MIS Exam 3
Maintenance phase
Fixing or adapting system Maintaining the server/software/customers after release. Do we need to patch up unforeseen errors or upgrade something?
Scope creep
(also called focus creep, requirement creep, feature creep, function creep) in project management refers to uncontrolled changes in a project's scope. This phenomenon can occur when the scope of a project is not properly defined, documented, or controlled.
How can you apply Complex Adaptive Systems Theory to the difficulty of process innovation? (Think top-down versus bottom-up in the Toyota example)
--hard to implement top down (CAS) --demand isn't going to change, its better bottom up 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.
RFM Analysis
Recency, Frequency, Money -analyzing and ranking customers according to purchasing patterns Score: 1-5 (highest to lowest) for each done
Risks of Outsourcing
-Loss of control -no easy exit -security -lack of quality -Multidisciplinary skills that aren't yet common in many low-cost countries -deep relationships with customers and extensive knowledge of local market conditions
Knowledge management system
-collect and share human knowledge -supported by five components of IS -increases company organizational responsiveness -improve customer service, reduce costs
Cross Sided market
-Switching cost of Google users are LOW --- so Google needs to please users with continuous innovation and products -To exploit cross-sided network effect, the platform needs to have very good matching ability to bring advertisers and consumers together
Google's steps to protect privacy
-Won't link query history or registration data to ads -Refuses to link registration data with tracking cookies -Placed significant control in the hands of users -Allows users to install a cookie or plug-in that opts them out of interest-based tracking
Effects of the Bullwhip Effect
-natural dynamic occurs due to multistage nature of supply chain -not related to erratic consumer demand -reduces overall profitability of supply chain -can lead to over supply and thus too much inventory, or not enough supply and thus empty inventory -It demands forecast updating (you have to guess the consumer demand), it causes price fluctuations (ordering pattern does not reflect buying pattern, ordering too much, consumers buying too little) -Poor customer service -High costs for customer sales -Lost sales -Excessive inventories (often leading to huge discounts) -Insufficient and excess capacities -Poor customer service and lost sales; Long backlogs -Frequent revision to production schedules -High costs for corrections - expedited shipments and/or overtime
Easy jobs to outsource
-no face to face time required -high info content -internet enabled process -low setup barriers
What kind of software (Customized or Packaged) would be best for a very complicated process and why? What about a simple process?
1) Complex process = Customized software (for all the complexities of the process). 2) Simple process = Packaged software (pre-made) (for performing simple common processes).
Why is inventory management so important? What happens when a retailer has too much inventory? What happens when a retailer has too little inventory?
1) Too much inventory = money tied up. No money until sold. Inventory = kiss of Death 2) 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.) Therefore ZARA is selling somewhere in between not too much and not too small, but enough that it makes a good marginal profit on each sale where it ultimately accumulates into huge profits with very little to zero inventory left.
What are the five phases of the development life cycle? What tasks are performed during each stage?
1. Inception Phase: Define the system goals -Determine the project scope -Assess the feasibility of the project 2. Analysis -Determine and document features and functions -Approve requirements (To-be Process) -Get the blueprint right 3.Design -Develop and evaluate alternatives -Hardware design determined by project team -Software design depends on the source -Database is designed -Procedures designed for business intelligence system -Job descriptions created for users and operations personnel 4. Construction -System is built -System testing -Users and data converted from old system to new system (plunge installation) -Test the system: -Confirm it all works (Product Quality Assurance) -Catch bugs before they get to users -Test scripts or beta testing 5. Production/Implementation Convert business activity from old system to new system Implement the new systems: Pilot Phased In-parallel Big Bang
BI Primary Systems
1. Reporting systems 2. Data mining systems 3. Knowledge management systems 4. Expert systems
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, Process, and People hardest parts to change are always process 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. "PEOPLE ARE ALWAYS THE BIGGEST PROBLEM." -clint
Click Fraud
A fake website or banner that redirects to a malicious virus-infested site
Pilot installation
A small test run of a system or production process to verify its acceptance and capabilities before going full-scale.(Only one user tests new system-reduces risk exposure)
Expert systems
A system that leverages rules or examples to perform a task in a way that mimicks applied human expertise -improve diagnostics and decision making for non-experts
Adsense
Allows publishers in the Google Network of content sites to serve automatic text, image, video, and rich media adverts that are targeted to site content and audience. • AdSense has become a popular company in creating and placing banner advertisements on a website, because the advertisements are less intrusive than most banners, and the contents of the website
Understand the differences between automating a process and transforming it? How do humans and technology play different roles in both?
