ITIS101 IT & BUSIN ESS PROCESSES

Lecture 12
Revision
 W hat to expect in the exam
• Exam content:Five Questions

• Questions will be divided into two parts –

 Q 1-4 will be short/long answer questions .

 Q 5 Long answer questions will be based on case study and may also have sub parts.

• Exam time:2 hours plus 10 minutes

• Exam format: Paper based.

– You must use full sentences in your answers for theory questions..
– Try to demonstrate your knowledge of the topics studied.
 Week 1 – Chapter 1

Information Systems in
Global Business Today
 What’s New in Management Information Systems
• IT Innovations • Firms and Organizations Change
– Cloud computing, big data, Internet of – More collaborative, less emphasis on
Things hierarchy and structure
– Mobile digital platform – Greater emphasis on competencies and skills
– AI and machine learning – Higher-speed/more accurate decision making
• New Business Models based on data and analysis

– Online streaming music and video – More willingness to interact with consumers (social
media)
– On-demand e-commerce services
– Better understanding of the importance of IT
• E-commerce Expansion
– E-commerce expands to nearly $1 trillion in 2018
– Netflix now has more than 125 million US subscribers
– Online services now approach online retail in revenue
– Online mobile advertising now larger than desktop
• Management Changes
– Managers use social networks, collaboration tools
– Business intelligence applications accelerate
– Virtual meetings proliferate
 Globalisation Challenges and O portunities:A Flattened W orld

• Internet and global communications have greatly changed how and where business is
done
– Drastic reduction of costs of operating and transacting on global scale
– Competition for jobs, markets, resources, ideas
– Growing interdependence of global economies
– Requires new understandings of skills, markets, opportunities
– Challenges yes, but opportunities as well
– Information systems enable globalization of commerce

The Emerging Digital Firm

• In a fully digital firm:

– Significant business relationships are digitally enabled and mediated
– Core business processes are accomplished through digital networks
– Key corporate assets are managed digitally
• Digital firms offer greater flexibility in organization and management
– Time shifting, space shifting
 Strategic Business Objectives of
Information Systems (2 of 2)
• Firms invest heavily in information systems to achieve six strategic business objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival
 Operational Excellence
• Improved efficiency results in higher profits
• Information systems and technologies help improve efficiency and productivity
• Example:Walmart
– Power of combining information systems and best business practices to achieve operational
efficiency—and over $485 billion in sales in 2017
– Most efficient retail store in world as result of digital links between suppliers and stores

N e w P roducts,Ser vices,and Business Models

• Information systems and technologies enable firms to create new products, services, and
business models
• Business model: how a company produces, delivers, and sells its products and services
• Example: Apple
– Transformed old model of music distribution with iTunes
– Constant innovations—iPod, iPhone, iPad, etc.
 Customer and Supplier Intimacy
• Customers who are served well become repeat customers who purchase more
– Example: Mandarin Oriental Hotel
– Uses IT to foster an intimate relationship with its customers, keeping track of
preferences, etc.
• Close relationships with suppliers result in lower costs
– Examples: Mandarin Oriental Hotel and JC Penney (in text)
– JC Penney uses IT to enhance relationship with supplier in Hong Kong

Improved Decision Making

• Without accurate information:
– Managers must use forecasts, best guesses, luck
– Results in:
• Overproduction, underproduction
• Misallocation of resources
• Poor response times
• Poor outcomes raise costs, lose customers
• Real-time data improves ability of managers to make decisions.
• Example:Verizon’s web-based digital dashboard to provide
managers with real-time data on customer complaints,
network performance, line outages, etc.
 C ompetitive Advantage
• Often results from achieving previous business objectives
• Advantages over competitors
• Charging less for superior products, better performance, and better response to suppliers and
customers
• Examples: Apple,Walmart, UPS are industry leaders because they know how to use
information systems for this purpose

Survival
• Businesses may need to invest in information systems out of necessity; simply the cost of
doing business
• Keeping up with competitors
– Citibank’s introduction of ATMs
 ITIS101 IT & BUSIN ESS PROCESSES

