Mis Final
What are the problems with transactional (operational) data? What is the dilemma many companies that have multiple databases built on different types incompatible systems face?
- data is in too many placess - data is "dirty" (missing values) -data is not maintained consistently -data is hard to retrieve from the "legacy system" -there is TOO MUCH data
Business Analytics
-Data is critical in business -YOU supply companies with lots of valuable data -more data=more value -data provides information which provides knowledge
What are provocation methods we can use to think differently?
-The Escape Method: Cancel, remove, or escape from what you take for granted. - Reversal: Go in the opposite direction of the normal approach to create instability. - Exaggeration: Greatly exaggerate certain aspects, such as speed of process, to create more instability. - Wishful Thinking: State an impossible fantasy or something that would not occur normally or be expected. - Random Entry: Introduce a random word or object, then tie that word to the situation in order to generate new ideas.
Why is inventory management so important? What happens when a retailer has too much inventory? What happens when a retailer has too little inventory?
-Too much inventory = money tied up. No money until sold. Inventory = Death -Small inventory = sell small batches ASAP (but if you run out of inventory then no money is being made and you have the potential to lose customers because the items they want aren't there.)
RFM Analysis
-recency+frequency+money
What is a typical structure of a supply chain? What parties can be involved?
1) Supplier-->Manufacturer-->Wholesaler-->Distributor-->Retailer-->Customer 2) Customer>Producer>You>Your factories>Your stores
What are the five components that make up an information system?
1)hardware 2)software 3)data 4)procedures 5)people
What are the key steps in good Business Process Management? (not on the study guide)
1. Creating a picture of the current processes. -As-Is Business Process. How hardware, software, data, procedures & people interact. -Example: Each dept. has its own database; they want to combine them 2. Identify areas where process is constraining strategy -Example: Redundancy, missing data in databases - must be combined 3. Redesign process or problematic portion of the process -to help strategy be better realized -To-Be Business Process. How IT can be leveraged as a tool to better process. -Example: Access, web-form, MySQL? How will the new database work? 4. Implement process changes 5. Create policy for ongoing effectiveness assessment -i.e. feedback loop-->do the steps over again -Adjust and repeat cycles
How do data warehouses add efficiency and better utilize data in companies systems?
Data warehouses add efficiency by having ALL the company's data in one place. The business no longer has to search near and far for the desired information and doesn't have to convert any measurements to one common measurement (ex The Saap, Oracle, and Custom data dilemma faced by the worldwide company in class 22, slide 9)
Atoms to bits
Get rid of physical CDs and other medium to go straight to immediately streaming. It costs less
Initial public stock offering (IPO)
Going public on the stock market. The price per stock on opening day.
What are benefits of having a more efficient or streamlined process? (not on the study guide)
Greater efficiency, lower costs, saves time i.e. to move from one place to another, and more revenue and profit!
How can you apply Complex Adaptive Systems Theory to the difficulty of process innovation? (Think top-down versus bottom-up in the Toyota example)
In Toyota.. they were innovative because they were open to suggestions from workers in the assembly line. Any employee in the Toyota Production System has the authority to stop production to signal a quality issue. One worker who was working there for many years thought that they should switch around the placement of parts.... he told his boss...and that change affected all factories. This one small process change saved millions in costs and time. Complex Adaptive Systems...even a small suggestion from the crowd can make a difference.
Are experts in a domain the only ones that can be creative? If not explain.
No, anyone can be creative
Contract manufacturing
Outsourcing production to third party firms
Long tail
Phenomenon where less popular products get sold more. Companies can take advantage and cater to unique demographics.
Provocation
Provoking creative thinking
Crowdsourcing
Rely on the crowd to solve problems by pooling in all the knowledge of people
Business Process Management
Systematic way of creating, assessing, and altering business processes as needed •Monitoring the current business process (create a picture of current process) •Analyzing it (identify areas where process is constraining strategy) •Then come up with ideas to improve it •Then modeling the redesigned process •Implement process changes •And then repeating the whole cycle all over again in order to innovate an even better process than the previous.
