CHAPTER 6: VALUING ORGANIZATION INFORMATION

Organizational Information

·         When addressing a significant business issue, employees must be able to obtain and analyse all the relevant  information so they 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 and 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 means immediate, up-to-date information.

·         Real-time systems provide real-time information in response to query requests.( eg: google)

The Value of Quality Information

·         Business decisions are only as good the quality of the information used to make them.

·         Information inconsistency occurs when the same data element has different values.

·         Information integrity issues occurs when a system produces incorrect, inconsistent, or duplicate data.

·         Characteristic of high-quality information:

• ·         Low quality information example:

1. Missing information

2.Incomplete information 

3.Inaccurate information

   4.Probable duplicate information

   5. Potential wrong information

Understanding the costs of poor information

·         wrong information can lead to making the wrong decision that can cost time, money, and even reputations.

·         Potential business effects resulting from low quality 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 non-existing customers and non-deliverable mail.

- Difficulty tracking revenue because of inaccurate invoices.

- Inability to build strong relationship with customers.

Understanding the Benefits of Good Information

• ·         High quality information can significantly improve by the chances of making a good decision.
• ·         Good decisions can impact an organization’s bottom line.
• ·         Information governance – information is a vital resource and users need to be educated on what they can and cannot do with it.
• ·         Data governance refers to the overall management of the availability, usability, integrity, and security of company data.

CHAPTER 5: ORGANIZATIONAL STUCTURES THAT SUPPORT STRATEGIC INITIATIVE

  ROLES AND RESPOSIBLELITY

·         Information technology is a relatively new functional area, having only around formally for around 40 years.

·         Recent IT- related strategic positions:

1.      Chief Information Officer (CIO)

-          Oversees all uses IT and ensures the strategic alignment of IT with business goals and objective.

-          Broad CIO function:

*Manager - ensuring the delivery of all IT projects, on time and within budget

*Leader     - ensuring the strategic vision of IT is line with the strategic vision                                                       

                       of the organization

*Communicator – building and maintaining strong executive relationships

2.      Chief Technology Officer (CTO)

-          Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT.

3.      Chief Security Officer (CSO)

-          Responsible for ensuring the security of IT system.

4.      Chief Privacy Officer (CPO)

-          Responsible for ensuring the ethical and legal use of information.

5.      Chief Knowledge Officer (CKO)

-          Responsible for collecting, maintaining, and distributing the organization’s knowledge.

·         Skills pivotal for success in executive IT roles.

THE GAP BETWEEN BUSINESS PERSONNEL AND IT PERSONEL

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

Ø  IT personnel have the technological expertise.

Ø  Use different terms

Ø  Different language

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 responsible of the CIO to ensure effective communication between business personnel and IT personnel

ORGANIZATIONAL FUNDAMENTALS ETHICS AND SECURITY

·         Ethics and security are two fundamental building blocks that organizations must base their business on to be successful.

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

ETHICS

• ·         Ethics is 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

1.      Intellectual property – Intangible creative work that is embodiment 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 in physical

                       documents.

3.      Fair use doctrine – In certain situations, it is legal to use copyright material.

4.      Pirated software – The unauthorized use, duplication, distribution, or sale of

                                   copyright software.

5.      Counterfeit software – Software that is manufactured to look like the real thing

                                            and sold as such.

·         One of the main ingredients in trust is privacy.

·         Primary reasons privacy issues lost for e-business

Loss personal privacy is a top concern for Americans in the 21st century.

Among Internet users, 32 percent would be “a lot” more inclined to purchase a product on a Web site that had a privacy policy.

Privacy or security is the number in factor that would convert Internet researchers into Internet buyers.

SECURITY

• ·         Organization information is intellectual capital must be protected.
• ·         Information security is the protection of information from accidental or intentional misuse by persons inside or outside an organization.
• ·         E-business automatically creates tremendous information security risks for organizations.

CHAPTER 4: MEASURING THE SOURCESS OF STRATEGIC INITIATIVE

MEASURING INFORMATION TECHNOLOGY’S SUCCESS: METRICS

METRICS are measurements that evaluate result to determine whether a project is meeting its goals.

·         Two core metrics:

 - Critical Success Factors (CSFs) are the crucial steps companies perform to achieve their goals and objectives and implement their strategies.

- Key performance indicator (KPIs) is a measures that tied to business drivers.

-Metrics are detailed measures that feed KPIs.

-Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from IT and business professionals.

·         Efficiency IT metric- measure the performance of the IT system itself including throughput, speed and availability.

·         Effectiveness IT metric- measure the impact IT has on business processes and activities including customer satisfaction, conversation rates, and sell-through increase.

-Benchmarking is a process of continuously measuring system result, comparing those results to optimal system performance (benchmark value), and identifying steps and procedures to improve system performance.

EFFICIENCY IT METRICS

Focus on technology.

1.      Throughput – the amount of information that can travel through a system at any point.

2.      Transactional speed – The amount of time system takes to perform a transaction.

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

4.      Information accuracy – The extent to which a system generates the correct results when executing the same transaction numerous times.

5.      Web traffic – Includes a host of benchmarks such as the number of page view, the number of unique visitors, and the average time spent viewing a web page.

