CIS 101: Chapter 1

(I.) Define data ==> How is data one's competitive advantage these days? (a. & b.) ==> Define big data - What does it combine business with and what does it include? - What are the four common characteristics of big data? a. Describe volume b. Describe velocity: c. Describe variety: d. Describe veracity: ==> Big data includes both structured and unstructured data: - Define structured data a. In what system is this data typically stored it? b. This data accounts for about how much data that surrounds us? c. What are the two sources of structured data? - What is machine-generated data. Provide examples. - What is human-generated data. Provide examples. - Define unstructured data: a. This data accounts for about how much data that surrounds us? b. What are the two sources of unstructured data? - Examples of machine-generated unstructured data - Examples of human-generated unstructured data ==> Define snapshot

(1) Data: raw facts that describe the characteristics of an event or objects ==> (a.) Allows you to make evidence-based decisions to help you run your operations along with analyzing past data to make future predictions ==> (b.) Data-driven decisions enable companies create business strategies that increase profits, reduce risk, and optimize business processing ==> Big data: a collection of large, complex datasets, that can't be analyzed using traditional database methods and tools. - Combines business with science, research, and government activities and includes petabytes of data - Large data volumes, with high velocity, wide variety, and veracity a. Large data volumes: the scale of data; includes enormous volumes of data generated daily; massive volume created by machines and networks; big data tools necessary to analyze zettabytes and brontobytes b. With high velocity: The analysis of streaming data as it travels around the internet; analysis necessary of social media messages and spreading globally Wide variety: different forms of structured and unstructured data; data from spreadsheets and databases as well as from email, videos, photos, and PDFs, all of which must be analyzed And veracity: The uncertainty of data, including biases, noise, and abnormalities; uncertainty or untrustworthiness of data; data must be meaningful to the problem being analyzed; must keep data clean and implement processes to keep dirty data from accumulating in systems ==> Big data includes structured and unstructured data: - Structured data: has a defined length, type, and format and includes numbers, dates, or strings such as Customer Address (financial data, accounting data) a. Typically stored in a traditional system such as a relational database or spreadsheet b. Accounts for about 20% of the data that surrounds us c. The two sources of structured data include machine-generated data and human-generated data: - Machine-generated data: created by a machine without human intervention. Machine-generated structured data includes sensor data, point-of-scale data, and web log data - Human-generated data: data that humans, in interaction with computers, generate. Human-generated structured data includes input data, clickstream data, or gaming data - Unstructured data: is not defined and does not follow a specific format and is typically free-form text such as emails, Twitter tweets, and text messages (photographic data, video data, voice mail data) a. Accounts for about 80% of the data that surrounds us b. The two sources of unstructured data include machine-generated unstructured data and human-generated unstructured data - Machine-generated unstructured data: including satellite images, scientific atmosphere data, and radar data - Human-generated unstructured data: including text messages, social media data, and emails ==> Snapchat: a view of data at a particular moment in time - Profit = Sales - Cost - How to know how one's business is performing as a whole: Need information, not data

(II.) Define information ==> What is the difference between data and information (a. & b.) ==> Define report - What can a report cover? - Define static report and an example - Define dynamic report and an example ==> Define variable - What do changing variables allow managers to create? - Manipulating variables is an important tool for...

(II.) Information: data converted into a meaningful and useful context ==> The difference between data and information: a. Data is a raw building block that has not been shaped, processed, or analyzed and frequently appears disorganized and unfriendly b. Information gives meaning and context to analyzed data, making it insightful for humans by providing context and structure that is extremely valuable when making informed business decisions. ==> Report: a document containing data organized in a table, matrix, or graphical format, allowing users to easily comprehend and understand information - Can cover a wide range of subjects or specific subject for a certain time period or event - Static report: created once, based on data that does not change (ex: Can include a sales report from last year or salary report from five years ago) - Dynamic report: changes automatically during creation (ex: Can include updating daily stock market prices or the calculation of available inventory) ==> Variable: A data characteristic that stands for a value that changes or various over time - Changing variables allows managers to create hypothetical scenarios to study future possibilities - Manipulating variables is an important tool for any business

