ISA 235 Chapter 1

Knowledge worker

Individual valued for their ability to interpret and analyze information

Business Intelligence

Information collected from multiple sources such as suppliers, customers, competitors, partners, and industries that analyzes patterns, trends, and relationships for strategic decision making

Two forms of structured data:

Machine-generated data - Created by a machine without human intervention Human-generated data - Data that humans, in interaction with computers, generate

Switching cost

Manipulating costs that make customers reluctant to switch to another product - reduce buyer power

Unstructured data

Not defined and does not follow a specified format

Product differentiation

Occurs when a company develops unique differences in its products or services with the intent to influence demand

First-mover advantage

Occurs when an organization can significantly impact its market share by being first to market with a competitive advantage

Chief information officer (CIO)

Oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives

Data

Raw facts that describe the characteristics of an event or object

Chief knowledge officer (CKO)

Responsible for collecting, maintaining, and distributing the organization's knowledge

Chief privacy officer (CPO)

Responsible for ensuring the ethical and legal use of information

Chief security officer (CSO)

Responsible for ensuring the security of IT systems

Chief technology officer (CTO)

Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT

Loyalty program

Rewards customers based on the amount of business they do with a particular organization - reduce buyer power

Knowledge

Skills, experience, and expertise coupled with information and intelligence that creates a person's intellectual resources

Structured Data

Stored in a traditional system such as a relational database or spreadsheet

Two ways to reduce buyer power:

Switching cost - Manipulating costs that make customers reluctant to switch to another product Loyalty program - Rewards customers based on the amount of business they do with a particular organization

Buyer Power

The ability of buyers to affect the price of an item

Information Age

The present time, during which infinite quantities of facts are widely available to anyone who can use a computer

Analytics

The science of fact-based decision making

Supplier power

The suppliers' ability to influence the prices they charge for supplies

Behavioral Analytics

Uses data about people's behaviors to understand intent and predict future actions

Value chain analysis

Views a firm as a series of business processes that each add value to the product or service

system

a collection of parts that link to achieve a common purpose - primary enabler of cross-functional operations

report

a document containing data organized in a table, matrix, or graphical format allowing users to easily comprehend and understand information

porters five forces model

a model for analyzing the competitive forces within the environment in which a company operates, to assess the potential for profitability in an industry

static report

a report created once based on data that doesn't change

dynamic report

a report that changes automatically during creation

SWOT Analysis

evaluates an organization's strengths, weaknesses, opportunities, and threats to identify significant influences that work for or against business strategies

support value activities

found along the top of the value chain and includes business processes such as firm infrastructure, HR management, technology development, and procurement, that support the primary value activities

primary value activities

found at the bottom of the value chain, these include business processes that acquire raw materials and manufacture, deliver, market, sell, and provide after-sales services

porters three generic strategies

generic business strategies that are neither organization nor industry specific and can be applied to any business, product, or service

Porter's Five Forces Model

look at chart

goods

material items or products that customers will buy to satisfy a want or need

chief data officer

responsible for determining the types of information the enterprise will capture, retain, analyze, and share

service

tasks that customers will buy to satisfy a want or need

Fact

the confirmation or validation of an event or object

competitive intelligence

the process of gathering information about the competitive environment, including competitors' plans, activities, and products, to improve a company's ability to succeed

production

the process where a business takes raw materials and processes them into a finished product

productivity

the rate at which goods and services are produced based on total output given total input

list the three generic business strategies

1. broad cost leadership 2. broad differentiation 3. focused strategy

Management Information Systems (MIS)

A business function, like accounting and human resources, which moves information about people, products, and processes across the company to facilitate decision-making and problem-solving

Big data

A collection of large, complex data sets, including structured and unstructured data, which cannot be analyzed using traditional database methods and tools

Entry barrier

A feature of a product or service that customers have come to expect and entering competitors must offer the same for survival

Business Strategy

A leadership plan that achieves a specific set of goals or objectives such as Developing new products or services Entering new markets Increasing customer loyalty Attracting new customers Increasing sales

Stakeholder

A person or group that has an interest or concern in an organization - drive business strategies

Competitive advantage

A product or service that an organization's customers place a greater value on than similar offerings from a competitor

Business process

A standardized set of activities that accomplish a specific task, such as a specific process

Snapshot

A view of data at a particular point in time

Systems thinking

A way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs while continuously gathering feedback on each part

Internet of Things

A world where interconnected, Internet-enabled devices or things can collect and share data WITHOUT human intervention

Examples of the power of business and technology:

Amazon, Netflix, Zappos - not technology companies

Fast Company magazine says a few executive levels might be created:

Chief intellectual property officer- Chief automation officer Chief user experience officer

Supply chain

Consists of all parties involved in the procurement of a product or raw material - suppliers > company > customers

Information

Data converted into meaningful and useful content

The core drivers of the information age:

Data, Information, Business Intelligence, Knowledge

Machine to Machine

Devices that connect to other devices

Predictive Analytics

Extracts information from data and uses it to predict future trends and identify behavioral patterns

Rivalry among existing competitors

High when competition is fierce in a market and low when competitors are more complacent

Threat of new entrants

High when it is easy for new competitors to enter a market and low when there are significant entry barriers

Threat of substitute products or services

High when there are many alternatives to a product or service and low when there are few alternatives