Point-of-sale (POS) systems
Transaction processing systems that captures customer purchases information
Bullwhip Effect
Where variations of inventory are amplified as you move down -will leave suppliers, manufacturers, distributors, and retailers with very high or low inventory
Internet Pure play
a company (often retail) that is purely a dot.com company and has no physical storefront; Amazon and Netflix are examples of this
Iterative Development (agile)
a development approach that "cycles" through the development phases, from gathering requirements to delivering functionality in a working release
Supply chain
a network of organizations and facilities that transforms raw materials into products delivered to customers
Just-in-time manufacturing
a process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials at the precise time they are needed on the production line
Business Process
a sequence of activities to accomplish an objective. A visual interpretation of steps to achieve something
Data Warehouses
a set of databases designed to support decision making in an organization -lots of data exists in old legacy systems -for companies to take advantage of data, info must be accessible -help to unite information from across an organization
Brook's Law
adding more people makes the project later
Information System (IS)
an integrated solution that combines 5 components (hardware, software, data, procedures, people)
Dis-economies of Scale
as development team grows, average contribution per worker decreases and project is harder to manage
Inception Phase
define system goals, determine project scope, and assess foreseeability of project
Design Phase
develop and evaluate alternatives. Hardware design determined by project team and software design depends on source
Prototyping
early sample, model or release of a product built to test a concept or process or to act as a thing to be replicated or learned from.
Business Process Innovation
focuses on the transformation of existing processes that increases revenue and reduces cost
Personal digital assistants(PDA)
handheld computing devices made largely for mobile use outside of an office setting (smartphones & tablets)
Does this mean companies should be vertically integrated?
irrelevant because as long as all members in a supply chain communicate efficiently to each other such as by using IS technology, then there will be no to low bullwhip effect
Maintenance Phase
maintaining the server/software/customers after release. Do we need to patch up errors or upgrade?
Systems Development
process of scoping, analyzing, designing, building, testing, deploying and supporting your new or updated IT system; requires tech expertise, business knowledge and management skill
Clustering
put products that people buy together to find similarities to send people incentives
Cinematch
ratings system that helps recommend movies to customers) Although it's something that other firms can copy, it gave
How do we reduce the bullwhip effect? How does Zara reduce it? How does Wal-Mart reduce it?
sharing consumer demand information at all parts in the supply chain.
How does a provocation make you think differently?
used as a starting point to think outside of the box and gain another perspective on the situation in order to generate more innovative and creative ideas.
Analysis Phase
what are your requirements? Determine and document features and functions, interview and approve requirements
Organizational Inertia
when an organization is static (i.e. is comfortable at where they are, not trying to continue improving in all aspects) rather than dynamic (i.e. continuously improving and making things better, responding to threats, adapting to CAS)
Waterfall Model
where you gather all the requirements up front, do all necessary design, down to a detailed level, then hand the specs to the coders, who write the code; then you do testing and deliver the whole thing in one big end-all release. Everything is big including the risk of failure
Of the 5 parts in the IS Model, what parts are the hardest to change usually and why?
•5 parts of the IS model: Hardware, Software, Data, Procedures, and People •Hardest parts to change are always procedures and people because people are the hardest to change •It is easy to change hardware, but takes a large amount of time to retrain the workers and teach them a different way of thinking.
How did streamlined operations and process innovation give Netflix a competitive advantage?
•They offered many kinds of videos, they were available for instant streaming to all devices around the house, and they were usually cheaper than renting + no late fees since it's online streaming. Customers loved it. •The DVD-by-mail concept was a big process innovation that gave Netflix a competitive advantage. •Customers do not have to leave their homes to get a movie or return it. Moreover, once you return a movie, the next one comes to you in the mail.
What is the overall purpose of a business intelligence system?
- improve decision making -NOT to get more customers to sign up -IS for company to make the most of the customers they have (RFM)
Understand the differences between automating a process and transforming it. How do humans and technology play different roles in both? (not on the study guide)
-Automating Process- Human element is completely taken out. During automation, processes are digitized and turned into programming codes of software. Basically, automation moves work from the human side to the technology side. -Transforming Process- During transformation, processes are redesigned and restructured to fit the logic within software. Transformation changes the human side to fit the technology side
What kind of software (Customized or Packaged) would be best for a very complicated process and why? What about a simple process? (not on the study guide)
-Complex process = Customized software (for all the complexities of the process) -Simple process = Packaged software (pre-made) (for performing simple common processes)
How is process innovation different from process improvement? Which is harder to do and why?
-Improvement is doing things better -Innovation is doing things differently (harder because of organizational inertia, disruptive, hard to implement top-down)
What are examples of how companies can use business intelligence? (Target, Wal-mart, etc...)
-Market Based Analysis can be used to create Association rules: If/then statements that can be created through data mining -Target=pregnancy score -Walmart=Hurricane Frances -Lift: How much more likely a person buying A is to buying B -Confidence: how sure we are that a person buying A will also buy B -Probability: frequency products appear in data base -Support: Like the two products will be purchased together
What BI tools are available to turn data into valuable information? What are examples of these and how they add value?
