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1. IS v IT? Basically, Information Technology is the study design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware. IT deals with the use of electronic computers and computer software to convert, store, protect process, transmit, and securely retrieve information. IS is a set of components (data, hardware, software, telecommunication, people, procedure) that work together to process data and produce information. Information system refers to a system of persons, data records and activities that process the data and information in an organization, and it includes the organization`s manual and automated processes. Computer-based information systems are the field of study for information technology, elements of which are sometimes called ³information system´ as well, a usage some consider to be incorrect. Information system is an organized combination of: IT (hardware, software, communications networks, data resources), and people in addition to policies and procedures. An IS that helps gain strategic advantages is called a strategic information system (SIS). To assure optimal utilization of IT for competitive advantage, executives must participate in generating ideas and champion new, innovative uses of information systems. In recent years, many of these ideas involved using the Internet. Actually, a company achieves strategic advantage by using strategy to maximize its strengths, resulting in a competitive advantage. Strategic advantage is often achieved by one or a combination of the following initiatives: 1.reduce costs 2.raise barriers to market entrants 3.establish high switching costs 4.create new products or services 5.differentiate products or services 6.enhance products or services 7.establish alliances 8.lock in suppliers or buyers. So, cost reduction enables a business to sell more units of its products or services while maintaining or increasing its profit margin. Raising barriers to potential entrants to the industry lets an organization maintain a sizable market share by developing systems that are prohibitively expensive for competitors to emulate. By establishing high switching cost, a business can make buying from competitors unattractive to clients. Developing totally new products or services can create an entirely new market for an organization, which can also enjoy the advantage of being a
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first mover for that product and market. and if the organization cannot create new products or services, it can still enjoy competitive advantage by differentiating its products so that customers view them as better than a competitor`s products. Organizations also attain advantage by enhancing existing products or services. Many new services are the fruits of alliances between companies: each contributes its own expertise to package services that entice customers with an overall value greater than that offered by the separate services individually. Locking in clients or suppliers, that is, creating conditions that make dealing with competitors infeasible is a powerful strategy to gain advantage. In the other word, 4 ways
that IS can lead to competitive advantages are: 1. Cost leadership 2. Niche markets 3.enhance suppliers and customer intimacy, and 4.innovative products.
Low-Cost Leadership y y y y Become low-cost producers Help suppliers or customers reduce costs Increase cost to competitors Example, Air Asia
Strategy for producing products and services at a lower price than competitors while enhancing quality and level of service Information systems used to achieve the lowest costs and the lowest prices Examples: Wal-Mart (EDLP, VMI, continuous replenishment systems), Dell (Masscustomization, Build-to-Order system) Product Innovation/Product Differentiation y y y Develop ways to differentiate a firm¶s products from its competitors Can focus on particular segment or niche of market Example, Dell , Toyota
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Strategy for creating brand loyalty by developing new and unique products and services not easily duplicated (imitated) by competitors Information systems used to enable new products and services, or greatly change the customer convenience Examples: ATMs, computerized reservation systems, Google (Maps), eBay (PayPal), Apple (iPod, iTunes) Focused on Market Niche y Find new ways of doing business
-Unique products or services or unique markets -Radical changes to business processes to alter the fundamental structure of an industry y Example, Amazon uses online full-service customer systems ± 3M - Nokia
Strategy for developing new market niches for specialized products and services Information systems used to produce data for sales and marketing; analyze customer behaviors Examples: One-to-one and customized marketing, (e.g., Hilton Hotels, Harrah¶s), Long tail Customer & Supplier Intimacy Strategy for developing strong ties and loyalty with customers Links consumer behaviors back to distribution, production, and supply chains Information systems used to link customer¶s value chain to firm¶s value chain Reduce inventory costs; deliver product or service more quickly to customer Examples: Chrysler Corporation, Amazon.com Strengthen customer and supplier intimacy
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Impacts of Internet on Competitive Forces Reduces barriers to entry Enables new substitute products and services Shifts bargaining power to customer (due to low search costs) Raises firm¶s bargaining power over suppliers Suppliers benefit from reduced barriers to entry and from elimination of intermediaries (disintermediation) Widens geographic market, increases number of competitors, reduces differentiation among competitors.
So, while companies continue to explore new ways of devising SISs, some successful SISs are the result of less lofty endeavors: to intention to improve mundane operations using IT has occasionally yielded a system with strategic qualities. According to Michael porter value chain activities comprise primary activities and support activities. Primary activities includes inbound logistics, operations, outbound logistic, marketing &sale, and service. Support activities include firm infrastructure, human resource management, technology development, and procurement. Basically, IT can impact on the each value chain component. Also, IT might offer many opportunities to accomplish a
competitive edge, especially in industries that are using older software, such as the insurance industry. In the software industry, creating standards often creates strategic advantage.
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I have to mention that, business level strategy for each company is one of these strategies: cost leadership, differentiation, or integrated cost leadership and differentiation. So, according to each strategy some of the value-creating activities are different. In Valuecreating activities for cost leadership, cost-effective management information system (MIS), investment in technologies in order to reduce costs, and finding low cost materials are some of the main advantages. But, in value-creating activities for differentiation, highly developed MIS, and emphasize on high-quality, and worker compensation for creativity/productivity, and investment on technologies that help firm to produce different products are some of the main advantages. One good example for success in using IS and IT is JetBlue in the U.S airline industry. The company`s success is the result of understanding priorities and gaining marked efficiencies through automating whatever IT can automate. JetBlue managed to gain strategic advantage by reducing cost, therefore reducing the price to customer, and improving a service, especially in terms of on-time departure and arrivals. JetBlue uses open skies, the software that is combination reservation system and accounting system, and support customer service and sales tracking. JetBlue saves office space rent and electricity by using reservation agents who work from home (telecommuting), and use VIOP for telephoning. Its use of IT technologies also placed the airline at the top of the list for on-schedule departures and arrivals. Radio-frequency identification (RFID) The most important development in hardware to support SCM has been a technology that called radio frequency identification. RFID is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. The technology requires some extent of cooperation of an RFID reader and an RFID tag. An RFID tag is an object that can be applied to or incorporated into a product, animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the line of sight of the reader.