Lecture 2
Information Systems in Global Business
Today
Textbook Reading:C hapter 2
 Business Processes
• Business processes
– Flows of material, information, knowledge
– Logically related set of tasks that define how specific business tasks are
performed
– May be tied to functional area or be cross-functional
• Businesses: Can be seen as collection of business processes
• Business processes may be assets or liabilities
• Examples of functional business processes
– Manufacturing and production
• Assembling the product
– Sales and marketing
• Identifying customers
– Finance and accounting
• Creating financial statements
– Human resources
• Hiring employees
 H ow InformationTechnolog y Improves Business Processes
• Increasing efficiency of existing processes
– Automating steps that were manual
• Enabling entirely new processes
– Changing flow of information
– Replacing sequential steps with parallel steps
– Eliminating delays in decision making
– Supporting new business models

Systems for Different Management Groups

• Transaction processing systems
– Serve operational managers and staff
– Perform and record daily routine transactions necessary to conduct business
• Examples: sales order entry, payroll, shipping
– Allow managers to monitor status of operations and relations with external
environment
– Serve predefined, structured goals and decision making
Figure 2.2A Payroll T P S
 Systems for Different Management Groups (2 of 2)
• Systems for business intelligence
– Data and software tools for organizing and analyzing data
– Used to help managers and users make improved decisions
• Management information systems
• Decision support systems
• Executive support systems
Figure 2.3 How Management Information Systems Obtain Their Data from the
Organisation’s TPS
 Enterprise Applications
• Systems for linking the enterprise
• Span functional areas
• Execute business processes across the firm
• Include all levels of management
• Four major applications
– Enterprise systems
– Supply chain management systems
– Customer relationship management systems
– Knowledge management systems

• Also called enterprise resource planning (ERP) systems

• Integrate data from key business processes into single system.
• Speed communication of information throughout firm.
• Enable greater flexibility in responding to customer requests, greater accuracy in order
fulfillment.
• Enable managers to assemble overall view of operations.
 Supply Chain Management (SCM) Systems
• Manage relationships with suppliers, purchasing firms, distributors, and logistics companies.
• Manage shared information about orders, production, inventory levels, and so on.
• Goal is to move correct amount of product from source to point of consumption as quickly as possible
and at lowest cost
• Type of interorganisational system: Automating flow of information across
organisational boundaries
Customer Relationship Management (CRM) Systems
• Help manage relationship with customers.
• Coordinate business processes that deal with customers in sales, marketing, and customer
service
• Goals:
– Optimise revenue
– Improve customer satisfaction
– Increase customer retention
– Identify and retain most profitable customers
– Increase sales
 Knowledge Management Systems (KMS)
• Manage processes for capturing and applying knowledge and expertise
• Collect relevant knowledge and make it available wherever needed in the enterprise to
improve business processes and management decisions.
• Link firm to external sources of knowledge

Intranets and Extranets

• Technology platforms that increase integration and expedite the flow of information
• Intranets:
– Internal networks based on Internet standards
– Often are private access area in company’s Web site
• Extranets:
– Company Web sites accessible only to authorized vendors and suppliers
– Facilitate collaboration
 E-Business, E-Commerce, and E-Government
• E-business - Use of digital technology and Internet to drive major business processes
• E-commerce -Subset of e-business
• - Buying and selling goods and services through Internet
• E-government - Using Internet technology to deliver information and services to citizens,
employees, and businesses

What is Collaboration? What is Social Business?

• Collaboration
– Short lived or long term • Social business

– Informal or formal (teams) – Use of social networking platforms (internal and

external) to engage employees, customers, and
• Growing importance of collaboration suppliers
– Changing nature of work • Aims to deepen interactions and expedite information
– Growth of professional work— sharing
“interaction jobs” • “Conversations” to strengthen bonds with customers
– Changing organisation of the firm • Requires information transparency
– Changing scope of the firm • Seen as way to drive operational efficiency, spur
– Emphasis on innovation innovation, accelerate decision making
– Changing culture of work
 Business Benefits of Collaboration and Teamwork
• Investment in collaboration technology can return large rewards, especially in sales
and marketing, research and development
• Productivity: Sharing knowledge and resolving problems
• Quality: Faster resolution of quality issues
• Innovation: More ideas for products and services
• Customer service: Complaints handled more rapidly
• Financial performance: Generated by improvements in factors above
Tools and Technologies for Collaboration and Social Business
• E-mail and instant messaging (IM)
• Wikis
• Virtual worlds
• Collaboration and social business platforms
– Virtual meeting systems (telepresence)
– Cloud collaboration services (Google Drive, Google Docs, etc.)
– Microsoft SharePoint and IBM Notes
– Enterprise social networking tools
ITIS101 IT & BUSIN ESS PROCESSES