-Reporting systems - Integrate data from multiple sources (Process data by sorting, grouping) -Data - mining systems - look at data and find non intuitive patterns -Knowledge management systems - capturing peoples knowledge -Expert systems - such as WebMD - spits out predictions and possibilities
How does the firm's strategic use of information technology influence design and product offerings, manufacturing, inventory, logistics, marketing and, ultimately, profitability?
-Zara utilizes PDAs to gather data about desired designs of clothing in order to gain information -This information is used to make decisions that can lead them to what the customers are wanting more or less of and in the long run this leads to higher profitability. This idea of collecting and analyzing data to gather information and make decisions can be used at every step of the business process in order to fine tune each stuff for maximum profits.
expert systems
-capture experts knowledge -produce if/then rules -improve diagnosis and then decision making in non-experts -WebMD
How does Knowledge Management present a value to an organization? What do organizations have to consider when it comes to incentives to use or not use the system?
-create value from intellectual capital -collect and share human knowledge -increase company organizational responsiveness
knowledge management systems
-create value from intellectual capital -collect and share human knowledge -supported by five components of information systems -foster innovation -increase company organizational responsiveness
Market-Based Analysis
-data-mining technique for determining sales patterns -shows products customers tend to buy together
business intelligence
-set of theories, methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information for business purposes
How does Zara's approach differ from the conventional wisdom in fashion retail?
-small inventory -two weeks to bring design to store -vertically integrated -uses tech + info systems + fast distribution + Close to airport + fast manufacture + fast putting up clothes -doesn't advertise
Unlike social analytics, business analytics or intelligence leverage data from which source?
-social analytics leverages social data -BI is from customers
The more organizations a process crosses, the harder it is to what?
-to implement process changes since it encompasses more organizations using the same process -change process, people, and the systems
What are the advantages and disadvantages of vertical integration? What are the advantages and disadvantages of contract manufacturing?
1) Vertical integration • PROS: control bottom up. Fast. Ability to adapt to changes to meet sudden demands quickly. Manager possess a view of the entire value chain. Faster turnaround time, i.e. repeating the process in the value chain over again. • CONS: Not diversified. In house distribution = susceptible to fuel costs. Risk is all on you. If one goes down, all parts go down since you own it. Expansion in other countries is a threat because factories and logistic centers are not close by. More expensive labor 2) Contract manufacturing • PROS: Saves you time and costs. Send someone else to make it that has expertise in that field. Focus on core values of business. Sometimes leads to better made products • CONS: Lack of control, rely on someone and hope they make it correctly. Partners can engage in sweatshop labor and environmental abuse (i.e. violating acceptable labor production conditions). In order to cut costs, contract firms skimp on safety, ignore environmental concerns, employ child labor, and engage in other ghastly practices.
Scope Creep
adding a few small things to the scope that quickly result in a lot added to the scope. (Ex: a window in the previously windowless utility room, along with a puppy door, along with a cutout in that wall) Basically the idea that a small idea can snowball into multiple ideas
Collaborative filtering
classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience
Disintermediation
cutting out the middlemen (shortens the supply chain so the bullwhip effect has less power.)
Association Rules
if people did something, did they do something else? If... then. Can we take action with this information
Direct (Big Bang ) Installation
install new system and discontinue old; there is no backup position (risk high; cost low)
Phased Installation
new system installed in phases; tested after each phase; continues until installed at entire organization (risk medium; cost medium)
What kind of discoveries does a data mining system help us uncover? (i.e. Intuitive or non-intuitive)
non-intuitive because it processes data using statistical techniques and uses patterns and relationships within this data to anticipate or predict outcomes
legacy system
older information systems that are often incompatible with other systems, technologies, and ways of conducting business. Incompatible legacy systems can be a major roadblock to turning data into information, and they can inhibit firm agility, holding back operational and strategic initiatives
Pilot Installation
organization implements entire system on limited users; if system fails, it doesn't affect everyone; reduces exposure risk (risk medium; cost medium)
Offshore
outside the US (you still own it - Your house in Europe)
Which is hardest to change and why?
people and procedures are the hardest to change because it is difficult to alter the way a person works. You have to retrain them and change their thinking process. People are stubborn and difficult to change compared to hardware which can be changed at the click of a button.