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Most RFID tags contain at least two parts. One is an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions. The second is an antenna for receiving and transmitting the signal. Today, RFID is used in enterprise supply chain management to improve the efficiency of inventory tracking and management. However, growth and adoption in the enterprise supply chain market is limited because current commercial technology does not link the indoor tracking to the overall end-to-end supply chain visibility. Coupled with fair cost-sharing mechanisms, rational motives and justified returns from RFID technology investments are the key ingredients to achieve long-term and sustainable RFID technology adoption Marks & Spencer In 2003, retailer Marks and Spencer in the UK showed the way by replacing barcodes on food trays, that were manually scanned one at a time, with RFID tags that are automatically read thirty at a time by a doorway interrogator. That obtained a payback of only one year, after which the substantial cost savings could be shared with the consumer. TI-RFid Systems announced that UK retailer Marks & Spencer is replacing existing barcodes with a TI RFid-based electronic tagging system. Using TI-RFid Tag-it smart labels, UK-based systems integrator Intelligent will create a system to track almost 3.5 million reusable trays, dollies and roll cages used throughout the store¶s refrigerated food supply chain TI-RFid technology will provide Marks &Spencer with a significant cost and speed advantage in tracking and managing its refrigerated food products. During Marks & Spencer¶s extensive trials of electronic smart labels, the TI tags reduced the time taken to read a stack of multiple trays by approximately 80 percent, compared with bar coding. A complete dolly with more than 25 trays can be scanned in a single pass through a portal in just 5 seconds with high accuracy and reliability ± compared with 29 seconds for conventional barcode scanning.
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More than 70 percent of Marks & Spencer¶s food business is in refrigerated fresh foods. Its supply chain needs to be very fast since the majority of its items are ordered at 6 a.m. and delivered the next day beginning at 7:30 a.m. In addition to a with international standards, other advantages of the RFID system include
faster, more accurate scanning and data capture, simultaneous read, lower labeling costs, and more efficient communication throughout the entire supply chain. Electronic tags are reusable and their fixed costs can be spread over a long period of time, whereas barcodes are used once. Marks & Spencer estimates the capital cost of an RFID system will be less than a tenth of the annual cost of using barcodes. The primary benefits of the RFID system include the reliable tracking of raw material and containers throughout the manufacturing process, the consistent implementation of FIFO (first in, first out) inventory management, and quality control of the final product. IS in functional business area: ISs have been integrated into almost every functional business area. In accounting and payroll, because of the routine and structured nature of accounting tasks, the systems automatically post transactions in the books and automate the generation of reports for management and legal requirements. Financial ISs help managers track cash available for transactions, while ensuring that available money is invested in short or long programs to yield the highest interest possible. Computer-aided design (CAD) helps engineers design new products and save and modify drawings electronically. Computer-aided manufacturing (CAM) direct machines in manufacturing parts and assembling products. Human resource management systems expedite staff selection and record-keeping. An increasing amount of recruiting is done via the web. Managers often use evaluation software to help assess their subordinate`s performance.
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2. CRM; SCM; ERP There are several types of information systems, such as supply chain management (SCM), customer relationship management (CRM), decision support systems (DSSs), and also Enterprise application systems, such as SCM or ERP systems. Simply, customer relationship management (CRM) systems help manage an organization`s relationship with its customers. The main goals of CRM systems are to increase the quality of customer service, reduce the amount of labor involved in serving customers, and learn as much as possible about the buying habits and service preferences of individual customers.CRM systems are often linked to web applications that track online shopping and process online transactions. Supply chain management systems: basically, supply chain refers to the sequence of activities involved in producing and selling products or services. For products activities include marketing, purchasing raw material, manufacturing and assembly, packing and shipping, billing, collection, and after-sale service. For services, activities include marketing, document management, and monitoring customer portfolios. So, an Information system that support these activities and are linked to become one large IS providing information on any stage of a business process are called supply chain management (SCM) systems. Enterprise resource planning systems ERP: A growing number of organizations elect to replace old, disparate ISs with enterprise applications that support all or most of business activities. Enterprise resource planning systems, although they are used not only for planning but also for managing daily operations. I have to mention that, current ERP market includes four vendors: SAP, Oracle, Microsoft, and sage software. Actually, these are definitions for CRM, SCM and ERP briefly. About relationship between these systems, I can mention that, one way to look at business functions and supporting systems is to following typical business cycles, which often being with marketing and sales activities. Serving customers better and faster, as well as learning more about their experiences and
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preferences, is facilitated by customer relationship management systems. When customers place orders, the orders are executed in the supply chain. Often information about customer is collected as orders are taken. This information may be useful down the road. Customer relationship management continues after delivery of the ordered goods in the forms of customer service and more marketing. When an organization enjoys the support of CRM and supply chain management (SCM) system, it can plan recourses well. Combined, these systems are often referred to as enterprise resource planning (ERP) systems. So, an enterprise resource planning system can encompass all business process, but is expensive and challenging.
