BMGT 301 EXAM 1 UMD

Customer relationship management systems

---enable a business to better manage its relationships with existing and potential customers. With the growth of the Web, potential customers can easily comparison shop for retail and wholesale goods and even raw materials, so treating customers better has become very important.

Knowledge management systems

---enable organizations to better manage processes for capturing and applying knowledge and expertise. These systems collect all relevant knowledge and experience in the firm, and make it available wherever and whenever it is needed to improve business processes and management decisions. They also link the firm to external sources of knowledge.

Vertical Differentiation

build a better product; products difer in quality

Processing:

converting or transforming data into useful outputs

Define and describe the value chain model.

---highlights specific activities in the business where competitive strategies can best be applied and where information systems will most likely have a strategic impact and identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive position.. ---views the firm as a series of basic activities that add a margin of value to a firm's products or services. The activities are categorized as either primary or support activities. ---Primary activities are most directly related to production and distribution of the firm's products and services, which create value for the customer. ---Support activities make the delivery of primary activities possible and consist of organization infrastructure ---linked to the value chains of its suppliers, distributors, and customers.

Internal business environmental forces include:

customers, suppliers, stockholders, regulations, and competitors.

Information:

data shaped into meaningful, useful form.

Business model:

describes how company produces, delivers, and sells product or service to create wealth

Operational managers

---need transaction-level information, such as the number of parts in inventory each day or the number of hours logged on Tuesday by each employee. ---Production or service workers actually produce the product and deliver the service. Production workers need access to information from production machines. Service workers need access to customer records so they can take orders and answer questions from customers.

Price discrimination

exists when sales of identical goods or services are transacted at diferent prices from the same provider.

The Value Chain Analysis Model

highlights the primary or support activities that add a margin of value to a firm's products or services where information systems can best be applied to achieve a competitive advantage

Strategy

is a set of decisions made to achieve competitive advantage

Senior managers

need summary information that quickly informs them about the overall performance of the firm, such as gross sales revenues, sales by product group and region, and overall profitability.

Netflix and its use of information technology

—Collaborative Filtering: A classification of software that monitors trends among customers and uses this data to personalize an individual's customer's experience. Netflix uses Cinematch. —Long Tail: Refers to an extremely large selection of content or products. This is a phenomenon where firms can make money by offering near limitless selection. —Crowdsourcing: This is the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined generally large group of people in the form of an open call. Netflix released their data to see who could improve their software —Atoms to bits: Physical goods to digital goods —Large data asset —Building competitive advantage through Brand and Scale

STDEV

Estimates standard deviation based on a sample (ignores logical values and text in the sample).

Explain why environments are important for understanding a business.

--- New developments in technology, politics, customer preferences, and regulations happen all the time. In general, when businesses fail, it is often because they failed to respond adequately to changes in their environments. A firm must monitor changes in its environment and share information with key entities in that environment in order to stay in business.

Describe the characteristics of transaction processing systems (TPS) and the role they play in a business.

---Transaction processing systems (TPS) are computerized systems that perform and record daily routine transactions necessary in conducting business; they serve the organization's operational level. The principal purpose of systems at this level is to answer routine questions and to track the flow of transactions through the organization. ---tasks, resources, and goals are predefined and highly structured. ---monitor the status of internal operations and the firm's relationship with its external environment. ---major producers of information for other types of systems. ---are often so central to a business that TPS failure for a few hours can lead to a firm's demise and perhaps that of other firms linked to it.

Define the value web and show how it is related to the value chain.

---a collection of independent firms that use information technology to coordinate their value chains to collectively produce a product or service. ---It is more customer driven and operates in a less linear fashion than the traditional value chain. ---a networked system that can synchronize the business processes of customers, suppliers, and trading partners among different companies in an industry or in related industries.

Explain how the value chain model can be used to identify opportunities for information systems.

