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Welcome/IS in Business

LITTLE NOTABLES EXCLUSIVE

IT: More general than IS, which is dedicated to business functions and

operations

Any computer-based tool that people use to work w/ information

and support the information & information-processing needs of

an organisation

Information systems deliver value

A competitive necessity these days rather than a CA or novelty

Support all areas of organisations

Impacts on business in order of importance:

o Reduces costs/improves productivity

o Improves customer satisfaction

o Creates CA’s

o Generates growth

o Generates new revenue streams

Levels of information


DEF of IS

Consists of interwoven components (People, Process, Tech,

Data)

That delivers meaningful information (by capturing, processing,

storing & distributing information)

To, support BPs (business, decision & collaborative)

That strategically manages, coordinates & controls an

organisation to deliver value

Systems thinking

Way of monitoring an entire system by viewing multiple inputs

being processed or transformed to produce outputs while

continuously gathering feedback

o Facilitated by IT creates BI & communications

4 Information Cultures

- Functional: Info used as leverage to exert power, slows down PP

- Sharing: Info shared across all departments

- Inquiring: Employees seek new info to align companies w/ trends

- Discovery: Employees open to new and radical insights

Vision, Industry Structure, CA & VC’s


Vision (Mission Statements)

DELL: To listen to customers and deliver innovative technology and services they trust

and value

GOOGLE: To organize the world’s information and make it universally accessible and

useful

AMAZON: To be earth’s most customer centric company; to build a place where people

can come to find and discover anything that might want to buy online

APPLE: To make a contribution to the world by making tools for the mind that advance

humankind

They are relatively vague, and contain general and positive ideas

about what they do

“Vision without action is a daydream. Action without vision is a

nightmare.” – Japanese proverb

Competitive Advantages – the things that will help our vision be

realised

CA = A product or service that an organization’s customers place

a greater value on than similar offerings from a competitor

First-mover advantage = When company gets to a market

first with CA

CA’s are often temporary because competitors replicate them

relatively quickly, inevitably become competitive necessities

Developing Competitive Advantage

We use 3 tools to analyze and develop CA:

o Porter’s Five Force Model

o Generic Strategies

o Value Chain Analysis

Porter’s Five-Forces Model

DEF: Determines the relative attractiveness of an industry

Supplier power

Buyer power

Rivalry among existing competitors


Threat of substitutes

Threat of new entrants

Buyer power

o High when buyers have many choices of whom to buy from

and low when their choices are few

o Can be reduced through loyalty programs, creating new

points of difference or locking people into using your

products (either in nice or not so nice way)

o E.G. switching costs (not so nice way)

Supplier power

o High when buyers have few choices and vice-versa, e.g.

govt. regulated markets like energy or telecommunication

in some countries

o There are some times where an organisation wants

supplier power to be high, and other times where they

want it to be low. I.e. – when they are buying raw

materials they will want it to be low, but when they are

selling they will want it to be high

o Supplier power can be decreased by organisations if they

are able to find alternative suppliers

o Perhaps can also be decreased if organisation reduces the

amount of materials it needs to buy off the supplier

Threat of substitute products or services

o High when there are many alternatives or an easily

reproducible product and vice versa

o Companies may try to make their ‘switching costs’ i.e. the

costs to use another product or service, very high so

people will remain loyal

Threat of New Entrants

o High when it is easy for new competitors to enter a market

and vice-versa (I.e. Presence of Entry Barriers)

o Easy: Restaurants, catering, event planning, movie rental

o Hard: Banks, Energy, Telecommunications, Banking


Rivalry amongst existing competitors

o High when competition is fierce and vice-versa

o General trend is towards more competition in new

markets, but some are more competitive than others

o Low competition: Energy markets, stock exchanges

o High competition: Fashion, Restaurants

Porter’s 4 Generic Strategies

Cost Leadership (Broad+LC)

o Lowest cost producer in the industry, and cheapest product

o EG Hyundai

Differentiation (Broad+HC)

o Offer wider range of products for people

o EG Audi

Focused market at low cost (Narrow+LC)

o EG Kia

Focused market at high cost (Narrow+HC)

o E.G Hummer

Determining which we use based on two things:

o Cost Strategy (Low or High) and Competitive Scope

(Narrow or Broad)

o Different situations and different businesses require

different models

o

Value Chain/Creation

Primary Value Activities

o Receiving and storing raw materials

o Making the G/S

o Delivery of G/S


o Market and sell the G/S

o Service after sale

Support Value Activities

o Firm infrastructure

o HR management

o Technology development and R&D

o Procurement

Business process – a standardised set of activities that

accomplish a specific task

Value chain – views an organisation as a series of processes,

each of which adds value to the product or service

Business Processes Transformation


Business Processes

BP = A collection of interrelated tasks, initiated in response to an

event, that achieves a specific result for the customer of the

process

o Developing BP’s can help company achieve its goals by

breaking down its activities into smaller, more manageable

steps, and can help ID areas for improvement

E.G. – Supermarket case: might involve a recognition process,

then when the customer is leaving there would be a scanning

process followed, perhaps, by an inventory management process


Customer-facing P

Results in G/S received by organisation’s external customer

Business-facing P

Invisible to external customer, but essential to management of

the business

DEF: Business Process Reengineering (BPR)

Completely overhauling a business process

Analysis and redesign of workflow within and between

enterprises

DEF: Business Process Modeling

Trying to represent and describe your business process so that

you can analyze it

The activity of creating a detailed flow chart or process map of a

work process showing its inputs, tasks, and activities


DEF: Business Process Management (BPM)

Tackles business processes in a more holistic way than BPR

Takes a more continuous and incremental approach than BPR

Integrates all of an organisation’s BPs to make individual

processes more efficient

o #1 reason to create ++ productivity

Irrational to look at different business processes as being limited

to various departments, we should bear in mind they are all part

of one larger process

BPM Cycle:

Understanding the Business

Process identification

Process modeling (as-is)

Process analysis

Process improvement (to-be)

Process implementation

Process execution

Process monitoring/controlling

Business Process Reengineering

Occurs when a process is failing/flawed, and a company attempts

to reinvent the process to make it more efficient

Selecting a process to reengineer:

Steps to make it happen

First step is to document the ‘as-is’ process

Then establish measures involved in the process

Follow the process


Measure the performance

Identify and implement improvements (see below steps)

o Set project scope

o Study competition

o Create new processes

o Implement solution

Example could be a company transforming from dealing in horses & carriages cars

planes to get people from A – B

A more real-world example can be found in the insurance industry: newer

companies created mobile claims processes which gave them competitive

advantages over older companies using traditional business processes

o Uses automation and streamlining to create competitive advantages

Magnitudes of Business Process Change:

Automation – computerization of manual tasks, making them

more efficient and lowering operating costs

Streamlining – improves process efficiency by eliminating

unnecessary (redundant) steps or steps that create bottlenecks

(full capacity that impedes production)

Business Process Reengineering – analysis and redesign of

workflow within & between enterprises

Strategic Reengineering – Redefines industry

Risk on X-axis here too

As the level of change increases, the capacity for benefit also

increases (risk as well)


Transformation

Operations Management

Production – the creation of G/S using the factors of production

Production Management – describes all the activities

managers do to help companies create goods

Operations Management – the management of systems or

processes that convert or transform resources into goods and

services

Value-added – term used to describe difference between cost of

inputs & value of price of outputs

Operations Strategy

This addresses broad questions about using major resources to

achieve corporate objectives

Some major long-term issues addressed in OS:

o How big to make facilities?

o Where to locate the facilities?

o When to build additional facilities?

o What type of processes to install to make the products?

Also contains 5 main tenants

o Cost – can only be one lowest-cost producer, this firm

usually establishes selling price in the market

o Service – HQ CS adds lots of value to ordinary product

o Quality – Made up of product & process quality

o Delivery – Firms ability to provide consistent & fast

delivery

o Flexibility – Firms ability to offer wide variety of products

Transaction Processing Systems Decision Support Systems


Transaction processing – operational business processes/actions

EG receiving money, selling products, receiving inventory

These transactions constitute data, the lowest form of

information, once we process it and make use of it, it becomes

proper information, this transformation process is called MIS

Once are in possession of information, we are then able to turn it

into BI and knowledge which can be used to support

management/strategic level decision making

Systems-thinking view of a TPS

Operations/managerial/strategic decisions

TPS/OLTP (automation of TPS) – short term, functional, day to

day (OPERATIONS)

o These decisions likely to be internal, structured/repetitive

tasks that can easily be measured next to relevant

performance indicators

o EG, how much inventory is left in the warehouse?

o Likely aims to turn data information

DSS/OLAP (Data warehousing) – short/mid-term, internal (little

bit of external), sales trends etc (MANAGERIAL)

o Decisions here are of a higher level, may be cross-

functional and cross-departmental, EG – what resources

should we allocate to each department to achieve goal X

o May be analytical, i.e. trying to draw BI from information &

data, EG – Why did sales fall last quarter for product X?