(III.) Define business intelligence ==> What does BI manipulate? ==> How can BC incorporate all types of internal and external variables? ==> Define analytics - Define business analytics a. How does business analytics use algorithms? b. Define algorithms ==> What are the characteristics of analytics driven companies? ==> What is BI used for and how does it play a role in helping managers? - Firms guided by data-driven decision making have...? ==> Analytics can range from...? ==> Define data scientist: - What are the techniques a data scientist will use to perform advanced data analytics? ==> What are the three broad categories of analytics? Also provide examples ==> Define anomaly detection - If the data you are using to perform your analysis is incorrect, then your analysis will be...? - How can detecting anomalies in data a key advantage of performed advanced analytics? - Anomaly detection can help to identify outliers in the data that can cause problems with...? a. Define outlier

(III.) Business intelligence: information collected from multiple sources such as suppliers, customers, competitors, partners, and industries that analyze patterns, trends, and relationships for strategic decision making. ==> Manipulates multiple variables and in some cases even hundreds of variables, including such items as interest rates, weather conditions, and even gas prices ==> BC can incorporate all types of internal and external variables to anticipate business performance, which in turn helps one to make strategic decision making (the analyzation of internal and external data) ==> Analytics: the science of fact-based decision making; the use of analytical techniques in the science and engineering fields as well as business - Business analytics: the scientific process of transforming data into insight for making better decisions a. || Uses algorithms to derive meaning from data by finding patterns to make future predictions b. || Algorithms: mathematical formulas placed in software that performs an analysis on a dataset ==> Characteristics of analytics driven companies: a. || Use management information systems to perform rigorous analysis to a wide range of business functions from marketing to human resources b. || Senior executive teams recognize the importance of analytics and make their development and maintenance a primary focus c. || View fact-based decision making as a best practice and part of the company culture d. || Key organizational players have analytical skills, use metrics as a key to monitoring and managing key business processes e. || Collect copious amounts of data from customers and suppliers ==> Used for data-driven or fact-based decision making, helping managers ensure they make successful decisions - Firms guided by data-driven decision making have higher productivity and market value along with increased output and profitability ==> Analytics can range from simple report to advanced optimization models (models that highlight the best course of action) ==> Data scientist: extracts knowledge from data by performing statistical analysis, data mining, and advanced analytics on big data to identify trends, market changes, and other relevant information - Techniques a data scientist will use to perform advanced data analytics: a. || Behavioral analysis: uses data about people's behaviors to understand intent and predict future actions b. || Correlation analysis: Determines a statistical relationship between variables, often for the purpose of identifying predictive factors among the variables c. || Exploratory data analysis: identifies patterns in data, including outliers, uncovering the underlying structure to understand relationships between the variables d. || Pattern recognition analysis: classifies or labels an identified pattern in the machine learning process e. || Social media analysis: Analyzed text flowing across the Internet, including unstructured text from blogs and messages f. || Speech analysis: Analyses recorded calls to gather information; brings structure to customer interactions and exposes information buried in customer contact center interactions with an enterprise. Speech analysis is heavily used in the customer service department to help improve processes by identifying angry customers and routing them to the appropriate customer service representative. g. || Text analysis: Analysis of unstructured data to find trends and patterns in words and sentences. Text mining a firm's customer support email might identify which customer service representative is best able to handle the question, allowing the system to forward it to the right person. h. || Web analysis: Analyzes unstructured data associated with websites to identify consumer behavior and website navigation. ==> The three broad categories of analytics include: a. || Descriptive analytics: uses techniques that describe past performance and history (Ex: Creating a report that includes charts and graphs that explains the data) b. || Predictive analytics: uses techniques that extract information data to predict future trends and identify behavioral patterns (Ex: Using past sales data to predict future sales) c. || Prescriptive analytics: uses techniques that create models indicating the best decision to make or course of action to take (Ex: Airline using past purchasing data as inputs into a model that recommends the best pricing strategy across all flights allowing the company to maximize revenue) ==> Anomaly detection: the process of identifying rare or unexpected items or events in a dataset that do not conform to other items in the dataset - If the data you are using to perform your analysis is incorrect, then your analysis will be incorrect - To ensure they're not used in models creating false results - Helps to identify outliers in the data that can cause problems with mathematical modeling a. || Outlier: A data value that is numerically distant from most of the other data points in a dataset

