MIS 304 Exam One
Organizational Requirements of Innovation: Process Requirements
An organization needs to change organizational processes and incentive systems, focus on success over other objectives
Business Intelligence System
Analyzed big data to help understand various aspects of a business (Online analytical processing (OLAP) system and data visualization)
Distinctive Competencies
Any unique strength possessed by an organization (innovation, agility, quality, or low cost) that helps to pursue an organizational strategy
Geographic Information System
Create, store, analyze, and manage geographically referenced data (Site selection for new shopping mall)
Intellectual Property
Creations of the mind that have commercial value, and the ability to easily download, copy, (and potentially modify), and share or distribute digital information, using another's work without purchase or attribution has significant legal and ethical ramifications
BYOD
"Bring your own device"
Radical Innovations
(Disruptive Innovations) An innovation that uses markedly new or different technology to access new customer segments and/or provide significantly greater benefits to existing customers, and eventually marginalizes or replaces existing products or services
Executive Level
(or strategic level) of the organization, managers focus on long-term strategic questions facing the organization, such as which products to produce, which countries to compete in, and what organizational strategy to follow. Provide aggregate summaries of past organizational data and projections of the future. To improve organizational strategy and planning (long term reports and planning, unstructured decisions)
Managerial Level
(or tactical level) of the organization, functional managers (marketing managers, finance managers, manufacturing managers, human resource managers) focus on monitoring and controlling operational-level activities providing information to higher levels of the organization. Improve organizational effectiveness. Managers at this level are referred to as midlevel managers (Semistructured decisions)
Revenue Type: Transaction fees/Brokerage
A commission is paid to the business for aiding in the transaction (PayPal, eBay, Airbnb, Uber)
Revenue Type: Traditional Sales
A consumer buys a product/service from the website or makes in-app purchases (Amazon, Zappos, iTunes, TikTok)
Semistructured Decisions
A decision where problems and solutions are not clear-cut and often require judgement and expertise (managerial level decisions)
Unstructured Decisions
A decisions where few or no procedures to follow for a given situation can be specified in advance
Organizational Strategy (Doing things smarter)
A firm's plan to accomplish its mission and goals as well as to gain or sustain competitive advantage over rivals and how it relates to information systems
Telecommunications Network
A group of two or more computer systems linked together with communications equipment
Freemium
A marketing approach companies use to obtain customers by offering something for free to build a large customer base and then charge a premium for unrestricted versions with more functionality
Internet of Things (IoT)
A network of a broad range of physical objects that can automatically share data over the internet, devices have embedded computers and sensors, enabling connectivity over the internet
Software
A program (or set of programs) that instructs the computer to perform certain processing functions
APIs (Application Programming Interfaces)
A software intermediary that provides ways for different components of software to interact and exchange data or functionality using common web communication protocols, a key driver of continuous innovations has been the rise of APIs
Differentiation Strategy
A strategy in which an organization differentiates itself by providing better products or services than its competitors (Porsche, Nordstrom, and IBM)
Best Cost Provider Strategy
A strategy to offer products or services of reasonably good quality at competitive prices (Dell)
Low-cost Leadership Strategy
A strategy to offer the best prices in the industry on goods or services (Walmart)
Business Model
A summary of a business's strategic direction that outlines how the objectives will be achieved; a business model specifies the value proposition as well as how a company will create, deliver, and capture value and identifies its customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners, and cost structure
Long Tail
Allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items
Information
Data that is formatted, organized and processed. A representation of reality, and can help to answer questions about who, what, where, when
Revenue Model
Describes how the firm will earn revenue, generate profits, and produce a superior return on invested capital
Organizational Requirements of Innovation: Resource Requirements
Employees with knowledge, skill, time, and resources. Must have resources and able systems partners available to outsource the development of such systems
Intelligent System
Emulate or enhance human capabilities (AI system for analyzing bank loan applications, self-driving cars, Siri, Alexa)
Electronic Commerce System
Enable customers to buy goods and services from a firm's website (Amazon, eBay)
Knowledge Management System
Enable generation, storage, sharing, and management of knowledge assets (knowledge portal for finding answers to common questions)
Collaboration System
Enable people to communicate, collaborate, and coordinate with each other (email system with automated, shared calendar)
Digital Platform
Enables other businesses or users to co-create value, Airbnb, Uber, Wikipedia, Twitter
What are some effects from the digital divide?