Then manager will drill down or up to get answers

o Semi-structured decisions


EIS/ESS – Similar to DSS but incorporates more external info,

and looks at the business from a long-term pov (STRATEGIC)

o These are infrequent unstructured decisions which take

political, economic & commercial factors into account, they

aim to glean knowledge from the BI & info being provided

to them through reports

o EG – deciding how recession will affect business over 3

years & planning accordingly

Structure

As we climb the scale, information becomes less structured

TPS – Structured

DSS – Semi-structured

EIS – Unstructured

As above

Relationship between TP, DS & enterprises & collaboration

CSFs, KPIs & how managers use them

CSF = Critical success factor – crucial steps companies perform to

achieve their business goals & objectives EG for UOA: Improve graduation

rates


KPI = Key performance indicator – Quantifiable metric(s) a company

uses to evaluate progress towards CSF’s EG for UOA: Avg graduation

rates by course & gender

Common KPI’s – market share & ROI

Metric = Measurements evaluating if project goals are being met

Information levels:

Granularity – smaller details = finer; larger trends = coarse

Processing – smaller things = OLTP; larger processing = OLAP

Processes – day-to-day = transactional; strategic-level =

analytic

As above

Efficiency vs. Effectiveness IT metrics

Efficiency IT M’s – measure IT performance (Doing things right)

EG: Throughput, Transaction speed, System availability,

Information accuracy, Response time

Effectiveness IT M’s – measures IT effects on BP (Doing right things)

EG: Usability, Customer satisfaction (% of customer retained &

satisfaction surveys), Conversion rates (# of exposures # of

sales), ROI, CBA, BEA

Examples:

ATM: efficiency metrics would measure level of business, but

effectiveness metrics would measure levels of customer

satisfaction gained from it

IT security: May make web transactions inefficient, but makes

them more effective as people won’t have to risk security to buy


Decision Support Systems

The Process

Common DSS analysis techniques

What-if analysis – checks impact of change in variable or

assumption on the whole business

Sensitivity analysis – checks impact on other variables if one is

changed repeatedly

Goal-seeking analysis – finds necessary input value to achieve a

goal, perhaps # of sales of products X & Y to break-even

Optimisation analysis – finds optimum value for target variable

by repeatedly changing other variables

Systems-thinking view of a DSS


TPS & DSS relationship

TPS/DSS/EIS relationship

Business Intelligence

A key problem today is the ‘data explosion’ that may render our MIS

useless if we do not sift and filter inputs properly, doubles p.a.

‘Computers promised a fountain of wisdom, but delivered a flood

of information.’

BI or Business Intelligence involves the applications and

technologies used to gather, provide access to and analyze data

and information to support decision making

o Many types, see below


Latency – Time between two occurrences

In a BI context, latency may refer to the time between a

business event and data being stored (data latency);

data being stored & information delivered (analysis latency);

the information delivered and action taken (decision latency)

As time goes on, the value of the information is reduced

o Goal of DSS is to reduce the latency in the decision making

process

Intelligence Density

Used to characterize the intelligence provided by a decision tool

Is the amount of useful decision support information that a

decision maker gets from using a system for a certain amount of

time How quickly can someone get the essence of the

underlying data from the input?

ID = Utilities of decision making power extracted/Units of

analytic time spent by the decision maker

Collaboration/ERP Systems


Collaboration systems

Teams, partnerships & alliances

Business often leverage their IT resources to create CA’s, e.g.

use of ERP/CRM/SCM systems, another way is through

collaboration systems

Underlying use of these is a core competency strategy,

whereby an organisation chooses to focus specifically on what it

does best & forms partnerships/alliances with other specialist

organisations to handle non-strategic processes

o Core competency = organisation’s key strength, a

business function it does better than any competitors

o Information partnership = occurs when 2 or more

organisations cooperate by integrating their IT systems,

thereby providing customers w/ best of both worlds

Collaboration systems

Collaboration system = set of tools that supports the work of teams or

groups by facilitating the sharing & flow of info

Linked closely w/ collective intelligence, this involves

collaborating and tapping into the core knowledge of all

employees, partners & customers

CS’s allow teams to leverage talents of people right across

supply-chain

o But can be difficult because of logistical & geographic

concerns, also requires seamless cooperation and flexibility

amongst team members


Evolution of collaboration systems

Types of collaboration

Unstructured collaboration (information collaboration)

o Includes document exchange, shared e-whiteboards,

discussion forums & emails

o Can improve personal productivity, reducing time spent

searching for answers

Structured collaboration (process collaboration)

o Involves shared participation in business processes (such

as workflow) where knowledge hard-coded as rules

o Beneficial in terms of improving automation & routing of

information

Basic collaboration tools

File storage & sharing = cloud-based collaboration tools such as

Gmail or Google Docs which allow users to store & share info

easily w/ each other, often free.

Email = electronic exchange of digital messages, allows for

sending of many file types, limited by size

Wikis = web-based tools that make it easy for users to add,

remove & change online content, business wikis are often used

by companies to manage the progress of a project


Instant messaging = type of comm service that enables

someone to create private chat room w/ another individual to

communicate in real-time over the internet, EG MSN – could also

include things like text messages

Conferencing = blends audio, video & document sharing

technologies to create virtual meeting rooms where people

‘gather’ at a website, EG Skype

o Very affordable and easy, many businesses use this

Strengths of collaboration process lie w/in integration of main

systems:

KMS

Knowledge management = involves capturing, classifying, evaluating,

retrieving and sharing information assets in a way that provides context

for effective decisions & actions

Process through which organisations generate value from

intellectual resources & knowledge

Primary objective of KM is to ensure company’s knowledge of

facts, sources of info & solutions are readily available to

employees whenever needed

KMS = supports the capturing, organisation and dissemination of

knowledge throughout an organisation

Up to organisation what info qualifies as knowledge, 2 categories

of intellectual/knowledge-based assets:

o Explicit knowledge: anything that can be documented,

archived & codified, usually w/ help of IT, EG patents,

trademarks, marketing plans, operating procedures

o Tacit knowledge: knowledge contained in peoples’ heads,

can be difficult to recognise, generate, share & manage

this knowledge

Ways of transferring/recreating tacit knowledge

Shadowing = when less experienced staff observe more

experienced counterparts


Joint problem solving = where a novice and expert work

together on a project and former learns latter’s approach, is a

more active & involved process than shadowing

Why use KMS + benefits + tools

Key reasons why organisations use KMS

Increase revenue/profit, retain key expertise, improve customer

satisfaction, defend market share

Benefits of KMS

Gets products & services to market faster

Improves CS by streamlining response time

Fosters innovation by encouraging ideas

Eliminates redundant OM processes

KMS tools = usually include e-learning apps, data-mining tools &

chatting

SNA (Social networking analysis) = process of mapping a group’s

contacts to identify who knows who and who works with who.

o Useful to ID who holds critical info and fill gaps/ID

opportunities for knowledge growth within organisation

CMS

Content Management System – provides tools to manage creation,

storage, editing & publication of info in a collaborative environment

Incorporates document management, digital asset management

& web content management


Common types of CMS (CECIL is CMS)

Document management system (DMS)

o Supports capturing, storage, distribution, archiving &

accessing of documents. Tracks editorial histories and

provides structured way to search many documents

Digital asset management system (DAM)

o Similar to DMS, but works with binary (multimedia) rather

than text files, allows for file manipulation & conversion

Web content management system (WCM)

o Adds to DMS & DAM by allowing content to be published

online, usually integrated w/ e-business systems

WMS (Workflow management systems)

Definitions

Workflow = defines all the steps of business rules from

beginning to end, required for a BP

WMS = facilitates the automations & management of BP &

controls the movement of work throughout the BP

o Allows companies to measure effectiveness of BP execution

at an aggregate level or even individual level

o Users typically notified when tasks come in and status of

job is updated as it is completed/worked on

2 types of WMS

Messaging based workflow systems

o Sends work assignments by email. Tracks order for work to

be assigned & each time step completed, system

automatically sends work to next individual in line

Database based workflow systems

o Stores documents in central location & automatically asks

team members to access it when it’s their turn to edit doc

Both help to present info in unified format & improve teamwork

by providing automated process support


GS (Groupware Systems)