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. ex) turning a checkout station into a self checkout station with no check out person 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, i.e. retraining the employees to adapt to the technology side. How do humans and technology play different roles in both? Example Starts with a lady calling a sales rep to get a product. Rep makes an order #. Warehouse guys use that order to update a pick-list (what to grab off shelves). Once it's picked, delivery # is made to be shipped. Person uses pick-list used to double check, products are boxed, scanned, and shipped. Wait for check. OR! Customer orders online, system checks inventory and processes payment. Robot gets items, updates inventory, packs product, route box through shipper. Delivered via UPS. Saves millions in costs!
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.
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.
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.
Because you must understand what the goal is first. You have to know exactly how the house is going to look like... number of closets, bed rooms, etc... to know what you need. If you change you mind halfway through building a house..it will be ridiculously expensive and time consuming to add those features in or take them out. 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 can 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 Prada is another example, they implemented IT and made this really fancy dressing room but none of the customers understood it and it was a disaster. IT is more than just technology, it is an integrated system.
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, which 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.
Phased installation
Changing from the old information system to the new one incrementally, starting with one or a few functional components and then gradually extending the installation to cover the whole new system.(all users move into new system, but only small section of the system)
Zombies
Computers infected that can be controlled by a master. all 1000000 zombies can attack one server and crash it.
What is the goal of testing?
Confirm that everything works as expected. (quality assurance) Catch the bugs before it gets to the users. (reduces risk exposure)
Testing
Confirming it all works as expected. A procedure intended to establish the quality, performance, or reliability of something, esp. before it is taken into widespread use
Cookies
Cookie's purpose is to let us know what websites we've logged into or visited. Log into email? A cookie is made. Check airplane tickets? A cookie is made. Websites see where you come from, and give you discount/raise prices.
Transaction Costs
Coordination. It is costly to get all 10,000 of your group members to sit down in 1 room on Wednesday 5pm and talk about what needs to be done. Same applies with business. ex, coordination costs, contracting costs, risks costs, loss of resource control, operating risks
What are the problems with transactional (operational) data? What is the dilemma many companies are in that have multiple databases built on different types incompatible systems.
Data is in too many places, data is "dirty" or missing values, inconsistent data and not maintained consistently, data hard to retrieve from the "legacy system", too much data.
Unlike Social Analytics (which leverages social data), Business Analytics or Intelligence leverages data from which source?
Data mining can leverage neural networks or other advanced algorithms and statistical techniques to hunt down and expose patterns, and build models to exploit findings. OR CONSUMERS IDK THE ANSWER
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 They have the customer feedback (data), which gives them what clothes the customers like and don't like (information), gives the production team and idea of what clothes to design (knowledge) and then when they design the correct clothes due to the data and information they create a profit (wisdom)
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 doesnt have to convert andy measurements to one common measurement (ex The Saap, Oracle, and Cutsom data dilemma faced by the worldwide company in class 22, slide 9)
Deliverable
Deliverable is a term used in project management to describe a tangible or intangible object produced as a result of the project that is intended to be delivered to a customer (either internal or external)
Plunge (Big Bang) installation
Direct installation, install new system and discontinue old, there is no backup position. (move into new, demo old)
How does disintermediation affect this challenge?
Disintermediation is cutting out the middle men, i.e. omitting wholesalers, distributors, and/or retailers, in order to reduce costs and lag time between members in the supply chain. It is basically the moving of goods from manufacturer to customers directly. By omitting the intermediaries, customers order straight from the manufacturer either by phone or by the manufacturer's website, where the supply chain would just consist of supplier, manufacturer, and customer. This is what Dell did, it increased efficiency and reduced costs, but again it comes with a greater risk.
DDOS Attack
Distributed denial of service. Flooding servers so noone can get in
Inception Phase
During this phase, you typically focus on understanding how to improve the way you manage requirements (Requirements discipline) and how you manage the project (Project Management discipline). First stage of the process. You define system goals, determine project scope, and assess feasibility of project.