---can be used at each stage of the value chain to improve operational efficiency, lower costs, improve profit margins, and forge a closer relationship with customers and suppliers ---help examine how value-adding activities are performed at each stage of the value chain. ---can improve the relationship with customers (customer relationship management systems) and with suppliers (supply chain management systems) who may be outside the value chain but belong to an extended value chain and can help businesses track benchmarks in the organization and identify best practices of their particular industries. ---After analyzing various stages in the value chain, an organization can devise a list of candidate applications for information systems.

Supply chain management systems

---help businesses better manage relationships with their suppliers. --- The objective of SCM is to get the right amount of product from the companies' source to the point of consumption with the least amount of time and with the lowest cost. ---Provide information to help suppliers, purchasing firms, distributors, and logistics companies share information about orders, production, inventory levels, and delivery of products and services so that they can source, produce, and deliver goods and services efficiently and helps organizations achieve greater efficiency by automating parts of these processes or by helping organizations rethink and streamline these processes. --- important to a business because through its efficiency it can coordinate, schedule, and control the delivery of products and services to customers.

Describe the characteristics of ESS and explain how these systems differ from DSS.

---help senior managers address strategic issues and long-term trends, both in the firm and in the external environment. ---address nonroutine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution. --- provide a generalized computing and communications capacity that can be applied to a changing array of problems. ---designed to incorporate data about external events, such as new tax laws or competitors, but they also draw summarized information from internal MIS and DSS. --- designed for ease-of-use and rely heavily on graphical presentations of data.

Activities in Value Chain

---inbound logistics - obtain raw materials ---Operations - transformation of inputs to finished goods ---Outbound logistics - storing products and delivering them ---Marketing/sales - establishing a customer need ---Service activities - after-sale service and maintenance

Explain how the value web helps businesses identify opportunities for strategic information systems.

---information systems enable value webs that are flexible and adaptive to changes in supply and demand. --- Relationships can be bundled or unbundled in response to changing market conditions. ---Firms can accelerate their time to market and to customers by optimizing their value web relationships to make quick decisions on who can deliver the required products or services at the right price and location. ---Information systems make it possible for companies to establish and operate value webs.

Enterprise systems

---integrate the key business processes of an organization into a single central data repository. This makes it possible for information that was previously fragmented in different systems to be shared across the firm and for different parts of the business to work more closely together.

Middle managers

---need more specific information on the results of specific functional areas and departments of the firm, such as sales contacts by the sales force, production statistics for specific factories or product lines, employment levels and costs, and sales revenues for each month or even each day. ---Knowledge workers, such as engineers, scientists, or architects, design products or services and create new knowledge for the firm. They may need access to external scientific databases or internal databases with organizational knowledge.

Powerful resources

1. Imitation-Resistant Value Chains: Others find hard to replicate 2. Brand: Proxy for quality and inspires trust 3. Scale: Advantages related to size; economies of scale 4. Switching Costs and Data: Costs consumer incur by switching providers 5. Differentiation: Be different; move away from being commoditized 6. Network Effects: When the value of a product or service increases as its number of users expands. 7. Distribution Channels: The path through which products or services get to customers 8. Patents.

Fast Follower Exists when?

1. Savvy rivals watch a pioneer's efforts 2. Learn from their successes and missteps 3. Then enter the market quickly with a comparable or superior product at a lower cost 4. Before the first mover can dominate.

Firms invest heavily in information systems to achieve six strategic business objectives:

1.Operational excellence 2.New products, services, and business models 3.Customer and supplier intimacy 4.Improved decision making 5.Competitive advantage 6.Survival

Computer-based information system (CBIS)

A single set of hardware, software, databases, telecommunications, people, and procedures that are configured to collect, manipulate, store, and process data into information

Sum

Adds all the numbers in a range of cells.

SUMIF/SUMIFS

Adds the cells specified by a given condition or criteria.