(IV.) Define knowledge ==> Define knowledge workers - What are today's workers commonly referred to as and how do they make decisions based on both information and intuition, valuable resource for any company? ==> Define knowledge facilitators - What do they help acquire and catalog? ==> Define knowledge assets (intellectual capital) - Where do knowledge assets reside in and what do they include? ==> It is impossible to collect all the information about every situation, and yet without that, it can be easy to misunderstand the problem. What is the key to finding success in business?

(IV.) Knowledge: includes the skills, experience, and expertise, coupled with information and intelligence, that creates a person's intellectual resources. ==> Knowledge workers: individuals valued for their ability to interpret and analyze information - Today's workers are commonly referred to as knowledge workers, and they use BI along with personal experience to make decisions based on both information and intuition, a valuable resource for any company ==> Knowledge facilitators: help harness the wealth of knowledge in the organization Help acquire and catalog the knowledge assets in an organization ==> Knowledge assets (intellectual capital): are the human, structural, and recorded resources available to the organization - Reside within the minds of members, customers, and colleagues, and include physical structures and recorded media ==> Using data, information, business intelligence, and knowledge to make decisions and solve problems is the key to finding success in business.

1. How do successful companies operate cross-functionally? 2. Define systems ==> What are systems the primary enabler of? 3. In order to know how systems work, it is important have a solid understanding of...? ==> Define goods ==> Define services ==> Define production ==> Define productivity ==> Ensuring the input, process, and output of goods and services work across all of the department of a company is where systems add what? 4. Define systems thinking ==> Provides an end=to-end view of how...? ==> Operations of systems thinking: - Define feedback: a. How can feedback help a system?

1. By integrating the operations of all departments 2. System: a collection of parts that link to achieve a common purpose ==> Systems are the primary enabler of cross-functional operations 3. In order to know how systems work, it is important to have a solid understanding of the basic production process for goods and services: ==> Goods: material items or products that customers will buy to satisfy a want or need ==> Services: tasks performed by people that customers will buy to satisfy a want or need ==> Production: the process where a business takes raw materials (inputs) and processes them or converts them into a finished product (output) for its goods or services ==> Productivity: the rate at which goods and services are reproduced based upon total output given total inputs - If a business could produce the same hamburger with less expensive inputs or more hamburgers with the same inputs, it would see a rise in productivity and possibly an increase in profits ==> Ensuring the input, process, and output of goods and services work across all of the departments of a company is where systems add tremendous value to overall business productivity 4. Systems thinking: a way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs while continuously gathering feedback on each part ==> Provides an end-to-end view of how operations work together to create a product or service ==> Overview of systems thinking: Input (data that is entered in a computer) ⇒ Process (computer program that processes the data) ⇒ Output (the resulting information from the computer program) ⇒ (Feedback: controls to ensure correct processing, can return back information to input, process, and output to modify the transmitter's actions and help maintain stability within the system) - Feedback: Information that returns to its original transmitter (input, transform, or output) and modifies the transmitter's actions a. Helps the system maintain stability

Value Chain Analysis-Executing Business Strategies 1. How can firms make a profit by taking raw inputs and applying a business process to them? - Define business process 2. Once a firm identifies the industry it wants to enter and the generic strategy it will focus on, it must then choose what? - What do the firms want to ensure about the processes - How to identify competitive advantages according to Michael Porter 3. Define view chain analysis: - What is view chain analysis a useful tool for determining? - Goal - When performing a value chain analysis, how can a firm do this? a. What are the competitive advantage decisions that the firm must decide on? - What can it provide? 4. What are the two categories that the value chan groups a firm's activities into? - Define primary value activities a. Define inbound logistics b. Define operations: c. Define marketing and sales d. Define service - Define support value activities a. Define firm infrastructure b. Define human resource management c. Define technology development d. Define procurement - Examining a firm as a value chain allows managers to identify what? - How does MIS help both primary and support value activities? - Managers can find additional value by doing what? - What is critical when using porter's three business strategies? - What must firm continually adapt to, which can cause what to do?