3. WHAT IS DATA WAREHOUSING? Data warehousing is the coordinated, architected, and periodic copying of data from various sources, both inside and outside the enterprise, into an environment optimized for analytical and information processing. In other words Data warehousing is combining data from multiple and usually varied sources into one comprehensive and easily manipulated database. Common accessing systems of data warehousing include queries, analysis and reporting. Because data warehousing creates one database in the end, the number of sources can be anything you want it to be, provided that the system can handle the volume, of course. The final result, however, is homogeneous data, which can be more easily manipulated. Some data warehouses are made up of several data marts, each focusing on an organizational unit or a subject. In each additional data from a transactional database to a data warehouse, the data is extracted, transformed, and loaded (ETL). Data mining Tools for analyzing large pools of data Find hidden patterns and infer rules to predict trends
Benefits of data warehousing Some of the benefits that a data warehouse provides are as follows:
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* A data warehouse provides a common data model for all data of interest regardless of the data's source. This makes it easier to report and analyze information than it would be if multiple data models were used to retrieve information such as sales invoices, order receipts, general ledger charges, etc. * Prior to loading data into the data warehouse, inconsistencies are identified and resolved. This greatly simplifies reporting and analysis. * Information in the data warehouse is under the control of data warehouse users so that, even if the source system data is purged over time, the information in the warehouse can be stored safely for extended periods of time. * Because they are separate from operational systems, data warehouses provide retrieval of data without slowing down operational systems. * Data warehouses can work in conjunction with and, hence, enhance the value of operational business applications, notably customer relationship management (CRM) systems. * Data warehouses facilitate decision support system applications such as trend reports (e.g., the items with the most sales in a particular area within the last two years), exception reports, and reports that show actual performance versus goals. DW BUSINESS BENEFITS : 1. CRM: Customer: y y y Acquire: attain Retain (keep holding loyalty) Cross-selling: Selecting the special customers Sell more products
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Link to DW: profile the customer to indentify who the customers are, then, focus on profitable customers. 2. ERP: Looks at the company and its departments . In other words, software system that links all aspects of a company¶s activity such as finance, manufacturing, HR and distribution designed to help the business managerial control to make it works more efficient. 3. REDUCING COST: Cost of operation by reduces advertisement. Benefits of Data Warehouses y Improved and easy accessibility to information Ability to model and remodel the data
CHALANGES OF IMPLEMENTING DW 1. Management issues: justifying the privacy issues and accepts or rejects the data. 2. Technical issues: y y y Consolidate information of different countries with different languages. Availability of new business process information Matching new software to different departments.
Key factors that should be consider before data warehousing y y Using mass data collection (technical) Interoperability between different systems from different vendors (technical)
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y y y y
Operational challenges (technical) Risk of first mover in using new technologies (technical) Failure perception (non technical) Change management issues (non technical){security(privacy) & skill ability}.
4. Network convergence In general, convergence is a coming together of two or more distinct entities or phenomena. Convergence is increasingly prevalent in the IT world; in this context the term refers to the combination of two or more different technologies in a single device. Taking pictures with a cell phone and surfing the Web on a television are two of the most common examples of this trend. In response to consumer demand, convergence has been evolving on the Internet ever since its inception. Nowadays, texting, Web surfing, VoIP (voice over IP), streaming media, videoconference applications, online gaming and e-commerce are all extensively engaged in by consumers, businesses, educational institutions and government agencies. All users demand high quality of service (QoS), quality of experience (QoE or QoX), robustness, moderate cost, standards compatibility, ease of modification and upgrading, security, privacy and freedom from malware. Network convergence challenges As network convergence evolves, major challenges confront network developers. Sheer demand for bandwidth is perhaps the most significant. As applications become more sophisticated and users exchange data of increasingly rich content, network resources can become overwhelmed. A
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key to effective network convergence therefore lies in the design, installation and maintenance of adequate hardware. Another challenge is the fact that the implementation of new technologies is limited by the extent to which investors and taxpayers are willing to support them. Still another key issue is the need for standards that ensure seamless operation with multiple end-user platforms and evolving communications modes. New technologies sometimes bring new types of traffic that place previously unknown demands on network hardware, operating systems, resources and software VOIP VoIP services convert your voice into a digital signal that travels over the Internet. If you are calling a regular phone number, the signal is converted to a regular telephone signal before it reaches the destination. VoIP can allow you to make a call directly from a computer, a VoIP enabled phone, or a traditional phone connected to a special adapter. Voice over Internet Protocol (VoIP) is a form of communication that allows you to make phone calls over a broadband internet connection instead of typical analog telephone lines. Basic VoIP access usually allows you to call others who are also receiving calls over the internet. Interconnected VoIP services also allow you to make and receive calls to and from traditional landline numbers, usually for a service fee. Some VoIP services require a computer or a dedicated VoIP phone, while others allow you to use your landline phone to place VoIP calls through a special adapter. VoIP is becoming an attractive communications option for consumers. Given the trend towards lower fees for basic broadband service and the brisk adoption of even faster internet offerings, VoIP usage should only gain popularity with time. However, as VoIP usage increases, so will the potential threats to the typical user. While VoIP vulnerabilities are typically similar to the ones users face on the internet, new threats, scams, and attacks unique to IP telephony are now emerging. VoIP configurations
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These devices allow you to use your traditional phone to place VoIP calls. They are connected to cable/DSL modems (or any high-speed internet source) and allow you to attach an ordinary telephone. Once configured, and with an appropriate VoIP provider and service plan, these devices require no special software or interaction with a computer. In fact, you only need to pick up your phone and dial a number at the dial tone. You also may bring your adapter with you when you travel and make calls wherever broadband internet access is available. What are some Advantages of VoIP? Some VoIP services offer features and services that are not available with a traditional phone, or are available but only for an additional fee. You may also be able to avoid paying for both a broadband connection and a traditional telephone line. A major advantage of VoIP and Internet telephony is that it avoids the tolls charged by ordinary telephone service. What are some disadvantages of VoIP? If you're considering replacing your traditional telephone service with VoIP, there are some possible differences: Some VoIP services don't work during power outages and the service provider may not offer backup power. Not all VoIP services connect directly to emergency services through 911. VoIP providers may or may not offer directory assistance/white page listings. Also, when your link to Internet is down, so is your VIOP service. Impact on Consumers Cheaper calls ³On net´ usually free ³Off net´ can be much cheaper Other fixed costs remain in most Savings may be limited cases Greater choice of providers
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Lower entry barriers Value added services Virtual numbers & area codes Messaging On line billing, call records etc. Service Bundles The future mobile phone: Within a few years, cell phone that has little resemblance to current mobile phones. New mobile phones will read biometric data, such as thumbprint, to allow access to data stored on networks. They will allow access to multiple live television broadcasts. Small sensors will monitor heart rate, which the device will send to doctor or fitness trainer. If the owner downloads a song, the device will maintain the license to prove that it was downloaded with permission, and may allow a limited time playing on another device to which the song will be transmitted. GPS circuitry will enable the owner to tag locations for friends. The device will also serve as a still and video camera, from which the photos or video can be transmitted to a flat-panel television set via WiFi, so that family and friends can watch. New home television sets are being designed to connect to cable, satellites, and the Internet, not only alternately, but concurrently. Thus, we will be able to watch a sports game and chat online about it at the same time through the same device, using two different networking technologies. So, for individuals, this means that they can carry a single device that will connect them to any type of network, erasing the lines between radio, television, telephone, and Internet surfing. For business, this offers an opportunity to provide new information services and manage a more effective and efficient sales force. Wireless technologies can be combined in the same device to enhance functionality.