Groupware = software that supports ream interaction &

dynamics including calendaring, scheduling & video conferencing

o Terms refers to specific class of tech relying on computers

& networks

o Can be sued to communicate, cooperate, coordinate,

compete or negotiate

4 primary categories of GS

o Working together at same time (synchronous groupware)

o Working together at different times (asynchronous

groupware)

o Working together in same place (face-to-face groupware)

o Working together in different places (distance groupware)

Different groupware system examples

o Same time + same place = presentation support

(synchronous + face-to-face)

o Same time + different place = videophones/IM

(synchronous + distance)

o Different time + same place = shared computers

(asynchronous + face-to-face)

o Different time + different place = email/workflow

(asynchronous + distance)

Advantages of groupware

o Facilitates communication (faster, clearer)

o Enables telecommuting (working from home)

o Reduces travel & organizational costs


o Shares expertise (collaborative intelligence)

o Facilitates group problem solving

Enterprise Resource Planning systems (ERP)

ERP = integrates all departments & functions throughout an organisation

or enterprise into a single IT system (or integrated set of IT systems) to

enable decisions to be made by viewing enterprise-wide info on all

business operations

If systems are segmented into ‘silos’, can lead to data

inconsistencies and inability of systems to ‘talk’ to each other &

share data

Core of ERP system = central database that automatically

updates entire system if it’s changed

ERP system takes info from all departments, consolidates &

correlates it, then generates enterprise-wide organizational

reports

Before

After


ERP supports & automates BPs

Example of ERP implementation

Sales rep can access ERP system to view all necessary info to

process orders (EG credit rating, order history, inventory levels &

delivery schedules), then once order complete, ERP system will

automatically route it to next relevant department – maybe

accounting

UPS in America allows for customers to track their parcels, the

delivery process is tracked & underpinned by an ERP system

Benefits of ERP

Makes company more profitable by providing ability to make

better strategic decisions, and more efficient service as

production of G/S done from enterprise-wide perspective – big

CA & can pass on savings to customers

Allows for collaborative decision-making across enterprise

o Also can involve suppliers & customers (EG case of UPS)

and add value to whole supply-chain

Provides consistency in data/info across enterprise

Can help ID goals for all departments that accord w/ each other

and provide better service

Automates business processes, making them more efficient

Allows enterprise-wide decision making


Areas ERP supports

Issues it addresses

Evolution of ERP

ERP (1990s) – mainly focused on materials planning, inventory

and distribution, but didn’t encompass front office departments

Extended ERP (2000) – ERP expanded to include scheduling,

forecasting, capacity planning & logistics etc.

ERP II (Present) – Moving towards more SCM & CRM

involvement, connects all elements of value chain

Core ERP components = traditional components in ERP systems which

typically focus on internal operations

Accounting & Finance ERP components


o Manages accounting data & financial processes within

enterprise such as accounts payable/receivable, budgeting

& asset management

Production & Materials Management ERP components

o Handles various aspects of production planning &

execution, EG demand forecasting, production scheduling

and quality control

HR ERP Components

o Tracks employee info such as payroll, befits, performance

assessments

Extended ERP components = Extra components that meet

organizational needs not covered by core components & which primarily

focus on external operations

BI (Business Intelligence)

o Typically these components collect information used

throughout organisation, organise it and apply analytical

tools to assist managers w/ decision-making.

o Data warehouses v/ popular extension to ERP systems

CRM (Customer Relationship Management)

o CRM components of ERP provide integrated view of

customer data & interactions, allowing organisations to

work more effectively w/ customers

SCM (Supply Chain Management)

o SCM components help organisation to plan, schedule,

control & optimize its SC

E-business (Conducting business on internet)

o Two primary features of e-business ERP components are e-

procurement (B2B purchasing & selling of supplies over

internet) & e-logistics (manages transportation & storage

of goods

o UPS example of allowing customers to track their own

packages relies on an ERP system with integrated e-

logistics functions (So ERP needs to have B2B & B2C

features)


Measuring ERP success

Very difficult, one method is the ‘balanced scorecard’ = a

managements/measurement system that enables organisations

to clarify vision/strategy & translate into action

o Looks at business from 4 perspectives:

Learning & growth perspective

Internal business process perspective

Customer perspective

Financial perspective

o Metrics also need to be developed to measure goals &

objectives sent, you can’t manage what you can’t measure

Selecting an ERP solution

Usually will be reflective of the business processes within the

organisation and their complexity

o Successful ERP systems have a good overall fit to

company’s BP’s, proper business analysis to measure what

is actually involved in BP’s they’re looking to integrate and

solid implementation plans which will monitor objectives

and success of implementation

Challenges of ERP

Cost: expensive to purchase/implement, but also to hire

consultants to service it when things go wrong and train staff to

use it


Forces employees to change the way they work: can be difficult

to learn & adjust

o Many ERP projects fail because managers underestimate

difficulty of getting it up & running

Overview of ERP/SCM/CRM/Collaboration

SCM & CRM Systems


Service Economy: one dominated by the service sector

Increasingly relevant to first world given rise in # of internet

services

Supply Chain Management (SCM)

Integrations

Connections allowing separate systems to communicate directly

w/ each other, eliminating disjoints & need for multiple systems

o Allows sharing of info across databases w/ ease

Forward integration (Backwards integration = VV)

o Takes info from a given system & sends it down supply

chain, EG (For customer information) – may take info

about customer from order processing system & send to

order fulfillment system then to billing system

o Most companies only invest in forward because if v/

expensive

Alternative Integration Method

o Central repository for one type of info, EG Customer data,

that updates all other systems w/ entered info, but can

only be edited from central system itself

Integration tools

o Enterprise systems: Provide company-wide support for

data-access, operations & business processes

o EAI: Enterprise App Integration, connects tools aimed to

integrate separate ES’

o Middleware: Software sitting between 2 apps to provide

connectivity

o EAI Middleware: Packages commonly used apps together

SCM fundamentals

Definitions:

Supply-chain: consists of all parties involved directly or indirectly

in obtaining raw materials or a product

o Main links: Suppliers Organisations Customers


o Adaptive supply chains involve: visibility, community,

collaboration & adaptability

Supply-chain management: Management of info flowing between

different parts of SC to maximize effectiveness & profitability

o May involve use of systems to automate SC & control tasks

such as demand forecasting or inventory control

Manufacturing SC

5 basic elements of SCM

Plan – Creating a ‘must-have’ plan for managing everything

leading to meeting customer demand, also includes metrics for

measuring efficiency & cost-effectiveness of SC

Source – Building relations w/ suppliers, establishing systems of

pricing & operation w/ metrics to measure quality & efficiency

Make – Making G/S inc. scheduling production, testing,

packaging & metrics to measure output/productivity etc.

Deliver – Developing set of logistics which controls effective &

efficient transportation & storage of supplies


Return – Creates network for dealing w/ defective products

Supply-chain importance

Can help company decrease power of buyers & increase its

power as a supplier (same thing really)

Can increase ‘switching costs’ to reduce threat of substitutes

Can create entry barriers to discourage new entrants

Can increase efficiency whilst seeking CA’s & cost-leadership

Can improve procurement process and overall quality of a

business & its products

7 principles of SCM

Segment customers by service needs & tailor services for each

group

Customize logistics network to focus on service requirements &

profitability of customer segments

Plan across entire SC & listen to market signals to form basis of

SCM

Use customer information to reduce need to hold inventory

Manage suppliers by attempting to reduce overall costs of

owning materials & services

Develop SC IT strategy which supports all levels of decision

making & provides clear views of product/info flow

Apply performance evaluation measures to each link in SC &

measure true-profitability

Benefits of SCM

Improved visibility, i.e. ability to view all links in SC in real-

time, essential tool for reacting to customer demand

o This relies on SC planning (uses algorithms to improve SC

flow & efficiency) & execution systems (automates steps in

SC) and up to date information

o Misinformation can = bullwhip effect: a ripple through SC

which affects profitability & decision-making correctness

EG: X drops price of one type of car on his lot to

stimulate demand but doesn’t tell car-maker, when

car-maker sees more of that model being sold they


produce more to meet what they think is general rise

in demand = oversupply of cars.