People in rural communities, the elderly, people with disabilities, and minorities lag behind national averages for internet access and computer literacy. The challenges in overcoming the digital divide are even greater in developing countries
Mobile App
Perform a well-defined function, typically on a mobile device (Instagram, Snapchat, WhatsApp)
Hardware
Physical computer equipment, such as the computer monitor, central processing unit, or keyboard
Transaction Processing System
Process day-to-day business event data at the operational level of the organization (grocery store checkout, student registration system)
Management Information System
Produce detailed information to help manage a firm or part of a firm (inventory management and planning system, student enrollment system)
Decision Support System
Provide analysis tools and access to databases to support quantitative decision making (product demand forecasting system, loan and investment analysis)
Lean Startup Methodology
Provides a framework to gain a competitive advantage from continuous innovation the ability to flexibly experiment with different solutions or business models quickly
Business Value of APIs
Providing the APIs can create new revenue streams and increase the accessibility of its services
Data
Raw symbols, such as characters and numbers. Data have no meaning in and of themselves and are of little value until processed, when processed data becomes useful
What is the emergence of the digital world?
Seeing new devices (iPhones, tablets, computers), changes in technology that allow and enable new ways of working and socializing, boundaries between work and leisure time are blurring
Office Automation System (personal productivity software)
Support a wide range of predefined day-to-day work activities of individuals and small groups (word processor, spreadsheet, presentation software, email client)
Enterprise Resource Planning System
Support and integrate all facts of the business, including planning, manufacturing, sales, marketing and so on (Financial, operations, and human resource management)
What are the pros of information systems?
Firms of all types and sizes can use information systems to gain or sustain a competitive advantage over their rivals, FedEx example where the company has used continuous update and fine-tuning to deliver packages on time
Innovation is often:
Fleeting and Risky and difficult
Strategic Planning (Doing things smarter)
Form a vision of where the organization needs to head, convert that vision into measurable objectives and performance targets, and craft a strategy to achieve the desired results
Revenue Type: Advertising
Free services are provided to customers and paid for by a third party (Yahoo!, Google, Facebook)
What are effects of globalization and societal issues in the digital world?
Globalization has opened many opportunities due to falling transportation and telecommunication costs. Globalization has led to a rapid rise of the middle class in many developing countries enabling companies to reach many new customers. With a decrease in communication costs, global companies now offer skilled professionals in many areas. Outsourcing
Sharing Economy
Has been defined as "an economic system in which assets or services are shared between private individuals, either free or for a free, typically by means of the internet
Micro-Moments
Immediate consumer need that initiates a mobile interaction to accomplish a particular, well-defined goal
Influence of the Internet on Competitive Forces: New Entrants
Implication for Firm: Increase capacity in industry, reduced prices and market share. Internet Influence on Competitive Forces: reduced entry barriers and eased critical resource access
Influence of the Internet on Competitive Forces: Suppliers' bargaining power
Implication for Firm: Increased costs and reduced quality. Internet Influence on Competitive Forces: equalized access to suppliers
Influence of the Internet on Competitive Forces: Customers' bargaining power
Implication for Firm: Reduced prices, demand for better quality and service. Internet Influence on Competitive Forces: wider customer choices, lower switching costs, higher customer bargaining power
Influence of the Internet on Competitive Forces: Threat of substitute products
Implication for Firm: potential returns on product, decreased market share, customer loss Internet Influence on Competitive Forces: new substitutes created by internet and IT
Influence of the Internet on Competitive Forces: Rivals within your Industry
Implication for the firm: competition in price, product distribution, and service. Internet Influence on Competitive Forces: geographic reach, ease of product comparison, price competition
What are the effects of increasing digital density interactions?
Increasing amounts of data will lead to new value-added interactions and business models, the network effect refers to the notion that the value of a network increases with the number of other users (Uber and Airbnb are examples)
The role of Information Systems in Value Chain Analysis
Information systems can automate and optimize many activities along the value chain, the use of information systems has become one of the primary ways that organizations improve their value chains.
Valuing Innovations
Innovation is key for organizations attempting to gain or sustain a competitive advantage, innovation involves creating new products or services that return value to the organization.
Why is successful innovation difficult?
Innovation is often fleeting, innovation is often risky (competing technologies result in a winner and a loser, Blu-Ray and HD DVD), Innovation choices are often difficult (it is impossible to pursue all opportunities, it is hard to predict which opportunities will lead to success)
Innovation
Involves creating new products, processes, or services that return value to the organization
Big Data
Is described as extremely large and complex datasets characterized as being high volume, variety, and velocity
Customer Relationship Management System
Support interaction between the firm and its customers (sales force automation, lead generation)
Functional Area Information System
Support the activities within a specific functional area of the firm (planning system for personnel training and work assignments)
Supply Chain Management System
Support the coordination of suppliers, product, or service production, and distribution (procurement planning)
Organizational Learning (Doing things better)
The ability of an organization to learn from past behavior and data, improving as a result
Knowledge
The ability to understand information, form opinions, and make decisions or predictions based on the information
Business/IT alignment
The alignment of information systems with a business's strategy
Digital Density
The amount of connect data per unit of activity
Information Systems (IS)
The combination of people and information technology that create, collect, process, store, distribute useful data, involves data, technology, people, organizations
Who owns the computerized information about people?