5. SDLC
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IT planning is important because of high investment costs and high risk in implementing enterprise applications. Steps in Planning Information Systems: IT planning includes several key steps: 1. Create a corporate and IT mission statement 2. Articulate the vision for IT within the organization 3. Create IT strategic and tactical plans 4. Create a plan for operations to achieve the mission and vision 5. Create a budget to ensure that resources are available to achieve the mission and vision. One major goal and advantage of planning is standardization. Benefits include: 1. Cost savings: better bargaining power in purchasing and leasing hardware and software 2. Efficient training: a smaller variety of software reduces employee training needs 3. Efficient support: enables more staff specialization. After planning, management must decide how to obtain the systems. In a great majority of cases, system means software. Systems development generally is conducted in two approaches: the traditional approach, Systems development life cycle (SDLC), and Nontraditional methods, including agile methods. The Systems Development Life Cycle: actually, Large ISs are conceived, planned, and developed within the systems development life cycle (SDLC) framework, and they are also known as waterfall development. The SDLC consists of four major sequential phases: Analysis, Design, Implementation, and Support. Systems analysis: is a five-step process includes Investigation, Technical feasibility study, Economic feasibility study, Operational feasibility study, Requirements definition. Investigation is the first step in the system analysis, which determines whether there is a real need for a system and whether the system as conceived is feasible. The objective of larger investigation team is to determine whether the proposed system is feasible technologically, economically, and operationally. The technical feasibility study: A
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new IS is technically feasible if its components exist or can be developed with available tools. The team must also consider the organization`s existing investment in hardware, software, and telecommunications equipment. The economic feasibility study: like any project, the development of a new IS must be economically justified, so organizations conduct an economic feasibility study. That is, over the life of system, the benefits must outweigh the costs. To this end, the analysts prepare a cost/benefit analysis, which can be a spreadsheet showing all the costs to be incurred by the system and all the benefits that are expected from its operation. So, the most accurate method of economic analysis is the fully quantitative return on investment (ROI). The operational feasibility study: the purpose of operational feasibility study is to determine whether the new system will be used as intended at its full capacity. Requirements Definition: is defined as Specific features and interface requirements of the system. Design: is the second phase in systems development, and Translation of user requirements into detailed functions of the system: Input files, Procedures, Output files, User Dialog, and Interfaces. Software development tools are Flowcharts, Data flow diagram, and Unified Modeling Language. The next step in design is Construction that used to Programming, and then Systems Testing step. Implementation: is used to delivery of a new system and Consists of two steps: Conversion and Training. Conversion: is switching from the old system to the new system and can be a very difficult time. Support: begins after delivery, and includes two responsibilities: Maintenance: post implementation debugging, updates, and adding postponed features and User help. Maintenance comprises up to 80% of IS budgets. 6. Information security Information security means protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction. Information Security Components are Confidentiality, Integrity and Availability (CIA). Basically, risk to ISs includes risk to hardware, risk to data and application, and risk to networks. Risk to hardware includes natural disasters, such as earthquakes, fires, and so on. Risk to data and application includes theft of information, identity theft, data alteration, computer viruses, and so on. And risk to online operations includes denial of service and computer hijacking. So, to minimize disruption, organizations use controls. Controls include program robustness and constraints on data entry, periodic backup of software and data files, access controls, atomic transactions, and audit trails.
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To protect resources that are linked to Internet, organizations us firewalls, which are special hardware and software to control access to servers and their contents. Many organizations have business recovery plans that are developed and periodically tested by a special committee. One important component in information security is cost. When considering how much to invest in security measures, organizations should evaluate the dollar amounts of the potential damage on one hand, and the cost of security on the other hand. The more that is spent on security, the smaller the potential loss. Actually, these were some notes about information security and its components. But, if you have a good security for company, it is not enough. When you create a strong information security for your organization with considering the above factors and some other factors, your organization should consider some other characteristics that I mention to them in following: It is true that poor code, inadequate protocols, and insufficient QA all conspire to create the current security situation we inhabit. But there is a more foundation level disconnect also at work. Consider some of the most successful businesses in the current economy, and now consider their business model. Most businesses are in the business of decentralization and pushing decision-making control and power out the edges of the organization. This may be done through combinations outsourcing, off shoring, specialization, innovation, and so on. Hundreds of thousands of people make their primary living selling things on Ebay, but they are not ebay employees. Insurance companies have large field offices with independent agents. The point is that lots of very successful businesses are predicated on decentralization. Set of policy in organizational culture has a significant impact inside the good information security for the organization. For example, when management of the organization is changed, how much does it have effect on the information security in the organization? The other factor is education. Suppose, an organization has a good information security, but their employees don`t have enough education about how can they create privacy on the information security, or how much their systems depends on the other systems and how they transact information with other systems. Education about ID theft can raise the awareness of consumers
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and businesses regarding ID theft. Cross-disciplinary is needed to analyze the problems and solutions of ID theft. The researcher should focus more on the techniques being used by ID
theft. Biometric identification will be the solution for ID theft.