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.
Inbound Logistics
Entails the movement of products from suppliers to companies; tasks like: coordination of purchasing from suppliers, inbound transportation, raw materials, component parts, work in process inventories and production scheduling.
Examples of Process Innovation
Ex: Early models of Dell, Wal-Mart (cross-docking), Progressive Insurance (quick response insurance and credit checking), Toyota Production Model Example: Wal-Mart's business process before: Moves inventory from distributer truck to Wal-Mart's warehouse-self and then from Wal-Mart's warehouse-self to Wal-Mart's retail-delivery-warehouse truck. Wal-Mart's business process after process innovation: Wal-Mart's new cross-docking process moves inventory from distributor truck to retail-delivery truck at the warehouse, where it skips the warehouse shelf process. Progressive Insurance implemented the Immediate Response claims handling A claimant can reach a progressive rep by phone 24 hours a day Rep schedules a time when adjuster will inspoect vehicle Adjuster doesn't work out of office from 9-5 but out of mobile claim vans Instead of 7-10 days to see car, it just takes them 9 hours.
How does the firm's strategic use of information technology influence design and product offerings, manufacturing, inventory, logistics, marketing and, ultimately, profitability?
For example, Zara utilizes PDAs to gather data about desired designs of clothing in order to gain information. This information is used to make decesions 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 stop of the business process in order to fine tune each stuff for maximum profits.
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.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.
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?
Greater efficiency, lower costs, saves time i.e. to move from one place to another, and more revenue and profit! ex) toyoto changing their order of manufacting to reduce time spent on each car = saving big money
The more organizations a process crosses, the harder it is to what?
Harder to implement process changes since it encompasses more organizations using the same process. Example: Try to tell everyone to use the Metric measurement instead of Standard measurement across the U.S. overnight. It would be disruptive. Harder to change process, people, and the systems
Information System (IS) and advantages
Hardware - Software - Data - Procedures - People Advantages for Zara: -reduce cost of buying and selling -sourcing, buying, settling are more effective and easier -reduces bullwhip effect -reduce size of inventory and costs -improve delivery scheduling (just in time inventory)
Outsourcing
Hiring another organization to perform service Advantages: -save costs -gain expertise you dont have -free up management time -refocus on core competencies -Control of budget more tightly for predictable costs -Get work done more efficiently or effectively -Make up for lack of in-house resources -Increase flexibility to meet changing business and commercial conditions -Access to innovation and thought leadership
Crowdsourcing
Rely on the crowd to solve ideas by pooling in all the knowledge of people - the act of taking a job traditionally performed by a designated agent and outsourcing it to an undefined, generally large group of people in the form of an open call; Netflix utilized this in the form of the "Netflix Prize" in which they offered a prize to the first group/individual who could improve Cinematch's ratings accuracy by 10%
Cost per thousand (CPM)
How much a company pays you for every 1000 times ad is displayed*
Cost-per-action (CPA)
How much a company pays you for every time someone fills out a form and hits send
Cost-per-click (CPC)
How much a company pays you for every time someone just "clicks" a banner
How is process innovation different from process improvement? Which is harder to do and why?
Improvement is doing things better , and innovation is doing things differently, i.e. in a unique way such as ZARA's value chain. *** Innovation is harder to do because of: ● Organizational Inertia - the bigger an organization is, the harder it is to change, i.e. people are so used to what they've been doing that their resistance to change is higher. Another example would be that the organization isn't moving anymore or has discontinued improving, i.e. not adapting to CAS! ● It is disruptive by its nature b/c one small change can change the entire chain of processes. ● Hard to implement top-down. Think back to the Toyota example, where the workers who have been doing the same procedures for years have found a more efficient way to do the process --> workers from the bottom that are good at what they're doing, have discovered a better way vs. workers at the top who are not the ones doing the procedures on a daily basis --> hard for the top-people to innovate a new process change while bottom-people have a better chance of discovering a process-change.
Parallel installation
Running the old information system and the new one at the same time until management decides the old system can be turned off. Expensive and time consuming
Core competency
Intellectual property that you own/makes you unique. Intel makes computer chips. McDonalds makes fast food. Walmart has affordable stuff of everything. dont outsource this
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?
