique visitors

Abandoned registrations

❤ Number of visitors who start the process of completing a registration page and then abandon the activity.

Abandoned shopping carts

❤ Number of visitor who create a shopping cart and start shopping and then abandon the activity before paying for the merchandise.

Click-through

❤ Count of the number of people who visit a site, click on an ad, and are taken to the site of the advertiser.

Conversion rate

❤ Percentage of potential customers who visit a site and actually buy something

Cost-Per-Thousand (CPM)

❤ Sales dollars generated per dollar or advertising. This is commonly used to make the case for spending money to appear on a search engine.

Page exposure

❤ 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. This is commonly used by Nielsen/Net ratings to rank the most popular Web sites.

SUPPLY CHAIN MANAGEMENT METRICS

• Back order
• Customer order promised cycle time
• Customer order actual cycle time
• Inventory replenishment cycle time
• Inventory turns (inventory turnover)

Back order

- An unfilled customer order. A back order is demand (immediate or past due) against an item whose current stock level is insufficient to satisfy demand.

Customer order promised cycle time

- The anticipated or agreed upon cycle time of purchase order. It is a gap between the purchase order creation date and the requested delivery date.

Customer order actual cycle time

- The average time it takes to actually fill a customers purchase order. This measure can be viewed on an order or an order line level.

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 turns over per year. Its is one of the most commonly used supply chain metrics.

CUSTOMER RELATIONSHIP MANAGEMENT METRICS

❤ Customer relationship management metrics measure user satisfaction and interaction and include

• sales metrics
• service metrics
• marketing metrics

BPR AND ERP METRICS

                                     THE END CHAPTER 4 

MGT 300 - Chapter 3

Strategic Initiatives for Implementing Competitive Advantages.

STRATEGIC INITIATIVES

• Organizations can undertake high-profile strategic initiatives including :-

- supply chain management (SCM)

- customer relationship management (CRM)

- business process reegineering (BPR)

- enterprise resource planning (ERP)

Supply Chain Management

1. Supply Chain Strategy - strategy for managing all resources to meet customer demand.

2. Supply Chain Partner - partners throughout the supply chain that deliver finished products, raw materials, 

                                                        and services.

3. Supply Chain Operation - schedule for production activities.

4. Supply Chain Logistics - product delivery process.

Supply Chain Management

Effective and efficient SCM systems can enable an organization to :

- Decrease the power of its buyers

- Increase its own supplier power

- Increase switching costs to reduce the threat of substitute products or services

- Increase efficiencies while seeking a competitive advantage through cost leadership

CUSTOMER RELATIONSHIP MANAGEMENT

• CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprise wide level
• CRM can enable an organization to :

           - Identify types of customers

           - Design individual customer marketing campaigns

           - Treat each customer as an individual

           - Understand customer buying behaviors

Business Process Reengineering

• 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 enterprise

Finding Opportunity Using BPR

Enterprise Resources Planning

• Enterprise resource planning (ERP) - integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise wide information on all business operations
• keyword in ERP is ''enterprise''

                                          OPENING CASE STUDY QUESTIONS 

                             Apple - Merging Technology, Business, and Entertainment 

1. Evaluate how apple can gain business intelligence through the implementation of a customers              relationship management system

2. Create an argument against the following statement: ''Apple should not invest any resources to            build a supply chain management system

3. why would a company like Apple invest in BPR?

                                                     CHAPTER THREE CASE

                                             Consolidating Touchpoints for Saab

• Saab consolidating customer view among its three primary channels

- Dealer network

- Customer assistance center

- Lead management center


                                                  THE END CHAPTER 3