CHAPTER 6 : VALUING ORGANIZATIONAL INFORMATION

Organizational information

Organizational information comes at different levels and in different formats and granularities. Information granularities refers to the extent of details within the information. The organizational must know what kind of information that they want to know. We must ensure the information gives the best quality or high quality for that organizational itself.

Employees must be able to differentiate the levels of the information, formats, and granularities of information when making a decision. If the employees can knows how to use the information with different levels of information or format then, the information can be a values to the sender or receiver of the information.

Successfully collecting, compiling, sorting, and finally analyzing information from multiple levels, in varied formats, exhibiting different granularity can provide tremendous insight how an organization is performing.

THE VALUE OF TRANSACTIONAL AND ANALYTICAL INFORMATION

•Transactional information

– encompasses all of the information contained 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 analysis tasks.Organizations capture and store transactional information in databases and use it when performing operational tasks and repetitive decisions such as analyzing daily sales reports and production schedules

•Transactional information 

·   examples include withdrawing cash from an ATM, making an airline reservation, purchasing stocks

·   Compile a list of additional transactional information examples

·   These could include daily sales, hourly employee payroll, product orders, shipping an order

•Analytical information

·   includes transactional information

·   Analytical information also includes external organizational information such as market, industry, and economic conditions

·   Analytical information is used to make ad-hoc decisions

·   Analytical information examples include trends, sales, product statistics, and future growth projections

·   Compile a list of additional analytical information examples

·   These could include cost/benefit analysis, sales forecast, market trends, industry trends, and regulations

·   •Ask your students to compile a list of the different types of ad-hoc decisions a business might base on analytical information

·   These could include building a new plant, hiring or reducing workforces, introducing a new product

Poor Information

Poor information happened when some of the information are not completed or missing and this make the information are not accurate, inability to track customers. With the poor information, its difficult for the organizational to make a right decision because of poor information happened.

High Information

High quality of information can significantly improve the chances of making a good decision and directly increase an organization's bottom line. But if the organizational have high quality information, that's not guarantee that can make a good decision because obviously people ultimately make decisions. So, if the organizational have a high quality of information but the people in the organizational do not use the information accurately, it will be nothing.

THE VALUE OF TIMELY INFORMATION

·        

•  Real-time information – immediate, up-to-date information
•  Real-time system – provides real-time information in responses to query requests

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

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

Chapter 5 Organizational Structres That Suppor Strategic Initiative

 Chief Information Officer(CIO)

1. Serves as the company’s top technology infrastructure manager.
2. Runs the organization’s internal IT operations.
3. Works to streamline business processes with technology.
4. Focuses on internal customers (users and business units).
5. Collaborates and manages vendors that supply infrastructure solutions.
6. Aligns the company’s IT infrastructure with business priorities.
7. Developers strategies to increase the company’s bottom line (profitability).
8. Has to be a skilled and organized manager to be successful.

(Chief Technology Officer (CTO)

1. Serves as the company’s top technology architect. 
2. Runs the organization’s engineering group. 
3. Uses technology to enhance the company’s product offerings. 
4. Focuses on external customers (buyers). 
5. Collaborates and manages vendors that supply solutions to enhance the company’s product(s). 
6. Aligns the company’s product architecture with business priorities. 
7. Develops strategies to increase the company’s top line (revenue). 
8. Has to be a creative and innovative technologist to be successful.

Chief Security Officer (CSO)

1. leader responsible for the development, implementation and management of the organization’s corporate security vision, strategy and programs. 
2. They direct staff in identifying, developing, implementing and maintaining security processes across the organization to reduce risks, respond to incidents, and limit exposure to liability in all areas of financial, physical, and personal risk. 
3. establish appropriate standards and risk controls associated with intellectual property and direct the establishment and implementation of policies and procedures related to data security.

Chief Privacy Officer (CPO)

1. Responsible for managing the risks and business impacts of privacy laws and policies. 
2. Created to respond to both consumer concern over the use of personal information, including medical data and financial information, and laws and regulations. 
3. Evaluating legislative and regulatory proposals involving collection, use, and disclosure of personal information by the Federal Government. 
4. conducting a privacy impact assessment of proposed rules of the Department or that of the Department on the privacy of personal information, including the type of personal information collected and the number of people affected. 
5. coordinating with the Officer for Civil Rights and Civil Liberties.

Chief Knowledge Officer (CKO)

1. responsible for overseeing knowledge information within an organization. 
2. The CKO's job is to ensure that the company profits from the effective use of knowledge resources. 
3. Investments in knowledge may include employees, processes and intellectual property. 
4. CKO can help an organization maximize the return on investment (ROI) on those investments. 
5. Maximize benefits from intangible assets, such as branding and customer relationships. 
6. Repeat successes and analyze and learn from failures. 
7. Foster innovation. 
8. Avoid the loss of knowledge that can result from loss of personnel.

Chapter 4 : Measuring the success of strategic initiatives

Key Performance Indicators (KPIs)

KPIs are the measure that are tied to business drivers. Performance metrics fall into a nebulous area of business intelligence that is neither technology nor business-centered, but this area requires input from form both IT and business professionals to find success.


In order to have a success in measuring the strategic initiatives, the organization should have the efficiency and effectiveness. Efficiency and effectiveness metrics are two primary types of IT metrics.

Efficiency IT

metrics measure the performance of It system itself including throughput, speed, availability.

Effectiveness IT

metrics measure the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases.


There must be benchmarks when want to measure the success based on effectiveness or efficiency. Benchmarking is a process of continuously measuring system results, comparing those results to optimal system performance and identifying steps and procedures to improve system performance.