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 • If content providers charge Netflix a per-unit basis for streamed content, then this also gets added to marginal costs. • Access to content • 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. • Influence of king DVD sales Wal-mart • 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 • Like House of Cards (it's own TV show) and have exclusive rights to shows like Mad Men
Incremental development
It involves iterations of a cycle of build, refine, and review so that the correct solution gradually emerges. A program development place technique for producing all or part of a production system based on an outline definition. The technique intended to reduce debugging by adding and testing only a small amount of code at a time. Step by step creating + deployment. Let's make one room at a time fully built before we start the next room.
Organizational Inertia
It is 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. continously improving and making things better, responding to threats, adapting to CAS). Basically an organization doing things the same and not changing the way they do things. Things go one way, hard to turn around/cost of ditching the old program. Forces inside an organization that make it resistant to change. Risk Aversion - would rather take the old certain/risk-free process that's been used over the years, over the new redesigned uncertain/risky process.
Detailed Logging
Logs every device/user that connects to the server. See who comes in and from what port/door. Useful for tracing when problems occured by who and when.
What advantages in terms of tracking and trending does online ad have over other media forms?
Online ads can track where you came from and when you clicked on ad; Google Analytics allows you to monitor your website and its traffic; Able to test ads and easily adjust them if you need to. Traditional advertising (i.e. print, radio, TV, billboards etc) are not as flexible with making changes quickly and tracking is a much harder and less accurate.
How has U.S. Advertising Spend changed since 2006?
Online advertising represents the only advertising category trending with positive growth.
Did iPremier offshore or onshore their storage?
Onshore
Why do you consider not outsourcing work, even if your labor/production costs go down?
Savings in production costs outweigh transaction costs. Price of labor will go down. Transaction/coordination costs will go up. The more you outsource the higher risk you need to coordinate all your peers to work together.
Market Capitalization
Share price x number of shares -quick way to value a company -google outperformed market for past year -google is most valuable media company
How are media consumption habits shifting? How does Google's approach to advertising explain this shift (i.e. why do people use online ad more)?
Shifts: • People are spending more time online • There's improved measurements and accountability for placed advertisements • People now can be more specifically targeted with ads why people use online ads more: -digital media is increasing -better accountability, you can measure clicks -TARGETING can let firms serve ads to specific categories of users to put something interesting to read for them
Did iPremier outsource storage or do it in house?
Outsource storage to someone else Qdata
Contract manufacturing
Outsourcing production to third party firms. Firms who do contract manufacturing dont own the plants or directly fund workers who are producing the goods. (used by conventional wisdom). Advantages: It helps keep the costs of goods low, leading to higher profit margins. Disadvantages: sweatshop labor and environmental abuse affects sales Zara only uses this for products with long shelf lives (jeans).
What are the key steps in good Business Process Management?
Process diagnostic-->Develop process maps-->Identify bottlenecks-->Redesign process-->Implement-->Evaluate the new process. 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.
Opt-out
Programs that enroll all customer by default, but allow consumers to discontinue participation if they want to
What is software project management? Why is systems development difficult and risky?
Software project management, the end users and developers need to know the length, duration and cost of the project. It is a process of managing, allocating and timing resources to develop computer software that meets requirements. Systems development is difficult and risky : -There is often difficulty determining the requirements (What they want.) -Requirements change as the system develops -Schedule and budget is often hard to estimate -Communication with large teams is difficult -Technology is constantly changing -Diseconomies of scale (Brook's Law) -Unexpected events
Business Process Management
Systematic way of creating, assessing, and altering business processes as needed. Achieved by monitoring the current business process, then analyzing it, then come up with ideas to improve it, then modeling the redesigned process, then of course implement it, and then repeating the whole cycle all over again in order to innovate an even better process than the previous.
How did streamlined operations and process innovation give Netflix a competitive advantage?
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 gave Netflix a competitive advantage: • Collaborative filtering(classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience)--used this concept to build Cinematch (ratings system that helps recommend movies to customers)
Data Conversion
The conversion of computer data from one format to another. Throughout a computer environment, data is encoded in a variety of ways.
Implementation/Production phase
The fifth decision-making phase, involving actually putting a recommended solution to work. system must be built system testing user and data must be converted from old to new system
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.