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first mover for that product and market. and if the organization cannot create new products or services, it can still enjoy competitive advantage by differentiating its products so that customers view them as better than a competitor`s products. Organizations also attain advantage by enhancing existing products or services. Many new services are the fruits of alliances between companies: each contributes its own expertise to package services that entice customers with an overall value greater than that offered by the separate services individually. Locking in clients or suppliers, that is, creating conditions that make dealing with competitors infeasible is a powerful strategy to gain advantage. In the other word, 4 ways
that IS can lead to competitive advantages are: 1. Cost leadership 2. Niche markets 3.enhance suppliers and customer intimacy, and 4.innovative products.
Low-Cost Leadership y y y y Become low-cost producers Help suppliers or customers reduce costs Increase cost to competitors Example, Air Asia
Strategy for producing products and services at a lower price than competitors while enhancing quality and level of service Information systems used to achieve the lowest costs and the lowest prices Examples: Wal-Mart (EDLP, VMI, continuous replenishment systems), Dell (Masscustomization, Build-to-Order system) Product Innovation/Product Differentiation y y y Develop ways to differentiate a firm¶s products from its competitors Can focus on particular segment or niche of market Example, Dell , Toyota
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Strategy for creating brand loyalty by developing new and unique products and services not easily duplicated (imitated) by competitors Information systems used to enable new products and services, or greatly change the customer convenience Examples: ATMs, computerized reservation systems, Google (Maps), eBay (PayPal), Apple (iPod, iTunes) Focused on Market Niche y Find new ways of doing business
-Unique products or services or unique markets -Radical changes to business processes to alter the fundamental structure of an industry y Example, Amazon uses online full-service customer systems ± 3M - Nokia
Strategy for developing new market niches for specialized products and services Information systems used to produce data for sales and marketing; analyze customer behaviors Examples: One-to-one and customized marketing, (e.g., Hilton Hotels, Harrah¶s), Long tail Customer & Supplier Intimacy Strategy for developing strong ties and loyalty with customers Links consumer behaviors back to distribution, production, and supply chains Information systems used to link customer¶s value chain to firm¶s value chain Reduce inventory costs; deliver product or service more quickly to customer Examples: Chrysler Corporation, Amazon.com Strengthen customer and supplier intimacy
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Impacts of Internet on Competitive Forces Reduces barriers to entry Enables new substitute products and services Shifts bargaining power to customer (due to low search costs) Raises firm¶s bargaining power over suppliers Suppliers benefit from reduced barriers to entry and from elimination of intermediaries (disintermediation) Widens geographic market, increases number of competitors, reduces differentiation among competitors.
So, while companies continue to explore new ways of devising SISs, some successful SISs are the result of less lofty endeavors: to intention to improve mundane operations using IT has occasionally yielded a system with strategic qualities. According to Michael porter value chain activities comprise primary activities and support activities. Primary activities includes inbound logistics, operations, outbound logistic, marketing &sale, and service. Support activities include firm infrastructure, human resource management, technology development, and procurement. Basically, IT can impact on the each value chain component. Also, IT might offer many opportunities to accomplish a
competitive edge, especially in industries that are using older software, such as the insurance industry. In the software industry, creating standards often creates strategic advantage.
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I have to mention that, business level strategy for each company is one of these strategies: cost leadership, differentiation, or integrated cost leadership and differentiation. So, according to each strategy some of the value-creating activities are different. In Valuecreating activities for cost leadership, cost-effective management information system (MIS), investment in technologies in order to reduce costs, and finding low cost materials are some of the main advantages. But, in value-creating activities for differentiation, highly developed MIS, and emphasize on high-quality, and worker compensation for creativity/productivity, and investment on technologies that help firm to produce different products are some of the main advantages. One good example for success in using IS and IT is JetBlue in the U.S airline industry. The company`s success is the result of understanding priorities and gaining marked efficiencies through automating whatever IT can automate. JetBlue managed to gain strategic advantage by reducing cost, therefore reducing the price to customer, and improving a service, especially in terms of on-time departure and arrivals. JetBlue uses open skies, the software that is combination reservation system and accounting system, and support customer service and sales tracking. JetBlue saves office space rent and electricity by using reservation agents who work from home (telecommuting), and use VIOP for telephoning. Its use of IT technologies also placed the airline at the top of the list for on-schedule departures and arrivals. Radio-frequency identification (RFID) The most important development in hardware to support SCM has been a technology that called radio frequency identification. RFID is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. The technology requires some extent of cooperation of an RFID reader and an RFID tag. An RFID tag is an object that can be applied to or incorporated into a product, animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the line of sight of the reader.
