Information Systems for Business and Beyond: Chapter 7: Does IT Matter?

this provides a competitive advantage through integrating the supply chain electronically; can be thought of as the computer-to-computer exchange of business documents in a standard electronic format between business partners.

electronic data interchange (EDI)

If there are __________________ suppliers in your industry, the the customer's bargaining power is considered _______________.

few; low

includes finance, accounting, ERP systems and quality control. All of these depend on information technology and represent functions where I.T. can have a positive impact.

firm infrastructure

When rivalry is fierce, each competitor is attempting to __________________________ from others. Resulting in __________________________, ___________________________, and other factors which might lure a customer away from a competitor.

gain additional market share; aggressive pricing, increasing customer support

Name a few examples of collaborative systems:

google drive microsoft sharepoint cisco webex

consists of recruiting, hiring, and other services needed to attract and retain employees. Using the Internet, HR departments can increase their reach when looking for candidates. I.T. also allows employees to use technology for a more flexible work environment

human resource management

these are the processes that bring in raw materials and other needed inputs. Information technology can be used to make these processes more efficient, such as with supply-chain management systems which allow the suppliers to manage their own inventory

inbound logistics

The _________________ has made people more aware of substitute products, driving DOWN industry profits in those industries in which substitution occurs.

internet

Adding in Porter's analysis of the Internet to his Five Forces results in the realization that technology has overall done what to profitability?

lowered it

Any part of a business that converts the raw materials into a final product or service is a part of operations. From manufacturing to business process management information technology can be used to provide more efficient processes and increase innovation through flows of information.

operations

these are the functions required to get the product out to the customer. As with inbound logistics, IT can be used here to improve processes, such as allowing for real-time inventory checks. IT can also be a delivery mechanism itself.

outbound logistics

these are the functions that directly impact the creation of a product or service; goal is to add value that is greater than the cost of that activity

primary activities

What are the 2 sets of activities that make up the value chain?

primary activities support activities

focuses on the acquisition of raw materials used in the creation of products. Business-to-business e-commerce can be used to improve the acquisition of materials.

procurement

this was created in 1991 by Erik Brynjolfsson which concluded that the addition of information technology to business had not improved productivity at all

productivity paradox

this helps you to evaluate your entry into the market

rivalry among existing competitors

these functions that will entice buyers to purchase the products are part of sales and marketing. Information technology is used in almost all aspects of this activity. From online advertising to online surveys, IT can be used to innovate product design and reach customers as never before. The company website can be a sales channel itself.

sales/marketing

Decision support systems work best when the decision makers are having to make ______________________________ decisions.

semi-structured

this type of DSS is one in which most of the factors needed for making the decision are known buy human experience and other outside factors may still impact the decision

semi-structured decisions

this involves the functions a business performs after the product has been purchased to maintain and enhance the product's value; can be enhanced via technology as well, including support services through websites and knowledge bases.

services

with this DSS, once you know the necessary information you also know the decision that needs to be made

structured decisions

This is the second set of activities in the value chain; functions in an organization that support all of the primary activities; can be considered indirect costs to the organization

support activities

provides innovation that supports primary activities. These advances are integrated across the firm to add value in a variety of departments.

technology development

this is a series of activities undertaken by the company to produce a product or service; each step contributes to the overall value of a product or service

the value chain

this challenges the user to consider the likelihood of another product or service replacing the product or service you offer

threat of substitute products and services

this DSS involves a lot of unknowns; usually made for the first time; IS can support thee types of decisions by providing the decision makers with information gathering tools and collaborative capabilities

unstructured decisions

Name 4 examples of strategic ISs:

1. business process management systems 2. electronic data interchange (EDI) 3. collaborative systems 4. decision support systems

What are the 3 conclusions of "investing in the IT that makes a competitive difference"?

1. data shows that IT has sharpened difference among companies instead of reducing them - Technology has accelerated and amplified the ability to select, adopt, and exploit innovations. 2. good management matters 3. the competitive shakeup brought on by IT is not nearly complete even in the IT intensive US econonmy

What are the 4 things a strategic information systems aims to do?

1. deliver a product or service at a lower cost 2. deliver a product or service that is differentiated 3. help an organization focus on a specific market segment 4. enable innovation

Name the 4 support activities:

1. firm infrastructure 2. human resource management 3. technology development 4. procurement

Name the 5 primary activities:

1. inbound logistics 2. operations 3. outbound logistics 4. sales/marketing 5. service

A paradox remains in our inability to unequivocally document any contribution of IT caused by what 4 factors?