Bit Coin

Bitcoin:An open-source, decentralized payment system that operates in a peer-to-peer environment, without bank or central authority. ---Benefits: Eliminates transaction fees Used for international commerce without delay or transaction fees Straddles the line between transparency and privacy ---Concerns: Difficult to understand/use technology Has bad reputation (drug dealers, tax evaders, etc...) Security Volatility of the value of a bitcoin

PMT

Calculates the payment for a loan based on constant payments and a constant interest rate.

IF

Checks whether a condition is met, and returns one value if TRUE, and another value if FALSE.

AND

Checks whether all arguments are TRUE, and returns TRUE if all arguments are TRUE.

OR

Checks whether any of the arguments are TRUE, and returns TRUE or FALSE. Returns FALSE only if all arguments are FALSE.

Proper

Converts a text string to proper case; the first letter in each word in uppercase, and all other letters to lowercase.

COUNTIF/COUNTIFS

Counts the number of cells within a range that meet the given condition.

Var

Estimates variance based on a sample

Sustainable Competitive Advantage

Financial performance that consistently outperforms industry averages

AVERAGEIF/AVERAGEIFS

Finds average(arithmetic mean) for the cells specified by a given condition or criteria.

Disruptive Technologies

First, they come to market with a set of performance attributes that existing customers don't value. Second, over time the performance attributes improve to the point where they invade established markets

Identify and describe the different levels in a business firm and their information needs.

From highest to lowest, the three levels of the organizational hierarchy are senior, middle, and operational management.

Executive Support Systems (ESS)

Information Inputs: Aggregate data; external, internal Information Outputs: Projections; responses to queries Users: Senior managers

Decision Support Systems (DSS)

Information Inputs: Optimized for data analysis, analytic models and data analysis tools. Information Outputs: Interactive; simulations; analysis Users: Professionals, staff managers

Management Information Systems (MIS)

Information Inputs: Summary transaction data; high-volume data; simple models Information Outputs: Summary and exception reports Users: Middle managers

Transaction Processing Systems (TPS)

Information Inputs: Transactions; daily events Information Outputs: Detailed reports; lists; summaries Users: Operations personnel; first-line supervisors

VLOOKUP

Looks for a value in the leftmost column of a table, and then returns a value in the same row from a column you specify. By default, the table must be sorted in an ascending order.

How MIS differs from TPS

MIS deal with summarized and compressed data from the TPS.

Improved decision making

Need accurate Information

True sustainable advantage comes from assets and business models that are simultaneously (Resource-based Theory):

Valuable Rare Difficult to imitate For which there are no substitutes.

Capabilities:

a subset of resources that enable a irm totake full advantage of other resources

Technology can play a key role in creating and reinforcing assets for sustainable advantage. This includes:

a. Enabling an imitation resistant value chain b. Strengthening a firm's brand c. Collecting useful data d. Establishing switching costs e. Creating a network effect f. Creating or enhancing a firm's scale advantage g. Enabling product or service differentiationh. Offering an opportunity to leverage unique distribution channels.

Input:

activity of gathering and capturing raw data

CONCATENATE

Joins several text strings into one text string.

Charts

allow you to illustrate your workbook data graphically

The Five Forces Model

he five forces this framework considers are (1) the intensity of rivalry among existing competitors, (2) the threat of new entrants, (3) the threat of substitute goods or services, (4) the bargaining power of buyers, and (5) the bargaining power of suppliers

Competitive advantage

•Delivering better performance •Charging less for superior products •Responding to customers and suppliers in real time

How information systems are transforming business

•Emerging mobile digital platform •Growing business use of "big data" •Growth in cloud computing

Globalization opportunities

•Internet has drastically reduced costs of operating on global scale •Increases in foreign trade, outsourcing •Presents both challenges and opportunities

Information system:

•Support decision making and control. •Help with analysis, visualization, and product creation.

Tactical Moves in Pursuing a Strategy

◦Internal innovation - generate new knowledge ◦Internal growth - economies of scale ◦Mergers & acquisitions ◦Strategic alliances - partnerships with other companies

Conditional formatting

Tools to quickly highlight important information in a spreadsheet.