o EDI: Standard format used by SC parties to exchange info

Increased profitability, resultant from better relationships w/

suppliers, increased productivity & ability to react to market

demand (means no inventory imbalances) Demand Planning

systems

o Only use of SCM gives companies big picture of what effect

one decision will have on enterprise’s profits

o Also allows businesses to customize orders to the extent

that they remain competitive with online systems &

alternatives

Cost-control/savings

o Linked closely to reduction of inventory as well

IT’s role in SCM

Planning & control SC integration: EG, Collaborative product

development

Information integration: EG, inventory visibility

BP integration: EG, collaborative logistics

Common SCM Metrics (ways to measure its performance)

Backorder: Measured by demand for item against sufficiency of

inventory

Customer order promised cycle time: Measured by gap between

order creation date and expected delivery date


Customer actual cycle time: Measured by gap between order

creation date & actual delivery date

Inventory replenishment cycle time: Manufacturing cycle time

plus time to deploy product to distribution centre

Inventory turnover: # of times a company’s inventory turns over

each year

Also: IFOTIS (measures effectiveness of customer order

fulfillment)

o In-full; On-time; In-specification

Benchmarking

4 types of KPIs

o Historical – compares 2013 to 2012 stats

o Theoretical – compare reality to hypothetical situations

o Internal – compare results within company

o External – compare your results to another company

Challenges of SCM

Can be costly and very complex

Must be supported by equally complex systems

Have to deal with multiple parties to improve it

Exacerbated further by globalisation: time zones, currencies,

languages, taxes etc.

Future of SCM

Home-based supply-chain fulfillment, EG shopping list being

automatically created/filled as food runs low

SC event management: planning for SCM in unexpected events

Collaborative engineering: Reduces product development costs &

provides both buyer & supplier perspectives

Collaborative demand planning: Reduces inventory investments


Customer Relationship Management (CRM)

Definition & Importance

A means of managing a customer’s relations w/ an organisation

in an effort to increase their loyalty/retention and your

profitability

o Key elements:

Listen – Learn – Acquire – Serve – Retain

Ability to track & manage all customer interactions can improve

ability to react to their needs, EG – if one department notes that

customer x called about a particular issue, then when the rep

rings them back they know what to expect

o Can be difficult to achieve this because customers can

interact w/ companies in many ways (both physical and

digital), CRM systems manage these interactions

o Strong customer base = CA

CRMs are indicative of deeper relationships w/ your customers,

as opposed to mass marketing strategies or even targeted

marketing strategies

o If possible, good to do all 3

Benefits of CRM

CRM systems make companies more in tune w/ individual

customers’ needs, thereby positioning themselves better for

success

o Increase customer revenues, provide better CS (may lead

to even more sales), cross-sell more effectively


Can help measure consumer patterns, providing valuable

information for decision-making and strategizing

o Results in better, more effective marketing campaigns

Helps businesses find & service most valuable customers:

o RFM method (Recency, Frequency & Monetary value) of

customer’s transactions will determine this

Can help identify new customers & segments, assisting SCM

RFM customer types:

High frequency, low recency = ‘Reactive’ customers

High frequency, high recency = ‘Keep happy’ customers

Low frequency, high recency = ‘Potential growth’ customers

Low frequency, low recency = ‘Ignore’ customers

In the middle = best opps

Evolution of CRM (3 phases)

Reporting – helps identify customers (What happened?)

Analysis – helps segment customers (Why did it happen?)

Predicting – helps predict customer behaviour (What will

happen?)

Evolution in action:

o What is total revenue by customer? (R)

o Why did it not meet sales forecasts? (A)

o Which customers are at risk of leaving? (P)


Operational & Analytical CRM DEFs

Operational: Supports transactional and day-to-day processes

that deal directly w/ customers

o Performs tasks for marketing, sales & customer service,

usually geared towards selling one customer many

products rather than one product to many customers

Analytical: Supports back-office operations & strategy, doesn’t

deal w/ customers

Marketing & Operational CRM

Key Op CRM technologies used:

o List generators: Compiles customer info from various

sources to segment it for marketing campaigns, EG can

help tailor campaign for particular income demographic


o Campaign management systems: Allows businesses to

define campaign, plan it, schedule it, apply customer

segments & perform success analyses

o Cross-selling/Up-selling

CS – Selling additional G/S to customer, ‘would you

like fries with that?’

US – Increasing value od sale, ‘would you like to

supersize your order?’

Sales & Operational CRM

Sales department first to use CRM because it handles so much

customer information

Key Op CRM technologies used

o Sales Management CRM systems: Automate each phase of

sales process, helping sales reps track & co-ordinate their

sales, can also involve: calendars/reminders/analysis

o Contact Management CRM systems: Maintains contact info

& identifies potential customers, may involve tracking

previous customer interactions to better prepare reps for

next interaction

o Opportunity Management CRM systems: Target sales

opportunities by finding new customers, more future-based

than contact management systems

Customer Service & Operational CRM

CS essential (along w/ marketing & sales) to building &

maintaining good customer relationships & repeat business

o Needs to create & support good customer experiences

Key Op CRM technologies used

o Call Centre: Where CS reps can respond to inquiries, can

then track call histories & build profiles


o Web based self-service systems: Allows customers to use

web to address their own issues, EG – FAQ, package

tracking, editing personal info

o Call scripting systems: Access organizational databases to

track similar issues and generate automatic answers and

support for CS reps (i.e. generic database)

Analytical CRM

Designed to ‘dig deep’ into company’s history to ID consumer

patterns which can genuinely be capitalized on

o Contrasts to Op CRM: it moves beyond legacy benefits

o Can quickly slice & dice info to display customer value,

spending patterns or product affinities

o May also highlight cross/up-selling opportunities and what

customers are worth investing in

Website personalization is the result of analytical CRM & IT

working together

Relies heavily on data warehousing tech & BI to glean insights

into what customers want & how to capitalize

Challenges of CRM

Where once a complaint would be a relatively private letter or

call, now can become viral through social media

o CRM systems must expand to meet the power of this

collaborative intelligence

Future of CRM

SupplierRM – Optimize supplier selection, keep suppliers happy

ParterRM – Optimize sales channels by selecting right partners

EmployeeRM – Manages employee relations w/ company

Enterprise Architecture Data & Databases


EA

Intro

EA is heart of most companies’ operating ability, EA alone does

not create sustainable advantages but works with other elements

of business to create overall CA’s

o Companies with rigid/outdated EA will struggle to compete

in a business environment where cycles are shorter &

shorter

What is it?

Enterprise Architecture involves the plans for how an

organisation builds, deploys, uses and shares its data, processes

& MIS assets. Underlies all business activity.

o Solid EA = reduced costs, better productivity, growth &

profitability

o Analogy: EA is like the utilities that support the foundation

& operation of a building EG – Water, Electricity, Gas

Continually forced to change to adapt to new business

requirements

o EG establishing sufficient architecture to support mobile

devices

o Enterprise Architect = person familiar w/ technology who

provides bridge between IT & the business to ensure the

company’s architecture is perfect

Goals of EA


3 primary types of EA (And sub categories)

Information Architecture:

Supports operations by ID’ing where & how important is

maintained & secured

o Creates contingency plans/systems for event of system

crashes/disasters/thefts/interruptions etc.

o 3 main components:

Backup & recovery, DR & BCP

Backup & Recovery

o Backup = an exact copy of system’s information

o Recovery = ability to get system up & running in event of

crash/failure & restoring information backup

o May use media such as CD’s, DVD’s, servers, USB sticks

etc to facilitate backup/store info

o Rate of backing up will depend on cost of doing so and the

amount of critical information businesses handle in any

given period of time

If lots of critical info = may be hourly/daily back up

Balance cost of backing up v cost of loss

o Two techniques in case of system failure:

Fault tolerance: Computer systems designed so

that if component fails, another can immediately

replace it with no loss of service

Failover: Backup where functions of a component

are assumed by secondary system components if

primary one is unavailable due to failure or

maintenance

Disaster Recovery (DR) – about info

o Involves preparing for serious disasters, both natural

(fires/floods/earthquakes) and manmade (hacking) and

planning how to cope with them


Includes detailed process for recovering info or an

IT system

Considers location of backup info – may be off-site

Comprehensive ones include if facilities destroyed

o Hot site: Separate facility fully equipped where company

can move in event of disaster

o Cold Site: Separate facility w/ no computer equipment

where employees can move post-disaster

o Warm Site: Separate facility w/ computer equipment that

requires installation & configuration

o Disaster Recovery Cost Curve: Charts cost to

organisation of unavailability of systems (low in beginning

but get higher) and cost to organisation of recovering from

disaster over time (high in beginning then get lower)

Must consider a vast array of costs, some of which

(EG loss of information) may be intangible

Optimal plan can be found where curves intersect

Business Continuity Planning (BCP) – about functions

o Plan for how organisation will recover & restore

partially/completely interrupted business functions

within a predetermined time

EG: Oz defence force have variety of data centres

across different locations, updated via private WAN

May also involve HR management in regards to

ID’ing key individuals needed for recovery and

communicating plan w/ all relevant parties


o Developing BCP may involve:

ID’ing existent risks to business

Analysing effects of interruptions to business as a

whole or in specific areas

Planning and developing recovery strategies &

communicating them to relevant stakeholders

Testing & updating plan

Infrastructural Architecture

Supports change & includes hardware, software,

telecommunications equipment that provides underlying

foundations to support

o Lack can severely hinder company’s growth/functionality

Seven primary characteristics of solid infrastructural architecture

o Accessibility

Refers to varying levels of what users can access,

view or perform when operating a system.