Lecture 3
Information Systems, Organisations
and Strategy

Textbook Reading:
Chapter 3
Disruptive Technologies

• IT changes relative costs of capital and the costs of information

• Information systems technology is a factor of production, like capital and labor
• IT affects the cost and quality of information and changes economics of information
• Information technology helps firms contract in size because it can reduce transaction
costs (the cost of participating in markets)
• Outsourcing

Economic Impacts

• Substitute products that perform as well as or better than existing product

• Technology that brings sweeping change to businesses, industries, markets
• Examples: personal computers, smartphones, Big Data, artificial intelligence, the Internet
• First movers and fast followers
• First movers—inventors of disruptive technologies
• Fast followers—firms with the size and resources to capitalise on that technology
 Porter’s Competitive Forces Model
• Why do some firms become leaders in their industry?
• Michael Porter’s competitive forces model
• Provides general view of firm, its competitors, and environment
• Five competitive forces shape fate of firm:
• Traditional competitors
• New market entrants
• Substitute products and services
• Customers
• Suppliers
 ITIS101
IT & BUSIN ESS PROCESSES

Lecture 4
I T Infrastructure and Emerging
Technologies
Textbook Reading:C hapter 5
Connection Between the Firm, IT Infrastructure, and Business Capabilities
 Computer Hardware Platforms

• Client machines
– Desktop PCs, laptops
– Mobile computing: smartphones, tablets
– Desktop chips vs. mobile chips
• Servers
• Mainframes
– IBM mainframe
– Digital workhorse for banking and telecommunications networks
What Are the Current Trends in Computer Hardware Platforms?
• The mobile digital platform • Consumerisation of IT and BYOD (bring your own
– Smartphones device)
– Netbooks – Forces businesses and IT departments to
rethink
– Tablet computers
how
– Digital e-book readers and apps (Kindle) IT equipment and services are acquired and
– Wearable devices managed
 What Are the Current Trends in Computer Hardware Platforms?
• Cloud computing
– On-demand computing services obtained over network
• Infrastructure as a service (IaaS)
• Software as a service (SaaS)
• Platform as a service (PaaS)
– Cloud can be public or private
– Allows companies to minimize IT investments
– Drawbacks: Concerns of security, reliability
– Hybrid cloud computing model

Figure 5.9 Cloud Computing Platform

 What Are the Current Computer Software Platforms and Trends?

• Software outsourcing and cloud services

– Software packages and enterprise software
– Software outsourcing
– Cloud-based software services and tools
• Service Level Agreements (SLAs): formal agreement with service providers
• Mashups and apps
ITIS101 IT & BUSIN ESS PROCESSES

Lecture 5
Achieving Operational Excellence and
Customer Intimacy: Enterprise
Applications

Textbook Reading:Chapter 9
 Enterprise Systems
• Enterprise resource planning (ERP) systems
• Suite of integrated software modules and a common central database
• Collects data from many divisions of firm for use in nearly all of firm’s internal business
activities
• Information entered in one process is immediately available for other processes

Business Value of Enterprise Systems

• Increase operational efficiency

• Provide firm-wide information to support decision
making
• Enable rapid responses to customer requests for
information or products
• Include analytical tools to evaluate overall
organizational performance and improve
decision-making Figure How Enterprise Systems Work
 Supply Chain Management
• Inefficiencies cut into a company’s operating costs
– Can waste up to 25 percent of operating expenses
• Just-in-time strategy
– Components arrive as they are needed
– Finished goods shipped after leaving assembly line
• Safety stock: buffer for lack of flexibility in supply chain
• Bullwhip effect
– Information about product demand gets distorted as it passes from one entity to next
across supply chain

Global Supply Chains and the Internet

• Global supply chain issues • Internet helps manage global complexities

– Greater geographical distances, time differences – Warehouse management
– Participants from different countries – Transportation management
• Different performance standards – Logistics
• Different legal requirements – Outsourcing
 Customer Relationship Management
• Knowing the customer
• In large businesses, too many customers and too many ways customers interact with firm
• CRM systems
– Capture and integrate customer data from all over the organisation
– Consolidate and analyse customer data
– Distribute customer information to various systems and customer touch points across
enterprise
– Provide single enterprise view of customers