Straddling

When a firm attempts to match the benefits of a success position while maintaining its existing position.

SUMPRODUCT

Returns the sum of the products of corresponding ranges or arrays.

Customer and supplier intimacy:

Serving customers well lead to customers returning, which raises revenues and profits.

How to measure competitive advantage

---Accounting profits ---Stock Price

Operational excellence

Improvement of efficiency to attain higher profitability

Business benefits include (Customer relationship management systems):

--- provide information to coordinate all the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention. This information helps firms identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales. ---consolidate customer data from multiple sources and provide analytical tools for answering questions such as: What is the value of a particular customer to the firm over his/her lifetime? --- tools integrate a business's customer-related processes and consolidate customer information from multiple communication channels, giving the customer a consolidated view of the company. ---Detailed and accurate knowledge of customers and their preferences helps firms increase the effectiveness of their marketing campaigns and provide higher-quality customer service and support.

Describe the characteristics of DSS and how they benefit businesses.

--- support nonroutine decision-making for middle managers. --- provide sophisticated analytical models and data analysis tools to support semistructured and unstructured decision-making activities. --- use data from TPS, MIS, and external sources, in condensed form, allowing decision makers to perform "what-if" analysis. --- focus on problems that are unique and rapidly changing; procedures for arriving at a solution may not be fully predefined. --- are designed so that users can work with them directly; these systems include interactive, user-friendly software.

Benefits of KMS System

--- support processes for acquiring, storing, distributing, and applying knowledge, as well as processes for creating new knowledge and integrating it into the organization. --- include enterprise-wide systems for managing and distributing documents, graphics, and other digital knowledge objects; systems for creating corporate knowledge directories of employees with special areas of expertise; office systems for distributing knowledge and information; and knowledge work systems to facilitate knowledge creation. --- intelligent techniques that codify knowledge and experience for use by other members of the organization and tools for knowledge discovery that recognize patterns and important relationships in large pools of data.

How IT Enables Competitive Advantage

---1. Be different ◦1.1 be the irst one there (irst mover advantage versus fast follower) ◦1.2 product differentiation ---2. New pricing strategies ◦Price discrimination 3. Lowering cost (Cost Leadership)

Business benefits include the increased ability to (Supply chain management systems):

---Decide when and what to produce, store, and move. ---Rapidly communicate orders. ---Track the status of orders. Check inventory availability and monitor inventory levels. ---Reduce inventory, transportation, and warehousing costs. ---Track shipments ---Plan production based on actual customer demand. ---Rapidly communicate changes in product design.

How enterprise systems change the flow of an organization

---Information flows seamlessly throughout an organization, improving coordination, efficiency, and decision making. ---Gives companies the flexibility to respond rapidly to customer requests while producing and stocking only that inventory necessary to fulfill existing orders. ---Increases customer satisfaction by improving product shipments, minimizing costs, and improving a firm's performance. ---Improves decision making by improving the quality of information for all levels of management. That leads to better analyses of overall business performance, more accurate sales and production forecasts, and higher profitability.

Describe the characteristics of MIS and explain how MIS differ from TPS and from DSS.

---Middle management needs systems to help with monitoring, controlling, decision-making, and administrative activities. ---provide middle managers with reports on the organization's current performance. This information is used to monitor and control the business and predict future performance. ---summarize and report the company's basic operations using data supplied by TPS. The basic transaction data from TPS are compressed and usually presented in reports that are produced on a regular schedule. ---serve managers primarily interested in weekly, monthly, and yearly results, although some MIS enable managers to drill down to see daily or hourly data if required. --- provide answers to routine questions that have been specified in advance and have a predefined procedure for answering them. --- generally are not flexible and have little analytical capability. ---use simple routines, such as summaries and comparisons, as opposed to sophisticated mathematical models or statistical techniques.