Horizontal Integration
single firm owns all of its retail outlet but does not own/control their supplier nor own/control their distributor
Vertical Integration
single firm owns several levels, if not all levels, in its own value chain. Such as ZARA is it's own supplier and distributor
Incremental Development
step by step creation and development
Implementation/Production Phase
system must be built, tested, and users and data must be converted from old to new system
Parallel Installation
test new system runs in parallel with old system on; expensive and time consuming (support both worlds); data must be entered twice (old and new); provides easy fallback position if new one breaks (risk low; cost high)
Quality Assurance (QA)
testing the product in order to prevent mistakes or defects in manufactured products and avoiding problems when delivering services to customers
Inbound Logistics
the activities of receiving, storing, and disseminating incoming raw material or goods for use on the production line or creating the final good
Outbound Logistics
the movement of final goods associated with storing, transporting, and distributing those goods to its distributors which then reaches the consumers at retailers
Operations
the organizational activities that are required to produce goods and services. It can also involve the development, execution, maintenance, control, and improvement of an organization's services and manufacturing procedures.
Order-to-Cash process
the process of how you receive, fulfill, and get payment for orders. It is the sequence of steps in the process
Data mining
the process of using computers to identify hidden patterns and to build models from large data sets -non trivial discovery of useful patterns from data -pattern=relationship in data
Business Process Improvement
to improve an existing process that becomes faster and more efficient that would result in increased profits, reduced costs, and time-saved
What are the various key issues holding back streaming video models? How did Netflix attempt to counteract these challenges? What have we learned from their attempts?
• Cable companies are limiting bandwidth • Most people want streaming for free, or as a free benefit to Netflix's DVD-by-mail service • The other issue is that for every video that is streamed, you can just as easily find it online as you can buy it • People are not receptive to paying for something that they can or have gotten for free. Because of this, Netflix's attempt to split businesses and charge for streaming backfired big time, resulting in the loss of 800,000 customers in a three month span, a drop in share price from $300/+ to $75/- Issues: • Costs that a firm must pay to telecommunications providers that connect them to the Internet (the more a firm transmits, the more it typically has to pay) • Cost of running programs on the servers of other companies • License fees o If content providers charge Netflix a per-unit basis for streamed content, then this also gets added to marginal costs • Access to content o Acquiring content is difficult--for example If a show or film is broadcast on HBO or ShowTime, it's pulled from Netflix until exclusive pay TV time closes o Influence of king DVD sales Wal-mart o Some firms steadfastly refuse to offer Netflix streaming rights How Netflix attempted to counteract challenges: • Partner with cable networks to help provide access to some content locked up inside pay television window and deals with individual networks and studios allow for streaming of current-season shows • Offer exclusive content of its own o Like House of Cards (it's own TV show) and have exclusive rights to shows like Mad Men
What sort of comparisons between YouTube movie rental versus Netflix can be made and what threats does it pose for Netflix?
• Youtube, because it's a completely free service and it's completely web 2.0, incurs no costs whatsoever, and instead profits entirely from ad placements • There is no cost of distribution centers, no cost of physical inventory, a Cinematch-like feature, no cost of membership, and incurs no shipping costs • Moreover, as it begins to offer movies, for free, it poses a potential threat to Netflix, especially in the DVD-by-Mail department because streaming is instantaneous, while DVD-by-mail is not • Netflix, on the other hand, has 60 distribution centers, a large physical inventory, has Cinematch, a low cost of membership, and incurs the shipping costs • Moreover, DVD-by-mail forces you to wait for your movie, while streaming via YouTube does not • YouTube poses a potential threat as Netflix attempts to shift over to the streaming business, because YouTube offers a much better deal for streaming, customers are likely to opt for YouTube, over Netflix. • YouTube movie rentals are not free, however they are cheap and the movies are newer than the movies on Netflix, because they are not restricted by the same contract that Netflix has with movie companies. (Netflix has to wait 28 days before they have access to most major movies) o YouTube's movie rental service is very similar to an online version of RedBox or the VideoOnDemand service by Time Warner
Why did other firms find Netflix's market attractive? Why did many analysts incorrectly suspect that Netflix was doomed to fail??
•Based on Netflix's IPO, other firms saw that this was a quickly growing business and a highly profitable market •Many analysts suspected Netflix would fail once its IPO was out because its rivals (Wal-Mart and Blockbuster) had significantly deeper pockets as well as a pre-established customer base that they could leverage to push Netflix out of the market •Doubters were concerned because Netflix was a dot-com, an Internet pure Play without a storefront and with a miniscule customer base when compared with Blockbuster and Wal-Mart
What was the downside to Netflix's early IPO? ?