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Most RFID tags contain at least two parts. One is an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions. The second is an antenna for receiving and transmitting the signal. Today, RFID is used in enterprise supply chain management to improve the efficiency of inventory tracking and management. However, growth and adoption in the enterprise supply chain market is limited because current commercial technology does not link the indoor tracking to the overall end-to-end supply chain visibility. Coupled with fair cost-sharing mechanisms, rational motives and justified returns from RFID technology investments are the key ingredients to achieve long-term and sustainable RFID technology adoption Marks & Spencer In 2003, retailer Marks and Spencer in the UK showed the way by replacing barcodes on food trays, that were manually scanned one at a time, with RFID tags that are automatically read thirty at a time by a doorway interrogator. That obtained a payback of only one year, after which the substantial cost savings could be shared with the consumer. TI-RFid Systems announced that UK retailer Marks & Spencer is replacing existing barcodes with a TI RFid-based electronic tagging system. Using TI-RFid Tag-it smart labels, UK-based systems integrator Intelligent will create a system to track almost 3.5 million reusable trays, dollies and roll cages used throughout the store¶s refrigerated food supply chain TI-RFid technology will provide Marks &Spencer with a significant cost and speed advantage in tracking and managing its refrigerated food products. During Marks & Spencer¶s extensive trials of electronic smart labels, the TI tags reduced the time taken to read a stack of multiple trays by approximately 80 percent, compared with bar coding. A complete dolly with more than 25 trays can be scanned in a single pass through a portal in just 5 seconds with high accuracy and reliability ± compared with 29 seconds for conventional barcode scanning.
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More than 70 percent of Marks & Spencer¶s food business is in refrigerated fresh foods. Its supply chain needs to be very fast since the majority of its items are ordered at 6 a.m. and delivered the next day beginning at 7:30 a.m. In addition to a with international standards, other advantages of the RFID system include
faster, more accurate scanning and data capture, simultaneous read, lower labeling costs, and more efficient communication throughout the entire supply chain. Electronic tags are reusable and their fixed costs can be spread over a long period of time, whereas barcodes are used once. Marks & Spencer estimates the capital cost of an RFID system will be less than a tenth of the annual cost of using barcodes. The primary benefits of the RFID system include the reliable tracking of raw material and containers throughout the manufacturing process, the consistent implementation of FIFO (first in, first out) inventory management, and quality control of the final product. IS in functional business area: ISs have been integrated into almost every functional business area. In accounting and payroll, because of the routine and structured nature of accounting tasks, the systems automatically post transactions in the books and automate the generation of reports for management and legal requirements. Financial ISs help managers track cash available for transactions, while ensuring that available money is invested in short or long programs to yield the highest interest possible. Computer-aided design (CAD) helps engineers design new products and save and modify drawings electronically. Computer-aided manufacturing (CAM) direct machines in manufacturing parts and assembling products. Human resource management systems expedite staff selection and record-keeping. An increasing amount of recruiting is done via the web. Managers often use evaluation software to help assess their subordinate`s performance.
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2. CRM; SCM; ERP There are several types of information systems, such as supply chain management (SCM), customer relationship management (CRM), decision support systems (DSSs), and also Enterprise application systems, such as SCM or ERP systems. Simply, customer relationship management (CRM) systems help manage an organization`s relationship with its customers. The main goals of CRM systems are to increase the quality of customer service, reduce the amount of labor involved in serving customers, and learn as much as possible about the buying habits and service preferences of individual customers.CRM systems are often linked to web applications that track online shopping and process online transactions. Supply chain management systems: basically, supply chain refers to the sequence of activities involved in producing and selling products or services. For products activities include marketing, purchasing raw material, manufacturing and assembly, packing and shipping, billing, collection, and after-sale service. For services, activities include marketing, document management, and monitoring customer portfolios. So, an Information system that support these activities and are linked to become one large IS providing information on any stage of a business process are called supply chain management (SCM) systems. Enterprise resource planning systems ERP: A growing number of organizations elect to replace old, disparate ISs with enterprise applications that support all or most of business activities. Enterprise resource planning systems, although they are used not only for planning but also for managing daily operations. I have to mention that, current ERP market includes four vendors: SAP, Oracle, Microsoft, and sage software. Actually, these are definitions for CRM, SCM and ERP briefly. About relationship between these systems, I can mention that, one way to look at business functions and supporting systems is to following typical business cycles, which often being with marketing and sales activities. Serving customers better and faster, as well as learning more about their experiences and
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preferences, is facilitated by customer relationship management systems. When customers place orders, the orders are executed in the supply chain. Often information about customer is collected as orders are taken. This information may be useful down the road. Customer relationship management continues after delivery of the ordered goods in the forms of customer service and more marketing. When an organization enjoys the support of CRM and supply chain management (SCM) system, it can plan recourses well. Combined, these systems are often referred to as enterprise resource planning (ERP) systems. So, an enterprise resource planning system can encompass all business process, but is expensive and challenging.