Different groups need to be able and unable to

access different parts of the system & edit them

o Availability

Time when system is operational, goal is high

availability rather than unavailability

Companies may deploy failover systems to operate

while primary systems down for maintenance

o Maintainability/Flexibility

How quickly a system can transform to support

environmental/business changes

EG: Allowing for purchasing in multiple currencies or

languages, globalisation of business in general

o Portability

Ability of an app to run on multiple devices or

software platforms/operating systems

EG: iTunes, can be used on many different systems

and devices


o Reliability/Accuracy

Ensures a system is functioning correctly & providing

the right info

Housing unreliable info is v/ dangerous for company

o Scalability

How well a system can scale up & adapt to increased

demands or growth, if unable to cope can result in

performance issues frustrating users

Capacity planning involves determining future

infrastructure requirements and taking steps to

ensure consistent performance, EG purchasing

software for when database grows

o Usability

Degree to which a system is easy/satisfying to

understand and use

May be accompanied by instructions/FAQ, tips or

shortcuts to improve user satisfaction

Sustainable Enterprise Architecture/Application Architecture

SEA supports sustainability & identifies ways a company can

grow its computing resources, whilst minimizing reliance on

hardware & energy consumption

o 3 key components: grid computing, cloud computing,

virtualized computing

Application architecture determines how applications integrate &

relate to each other

Grid computing

o Involves a geographically dispersed group of computers

being coordinated to solve a common problem

Allow for much greater efficiency than a single

computer can offer ‘virtual supercomputer’

Cloud computing

o Use of resources & applications hosted remotely on the

internet e.g. Gmail, Facebook, Twitter etc.


o Can involve cloud provision of hardware, networking or

applications on a pay-per-use basis

o Benefits:

Fewer maintenance issues & labour costs as a result

of reduced hardware

Increased computing power

Increased performance due to fewer apps on main

system, allows faster speed for users

Increased reliability: info stored on cloud so

computer crash doesn’t affect it

Increased storage capacity

Easy software updates

o Challenges:

Limited features, EG – Google Presentations has

comparatively few features to Powerpoint

Internet connection required, big limiting factor

especially in places with weak internet access

Security can be questionable

Virtualised computing

o Creates multiple ‘virtual machines’ on a single computing

device, allowing multiple operating systems and software

apps to run at the same time.

Easily portable onto new physical devices in event of

computer crashes etc.

o EG – MacBook running both Windows & Mac software

Also be aware of:

o Client server architecture

o

o Service oriented architecture


o Web service architecture

o o Open systems

Data, information & databases

Intro

Ability to obtain and analyze all relevant information is essential

to effective decision making in a company

o Info comes in different levels, formats & granularities

o Information granularity: refers to the extent of detail

within the information, fine and detailed or coarse & broad

Info levels: individual, department, enterprise

o EG, individual sales revenue vs. whole enterprise

Info formats: document, presentation, spreadsheet, database

Info granularities: fine, coarse, summary

o EG, report for an individual sales person vs. whole dpt.


4 primary traits that help determine value of info

Information type – transactional or analytical

Transactional info: all information from within single BP or unit of

work, primary purpose is to support daily operational tasks

o Assists organisation in performing repetitive tasks (EG,

how much inventory should we carry?), may be something

like airline ticket/packing slip

Analytical info: all organizational info, primary task is to support

managerial analysis

o Allows companies to spot business trends and make key

decisions, EG – should we build this new product?

Information timeliness

The importance of this will depend on the industry, some (stock

traders/banks) require more up-to-date info than others

(construction/insurance companies)

o Real time info: immediate, up-to-date info

o Real-time systems: provide real-time info in response to

requests

Need for these stems from shorter & shorter business cycles,

need to make fast/effective decisions and keep smaller

inventories

o Is important not to create systems that work too fast for

employees to absorb the info


o Biggest pitfall of RT systems is continual change, this can

cause confusion amongst people analysing data if they

draw different conclusions on it.

Information quality

Decisions only as good as quality of info used to make them

o Data inconsistency: occurs when same data element has

different values

EG, when info on customer updated in one system

but not in another = inconsistency

o Data integrity issues: occurs when a system produces

incorrect, inconsistent or duplicate data

Can cause managers to consider system reports

invalid & make bad decisions based on other sources

o 5 characteristics common for HQ organizational info

Accuracy – are values correct?

Completeness – is anything missing?

Consistency – does summary info accord w/ details?

Timeliness – information current re: business needs?

Uniqueness – each transaction/entity/event

described only once? (i.e. no duplicates)

o 4 reasons for LQ organizational info:

Online customers enter wrong info to protect privacy

Diff systems have diff info entry standards/formats

Data-entry staff enter abbreviated info to save time,

or wrong info by accident

3rd party/external info contains errors itself

NOTE: GIGO (Garbage in, Garbage Out)

Information governance

The way users handle information is important in ensuring its

accuracy, security and overall value

o Data governance: refers to overall management of the

availability, usability, integrity & security of company data


o Companies which have clear data governance policies will

be much more effective in managing their data.

Storing info in relational DBMS

Database: ‘organised collection of logically related data’, EG

phonebook

o Maintains info about various types of objects (inventory),

events (transactions), people (employees) & places

(warehouses)

o Sit at centre of ERP to create 1 version of the truth as per

Postie Plus video

DBMS (Database Management System): Computer program used

to manage query database

o Essential functions of DBMS = CRUD:

Create, Read, Update, Delete

Data hierarchy

o Database [collection of tables]

o Table [collection of records]

o Record [strip of info made up of many fields]

o Field [Singe data element]

Other terms:

o QBE: Query-by-example

o SQL: Structured query language

o Data element: Smallest/most basic unit of information, EG

a customer’s name or email address

o Data models: Logical data structures that detail

relationships among data elements


o Metadata: Provides details about data, EG the resolution

rate of an image

Entities & attributes

o Entity: (AKA table) stores information about a thing

o Attributes: (AKA columns/fields) data elements associated

w/ an entity

o Record: Collection of related data elements

Creating relationships through keys

o Primary key: a field that uniquely identifies a given record

in a table, EG, UPI #

Allow each record in a table to be identified

o Foreign key: Primary key of one table that appears as an

attribute in another table and provides a logical

relationship between two tables

Benefits of relational database (EG Microsoft Access)

Increased flexibility

o Supports expanded physical and logical views of info, i.e.

you can have one physical screen of data in front of you,

but be able to logically search it in multiple ways

Increased scalability & performance

o Databases allow for massive scalability

Reduced information redundancy

o Single entry and ability to check for duplicates etc.