1. Firms make profit by taking raw inputs and applying a business process to turn them into a product or service that customers find valuable - Business process: a standardized set of activities that accomplish a specific task, like processing a customer's order 2. Once a firm identifies the industry it wants to enter and the generic strategy it will focus on, it must then choose the business processes required to create its products or services - Firm will want to ensure the processes add value and create competitive advantages. - To identify these competitive advantages, Michael Porter created value chain analysis. 3. View chain analysis: Views a firm as a series of business processes that each add value to the product or service - A useful tool for determining how to create the greatest possible value for customers - Goal: identify processes in which the firm can add value for the customer and create a competitive advantage for itself, with a cost advantage or product differentiation - When performing a value chain analysis, a firm could survey customers about the extent to which they believe each activity adds value to the product or service. This generates responses the firm can measure, shown as percentages, to describe how each activity adds (or reduces) value. Then the competitive advantage decision for the firm is whether to: a. Target high value-adding activities to further enhance their value b. Target low value-adding activities to increase their value d. Perform some combination of the two - Provides hard and fast numbers for evaluating the activities that add value to products and services 4. The value chain groups a firm's activities into two categories: primary value activities and support value activities - Primary value activities: shown on bottom of the value chain, acquire raw materials and manufacture, deliver, market, sell, and provide after-sales services a. Inbound logistics: acquires raw materials and resources and distributes to manufacturing as required b. Operations: transforms raw materials or inputs into goods and services c. Outbound logistics: distributes goods and services to customers d. Marketing and sales: promotes, prices, and sells products to customers e. Service: provides customer support after the sale of goods and services - Support value activities: along the top of the value chain, include firm infrastructure, human resource management, technology development, and procurement. These support the primary value activities a. Firm infrastructure: includes the company format or department structures, environment, and systems b. Human resource management: provides employee training, hiring, and compensation c. Technology development: applies MIS to processes to add value d. Procurement: purchases inputs such as raw materials, resources, equipment, and supplies - Examining a firm as a value chain allows managers to identify the important business processes that add value for customers and then find MIS solutions that support them - MIS adds value to both primary and support value activities - Managers can find additional value by analyzing and constructing the value chain in terms of Porter's Five Forces Model - Revising Porter's three business strategies is critical Firms must continually adapt to their competitive environments, which can cause business strategy to shift

1. Define Management information systems (MIS) ==> How can MIS help companies operate cross-functionally? ==> What is MIS an important enabler of? - MIS is a tool that is most valuable when it...? ==> To perform the MIS function effectively, almost all companies, particularly large and medium-sized ones have...?

1. Management information systems (MIS): a business function, like accounting and human resources, which moves information about people, products, and processes across the company to facilitate decision making and problem solving ==> Incorporates systems thinking to help companies operate cross-functionally ==> MIS can be an important enabler of business success and innovation - MIS is a tool that is most valuable when it leverages the talents of people who know how to use and manage it effectively ==> To perform the MIS function effectively, almost all companies, particularly large and medium-sized ones, have an internal MIS department, often called information technology (IT), information systems (IS), or management information systems (MIS)

The Three Generic Strategies-Choosing a Business Focus 1. Once top management has determined the relative attractiveness of an industry and decided to enter it, what must the firm formulate? 2. Define Porter's three generic strategies - What are the three generic business strategies for entering a new market? (3), a. What is the difference between broad strategies and focused strategies - Competitive scope and cost strategy a. Strategy to use: broad market, low cost b. Strategy to use: broad market, high cost c. Strategy to use: narrow market, low cost d. Strategy to use: narrow market, high cost

1. Once top management has determined the relative attractiveness of an industry and decided to enter it, the firm must formulate a strategy for doing so 2. Porter's three generic strategies: generic business strategies that are neither organization nor industry specific and can be applied to any business, product, or service - These three generic business strategies for entering a new market: (1) Broad cost of leadership (2) Broad differentiation (3) Focused strategy a. Broad strategies reach a large market segment while focused strategies target a niche or unique market with either cost leadership or differentiation Competitive scope & Cost strategy Broad market, low cost: cost leadership Broad market, high cost: Differentiation Narrow market, low cost: focused strategy Narrow market, high cost: focused strategy

1. What is one of the biggest obstacles to data-driven decision making? ==> Many organizations continue to relegate data analysis knowledge to who? 2. Data democratization: ==> The goal of data democratization ==> Allows analytics to become a part of the organization's overall competitive strategy by...?

