CHAPTER 1

BUSINESS DRIVEN TECHNOLOGY

Information Technology’s Impact on Business Operations

Describe a few of the types of IT services each business function might be receiving from IT.

§Customer service: click-to-talk, call scripting, auto answering, call centers

§Finance: accounting packages, Sarbanes Oxley

§Sales and marketing: campaign management, customer relationship management

§Operations: supply chain management

§Human resources: software to track employees at risk of leaving

Which types of IT services can be used to meet these types of goals?

§Reduce costs/ improve productivity: supply chain management, enterprise resource planning

§Improve customer satisfaction/loyalty: customer relationship management, loyalty programs

§Create competitive advantage: business intelligence/data warehousing

§Generate growth: sales management systems

§Streamline supply chain: demand planning software

§Global expansion: e-business

§Accounting provides quantitative information about the finances of the business including recording, measuring, and describing financial information

§Finance deals with the strategic financial issues associated with increasing the value of the business, while observing applicable laws and social responsibilities

§Human resources includes the policies, plans, and procedures for the effective management of employees (human resources)

§Sales is the function of selling a good or service and focuses on increasing customer sales, which increases company revenues

§Marketing is the process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the company’s products

§Operations management (also called production management ) includes the methods, tasks, and techniques organizations use to produce goods and services. Transportation (also called logistics) is part of operations management.

§Management information systems (MIS) is the function that plans for, develops, implements, and maintains IT hardware, software, and the portfolio of applications that people use to support the goals of an organization

—Organizations typically operate by functional areas or functional silos

—Functional areas are interdependent

Each functional area undertakes a specific core business function.

§Sales and Marketing – forecasting, segmentation, advertising, promotion

§Operations and Logistics – purchasing, supplying, receiving, transportation

§Accounting and finance – accounting, planning, budgeting, tax, costs

§Human resources – hiring, training, benefits, and payroll

Information Technology Basics

•IT does not equal or represent business success and innovation, it is simply an enabler of business success and innovation

Will spending large amounts of money on IT guarantee automatic

success?

§Spending large amounts of money on IT will not guarantee an organization automatic success

§Organizations need to allocate resources on the right types of IT that correctly support their business operations to be successful

—Management information systems (MIS) – a general name for the business function and academic discipline covering the application of people, technologies, and procedures  to solve business problems

—MIS is a business function, similar to Accounting, Finance, Operations, and Human Resources

—When beginning to learn about information technology it is important to understand

—Data, information, and business intelligence

—IT resources

—IT cultures

                  Data, Information, and BI

—Data - raw facts that describe the characteristic of an event

—Information - data converted into a meaningful and useful context

—Business intelligence – applications and technologies that are used to support decision-making efforts

IT Resources

—People use

—Information

—Information technology to work with

IT Cultures

—Information-Functional Culture

   - Employees use information as a means of exercising influence or power over others. For example, a manager in sales refuses to share information with marketing. This causes marketing to need the sales manager’s input each time a new sales strategy is developed.

—Information-Sharing Culture 

  - Employees across departments trust each other to use information (especially about problems and failures) to improve performance.

—Information-Inquiring Culture

  - Employees across departments search for information to better understand the future and align themselves with current trends and new directions.

—Information-Discovery Culture

  - Employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages.

Which type of information culture will help an organization achieve the greatest success?

§Information-discovery culture

Which type of information culture would hurt an organization?

§Information-functional culture

§Organizations that encourage their employees to share ideas and openly discuss challenges and opportunities on an enterprisewide level have a competitive advantage over organizations that operate in functional silos

§This point is easily demonstrated by looking back at the Apple case and how many different people from different areas needed to be involved in the iPod creation

§Apple even purchased an outside company, SoundStep, to help bring the iPod to life.