Product Quality Assurance (PQA) - aka testing -
The maintenance of a desired level of quality in a service or product, esp. by means of attention to every stage of the process of delivery or production.
Analysis phase
The purpose of this phase is to determine what the job holder must know or do on the job and to determine training needs. Less expensive to change the system during this phase
Click-through rate (CTR)
The ratio of viewers on a page and those that actually click the links advertised.
What is the user's role in the requirements phase? What happens if users do not participate in this phase?
The requirements phase is the phase in which all the necessary functions, fixtures, etc. (what they want) are identified. If the users do not participate in this phase, it is highly likely that they will not be satisfied with the end product and will request additional items to be added. This will take up more time and resources due to a change in the scope. It also is not as efficient as adding these items at the beginning of the project.
Critical path
The sequence of stages determining the minimum time needed for an operation. A sequence of events where a slip in any one activity generates a slip in the overall schedule. Used extensively in the exciting world of project management.
Design phase
The third decision-making phase, which involves finding possible alternatives in decision making and assessing their contributions. develop and evaluate alternatives hardware design determined by project team software design depends on source
What are the tradeoffs associated with systems development? Be sure to understand the tradeoffs between scope, schedule (time), and resources (aka the triple constraint).
The tradeoffs associated with the systems development are a triple constraint. This means that if you want to improve one aspect of the three (scope, schedule, and resources) then there is a trade off and you must reduce another aspect of the three. For example, if you are behind schedule and can't make the deadline, but finishing late is not an option, then you should decrease the scope of the project in order to finish on time. Another example would be if you have no more money for resources to finish the product, then a tradeoff can be to push the due date (schedule) back for the developing system in order to have more money for resources over time.
What security policies and procedures did iPremier have in place? Did they work and why not?
They did not have any procedures in place. They only implemented to try to fix it AFTER the attack. They did have some sort of plan, it just wasn't affective.
What risks did outsourcing cause in this case?
They had no control over security. They relied on someone else to watch their back door. They could not track who started the attack because they didn't have detailed logging software.
Adwords
To display an ad on Google search • Specifying just a single ad, or multiple ad campaigns that trigger different ads for different keywords. Advertisers also specify what they're willing to pay each time an ad is clicked, how much their overall ad budget is, and they can control additional parameters, such as the timing and duration of an ad campaign.
Production Costs-cost to produce good (materials, factory, etc)
Total cost=Production + Transaction ex. lower wages in offshore, market efficiency, specialization, economies of scale, favorable business env.
Point-of-sale (POS) systems
Transaction processing systems that captures customer purchases information. Cash registers and store checkout systems are examples of POS systems. They are critical to capturing sales data and are usually linked to inventory systems to subtract out any sold items.
Diseconomies of scale
When costs increase per unit. Are the forces that cause larger firms to produce goods and services at increased per-unit costs-As development teams grow, average contribution per worker decreases. Brook's Law- Adding more people to project makes project later
How does work become easier to estimate?
When the scope is well defined- broken down into small pieces. It is a lot easier to predict the time it takes to paint a living room than the time it takes to build an entire house.
Analytics
describing the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact- based management to drive decisions and actions. discovery and communication of meaningful patterns in data.
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.
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 cot 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.
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
Vertical Integration
a single firm owns several layers of its value chain (supplier and distributer) Advantages: 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. Disadvantages: financial problems as Euro strengths in relation to the dollar, and rising cost of transportation, 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 Ex. Zara makes 40% of its fabric
Ways to reduce the Bullwhip Effect
by sharing consumer demand information at all parts in the supply chain. 1) Minimize turn around time, use technology 2.) Align all levels of production 2) Zara vertically integrates itself by controlling all aspects of their supply chain. 3) Walmart communicates with the members of its supply chain and shares customer information so they can be prepared for changes in demand, and thus match the supply.-- POS back to headquarters multiple times a day 5) Channel alignment - coordination of pricing, transportation, inventory planning and ownership
Market basket analysis
determining which products customers buy together, and how an organization can use this information to cross-sell more products or services. -data mining technique Probability: frequently bought together Lift: likeliness of buying both than just 1 Confidence: likelihood of buying A and buying B Lift: how much more likely is it a person buys products A+B together than the likelihood of just buying B
Business Process Innovation
focuses on the transformation of existing processes that increases revenue and reduces cost. Basically eliminates the existing business process, and construction of a brand new business process that is more efficient and better which results in increased revenues, reduced costs, and time-saved.