1. One of the biggest obstacles to data-driven decision making is not technology or even human skills, but gaining access to the data in the first place ==> To only a small number of employees, which can lead to a business failure in the long run 2. Data democratization: the ability for data to be collected, analyzed, and accessible to all users (the average end user) Goal: allow all employees the ability to collect and analyze data without requiring outside help. Allows analytics to become a part of the organization's overall competitive strategy by pushing it down to decision makers at every organizational level (arming employees with the best facts and evidence for making decisions is a huge competitive advantage)

1. Recently there are more MIS-related strategic positions, such as: ==> Chief information officer: what is the position responsible for? - Often reports directly to who? - Most possess what? - Broad functions of a CIO: a. Manager: ensures the delivery of what? b. Leader: ensures the strategic of MIS is in line with what? c. Communicator: Advocates and communicates the MIS strategy by doing what? ==> Chief data officer (CDO): responsible for what? - The difference between CIO and CDO (a. & b.) ==> Chief technology officer (CTO): responsible for what? - CTOs are similar to CIOs except that: (a. & b.) - Most CTOs possess well-rounded knowledge of what? ==> Chief security officer (CSO): responsible for what? - Why do they possess detailed knowledge of networks and telecommunications? ==> Chief privacy officer (CPO): responsible for what? - The newest ...? - Many are lawyers by training, enabling them to understand what? ==> Chief knowledge officer (CKO): responsible for what? - What kind of programs and systems do they design? a. These systems create repositories of what? b. They establish methods to do what? - Most continuously encourage what? - Can contribute directly to the organization's bottom line by ...? ==> A few executive levels one might see created over the next decade: - Chief automation officer: - Chief intellectual property officer: - Chief sustainability officer: - Chief user experience officer: ==> Define MIS skills gap

1. Recently there are more MIS-related strategic positions, such as: ==> Chief information officer (CIO): Responsible for (1) overseeing all uses of MIS and (2) ensuring the strategic alignment of MIS with business goals and objectives - Often reports directly to the CEO - Must possess a solid and detailed understanding of every aspect of an organization, coupled with tremendous insight into the capability of MIS - Broad functions of a CIO: a. Manager: ensure the delivery of all MIS projects on time and within budget b. Leader: ensure the strategic vision of MIS is in line with the strategic vision of the organization c. Communicator: advocate and communicate the MIS strategy by building and maintaining strong executive relationships ==> Chief data officer (CDO): responsible for determining the types of information the enterprise will capture, retain, analyze, and share - Difference between CIO and CDO: a. CIO is responsible for the information systems through which data is stored and processed b. CDO is responsible for the data, regardless of the information system ==> Chief technology officer (CTO): responsible for ensuring the throughput, speed, accuracy, availability, and reliability of an organization's MIS - CTOs are similar to CIOs, except that: a. CIOs take on the additional responsibility for effectiveness of ensuring that MIS is aligned with the organization's strategic initiatives b. CTOs have direct responsibility for ensuring the efficiency of MIS systems throughout the organization - Most CTOs possess well-rounded knowledge of all aspects of MIS, including hardware, software, and telecommunications ==> Chief security officer (CSO): Responsible for ensuring the security of MIS systems and developing strategies and MIS safeguards against attacks from hackers and viruses - Possess detailed knowledge of networks and telecommunications because hackers and viruses usually find their way into MIS systems through networked computers ==> Chief privacy officer (CPO): responsible for ensuring the ethical and legal use of information within an organization - The newest senior executive position in MIS - Many are lawyers by training, enabling them to understand the often complex legal issues surrounding the use of information ==> Chief knowledge officer (CKO): responsible for collective, maintaining, and distributing the organization's knowledge - Designs programs and systems that make it easy for people to reuse knowledge a. These systems create repositories of organizational documents, methodologies, tools, and practices b. They establish methods for filtering information - Must continuously encourage employee contributions to keep the systems up-to-date - Can contribute directly to the organization's bottom line by reducing the learning curve for new employees or employees taking on new roles ==> A few executive levels one might see created over the next decade: - Chief automation officer: will determine if a person or business process can be replaced by a robot or software - Chief intellectual property officer: will manage and defend intellectual property, copyrights, and patents - Chief sustainability officer: will oversee the corporation's "environmental" programs, such as helping adapt to climate change and reducing carbon emissions - Chief user experience officer: will create the optimal relationship between user and technology ==> MIS skills gap: the difference between existing MIS workplace knowledge and the knowledge required to fulfill the business goals and strategies