6.      Response time – The time it takes to respond to user interactions such as a mouse click.

EFFECTIVENESS IT METRICS

Focus on an organization’s goals, strategies, and objectives.

1.      Usability – The ease with which people perform transactions and find information. A popular usability metric on the internet is degrees of freedom, which measures the number of clicks required to find desired information.

2.      Customer satisfaction – Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer.

3.      Conversion rates – The number of customers an organization “touches” for the first time and persuades to purchase its product or services.

4.      Financial – such as return investment (the earning power of an organization’s assets, cost benefit analysis (to 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.

·         It is inefficient for an organization to implement internet security, since it slows down processing

-          However to be effective it must implement internet security

-          Secure internet connection must offer encryption and Secure Layers (SSK denoted by the lock symbol in the lower right corner of a browser)

METRICS FOR STRATEGIC INITIATIVE

For measuring and managing strategic initiatives includes;

-          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

1.      Abandoned registrations – Number of visitor who start the process of completing a registration page and then abandon the activity.

2.      Abandoned shopping carts – Number of visitors who create a shopping cart and start shopping and then abandon the activity before paying for the merchandise.

3.      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.

4.      Conversation rate – Percentage of potential customers who visit a site and actually buy something.

5.      Cost-per-thousand (CPM) – Sales dollars generated per dollar of advertising. This is commonly used to make the case for spending money to appear on a search engine.

6.      Page exposures – Average number of page exposures to an individual visitor.

7.      Total hits – Number of visits to a Web site, many of which may be by the same visitor.

8.      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 (SCM) METRICS

1.      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.

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

3.      Customer order actual cycle time – The average time it takes to actually fill a customer’s purchase order. This measure can be viewed on an order or an order line level.

4.      Inventory replenishment cycle time – Measure of the manufacturing cycle time plus the time included to deploy the product to the appropriate distribution center.

5.      Inventory turns (inventory turnover) – The number of time that a company’s inventory cycle or turns over per year. It is one of the most commonly used supply chain metrics.

CUSTOMERS RELATIONSHOP MANAGEMENT (CRM) METRICS

Customer relationship management metrics measure user satisfaction and interaction.

1.      Sales metric

2.      Service metrics

3.      Marketing metrics

BPR AND ERP METRICS

The balance scorecard enables organizations to measure and manage strategic initiative.

CHAPTER 3: STRATEGIC INITIATIVE FOR IMPLEMENTING COMPETITIVE ADVANTAGE

STRATEGIC INITIATIVE FOR COMPETITIVE ADVANTAGE

1     1.   .Supply chain management (SCM)
2.     Customer relationship management (CRM)
3.     Business process reenginering (BPR)
4.     Enterprise resource planning (ERP)

Business process is a standardized set of activities that accomplish a specific task, such as processing a customer’s order.

SUPPLY CHAIN MANAGEMENT (SCM)

Supply chain includes all parties involved, directly or indirectly, in obtaining raw materials or a product.

·         Supply chain management (SCM) – the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

·         Five Basic Supply Activities

·         Five basic component of supply chain management include:

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 to customer.

EFECTIVE AND AFFICIENT SCM SYSTEMS can enable an organization to:

·         Decrease the power of its buyers

·         Increase its own supplier power

·         Increase switching cost to reduce the threat of substitute product or services

·         Create entry barriers thereby reducing the treat of new entrants

·          Increase efficiencies while seeking a competitive advantage through cost leadership

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

·         Customer relationship management (CRM) – managing all aspects of a customer’s relationship with and organization to increase customer loyalty and retention and an organization’s profitability.

·         CRM allows an organization to gain insight into customers’ profitability.

·         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:

-          Identifying types of customers

-          Design individual customer marketing campaigns

-          Treat each customer as an individual

-          Understand customer buying behaviors

·         THREE PHASES OR CRM

 - REPORTING: help organization identify their customers across other application.

- ANALYSIS: help organization segment their customers into categories such as best and worst customers.

 - PREDICTING: help organization predict customer behavior, such as customers risk of leaving.

BUSINESS PROCESS REENGINEERING (BPR)

Business process is 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.

·         The purpose of BPR is to make all business processes best-in-class.

·         Reengineering the cooperation – book written by Michael Hammer and James Champy that recommends seven principles of BPR:

1.       Organization around outcomes, not task.

2.       Identify all the organization’s processing and prioritize them in order to redesign urgency.

3.       Integrate information processing work into the real work that produces the information.

4.       Treat geographically dispersed resources as through that were centralized.

5.       Link parallel activities in the workflow instead of just integrating their result.

6.       Put decision point where the work is performed, and built control into the process.

7.       Capture information once and at the source. 

·         A company can improve the way it travel the road by moving from foot to horse and then horse to car.

·         BPR looks at taking a different path, such as an airplane which ignore the road completely.

·         Types of change an organization can achieve, along with the magnitudes of change and the potential business benefit.

·         PITFALL OF BPR is fails to keep up with competitors.

ENTERPRISE RESOURCE PLANNING (ERP)

·         Enterprise resource planning (ERP) – integrates all departments and functions throughout an organization into a single IT system so that employees can make decision by viewing enterprisewide information on all business operation.

·         Keyword in ERP is “enterprise”.

EPR system collect data from across an organization and correlates the data generating an enterprisewide view.