1. mismeasurement of outputs and inputs 2. lags due to learning and adjustment 3. redistribution and dissipation of profits 4. mismanagement of information and technology

Name the 5 Forces:

1. threat of substitute products and services 2. bargaining powers of suppliers 3. bargaining powers of customers 4. barriers to entry 5. rivalry among existing competitors

What was the follow up paper produced in 1998 by Erik Brynojolfsson where the authors utilized new data that had been collected and found that IT did indeed provided a positive result for business?

Beyond the Productivity Paradox

Who ultimately found that IT can play a role in competitive advantage if deployed wisely?

Brynojolfsson and McAfee

Who argued in their book IT Doesn't Matter - Business Processes Do, that it is the integration of information systems with business processes that leads to competitive advantage and that true competitive advantage can be found with information systems that support business processes?

Howard Smith and Peter Fingar

_____________________________ is the primary generator of value in technology development.

Information Technology

Name an example of a good semi-structured decision:

Isabel- a health care DSS

The internet has given companies access to ________________ suppliers, thus driving down prices.

MORE

Who caused an uproar with his article in 2003 "IT Doesn't Matter" asserting that as information technology has become ubiquitous, it has also become less of a differentiator much like a commodity.

Nicholas Carr

The _____________________________ was developed as a framework for industry analysis; the model can be used to help understand the degree of competition in an industry and analyze its strengths and weaknesses.

Porter's Five Forces Model

True/False - A DSS can be looked at as a tool for competitive advantage because it can give an organization a mechanism to make wise decisions about products and innovations.

True

True/False - A strategic information system is designed specifically to implement an organizational strategy meant to provide a competitive advantage.

True

True/False - In Carr's view all information technology was the same, delivering the same value regardless of price or supplier. Carr suggested that since IT is essentially a commodity, it should be managed like one. Just select the one with the lowest cost this is most easily accessible.

True

True/False - In regard to barriers to entry, the easier it is to enter an industry, the more challenging it will be to make a profit in that industry.

True

True/False - In the paper "Beyond the Productivity Paradox", they found that sometimes the true advantages in using technology were not directly relatable to higher productivity, but to "softer" measures, such as the impact on organizational structure. They also found that the impact of information technology can vary widely between companies.

True

True/False - Information systems can be used for competitive advantage, but they must be used strategically. Organizations must understand how they want to differentiate themselves and then use all the elements of information systems (hardware, software, data, people, and process) to accomplish that differentiation.

True

True/False - Structured decisions are good candidates for automation, but decision-support systems are generally not built for them.

True

True/False - The more types of products or services there are that can meet a particular need, the less profitability there will be in an industry.

True

True/False - any software that allows multiple users to interact on a document or topic could be considered collaborative like email, shared word document and social networks

True

True/False - markets in which rivalry is low may be easier to enter and become profitable sooner because all of the competitors are accepting of each other's presence.

True

True/False - when your company has several suppliers to choose from, you can negotiate a lower price. When a sole supplier exists, then your company is at the mercy of the supplier.

True

_________________ is built through the value chain.

Value

Why is EDI thought to be useful?

a company can vastly reduce the resources required to manage the relevant information

When is it said a company has competitive advantage?

a company is said to have competitive advantage over its rival when it is able to sustain profits that exceed the average for the industry

this is strong when your company along with your competitors is attempting to provide the same product to a customer; thus the customer has many sources from which to source a product so they can approach your company and seek a price reduction

bargaining power of customers

this refers to when a supplier's bargaining power is strong when there are few suppliers from which your company can obtain a needed product or service. Conversely, when they are many suppliers their bargaining power is lower since your company would have many sources from which to source a product

bargaining power of suppliers

How can information technology be a factor in one or both of these methods, cost advantage and differentiation advantage?

by looking at Porter's analysis tools 1. value chain 2. five forces model

these systems allowed users to brainstorm ideas together without the necessity of physical, face-to-face meetings. Tools such as video conferencing with Skype or WebEx, collaboration and document sharing with Microsoft SharePoint, and project management with SAP's Project System make collaboration possible in a variety of endeavors

collaborative systems

What are the 2 primary methods for obtaining competitive advantage according to Michael Porter?

cost advantage differentiation advantage

this helps an organization make a specific decision or set of decisions; can exist at different levels of decision making within the organization; designed to take inputs regarding a known or partially known decision making process and provide the information necessary to make a decision

decision support system (DSS)