Figure . Customer Relationship Management (CRM)

 Customer Relationship Management Software
• CRM packages typically include tools for:
– Sales force automation (SFA)
• Sales prospect and contact information
• Sales quote generation capabilities
– Customer service
• Assigning and managing customer service requests
• Web-based self-service capabilities
– Marketing
• Capturing prospect and customer data, scheduling and tracking direct-
marketing mailings or e-mail
• Cross-selling

Business Value of Customer Relationship Management Systems

• Business value of CRM systems
• Churn rate
– Increased customer satisfaction
– Number of customers who stop using or
– Reduced direct-marketing costs purchasing products or services from a
– More effective marketing company
– Lower costs for customer acquisition/retention – Indicator of growth or decline of firm’s
customer base
– Increased sales revenue
ITIS101 IT & BUSIN ESS PROCESSES

Lecture 7
Enhancing Decision Making

Textbook Reading:C hapter 12

Information Requirements of Key Decision-Making Groups in a Firm
 The Decision Making Process

• Intelligence
– Discovering, identifying, and understanding the problems occurring in the organization
• Design
– Identifying and exploring solutions to the problem
• Choice
– Choosing among solution alternatives
• Implementation
– Making chosen alternative work and continuing to monitor how well solution is working
 What is Business Intelligence?
• Business intelligence
– Infrastructure for collecting, storing, analysing data produced by business
– Databases, data warehouses, data marts
• Business analytics
– Tools and techniques for analysing data
– OLAP, statistics, models, data mining
• Business intelligence vendors
– Create business intelligence and analytics purchased by firms

Business Intelligence and Analytics Capabilities

• Goal is to deliver accurate real-time information to decision makers

• Main analytic functionalities of BI systems
– Production reports
– Parameterised reports
– Dashboards/scorecards
– Ad hoc query/search/report creation
– Drill down
– Forecasts, scenarios, models
 Table 12.4 Examples of Business Intelligence Predefined Production
Reports

Business Functional Area Production Reports

Sales Forecast sales;sales team performance; cross-selling; sales cycle times

Service/call center Customer satisfaction; service cost; resolution rates; churn rates

Marketing Campaign effectiveness;loyalty and attrition; market basket analysis

Procurement and support Direct and indirect spending; off-contract purchases;supplier performance

Supply chain Backlog; fulfillment status; order cycle time;bill of materials analysis

Financials General ledger; accounts receivable and payable;cash flow;profitability

Human resources Employee productivity; compensation;workforce demographics; retention

 Predictive Analytics
• Uses variety of data, techniques to predict future trends and behavior patterns
– Statistical analysis
– Data mining
– Historical data
– Assumptions
• Incorporated into numerous BI applications for sales, marketing, finance, fraud
detection, health care
– Credit scoring
– Predicting responses to direct marketing campaigns

Big Data Analytics

• Big data: Massive datasets collected from social media, online and in-store customer data,
and so on
• Help create real-time, personalised shopping experiences for major online retailers
• Smart cities
– Public records
– Sensors, location data from smartphones
– Ability to evaluate effect of one service change on system
 Operational Intelligence and Analytics

• Operational intelligence: Business activity monitoring

• Collection and use of data generated by sensors
• Internet of Things
– Creating huge streams of data from web activities, sensors, and other monitoring devices
• Software for operational intelligence and analytics enable companies to analyse their big
data
ITIS101 IT & BUSIN ESS PROCESSES