Zara and its use of information technology

---Pure Play: companies that rely solely on the Internet to distribute products and services. ---Builds its brand ---Contract manufacturing: Involves outsourcing production to third-party firms ---Use PDA to: Gather customer input, and Chat up with customers to gain feedback on what they'd like to see more of ---Give incentives for success ---Point-of-sale (POS) system: A transaction process that captures customer purchase information, showing how garments rank by sales ---Vertical Integration: When a single firm owns several layers in its value chain ---Value chain: The set of interdependent activities that bring a product or service to market Reused security tags

Relative vs absolute addressing

---Relative Addressing is when you copy a formula across/down and it increments the letters in the formula. ---Absolute Addressing is when you lock in the cell in a formula so that when you copy across or down the particular cell does not change.

Describe how the Internet has changed competitive forces and competitive advantage.

---The Internet has nearly destroyed some industries and severely threatened others. The Internet has also created entirely new markets and formed the basis of thousands of new businesses. ---The Internet has enabled new products and services, new business models, and new industries to rapidly develop. ---Because of the Internet, competitive rivalry has become much more intense. Internet technology is based on universal standards that any company can use, making it easy for rivals to compete on price alone and for new competitors to enter the market. ---Because information is available to everyone, the Internet raises the bargaining power of customers, who can quickly find the lowest-cost provider on the Web.

Strategic Positioning

Performing different tasks than rivals or the same tasks in a different way.

Operational Effectiveness

Performing the same tasks better than rivals perform them.

Max

Provides maximum of data set

Min

Provides minimum of data set

Trim

Removes all spaces from a text string except for single spaces between words.

Average

Returns the average (arithmetic mean) of its arguments, which can be numbers or names, arrays, or references that contain numbers.

Large

Returns the k-th largest value in a data set. For example, the fifth largest number.

median

Returns the median, or the number in the middle of the set of given numbers.

Mode

Returns the most frequently occurring, or repetitive, value in an array or range of data.

Fresh Direct

oWorker shifts are HIGHLY EFFICIENT, avoiding the downtime lulls and busy rush hour spikes of storefronts. oHIGHER INVENTORY TURNSmean the firm is selling product faster, so it collects money quicker than its rivals do. oArtificial intelligence software, coupled with some seven miles of fiber-optic cables linking systems and sensors, supports everything from baking the perfect baguette to verifying orders with 99.9 PERCENT ACCURACY. oSince it lacks the money-sucking open-air refrigerators of the competition, the firm even SAVES BIG ON ENERGY (instead, staff bundle up for shifts in climate-controlled cold rooms tailored to the specific needs of dairy, deli, and produce). oThe firm also uses RECYCLED BIODIESEL FUEL to cut down on delivery costs. oFreshDirect buys directly from suppliers, ELIMINATING MIDDLEMEN wherever possible. oOffering to carry a greater selection of supplier products whileELIMINATING THE "SLOTTING FEES" (payments by suppliers for prime shelf space) common in traditional retail oPAYING PARTNERS IN DAYS rather than weeks oSHARING DATA to help improve supplier sales and operations

Feedback:

output used to make changes to input or processing activities

Horizontal Differentiation

position yourself in "product space" away from your competitors; used to appeal to distinct group of customers

Output:

production of useful information, usually in form of documents and reports

System Variable

quantity or item controlled by the decision maker

Examples of MIS

sales and profit per customer and per region, relocation summary and analysis, inventory control, capital investment analysis, and even a report on students who were here in the autumn but did not return in the spring.

Data:

streams of raw facts.

Resources:

tangible and intangible assets of a firm

External business environmental forces include:

technology and science; economy, international change, and politics.

Information technology:

the hardware and software a business uses to achieve objectives.

Types of information systems

transaction processing at the operational level decision-support systems management information systems at the middle level executive support systems at the senior level.

System parameter

value or quantity that cannot be controlled

How MIS differs from DSS

will often use data from external sources, as well as data from TPS and MIS. DSS supports "what-if" analyses rather than a long-term structured analysis of MIS. MIS are generally not flexible and provide little analytical capabilities. In contrast, DSS are designed for analytical purposes and are flexible.