•Because they had made their IPO as early as they did, they tipped off other companies to how profitable a business Netflix's business was •If they had waited two to four years, they would have been able to majorly blindside the industry and raise competitors' barriers to entry into the business.
process mapping
•Breaking down a businesses process into individual tasks and events •Breaking down the process makes it easy to analyze and determine what can be changed in it, making it more efficient.
How has Zara's parent company Inditex leveraged a technology-enabled strategy to become the world's largest fashion retailer?
•By solely focusing on purchasing technology that will have positive benefits at parts in the value chain and help increase revenue/profit while being vertically integrated, thus, allowing Zara to quickly sell products due to great fashion styles, limited availability that creates exclusivity, and inexpensive prices due to low costs of production. this constantly attracts customer attention every two weeks as a result •Zara constantly monitors its customers preferences and can very quickly adjust to any changes, preventing the kiss of death in retailing- extra inventory.
Explain how data, information, knowledge, and wisdom are related.
•Data refers simply to raw facts and figures. Alone it tells you nothing •The real goal is to turn data into information •Data becomes information when it's presented in a context so that it can answer a question or support decision making. And it's when this information can be combined with a manager's knowledge, also the more information you have the more knowledge you have, —their insight from experience and expertise—that stronger decisions can be made •Finally, the knowledge yields insight which ultimately births wisdom
What role do scale economies play in Netflix's strategies? How do these scale economies pose an entry barrier to potential competitors?
•Economies of scale allow Netflix to leverage lower prices and spend more on getting more customers/making the product better •It creates strong network effects that creates high barriers to entry •Netflix's key potential competitors, Blockbuster and Walmart, end up straddling the online and physical markets, which can break a company. Meanwhile, upstart rivals will start small and won't have the user base, the amount of data, or the selection that Netflix has, forcing them into an uphill fight.
What kind of data does Zara capture and how do they derive knowledge from this data?
•Gathered data by using a PDA for customer feedback (why they didn't like the clothes and what would make it better). •From this PDA they also gathered POS data (Point of Sale) Gathers directly from customers by asking what they like and don't like (ex. in fitting rooms etc). POS systems show how garments rank in sales
Why is good supply chain management a positive thing and what are the benefits?
•Good supply chain management allows you to react to outside forces faster (outside forces such as natural disasters, periods of high/low demand) •Results in low costs, is more efficient, and ensures that each member of the supply chain is fully informed of changing conditions
How is the concept of "atoms to bits" impacting a wide range of industries?
•It offers real time streaming or instant access. No need to drive to blockbuster... or wal-mart. Amazon offers shopping online too! •Atoms to bits refers to the general movement towards digitization in today's current society. This has resulted in a lot of brick and mortar business (bookstores, music stores, etc.) going out of business because things sold online can be sold cheaper and in bulk, offering greater profit for companies and records.
How does the "long tail" concept relate to Netflix's ability to offer the customer a huge selection of movies? What advantages does the longtail give online firms that actual stores can capture and why?
•The long tail concept can cater to unique demographics... such as foreign films or really old movies •No one carries those DVDs or tapes anymore. Having the advantage of streaming only lets companies like Netflix prosper. •The long tail concept relates to Netflix in that it can overcome geographic boundaries that actual storefronts have to deal with •More people want to see less popular films; the problem is, they're not all in one place •Netflix's variety gives it the ability to leverage the long tail effect because it isn't limited by the average customer preferences (which often just includes the most popular films, aka blockbusters) or physical boundaries like shelf space
Why is branding and customer happiness particularly important for online (aka internet pure play) firms? What factors contributed to Netflix's exceptional brand strength?
•Word of mouth and ease of use made netflix so popular. •For a brick and mortar store, if a consumer has a bad experience at one store, while they may not choose to frequent that particular store again, they will go to another of those outlets and the company will not lose their business. •However, for an IPP business, if a customer is not happy with the service at the firm's site, the firm does not have any other site that might appease the customer, which could potentially lose the customer's business altogether (or worse, send the customer's business over to a rival). •Durable brands are built through customer experience, and technology lies at the center of the Netflix top satisfaction ratings and hence the firm's best-in-class brand strength
Why is it helpful to understand the process before moving towards building your Information System? Think back to a class discussion around the grocery checkout example and what parts of the IS model need to change in order to move from a regular checkout to a self-checkout. (not on the study guide)
•You must understand what the goal is first •Processes are ingrained in all parts of the business value chain and IT •In order for businesses to evolve and adapt, we must understand how we do things and how we do things better •Just like strategy comes before technology, the process comes first too. Technology is used to help make processes more efficient or automated