Increased info integrity

o Relational database wouldn’t allow for users to enter

blatantly incorrect values better information

Increased info security

o Databases provide information security features such as

passwords, read-only files, access levels & controls

BI: Data Warehousing/Mining/Visualisation Computing Software & Hardware


Business Intelligence (BI)

Business benefits of data warehousing

Reasons for move towards data warehousing in 1990s

o Inconsistent data definitions across different departments’

databases/info storage system

o Lack of data standards because of different systems

o Poor data quality

o Inadequate data usefulness

o Ineffective direct data access, hard unless an expert

Data Warehouse = a logical collection of info gathered from

many different operational databases, that supports business

analysis activities & decision-making tasks

o Main aim is to aggregate all strategic info into a single

repository so that people who need access to it can get it

easily, also standardizes info to make it even more uniform

o Take transactional info from internal databases and

aggregate it into analytical info to support decision making

o Also inputs external information/databases such as

industry/competitor info, market analyses & mailing lists

o Can also be referred to as OLAP

o Said to be subject-oriented, integrated, time-variant &

non-volatile


Performing business analysis w/ data marts

ETL (Extraction, Transformation, Loading) = process that extracts

info from internal & external databases, transforms it using common set

of enterprise definitions and loads it into data warehouse

Data warehouse then sends portions of info into data marts, EG

‘marketing data mart or sales data mart’

Warehouses have an organizational focus, whilst marts have a

more functional focus

Multi-dimensional analysis = ability to analyse multiple attributes of

info, EG – can ID how Product X did in Store 1 during Quarter 2

Represented in cubes

Informational cleansing or scrubbing = process that weeds out &

fixes or discards inconsistent, incorrect or incomplete information

May involve analysing, standardizing, correcting, matching &

consolidating data warehouse info

o Process also fixes missing/redundant records/keys & other

data as well as erroneous relationships/references

o This process is vital because DW often obtains info from

external sources which may have LQ information standards

4 types of data w/ respect to completeness & accuracy

o Complete & accurate = Perfect = Expensive

o Incomplete & accurate = Little data = reso inexpensive

o Complete & inaccurate = Known errors = reso expensive

o Incomplete & inaccurate = Useless = reso inexpensive

o NOTE: Completeness costs $$$


Uncovering trends & patterns w/ data mining

Data-mining = process of analysing data to extract info not offered by

raw data alone

Can begin at coarse level of granularity & ‘drill down’ to finer

details, or ‘drill up’ if necessary

Companies use data mining to compile picture of their operations

within a single view, allowing them to ID trends & forecasts

Data-mining tools = variety of techniques to find patterns &

relationships in large volumes of info that predict future behaviour &

guide decisions

Help users uncover BI (I.e. market trends etc.) and illustrate

relationships between internal & external factors

o EG: Analysis of customer buying patterns to tailor future

marketing campaigns to customer segments

Approaches tasks w/ few techniques in mind:

o Classification – assigns records to one predefined class

o Estimation – determines values for unknown continuous

variable behaviour or estimated future value

o Affinity grouping – determines which things go together

o Clustering – puts independent groups of records into more

related sub-groups

Other terms:

o Structured data: data already in spreadsheet or database


o Unstructured data: data that doesn’t exist in fixed

location, EG a word document, email or voice message

o Text mining: analyses unstructured data to find trends &

patterns in words & sentences

Three most common forms of data-mining

Cluster analysis = technique used to divide info set into mutually

exclusive groups so that members of each group are as close together as

possible, while those of different groups are as far away as possible

Used to segment customer info for CRM systems, very effective

one is Cluster analysis by postcode to determine propensity to

purchase G/S

Association detection = reveals the degree to which variables are

related and the nature & frequency of these relationships in the

information

EG: Can tell ID likely customer complaints from product X and

allows CS reps to prepare accordingly to improve customer

experiences.

Market basket analysis is a common form of AD, it analyses

such items as websites & checkout scanner info to detect

customers’ buying behaviour & predict future behaviour by ID’ing

affinities among their purchasing choices

o Used frequently to develop campaigns for cross-selling,

physical product placement and inventory control

Statistical Analysis = performs such functions as information

correlations, distributions, calculations and variance analysis

Common use is forecasting, i.e. making predictions based on

time-stamped transactional info collected at a particular

frequency

o Ability to predict patterns based on statistical trends very

powerful aid in strategic decision making

Difference between DW & DM

Is based on level of manager input:

o Managers usually query DW w/ a preconceived question or

target statistic


o Conversely, managers often use data mining to answer

questions they have not thought to ask yet and ID things

that would not otherwise be readily apparent

Data visualization = Visually representing the data obtained by OLAP or

one of the other data-mining techniques, can be every helpful for

identifying patterns and trends

Supporting decisions w/ BI

The problem: businesses are often data rich, but information

poor EG, they know that customers are buying less of product

X, but they may not know why

The solution: BI = information collected from multiple sources

(suppliers, customers, competitors, partners & industries) that

analyses patterns, trends & relationships for strategic decision

making

o BI generally involves managers drilling down or up into

reports/trans or analytical info to locate source of issue

o BI can help align organisation w/ its key objectives by

using KPIs to suit style & strategy

Computing Software & Hardware

Some basic definitions:

o Hardware – all physical devices associated w/ computer

system

o Software – set of instructions the hardware executes to

carry out specific tasks

o MIS infrastructure – plans for how a firm builds, deploys,

uses & shares its data, processes & MIS assets

o Network – communications system created by linking 2 or

more devices & establishing a standard of methodology by

which they can communicate

o Client – computer designed to request info from a server


o Server – computer dedicated to providing info in response

to requests

o Enterprise Architect – person grounded in technology,

but fluent in business who bridges gap between two

departments to make sure relationship is effective

o Computer – electronic device operating under control of

instructions stored in its own memory that can accept,

manipulate & store data

Six components of a computer system

Central processing unit

o Actual hardware that interprets & executes program

(software) instructions & coordinates how all other

hardware devices work together

Primary storage

o Computer’s main memory, consists of RAM (random

access memory volatile memory (i.e. if you turn power

off you lose everything, it erases itself), cache memory &

ROM (read-only memory, non-volatile memory)

Secondary storage

o Equipment designed to store large volumes of data for long

time, EG hard drive, memory card, USB drive

Input devices (can be manual or automatic)

o Equipment used to capture info & commands, EG

keyboards (manual) or barcode scanners (auto)

o MICR – reads ink on cheques; OCR – converts text into

digital format for computer input; OMR – detects presence

or absence of mark in predetermined place

Output devices

o Equipment used to see, hear & react to results of

processing info, EG monitors or printers


Communication devices

o Equipment used to send info & receive it from one location

to another, EG modem

Modem = comm device which connects a computer

to a telephone line in order to access another

computer. Converts digital signal from computer to

analogue one and vice versa

List of modems by speed:

Dial-up, cable, DSL, Wireless, Satellite

Binary terms & capacity

Bit – 1 character in binary code (1 or 0)

Byte – 8 bits

Kilobyte (KB) – 1024 bytes

Megabyte (MB) – 1024 KB

Gigabyte (GB) – 1024 MB – 10^9 bytes

Terabyte (TB) – 1024 GB – 10^12 bytes

Petabyte (PB) – 1024 TB – 10^15 bytes

Exabyte (EB) – 1024 PB – 10^18 bytes

ASCII = American Standard Code for Information Interchange,

type of binary code, allows for computers to talk to each other

w/ ease

Computer Categories (in size order)

PDA

Tablet

Laptop

Desktop

Workstation – computer strengthened for software/web

development and other e-business tools

Minicomputer – server for managing internal company

networks

Mainframe computer – designed to meet computing needs of

hundreds in a large business environment

Supercomputer – used by companies like NASA who need

massive amounts of data analysed


o Use of these has led to clustering (chaining of many PC’s

together to build mass-market systems)

System software

Includes both operating system software & utility software

o OS software: controls the application software & manages

how the hardware devices work together, EG – Mac OS X,

Microsoft Windows, Linux (Open System, was developed

through crowd-sourcing), Unix (for scientists)

o Utility software: provides additional functionality to

operating system, EG – anti-virus software, screen savers

or file & data recovery

o Application software: used for specific information

processing needs, EG – payroll, CRM, project management

& many others

Can also include things like internet browsers, email

software, data management software & many more

Moore’s Law: States that # of transistors on a chip will double

approximately every 2 years

BIOS = Basic input/output system, tells computer how to load

something (operating system) up/how to ready hard drive & get data

from it

Networks Programming


Definitions

Network – a communications, data exchange, and resource-sharing

system created by linking two or more computers and establishing

standards, or protocols, so that they can work together

Any two points that are connected electronically, computers,

phones etc.

