BMGT301 End term Review 1 IT Strategy What s wrong with Nicolas Carr s argument o IT has become a commodity citing that once every business has it the value of IT will diminish NOT TRUE because he only focused on the hardware part definition of IT was too narrow IT provides a platform of innovation rather than just a cost 2 IT and Organization Organization design motivation and coordination How organization achieves the two goals o HIERARCHY is associated with different decision rights Decision rights and centralization o Centralization more knowledge to decision maker o Decentralization delegate decision rights to knowledge owner UPS Fedex Amazon open source software o Two types of knowledge General scientific easily communicated Specific difficult to communicate o Principles for designing good incentive plan Quality instead of quantity focus on bottom line accurate understandable and resists gaming o Definition of complementarities Marginal value of one activity is increasing the amount of another activity correlated synergies ex hardware and software Market price mechanism Organization Hierarchy Coordination Supply Demand Giving Dividing Jobs Motivation Price Promotion 3 Technology fundamentals Basic concepts Moore s law the number of transistors that can be placed on a semiconductor chip doubles every 18 months Increase product Lower price Metcalfe s law the value of a network increases with the square number of users In turn this means that the more connections that become available in a network the higher value of the network will be NETWORK EXTERNALITY Flaws more users more traffic jam Hardware Binary number system of 0 and 1 Bit b a binary digit representing 0 or 1 Byte B composed of 8 bits one byte can represent a single character Memory megabyte millions Hardware gigabyte billions Difference between Internet and the web Internet bigger and older massive network of networks which connects millions of computers with each other Web a way of accessing information over a medium of internet big collection of HTML pages on the internet The concept of network neutrality There is currently no way of prioritizing information on the web over other information 80 of the final exam comes from 6 9 as both multiple choice questions and short answers 6 Disruptive technology innovation that disrupts an existing market Disruptive at two levels product level business model level Product level the new technology is superior to the old one o Ex steam boat Encarta Flash drive Business model level existing business model is not compatible with new technology o Ex Telegraph to the local exchange network Netflix Innovator s dilemma why can t incumbent firms adjust to new technology NO DEMAND FOR NEW PRODUCT o Staying close to your customers usually reaps competitive advantages But sometimes it can make your company obsolete out of date o When it comes to discover the NEXT BIG THING your best customers may be giving you the WORST ADVICE Seek higher margins Target larger marker rather than smaller ones 7 Database Database collection of tables each table is one entity of your business Field attributes of an entity defines the data that a tale can hold titles for columns in the table for customer tables fields first name last name Record a collection of fields that describe an instance of an entity in Table collection of rows records list of data ex product list customer customer table information Relational database o How relational database link tables together KEY the field used to relate tables in a database o Primary Key an attribute or group of attributes that uniquely identifies a row record in a relation Every record MUST have a primary key o Foreign Key a non key attribute in one relation that appears as the primary key in another relation 8 The digital enterprise The history of business value of computers 1950s to 2000s 1950s But what is it good for o I think there is a worldwide market for maybe 10 computers TJ Watson Sr o First Supercomputer by IBM 1960 early 1970s Back office automation o IT Management Control costs o First adopted by finance NYSE Late 1970s early 1980s Enterprise Computing o There is no reason for anyone to have a computer in their home Ken Olson o Mainframe minicomputer Mid 1980s Hustle your way to competitive advantage o Competitive advantage through operational efficiency Late 1980s First Interorganizational Systems o EDI We now call this B2B eBusiness o Improve Operational efficiency o Lock in and network effects Early 1990s Organizational Computing o Reengineering Don t automate obliterate o Computer supported collaborative work o Changing boundaries of the firm Late 1990s The promise and distraction of eBusiness o Build up marketplace eBay Amazon o Outsourcing 2000s Web 2 0 o Quiz Time Magazine Person of the Year for 2006 You the people of the Information Age ERP Enterprise Resource Planning A system that integrates internal and external management information across an entire organization Why is ERP so popular today Integrates everything o Streamline simplify and standardize in order to cut costs Accounting information systems AIS collects process report and analyze information related to the financial aspects of a business o Helps reduce input errors more flexibility save duplicated work faster automate procedures support decision making o Accountants are become information management professionals that add value to the business give advice about efficient and effectiveness of information system CRM Customer Relationship Management The new media more ways to reach your customers Growing importance of online WOM Viral marketing Operational CRM customer facing applications such as sales force automation call center and customer service support Analytical CRM application dealing with the analysis of customer data to provide information for improving business performance Basic concepts of Data mining beer and diaper o Used to find hidden patterns and relationships in customer data stored in data warehouse SCM Supply Chain Management Three flows o Physical Product Flow Movement of goods from supplier to customer Transmitting orders and updating delivery status o Information Flow o Payment Flow Credit terms payment schedules consignment and title ownership arrangements Bullwhip effect demand fluctuation is amplified up the supply chain a type of information distortion o What causes it Exaggeration of demand o Why is it bad Higher production transportation costs
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