1. Define SWOT Analysis ==> Where do strengths and weaknesses originate in an organization? - How to find potential internal strengths (helpful) - How to find internal weaknesses (harmful) ==> Where do opportunities and threats originate in an organization? - How to find potential external opportunities (helpful) - How to find potential external threats (harmful):

1. SWOT Analysis: evaluates an organization's strengths, weaknesses, opportunities, and threats to identify significant influences that work for or against business strategies ==> Strengths and weaknesses originate inside an organization (or internally) - Potential internal strengths (Helpful): Identify all key strengths associated with the competitive advantage, including cost advantages, new and/or innovate services, special expertise and/or experience, proven market leader, and improved marketing campaigns - Potential internal weaknesses (harmful): identify all key areas that require improvement. Focuses on the absence of certain strengths, including absence of an internet marketing plan, damaged reputation, problem areas for service, and outdated technology ==> Opportunities and threats originate outside an organization (or externally) and cannot always be anticipated or controlled - Potential external opportunities (helpful): identify all significant trends along with how the organization can benefit from each, including new markets, additional customer groups, innovate technologies, population changes, and competitor issues - Potential external threats (harmful): identify all threats or risks detrimental to your organization, including new market entrants, substitute products, employee turnover, differentiating products, shrinking markets, adverse changes in regulations, and economic shifts

1. Define stakeholder ==> Stakeholders and business strategies ==> It is not uncommon to find stakeholders' business strategies have...? ==> The different stakeholders found in an organization and their common business interests: a. Partners/suppliers b. Shareholders/investors c. Community d. Employees e. Customers f. Government

1. Stakeholder: a person or group that has an interest or concern in an organization ==> Drive business strategies, and depending on the stakeholder's perspective, the business strategy can change ==> Not uncommon to find stakeholders' business strategies have conflicting ==> The different stakeholders found in an organization and their common business interests: a. Partners/suppliers: Reliable contracts Ethical materials Handling Responsible Production b. Shareholders/Investors Maximize profits Grow market share High return on investment c. Community Professional Associations Ethical Recycling Increase Employment d. Employees: Fair compensation Job security Ethical conduct/treatment e. Customers: Exceptional customer service High-quality products Ethical Dealing f. Government: Adhere to regulations/laws Increase employment Ethical taxation reporting

1. Good leaders also anticipate...? 2. Updating business strategies is a continuous undertaking as...? 3. Business strategies that match core company competencies to opportunities results in...? ==> Define competitive advantage - It provides what kind of product or service? - Why are they typically temporary? - When a company is the first to market with a competitive advantage, it gains what? a. When does the first-mover advantage occur? - Define competitive intelligence a. It involves understanding and learning about what? And why? - What are the four common tools that managers use to analyze competitive intelligence and develop competitive advantages?