Needs standards i.e. common languages to communicate in

Client – computer designed to request info from a server

Server – computer dedicated to providing info in response to requests

Telecommunication system – enables the transmission of data over

public or private networks

HTML – Hypertext markup language

Standardised system or language for tagging text files to achieve

font, colour, graphic & hyperlink effects in web browser

Transmission Mediums

The tools or physical things used to send data signals

Can be wired or wireless

o E.G. Bluetooth, infrared, RFID, 3G (Wireless)

Routers = cabled too, so most instances of internet will be multi,

not just one

Trend towards fibre optic cables, as they are fastest option,

much faster than wireless or cabled options

o May also work over cellular network to get data

o Or may have to use satellite in remote areas, but this is

subject to changing weather, latency is also quite high

because of distances

Network’s 4 components (besides computer)

Protocol – set of rules to make sure everyone speaks the same

language

NIC (Network interface card) – allows computers to send/receive

messages


Cable – connects computers together

Router – performs traffic control

4 things that differentiate networks

Architecture:

o P2P – network that relies on computing power &

bandwidth of participants in the network rather than a

centralized server

o Client/Server networks – model for applications in

which bulk of back-end processing takes place on a server,

while processing that involves communication w/ users

takes place on clients

Topology:

o Physical way computers are connected, may affect speed

as some require centralized hub, EG star shape

Protocols:

o Standard that specifies format of data & rules for

transmission

o Results in interoperability, where two computers that have

been made by different manufacturers can share data &

resources

Media:

o Refers to type of media used to carry signals between

computers, can be wired or wireless

Types of Networks

LAN (Local Area Network)

o Designed to connect groups of computers in close

proximity to each other such as in an office building

o Usually quite small, EG – City library

WAN (Wide Area Network) Spans a large geographic area, such

as a state, province or country. WAN’s often connect multiple

smaller networks, such as LANs, EG the internet


A medium range one is MAN (Metropolitan area network), EG a

university campus

When thinking about what kind of network a company would

need, think about the scale of their operation & where thye’re

working

Internet = network of networks

Technically began in 1969 with development on ARPANET in

response to threat of soviet missile strikes

If nukes had hit, communications system would’ve been knocked

out

ARPANET allowed messages from computer to computer and did

not have to use large nodes etc.

This is essentially the way the internet operates now

Intranet

An internalized portion of the internet, protected from outside

access, that allows an organisation to provide access to

information and application software to only its employees

E.g. – CECIL for UOA

Might be used for security, or for efficiency

Extranet

An intranet that is available to strategic allies

E.g. ‘just in time’ production which lets suppliers know when

they need to supply you with things to ensure efficiency

Feedback functions might also operate on intranet

Companies use communications medium of internet to access their

intranets and extranets

VPN (Virtual Private Networks)

A way to use public telecommunication infrastructure (e.g.

Internet) to provide secure access to an organization’s network

Will encrypt your data along the way to make sure people can’t

freely access it


VAN (Value-added network)

A private network, provided by a 3rd party, for exchanging

information through a high capacity connection

Business Network Characteristics

Computer can only do exactly what we tell it to do, thus every

function must be thoroughly mapped out

Computer programs are essentially algorithms

Algorithm = A procedure for solving a problem in terms of the

actions to be executed and the order in which these actions are

to be executed

Order of algorithm is important or can cause issues

Pseudocode

An artificial and informal language that helps programmers

develop algorithms

Very similar to everyday English, is convenient and user-friendly

and is not an actual computer language

o It can not be executed on computers

Helps programmers to think out a program before attempting to

write it in a programming language

o (See pancakes example)

o Often distinguished from natural language by ‘do’ and

‘wait’

Natural language = language we speak to each other in

Systems Development Methodologies Project Management


Business consequences of software success/failure:

Increased/Decreased revenue

o If SCM of company x is bad can cause earnings to fall

Repair or damage to brand reputation

o CRM can directly enhance brand’s reputation, equally, bad

software can damage reputation of brand

Prevent or incur liabilities

o Good technology can save lives, faulty technology can take

them. And if harm is caused that means lawsuits

Increasing or decreasing productivity

o CRM & SCM can directly increase productivity

Systems development lifecycle

Planning phase

o Plan what we’re trying to achieve, someone has a bright

idea they take to an executive, plan goals etc.

Analysis phase

o Analyze what stakeholders require and refine project goals

into defined functions and operations of the intended

system. IE – talk to the people who’re going to be

using/managing the system/customers and give use

feedback

o May involve using surveys, questionnaires, focus groups

Design phase

o Take the requirements we’ve identified and putting them

down on paper. This takes the form of, layouts, business

rules, diagrams, pseudo code etc.

Development phase

o Involves taking detailed design and writing code,

transforming the design into an actual system

Testing phase


o Brings all project pieces together into a special testing

environment to test for errors, bugs, and interoperability

and verify that the system meets all of the business

requirements defined in the analysis phase

o Most skipped phase, results in flawed products and the

needs for patches/updates etc.

o Companies today may even test things on customers with

limited releases.

Implementation phase

o You place system into production, and install it at company

so users can perform actual business functions

o Sometimes runs into problems when need to train staff

arises, managers don’t want to lose production hours

o Good opportunity: in hospitals

Maintenance phase (Longest phase, 80%)

o Involves performing changes, corrections, additions, and

upgrades to ensure system continues to meet business

goals

FURPS (Framework for testing quality)

Functionality – does it do what it’s supposed to do

Usability – is it easy for my customers to use it

Reliability – is my system working consistently

Performance – how fast and efficient system is

Supportability – has to be easy to fix and maintain

Methodology

What is it?

o A set of policies, procedures, standards & processes that

people apply to challenges

Traditional software development methodologies:

Waterfall methodology:

o Takes systems development life cycle and does them one

after another in a nice sequence


o Success rate is about 10%

o Very inflexible, what if major change in market i.e. a new

operating system developed

Assumes user can specify all business requirements

in advance

Agile Methodologies

Giving people new technology while it’s still being structured e.g.

Google Beta (Gmail on beta for 5 years)

o Aims to speed up development process by giving

customers tech quickly then continuously developing it

Rapid App development (RAD) or prototyping

o Communicate with stakeholders, and as soon as customers

start telling us things we mock up a prototype and go back

to customers

o Repeat process very quickly, lots of communication (Build,

demonstrate, refine until done)

o Aims to accelerate systems development process through

rapid construction of evolutionary prototypes

o Big benefit = if you’re doing the wrong things it’ll probably

get picked up quickly & you can get opinions from all levels

of business hierarchy & test it all the time

eXtreme programming (XP)


o About communication with customers, breaks a project

into tiny phases, and developers can not continue on to

next phase until the first phase is complete

Rational Unified Process (designed by IBM, not that agile)

o Provides a framework for breaking down the development

of software into 4 phases:

o Inception, elaboration, construction, transition

o Project does not progress from one phase to the next until

the customer is happy

SCRUM (Used by UoA a lot e.g. CECIL)

o Uses small teams to produce small pieces of deliverable

software using daily meetings and ‘sprints’ or 30 day

intervals to achieve an appointed goal


o Lots of communication with customer

Agile Manifesto:

“We are uncovering better ways of developing software by doing it &

helping others to do it. Through this work we have come to value:

Individuals & interactions over processes & tools

Working software over comprehensive documentation

Customer collaboration over contract negotiation

Responding to change over following a plan

While there is value in the items on the right, we value the items on the

left more

12 principles behind agile manifesto

Satisfy the customer through early and continuous delivery of

valuable software

Welcome changing requirements

Deliver working software frequently

Business people and developers must work together on a daily

basis

Build projects around motivated people

Face-to-face communication is best

Working software is the measure of progress

Agile processes promote sustainable development

Technical excellence and good design enhances agility

Simplicity is essential

The best constructs emerge from self-organizing teams

Regularly reflect on how to be more effective and adjust

accordingly

Key reasons why software projects fail


Having unclear or missing business requirements

Skipping SDLC phases

Changing technology

Catering for cost of finding errors in SDLC

Keys to developing successful software

Slash the budget

o Small budgets force users to focus on the essential

If it doesn’t work, kill it

o Bring all key stakeholders together to evaluate and assess

the software

Keep requirements to a minimum

o Start each project with what the software must absolutely

do

Test and deliver frequently

o As often as once a week and not less than once a month,

complete a part of the project or a piece of software

Assign non-IT executives to software projects

o Keeps everything in perspective for the business and act as

useful liaisons

Project Management

Project definitions

A project is temporary endeavour undertaken by a temporary team

(maybe) with a defined beginning and end, undertaken to meet unique

goals and objectives, typically to bring about added value

A successful project is one that is one time, within budget, meets the

business requirements and satisfies the customer’s needs

Project management is the application of knowledge, skills, tools and

techniques to project activities to meet project requirements

Deliverable is any measureable, tangible, verifiable outcome, result or

item that is produced to complete a project

A milestone is a key date when certain activities must be performed


Project managers are individuals who are experts in project planning

and management

Project management office is an internal department that oversees all

organizational projects

Project management process

Initiation

Determine nature and scope of projects

Planning

Plan time, costs, resources to effectively manage project

Execution

Involves coordinating people and resources with a view to

completing project

Monitoring and controlling

Consists of those processes performed to observe project

execution so that potential problems can be identified in a timely

manner and corrective action can be taken, when necessary, to

control the execution of the project

Closing

Includes the formal acceptance of the project and end, can be

success or failure

Project risks (Main reasons they fail)

Poor planning or project management

Change in business goals during project

Lack of support form business management

Lack of resources

Lack of support form IT management

Change in technology during project


About 30% of Major IT projects fail, but about 70% of software

engineering projects fail

What do project managers do?