Personal digital assistants (PDA)-
handheld computing devices made largely for mobile use outside of an office setting (smartphones & tablets) Ex: Zara uses this to gather immediate customer input and feedback.
Horizontal Integration
hen a single firm owns all of its retail outlet but does not own/control their supplier nor own/control their distributor. Hence they use contract manufacturers, or outsourcing to 3rd party companies to make a component of a good that will ultimately be used as part of creating the final good at the single firm's production line
Onshoring
inside the Us -in firm, in house -out of firm, local outsourcing
Reporting Systems
integrate data from multiple sources -process data by sorting, grouping, summing, averaging, and comparing -results format into reports -improves decision making by providing right information to right person at right time
Outbound Logistics
involves managing the flow of finished products and information to business buyers and ultimately to consumers. Tasks like: coordinate forecasting how much to send out to distributors or retailers, finished goods inventory management, warehousing, outbound transportation, customer service and production scheduling.
Business Process
is a sequence of activities to accomplish an objective. A visual interpretation of steps to achieve something.
Order-to-Cash Process
is the process of how you receive, fulfill, and get payment for orders. It is the sequence of steps in the process. Customer orders online, system checks inventory and processes payment. Robot gets items, updates inventory, packs product, route box through shipper. Delivered via UPS. Saves millions in costs!
Business Process Improvement
is to improve an existing process that becomes faster and more efficient that would result in increased profits, reduced costs, and time-saved. Example: The changes made in the order-to-cash process (i.e. automating of the processes).
Search engine optimization (SEO)
process of improving a page's organic search results
Data mining system
process using computers to identify hidden patterns and to build models from large data sets -Look for patterns and relationships to anticipate events or predict outcomes (market basket analysis) -determines preferences for product lines -miners want to sample
Push Advertising
relies on companies to market + sell you the product.. "buy this shiny toy!
Pull Advertising
relies on demand from customers. You want it. you find it.
Business intelligence (BI)
set of theories, methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information for business purposes combines aspects of reporting, data exploration and ad hoc queries, and sophisticated data for modeling and analysis -provides info for improving decision making, making it fast and effort less for proper data -uses data created by other systems to provide reporting and analysis for organizational decision making
Atoms to bits
the idea that many media products are sold in containers (physical products or atoms) for bits (the ones and zeros that make up a video file, song, or a layout of a book); as the internet offers fast wireless delivery to TVs, music players, book readers, and other devices, the "atoms" of the container aren't necessary; physical inventory is eliminated, offering great cost savings;
Operations
the organizational activities that are required to produce goods and services. It can also involve the development, execution, maintinence, control, and improvement of an organization's services and manufacturing procedures.
Long tail
the phenomenon whereby firms can make money by selling a near-limitless selection of less-popular products (or titles, in the case of Netflix); the long tail works with IPP firms because 1) selection attracts customers and 2) the internet allows large-selection inventory efficiencies that offline firms can't match
The Bullwhip Effect
where variations of inventory are amplified as you move up the supply chain from consumer to end-raw-material supplier when there is a change in consumer demand and no information is being shared about consumer demand between all members in the supply chain which will leave suppliers, manufacturers, distributors, and retailers with very high or low inventontory. Variability in order size and order timing increase at each stage up the supply chain from consumer to end raw material supplier.
How does Zara's approach differ from the conventional wisdom in fashion retail?
• Zara = small inventory. Sell small batches ASAP. • Zara 2 weeks design to store. Gap = 9 months. • Zara is vertically integrated • Zara uses tech + info systems + fast distribution + Close to airport + fast manufacture + fast putting up clothes • Zara doesn't have to guess what customers want, and it has a faster turnaround speed because it is vertically integrated (60% merchandise is produced in house) • Zara manages their supply chain with attention to the entire value chain
When does Project Management (PM) get involved on a project? What are tasks of a PM?
•It exists from the start to finish of the project -Manage resources -Monitors schedule and progress •Did a task or phase take longer or need more people? -Manages Risk and Issues -Handles project communication -Plans handoffs between phases •Ex: Is the builder okay with the design? •Ex: Is the user happy with finished product? -And so much more...