1. Unexpected misfortunes 2. Updating business strategies is a continuous undertaking as internal and external environments rapidly change 3. Business strategies that match core company competencies to opportunities result in competitive advantages ==> Competitive advantage: a feature of a product or service on which customers place a greater value than they do on similar offerings from competitors - They provide the same product or service either at a lower price or with additional value that can fetch premium prices - Are typically temporary because competitors often quickly seek ways to duplicate them (such as acquiring new technology, copying the business operations, and hiring away key employees). In turn, organizations must develop a strategy based on a new competitive advantage. - When a company is the first to market with a competitive advantage, it gains a particular benefit a. The first-mover advantage occurs when a company can significantly increase its market share by being first with a new competitive advantage - Competitive intelligence: the process of gathering information about the competitive environment, including competitors' plans, activities, and products, to improve a company's ability to succeed Understanding and learning as much as possible as soon as possible about what is occurring outside the company to remain competitive - Managers use four common tools to analyze competitive intelligence and develop competitive advantages: a. SWOT analysis: Evaluates Project position b. The five forces model: Evaluates Industry Attractiveness c. The three generic strategies: Chooses Business Focus d. Valuable Chain Analysis: Executes Business strategy

2. The Five Forces Model-Evaluating Industry Attractiveness ==> What are the five pressures that can hurt potential sales? ==> Porter's Five Forces Model: - How can it help managers - What does it analyze - Its purpose a. What if forces are strong? b. What if forces are weak? ==> The five forces and their associated MIS business strategy: 1. Define buyer power - Factors used to assess buyer power - What if buyer power is high? - Two ways to reduce buyer power: a. Define switching costs (includes what kind of values) b. Define loyalty programs 2. Supplier power - Define supply chain a. In a typical supply chain, what two roles does a company play as? - Factors used to appraise supplier power - What is supplier power is high? a. When a suppliers raises prices, what will the buyers pays on to their customers? b. When supplier power is high, why do buyers lose revenue? c. Some powerful suppliers can exert a threat over an entire industry when...? - Using MIS to find alternative products is one way of doing what? - How Buyers can use MIS to increase the buyer group and reduce supplier power? 3. Threat of substitute products or services: - When is it high? - When is it low? a. Ideally, a company would like to be in what kind of market when it comes to substitutes? - How can a company reduce the threat of substitutes? (a. &b.) 4. Rivalry among existing competitors - When is it high? - When is it low? - Define product differentiation a. How can companies use differentiation

==> Discovered by Michal Porter (professor at Harvard Business School), identified pressures that can hurt potential sales: - Knowledgeable customers can force down prices by pitting rivals against each other - Influential suppliers can drive down profits by charging higher prices for suppliers - Competition can steal customers - New market entrants can steal potential investment capital - Substitute products can steal customers ==> Porter's Five Forces Model: helps managers set business strategy by identifying the competitive structure and economic environment of an industry (if the forces is strong, they increase competition; if the forces are weak, they decrease it) analyzes the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry Its purpose is to combat competitive forces by identifying opportunities, competitive advantages, and competitive intelligence If the forces are strong, they increase competition If forces are weak, they decrease competition ==> The five forces and their associated MIS business strategy: 1. Buyer Power: the ability of buyers to affect the price they must pay for an item - Factors used to assess buyer power: number of customers, their sensitivity to price, size of orders, differences between competitors, and availability of substitute products - If high, customers can force a company and its competitors to compete on price, which typically drives prices down - Can reduce buyer power by manipulating switching costs: costs that make customers reluctant to switch to another product or service (Include financial and intangible values) - Can reduce buyer power with loyalty programs: rewards customers based on their spending 2. Supplier Power: the suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services) - Supply chain: consists of all parties involved, directly or indirectly, in obtaining raw materials or a product In a typical supply chain, a company will be both a supplier (to customers) and a customer (of other suppliers) a. Factors used to appraise supplier power include number of suppliers, size of supplies, uniqueness of services, and availability of substitute products - If supplier power is high, the supplier can include the industry by: charging higher prices, limiting quality or services, and shifting costs to industry participants a. When a supplier raises prices, the buyers will pass on the increase to their customers by raising prices on the end product b. When supplier power is high, buyers lose revenue because they can't pass on the raw material price increase to their customers c. Some powerful suppliers can exert a threat over an entire industry when substitutes are limited and the product is critical to the buyers - Using MIS to find alternative products is one way of decreasing supplier power - Buyers can use MIS to form groups or collaborate with other buyers, increasing the size of the buyer group and reducing the supplier power 3. Threat of substitute products or services: - is high when there are many alternatives to a product or service - Low when there are few alternatives from which to choose a. Ideally, a company would like to be in a market in which there are few substitutes for the products or services it offers - How can a company reduce the threat of substitutes: a. A company can reduce the threat of substitutes by offering additional value through wider product distribution b. Companies can also offer various add-on services, making the substitute product less of a threat 4. Rivalry among existing competitors: - High when competition is fierce in a market - Low when competitors are more complacent The overall trend is toward increased competition in almost every industry - Product differentiation: occurs when a company develops unique differences in its products or services with the intent to influence demand a. Companies can use differentiation to reduce rivalry