The company that maintains the database of customers if free to sell it within limits
What is the digital divide?
The gap between those individuals in our society who are computer literate and have access to information resources, such as the internet, and those who do not
Globalization
The integration of economies throughout the world, enabled by innovation and technological process
Network Effect
The notion that the value of a network (or tool or application based on a network) is dependent on the number of other users
Knowledge Worker
Typically professionals who are relatively well educated and who create, modify, and/or synthesize knowledge as a fundamental part of their jobs
Computer Ethics
Used to describe moral issue and standards of conduct as they pertain to the use of information systems
Revenue Type: Licensing
Users pay a fee for using protected intellectual property (Minecraft, Angry birds, Tasker)
Revenue Type: Subscription
Users pay a monthly or yearly recurring fee for the use of the product/service (Netflix, World of Warcraft, Spotify)
Automating (Doing things faster)
Using information systems to do an activity faster, cheaper, and perhaps with more accuracy and/or consistency
What are the risks of information systems?
Various hacks that have had your information exposed, social media failures (posting something online is almost impossible to erase), computer glitches (airplane scheduling glitch)
Cloud Computing
Web technologies enable using the internet as the platform for applications and data, applications that used to be installed on individual computers are increasingly kept in the cloud, cloud computing can enable advanced analytics of massive amounts of big data generated by mobile devices, sensors, or users of social networks
What should a business model reflect?
What does a company do? How does a company uniquely do it? In what way (or ways) does the company get paid for doing it? What are the key resources and activities needed? What are the costs involved?
Internet of Everything (IoE)
As the number of sensors and devices connected to the internet grows, the Internet of Things will evolve to become IoE, where just about any device's functionality is enhanced through connectivity and intelligence
Revenue Type: Freemium
Basic services are offered for free, but a premium is charged for special features (Flickr, Skype, Dropbox.com)
Information Privacy
Concerned with what information an individual should have to reveal to others in the workplace or through other transactions, such as online shopping
Social Software
Facilitate collaboration and knowledge sharing (Social network, connecting colleagues, and friends)
E-mail Privacy
Legally, there is no right to e-mail privacy. The electronic communications privacy act (ECPA) passed in 1986, protects phone conversations, but not e-mail
Outsourcing
Moving of business processes or tasks to another company, gives ability to utilize skilled workers and to reduce costs
Organizational Requirements of Innovation: Risk Tolerance Requirements
Must have appropriate tolerance for risk and uncertainty as well as the willingness to test products that may not meet the requirements and fail fast
Effects of Increasing Digital Density - Connections
Now we are able to connect just about any element of the physical world to the digital world, increased mobility using mobile apps, increased micro-moments (using a mobile device to accomplish a goal)
Value Creation
Occurs when an organization can provide products at a lower cost or with superior benefits to the customer. This is how organizations gain a competitive advantage
Operational Level
Of a firm, the routine, day-to-day business processes and interactions with customers occur. Information systems at this level are designed to automate repetitive activities, such as processing, sales transactions, and to improve the efficiency of business processes at the customer interface (Structured decisions)
Challenges of Globalization
Operation challenges: political system differences, regulatory environments, laws and standards. Geo-economic challenges: differences in infrastructure, demographics, welfare, workers' expertise. Cultural differences such as different languages, beliefs, attitudes, religions, life focus
Technology/Strategy Fit in IS
Organizations try to maximize business/IT alignment, means matching the IT investment to the company's strategy (don't invest in IS that maximizes product differentiation if your company's strategic focus is on being a low-cost leader), companies that focus on improvements and business process management that help their value creation strategy the most will see the greatest competitive benefit (there are never enough resources to implement every IS possible)
Revenue Type: Affiliate Marketing
Paying businesses that bring or refer customers to another business. Revenue sharing is typically used. (Amazon's associates program)
Value Chain Analysis
The process of analyzing an organization's activities to determine where value is added to products and/or services and the costs that are incurred for doing so
Value Chain
The set of primary and support activities in an organization where value is added to a product or service
Consumerization of IT
The trend of technological innovations first being introduced in the consumer marketplace before being used by organizations
Why do we invest in IS?
To gain competitive advantage, be faster, better, more economical
What are some other reasons for outsourcing?
Tremendous decrease in communications costs is the primary driver for increase in outsourcing, reduce or control costs, free up internal resources, gain access to world-class capabilities, increase the revenue potential of the organization, reduce time to market, increase process efficiencies, able to focus on core activities, compensate for lack of specific capabilites or skills