3. WHAT IS DATA WAREHOUSING? Data warehousing is the coordinated, architected, and periodic copying of data from various sources, both inside and outside the enterprise, into an environment optimized for analytical and information processing. In other words Data warehousing is combining data from multiple and usually varied sources into one comprehensive and easily manipulated database. Common accessing systems of data warehousing include queries, analysis and reporting. Because data warehousing creates one database in the end, the number of sources can be anything you want it to be, provided that the system can handle the volume, of course. The final result, however, is homogeneous data, which can be more easily manipulated. Some data warehouses are made up of several data marts, each focusing on an organizational unit or a subject. In each additional data from a transactional database to a data warehouse, the data is extracted, transformed, and loaded (ETL). Data mining Tools for analyzing large pools of data Find hidden patterns and infer rules to predict trends
Benefits of data warehousing Some of the benefits that a data warehouse provides are as follows:
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* A data warehouse provides a common data model for all data of interest regardless of the data's source. This makes it easier to report and analyze information than it would be if multiple data models were used to retrieve information such as sales invoices, order receipts, general ledger charges, etc. * Prior to loading data into the data warehouse, inconsistencies are identified and resolved. This greatly simplifies reporting and analysis. * Information in the data warehouse is under the control of data warehouse users so that, even if the source system data is purged over time, the information in the warehouse can be stored safely for extended periods of time. * Because they are separate from operational systems, data warehouses provide retrieval of data without slowing down operational systems. * Data warehouses can work in conjunction with and, hence, enhance the value of operational business applications, notably customer relationship management (CRM) systems. * Data warehouses facilitate decision support system applications such as trend reports (e.g., the items with the most sales in a particular area within the last two years), exception reports, and reports that show actual performance versus goals. DW BUSINESS BENEFITS : 1. CRM: Customer: y y y Acquire: attain Retain (keep holding loyalty) Cross-selling: Selecting the special customers Sell more products
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Link to DW: profile the customer to indentify who the customers are, then, focus on profitable customers. 2. ERP: Looks at the company and its departments . In other words, software system that links all aspects of a company¶s activity such as finance, manufacturing, HR and distribution designed to help the business managerial control to make it works more efficient. 3. REDUCING COST: Cost of operation by reduces advertisement. Benefits of Data Warehouses y Improved and easy accessibility to information Ability to model and remodel the data
CHALANGES OF IMPLEMENTING DW 1. Management issues: justifying the privacy issues and accepts or rejects the data. 2. Technical issues: y y y Consolidate information of different countries with different languages. Availability of new business process information Matching new software to different departments.
Key factors that should be consider before data warehousing y y Using mass data collection (technical) Interoperability between different systems from different vendors (technical)
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y y y y
Operational challenges (technical) Risk of first mover in using new technologies (technical) Failure perception (non technical) Change management issues (non technical){security(privacy) & skill ability}.
4. Network convergence In general, convergence is a coming together of two or more distinct entities or phenomena. Convergence is increasingly prevalent in the IT world; in this context the term refers to the combination of two or more different technologies in a single device. Taking pictures with a cell phone and surfing the Web on a television are two of the most common examples of this trend. In response to consumer demand, convergence has been evolving on the Internet ever since its inception. Nowadays, texting, Web surfing, VoIP (voice over IP), streaming media, videoconference applications, online gaming and e-commerce are all extensively engaged in by consumers, businesses, educational institutions and government agencies. All users demand high quality of service (QoS), quality of experience (QoE or QoX), robustness, moderate cost, standards compatibility, ease of modification and upgrading, security, privacy and freedom from malware. Network convergence challenges As network convergence evolves, major challenges confront network developers. Sheer demand for bandwidth is perhaps the most significant. As applications become more sophisticated and users exchange data of increasingly rich content, network resources can become overwhelmed. A
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key to effective network convergence therefore lies in the design, installation and maintenance of adequate hardware. Another challenge is the fact that the implementation of new technologies is limited by the extent to which investors and taxpayers are willing to support them. Still another key issue is the need for standards that ensure seamless operation with multiple end-user platforms and evolving communications modes. New technologies sometimes bring new types of traffic that place previously unknown demands on network hardware, operating systems, resources and software VOIP VoIP services convert your voice into a digital signal that travels over the Internet. If you are calling a regular phone number, the signal is converted to a regular telephone signal before it reaches the destination. VoIP can allow you to make a call directly from a computer, a VoIP enabled phone, or a traditional phone connected to a special adapter. Voice over Internet Protocol (VoIP) is a form of communication that allows you to make phone calls over a broadband internet connection instead of typical analog telephone lines. Basic VoIP access usually allows you to call others who are also receiving calls over the internet. Interconnected VoIP services also allow you to make and receive calls to and from traditional landline numbers, usually for a service fee. Some VoIP services require a computer or a dedicated VoIP phone, while others allow you to use your landline phone to place VoIP calls through a special adapter. VoIP is becoming an attractive communications option for consumers. Given the trend towards lower fees for basic broadband service and the brisk adoption of even faster internet offerings, VoIP usage should only gain popularity with time. However, as VoIP usage increases, so will the potential threats to the typical user. While VoIP vulnerabilities are typically similar to the ones users face on the internet, new threats, scams, and attacks unique to IP telephony are now emerging. VoIP configurations
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These devices allow you to use your traditional phone to place VoIP calls. They are connected to cable/DSL modems (or any high-speed internet source) and allow you to attach an ordinary telephone. Once configured, and with an appropriate VoIP provider and service plan, these devices require no special software or interaction with a computer. In fact, you only need to pick up your phone and dial a number at the dial tone. You also may bring your adapter with you when you travel and make calls wherever broadband internet access is available. What are some Advantages of VoIP? Some VoIP services offer features and services that are not available with a traditional phone, or are available but only for an additional fee. You may also be able to avoid paying for both a broadband connection and a traditional telephone line. A major advantage of VoIP and Internet telephony is that it avoids the tolls charged by ordinary telephone service. What are some disadvantages of VoIP? If you're considering replacing your traditional telephone service with VoIP, there are some possible differences: Some VoIP services don't work during power outages and the service provider may not offer backup power. Not all VoIP services connect directly to emergency services through 911. VoIP providers may or may not offer directory assistance/white page listings. Also, when your link to Internet is down, so is your VIOP service. Impact on Consumers Cheaper calls ³On net´ usually free ³Off net´ can be much cheaper Other fixed costs remain in most Savings may be limited cases Greater choice of providers
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Lower entry barriers Value added services Virtual numbers & area codes Messaging On line billing, call records etc. Service Bundles The future mobile phone: Within a few years, cell phone that has little resemblance to current mobile phones. New mobile phones will read biometric data, such as thumbprint, to allow access to data stored on networks. They will allow access to multiple live television broadcasts. Small sensors will monitor heart rate, which the device will send to doctor or fitness trainer. If the owner downloads a song, the device will maintain the license to prove that it was downloaded with permission, and may allow a limited time playing on another device to which the song will be transmitted. GPS circuitry will enable the owner to tag locations for friends. The device will also serve as a still and video camera, from which the photos or video can be transmitted to a flat-panel television set via WiFi, so that family and friends can watch. New home television sets are being designed to connect to cable, satellites, and the Internet, not only alternately, but concurrently. Thus, we will be able to watch a sports game and chat online about it at the same time through the same device, using two different networking technologies. So, for individuals, this means that they can carry a single device that will connect them to any type of network, erasing the lines between radio, television, telephone, and Internet surfing. For business, this offers an opportunity to provide new information services and manage a more effective and efficient sales force. Wireless technologies can be combined in the same device to enhance functionality.