Define information silo: ==> As each organization operates functionally, this can cause...? ==> The activities of each organization: a. Sales and marketing; the data they maintain b. Finance and accounting; the data they maintain c. Operations management; the data they maintain d. Human resources; the data they maintain ==> Although each department has its own focus and data, none can work independently if...? ==> A business decision made by one department can affect... - How can a firm be successful in terms of sharing information and operating? - The type of data each department shares in order to work together: a. Accounting b. Finance c. Human resources d. Marketing e. Operations management f. Sales

An information silo: occurs when one business unit is unable to freely communicate with other business units, making it difficult or impossible for organizations to work cross-functionally ==> As each organization operates functionally, this can cause information silos as each department performs its own activities: ==> The activities of each organization: a. Sales and marketing focus on moving goods or services into the hands of consumers; they maintain transactional data b. Finance and accounting focus on managing the company's resources and maintain monetary data c. Operations management focuses on manufacturing and maintains production data d. Human resources focuses on hiring and training people and maintains employee data ==> Although each department has its own focus and data, none can work independently if the company is to operate as a whole ==> A business decision made by one department can affect other departments - For a firm to be successful, all departments must work together as a single unit sharing common information and not operate independently or in a silo - The type of data each department shares in order to work together: a. Accounting: transactional data, purchasing data, payroll data, tax data b. Finance: investment data, monetary data, reporting data c. Human resources: employee data, promotion data, vacation data d. Marketing: promotion data, sales data, advertising data e. Operations management: manufacturing data, distribution data, production data f. Sales: potential customer data, sales report data, commission data, customer support data

Define business strategy

Business strategy: a leadership plan that achieves a specific set of goals or objectives such as increasing sales, decreasing costs, entering new markets, or developing new products or services

Define business unit ==> Corporations are typically organized by...? ==> The different types of business units: - Accounting: - Finance: - Human Resources: - Marketing: - Operations management: - Sales:

Business unit: a segment of a company (such as accounting, production, marketing) representing a specific business function (aka department and functional area) ==> Corporations are typically organized by business unit - Accounting: records, measures, and reports monetary transactions - Finance: Deals with strategic financial issues, including money, banking, credit, investments, and assets - Human Resources: maintains policies, plans, and procedures for the effective management of employees - Marketing: Supports sales by planning, pricing, and promoting goods or services - Operations management: manages the process of converting or transforming or resources into goods or services - Sales: performs the function of selling goods or services

Define fact:

Fact: the confirmation or validation of an event or object

Section 1.3

Identifying Competitive Advantage

Define Internet of Things (IoT) ==> Define Machine-to-machine (M2M) ==> Must be prepared to encounter what with IoT and M2m? ==> Realizing the value of obtaining real-time data from connected "things" will allow you to make more

Internet of Things (IOT): created by professors at MIT, a world where interconnected internet-enabled devices or "things" have the ability to collect and share data without human intervention ==> Machine-to-machine (M2M): refers to devices that connect directly to other devices (massive amounts of data sent between devices does not need human intervention) ==> Must be prepared to encounter various security issues with IoT and M2M ==> Make more informed decisions, identify new opportunities, and analyze customers patterns to predict new behaviors

Not only can student who are well-verse in advanced technology compete in the information, but also...?

Not only can student who are well-verse in advanced technology compete in the information, but also business leaders who couple the power of the information age with traditional business methods to innovate companies and lead entire industries

Section 1.2

Systems Thinking and Management Information Systems

What is the information age? ==> What are the fore core drivers of the information age?

We live in the information age: the present time, when infinite quantities of facts are widely available to anyone who can use a computer ==> The four core drivers of the information age: Data, information, business intelligence, and knowledge