Choosing strategic projects

o Depends on business goals, needs & a CBA of the project

Draw up the project plan

o A formal, approved document that manages and controls

the project execution

o Characteristics of good plan:

Easy to understand and read, communicated to all

participants, appropriate to projects size/complexity

and prepared by team rather than individual

o Will define scope, objectives, constraints and assumptions

made w/ regard to project

o SMART objectives:

Specific, measurable, agreed upon, realistic & timely

o Should also have success plans and a kill switch

Balance triple constraints (Project management triangle)

o Cost (Expense)

o Scope (Functional requirements)

o Time (Deadlines)


Managing the project:

o Managing people

o Managing communications both internally and externally

o Managing change

Outsourcing projects

o IE handing over a business function to an outside provider

o EG – Tests being printed by outside company for UoA

IT departments and HR do the most outsourcing

Followed by facilities management, finance and accounting then

marketing and sales

Ethics Info Security


Ethics

Principles & standards that guide our behaviour

Common aspects of Ethics relating to IS

Privacy – 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

o In the future privacy is a perversion: Blind Faith, Ben Elton

Confidentiality – the assurance that messages and information

are available only to those who are authorized to view them

o IP – covers all intangible creative work that is embodied in

physical form by copyright, trademarks & patents

Information Ethics – examines the ethical and moral issues

arising from the development and use of information

technologies, as well as the creation, collection, duplication,

distribution and processing of info itself

Key laws

Privacy Act 1993

Crimes Act 1961

OIA 1982

NZ BofR Act 1990

Unsolicited Electronic Messages Act 2007


Issues affected by technology advances

IP – intangible creative work embodied in physical form

Copyright – legal protection afforded to an expression of an idea,

such as a song/video game

Fair use doctrine – in certain situations is ok to use copyrighted

material

Pirated software – unauthorized use, duplication, distribution or

sale of copyrighted software

Counterfeit software – Software manufactured to look like the

real thing and sold as such

Policies

Exist to apply ethics to peoples’ interactions with IS, EG – proper

use policy or social media policy


Information Security

Definition:

A broad terms encompassing the protection of information from

accidental or intentional misuse by persons inside or outside the

organisation

Domains:

Physical

Digital

Political


IS Systems must be secure enough to maintain confidentiality

and functionality

o Downtimes (times when a system is unavailable) can be

very costly if companies don’t plan adequately for them

o Can be caused by natural or manmade issues

Costs to business of downtime:

CIA of information security

Confidentiality

o About what kind of people can access what kind of people

can access info

Availability

o Making sure that info is available when needs to be used

Integrity

o Making sure information is up to date & accurate

Information Security Services

Confidentiality

Integrity

Availability

Authentication

o Someone user knows, EG using your UPI & password

o Something user has:

Swipe Cards


ID Cards/Authentication Keys

Token: EG: ASB Netcode

o Something that is part of the user:

Biometrics (EG facial recognition)

Access control – whether or not you can access

Non-repudiation

Auditing

Other terms

Phishing: a technique to gain personal information for the

purpose of identity theft, usually by means of fraudulent email

Social Engineering

o Using one’s social skills to trick people into revealing

access credentials or other information valuable to the

attacker

Virus: Software written with malicious intent to cause

annoyance

Black-hat hacker: breaks into other peoples’ systems & may

just look around or may steal & destroy info

White-hat hacker: works at the request of a system owner to

find system vulnerabilities & address them

Adware: purports to serve some useful function, but really is

just way for advertisers to display w/out consent


Spyware: Special class of adware that collects data about user

& transmits it over internet w/out user’s permission

Hacker weapons:

o Elevation of privilege

o Hoax (sends hoax virus message which has virus attached

to it, so when people open it they get virus)

o Spoofing – pretending to be someone else

Common viruses

o Backdoor program – opens way into network for virus

o DoS attacks or DDos attacks (Denial of service or

Distributed Denial of Service)

o Trojan-horse

o Worm – Spreads itself from file to file, doesn’t need to

attack to anything, can tunnel anywhere

Protection & Resistance

Content filtering

o Prevents emails containing sensitive info from transmitting

and stops span and viruses from spreading

Encryption

o Scrambles information into an alternative form that

requires a key or password to decrypt the information

Firewalls

o Examines each message that wants entrance to the

network, and unless the message has the correct marking

the firewall prevents it from entering the network

First line of defence is people, Second line is technology

People = forming information security plan/policies

Tech = deploying technologies to combat attacks

Adapt/Success


Focus: How businesses adapt to new environments

EG: DVD players

Starts with limited competitive scope, and high costs of

production

But eventually becomes much cheaper because of economies of

scale as a result of demand, then becomes low cost and big

competitive cope

Inevitably, however, product goes into final stage: decline,

whereby the product is replaced by newer & better technologies

VIDEO: Health/Wealth stats

Main idea is to show what happens when cultures mix, it’s good

for business

EG: Cameras

Polaroid cameras start in 1942 as very small market, for very

expensive good. But by 1960s/70s becomes popular and part of

much larger market

But today, polaroid in a decline phase and less people buy them

o To address this they made it more of a designer item,

colourful etc.

o Still has CA of instant printing, but most don’t have digital

memories etc. – films/ink = quite expensive

o But recently have created polaroid cameras w/ ink jet

printers in them and digital capabilities, films/ink still very

expensive – but is example of attempted adaption

Ability to adapt to new business environment and sustain growth

is key for survival

Example of failure to adapt: Typewriters

EG: Blockbuster v Netflix

Shows failure of BB to adapt

Netflix provides multi-platform CA’s that BB can’t compete w/


Sustaining & Disruptive technologies

Sustaining: Technology that continuously improves your

business, may be incremental

o EG: Better computer chip or USB sticks

Disruptive: Like BPR, completely overhauls the way you do

things – overhauls whole situation

o EG: Printing press (disrupted concentration of printing

power amongst rich elite) or steam engine (allows for

mechanization of many business activities = factories)

o Rupert Murdoch says internet is like printing press in terms

of it’s impact on business

As businesses develop, 5 forces analysis of industry will change

as well. EG if tech becomes more popular more firms will sell it,

thereby increasing buyer power etc.

o May use this idea of development in the exam, to talk

about how they might change and grow as the business

environment grows Same for strategy and value chain,

both will have to develop

o HAVE TO REMAIN ADAPTIVE = core idea of this lecture

Videos


W1

The Future Supermarket

1. What systems supported the process?

Facial recognition/remembrance systems

Electronic wallet system

Automatic payment/transaction systems, able to scan all information on products

Inventory management system real time supplier management

Barcode processing system

Security system

Decision-making system (To see if shopper has enough credit)

2. What value was delivered by IS?

Saving time for both shopper and supermarket

Saving space on aisles to allow for more products to be displayed

No more checkout jobs…bad thing?

Nothing can be stolen, all scanned & $$$ deducted

Comcast – Fastest Fast

- Shows how Comcast wants to portray itself in terms of vision, a

company that adapts to change and provides highest quality service

BMW 1-series coupe production

-

W2

Piano Staircase

Making fries at McD’s

Future Supermarket again

TradeMe (Exercise, not video)

The Trillion $ Bet

Perceptive Pixel

W3

Chimps collaboration

Postie Plus (Quotes, not video)


Bodyshop SAP

Microsoft CRM 3.0: Lemonade Stand

Ordering Pizza in the future

Fish to Plate

Fletcher Challenge Forests

SCM for a better world

W4

That is architecture

Software + Services

Why Data Matters

The Internet of things

Wal-Mart Beer/Diapers

Animated map of AKL’s public transport

Value of data visualisation

W5

Britain from above

VPN

Business Networks

Project Glass

Building a plane v building an app

Herding Cats

W6

Google’s goals

Larry & the physical security

Stuxnet

BBC 4 statistics

You Will AT&T ad campaign

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