5. SDLC
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IT planning is important because of high investment costs and high risk in implementing enterprise applications. Steps in Planning Information Systems: IT planning includes several key steps: 1. Create a corporate and IT mission statement 2. Articulate the vision for IT within the organization 3. Create IT strategic and tactical plans 4. Create a plan for operations to achieve the mission and vision 5. Create a budget to ensure that resources are available to achieve the mission and vision. One major goal and advantage of planning is standardization. Benefits include: 1. Cost savings: better bargaining power in purchasing and leasing hardware and software 2. Efficient training: a smaller variety of software reduces employee training needs 3. Efficient support: enables more staff specialization. After planning, management must decide how to obtain the systems. In a great majority of cases, system means software. Systems development generally is conducted in two approaches: the traditional approach, Systems development life cycle (SDLC), and Nontraditional methods, including agile methods. The Systems Development Life Cycle: actually, Large ISs are conceived, planned, and developed within the systems development life cycle (SDLC) framework, and they are also known as waterfall development. The SDLC consists of four major sequential phases: Analysis, Design, Implementation, and Support. Systems analysis: is a five-step process includes Investigation, Technical feasibility study, Economic feasibility study, Operational feasibility study, Requirements definition. Investigation is the first step in the system analysis, which determines whether there is a real need for a system and whether the system as conceived is feasible. The objective of larger investigation team is to determine whether the proposed system is feasible technologically, economically, and operationally. The technical feasibility study: A
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new IS is technically feasible if its components exist or can be developed with available tools. The team must also consider the organization`s existing investment in hardware, software, and telecommunications equipment. The economic feasibility study: like any project, the development of a new IS must be economically justified, so organizations conduct an economic feasibility study. That is, over the life of system, the benefits must outweigh the costs. To this end, the analysts prepare a cost/benefit analysis, which can be a spreadsheet showing all the costs to be incurred by the system and all the benefits that are expected from its operation. So, the most accurate method of economic analysis is the fully quantitative return on investment (ROI). The operational feasibility study: the purpose of operational feasibility study is to determine whether the new system will be used as intended at its full capacity. Requirements Definition: is defined as Specific features and interface requirements of the system. Design: is the second phase in systems development, and Translation of user requirements into detailed functions of the system: Input files, Procedures, Output files, User Dialog, and Interfaces. Software development tools are Flowcharts, Data flow diagram, and Unified Modeling Language. The next step in design is Construction that used to Programming, and then Systems Testing step. Implementation: is used to delivery of a new system and Consists of two steps: Conversion and Training. Conversion: is switching from the old system to the new system and can be a very difficult time. Support: begins after delivery, and includes two responsibilities: Maintenance: post implementation debugging, updates, and adding postponed features and User help. Maintenance comprises up to 80% of IS budgets. 6. Information security Information security means protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction. Information Security Components are Confidentiality, Integrity and Availability (CIA). Basically, risk to ISs includes risk to hardware, risk to data and application, and risk to networks. Risk to hardware includes natural disasters, such as earthquakes, fires, and so on. Risk to data and application includes theft of information, identity theft, data alteration, computer viruses, and so on. And risk to online operations includes denial of service and computer hijacking. So, to minimize disruption, organizations use controls. Controls include program robustness and constraints on data entry, periodic backup of software and data files, access controls, atomic transactions, and audit trails.
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To protect resources that are linked to Internet, organizations us firewalls, which are special hardware and software to control access to servers and their contents. Many organizations have business recovery plans that are developed and periodically tested by a special committee. One important component in information security is cost. When considering how much to invest in security measures, organizations should evaluate the dollar amounts of the potential damage on one hand, and the cost of security on the other hand. The more that is spent on security, the smaller the potential loss. Actually, these were some notes about information security and its components. But, if you have a good security for company, it is not enough. When you create a strong information security for your organization with considering the above factors and some other factors, your organization should consider some other characteristics that I mention to them in following: It is true that poor code, inadequate protocols, and insufficient QA all conspire to create the current security situation we inhabit. But there is a more foundation level disconnect also at work. Consider some of the most successful businesses in the current economy, and now consider their business model. Most businesses are in the business of decentralization and pushing decision-making control and power out the edges of the organization. This may be done through combinations outsourcing, off shoring, specialization, innovation, and so on. Hundreds of thousands of people make their primary living selling things on Ebay, but they are not ebay employees. Insurance companies have large field offices with independent agents. The point is that lots of very successful businesses are predicated on decentralization. Set of policy in organizational culture has a significant impact inside the good information security for the organization. For example, when management of the organization is changed, how much does it have effect on the information security in the organization? The other factor is education. Suppose, an organization has a good information security, but their employees don`t have enough education about how can they create privacy on the information security, or how much their systems depends on the other systems and how they transact information with other systems. Education about ID theft can raise the awareness of consumers
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and businesses regarding ID theft. Cross-disciplinary is needed to analyze the problems and solutions of ID theft. The researcher should focus more on the techniques being used by ID
theft. Biometric identification will be the solution for ID theft.
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