Chapter 3 : Strategic Initiatives for Implementing Competitive Advantages

Supply Chain Management (SCM) 

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

Four basic components 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

Effective and efficient SCM systems can enable an organization to:

• –Decrease the power of its buyers 
• –Increase its own supplier power 
• –Increase switching costs to reduce the threat of substitute products or services 
• –Create entry barriers thereby reducing the threat of new entrants 
• –Increase efficiencies while seeking a competitive advantage through cost leadership

Customer relationship management (CRM) 

 involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization's profitability

Many organizations, such as Charles Schwab and Kaiser Permanente, have obtained great success through the implementation of CRM systems

 Business Process Reengineering - BPR

-BPR is like standardized set of activities that accomplish a specific task such as processing a customers order such as McDonalds,Big Apple, and so on.

Enterprise resource planning (ERP) 

Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprisewide information on all business operations.Keyword in ERP is “enterprise”

Chapter 2 : Identifying Competitive Advantages

WHAT IS COMPETITIVE ADVANTAGES ?

A product or service that an organization’s customers place a greater value on than similar offerings from a competitor. Same like best value product.

A business strategy is a leadership plan that achieves a specific set of goals or objectives such as:

- Developing new products or services.
- Entering new markets
- Increasing customer loyalty
- Attracting new customers
- Increasing sales.
- Decrasing costs.

The Five Force Model

1. - Buyer power
2. - Supplier power
3. - Threat of subtitude products or services.
4. - Threats of new entrants
5. - Rivalry among existing companies

1- Buyer power

• High – when buyers have many choices of whom to buy.
• Low – when their choices are few.
• To reduce buyer power (and create competitive advantage), an organization must make it more attractive to buy from the company not from the competitors.Best practices of IT-based
• Loyalty program in travel industry (e.g. rewards on free airline tickets or hotel stays )

2 - Supplier power

• High – when buyers have few choices of whom to buy from. 
• Low – when their choices are many.
• Best practices of IT to create competitive advantage.
• E.g. B2B marketplace – private exchange allow a single buyer to posts it needs and then open the bidding to any supplier who  would care to bid. Reverse auction is an auction format in which increasingly lower bids. 

3- Threat of subtitude products or services

• High – when there are many alternatives to a product or service. 
• Low – when there are few alternatives from which to choose.
• Ideally, an organization would like to be on a market in which there are few substitutes of their product or services. 
• Best practices of IT 
• E.g. Electronic product -same function different brands

 4.Threats of new entrants

• High – when it is easy for new competitors to enter a market.
• Low – when there are significant entry barriers to entering a market. 
• Entry barriers is a product or service feature that customers have come to expect from organizations and must be offered by entering organization to compete and survive.
• Best practices of IT
• E.g. new bank must offers online paying bills, acc monitoring to compete.

5- Rivalry among existing companies

• High – when competition is fierce in a market 
• Low – when competition is more complacent 
• Best Practices of IT 
• Wal-mart and its suppliers using IT-enabled system for communication and track product at aisles by effective tagging system. Reduce cost by using effective supply chain

The Three Generics Strategies 

1. Cost Leadership

Becoming a low-cost producer in the industry allows the company to lower prices to customers.
Competitors with higher costs cannot afford to compete with the low-cost leader on price.

2. Differentiation
Create competitive advantage by distinguishing their products on one or more features important to their customers.
Unique features or benefits may justify price differences and/or stimulate demand.
Ex: i-care by Proton

3. Focused Strategy

Target to a niche market.Concentrates on either cost leadership or differentiation

The Value Chains-
Targeting Business Processes

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

Chapter 1 : Business Driven Technology

Information Technology Basic

Information Technology is a field concerned with the used of technology in managing and pcocessing information.

Management Information systems (MIS)

•  A general name for the business function and academic discipline covering the application of people, technologies, and procedures to solve business problems.
• Management Information Systems (MIS) is a business function for marketing, finance, operations and human resources to collecting information and solve business problems.
• Basically, this MIS is business function and academic discipline covering the application of people, technologies and procedures. 
• There are three important elements of MIS and the first important elements are data, information and business intelligence. 

• Before it gathers as information, raw facts such as date, item number, item description, quantity ordered, customer name, shipping details are characteristics of an event and after that, the data will converted into meaningful and useful context. 
• The information will be analyze and making efforts to support the decision. 
• This way helps companies gain a more comprehensive knowledge of the factors affecting their business.

It is important to learn about:

Data, information, and business intelligence IT resources.
 IT cultures


IT RESOURCES

1. people use
2. information technology to work with
3. information

There are  organizational information cultures.Which are:

• Information functional culture. 

It means everyone has their own function. Sales department refuse to share information about their sales income with finance department. So, manager of finance department need the sales income information each time new sales income and strategy is developed.

• Information

sharing culture which means every different department trust and share with each other.

• Information-inquiring culture.

 It means that every department in the business organization search for information they need that will lead them to latest trend and new direction.

• Information-discovery culture.

It's about employees in all department are open to new insight and goal about the challenges and find initiative to create competitive advantage. 


It Cultures
Information-Functional Culture Employees use information as a means of exercising influence or power over others. For example, a manager in sales refuses to share information with marketing. This causes marketing to need the sales manager’s input each time a new sales strategy is developed.


Information-Inquiring Culture

Employees across departments search for information to better understand the future and align themselves with current trends and new directions.

Information-Sharing Culture

 Employees across departments trust each other to use information (especially about problems and failures) to improve performance.


Information-Discovery Culture

Employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages.

Information-Functional Culture 

Employees use information as a means of exercising influence or power over others. For example, a manager in sales refuses to share information with marketing. This causes marketing to need the sales manager’s input each time a new sales strategy is developed.

INFORMATION TECHNOLOGY'S IMPACT ON BUSINESS OPERATION