Lecture 8
M anaging K nowledge and A rtificial
Intelligence

Textbook Reading:C hapter 11

 Types of Knowledge Management Systems

• Enterprise-wide knowledge management systems

– General-purpose firm-wide efforts to collect, store, distribute, and apply digital content
and knowledge
• Knowledge work systems (KWS)
– Specialized systems built for engineers, scientists, other knowledge workers charged with
discovering and creating new knowledge
• Intelligent techniques
– Diverse group of techniques such as data mining used for various goals:
discovering knowledge, distilling knowledge, discovering optimal solutions
 What Is Artificial Intelligence?
• Grand vision
– Computer hardware and software systems that are as “smart” as humans
– So far, this vision has eluded computer programmers and scientists
• Realistic vision
–
Systems that take data inputs, process them, and produce outputs (like all software
programs) and that can perform many complex tasks that would be difficult or impossible
for humans to perform.
• Examples:
– Recognise millions of faces in seconds • Major Types of AI
– Interpret millions of CT scans in minutes – Expert systems
– Analyse millions of financial records – Machine learning
– Detect patterns in very large Big Data databases – Neural networks and deep learning netw
– Improve their performance over time (“learn”) – Genetic algorithms
– Navigate a car in certain limited conditions – Natural language Processing
– Respond to questions from humans (natural – Computer vision
language); speech activated assistants like Siri, – Robotics
Alexa, and Cortana
 ITIS101
IT & BUSIN ESS PROCESSES

Lecture 11
Ethical and Social Issues in
Information Systems
Textbook Reading:C hapter 4
 What Ethical, Social, and Political Issues are Raised by Information Systems?
• Recent cases of failed ethical judgment in business
– Wells Fargo, Deerfield Management, General Motors, Takata Corporation
– In many, information systems used to bury decisions from public scrutiny
• Ethics
– Principles of right and wrong that individuals, acting as free moral agents, use to make
choices to guide their behaviors

• Information systems raise new ethical questions because they create opportunities for:
– Intense social change, threatening existing distributions of power, money, rights, and
obligations
• New opportunities for crime
• New kinds of crimes
 Five Moral Dimensions of the Information Age
• Information rights and obligations
• Property rights and obligations
• Accountability and control
• System quality
• Quality of life

Advances in Data Analysis Techniques

• Profiling
– Combining data from multiple sources to create
dossiers of detailed information on individuals
• Nonobvious relationship awareness (NORA)
– Combining data from multiple sources to find
obscure hidden connections that might help
identify criminals or terrorists
Basic Concepts: Responsibility, Accountability, and Liability
• Responsibility
– Accepting the potential costs, duties, and obligations for decisions
• Accountability
– Mechanisms for identifying responsible parties
• Liability
– Permits individuals (and firms) to recover damages done to them
• Due process
– Laws are well-known and understood, with an ability to appeal to higher authorities

Ethical Analysis
• Five-step process for ethical analysis
1. Identify and clearly describe the facts.
2. Define the conflict or dilemma and identify the higher- order values involved.
3. Identify the stakeholders.
4. Identify the options that you can reasonably take.
5. Identify the potential consequences of your options.
 Information Rights: Privacy and Freedom in the Internet Age
• Privacy
– Claim of individuals to be left alone, free from surveillance or interference from other
individuals, organizations, or state; claim to be able to control information about yourself
• In the United States, privacy protected by:
– First Amendment (freedom of speech and association)
– Fourth Amendment (unreasonable search and seizure)
– Additional federal statues (e.g., Privacy Act of 1974)

• Fair information practices

– Set of principles governing the collection and use of information
• Basis of most U.S. and European privacy laws
– Used to drive changes in privacy legislation
• COPPA , Gramm-Leach-Bliley Act ,HIPA A
• FTC FIP principles
– Notice/awareness (core principle)
– Choice/consent (core principle)
– Access/participation
– Security
– Enforcement
 Internet Challenges to Privacy
• Cookies
– Identify browser and track visits to site
– Super cookies (Flash cookies)
• Web beacons (web bugs)
– Tiny graphics embedded in e-mails and web pages
– Monitor who is reading email message or visiting site
• Spyware
– Surreptitiously installed on user’s computer
– May transmit user’s keystrokes or display unwanted ads
• Google services and behavioral targeting
• The United States allows businesses to gather transaction information and use this for
other marketing purposes.
• Opt-out vs. opt-in model
• Online industry promotes self-regulation over privacy legislation.
– Complex/ambiguous privacy statements
– Opt-out models selected over opt-in
– Online “seals” of privacy principles
 Technical Solutions

• Solutions include:
– Email encryption
– Anonymity tools
– Anti-spyware tools
• Overall, technical solutions have failed to protect users from being tracked from one site to
another
– Browser features
• “Private” browsing
• “Do not track” options