Final Doc(for Revision)

8/6/2019 Final Doc(for Revision)

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DATA MANAGMENT AND IT LIKEY QUESTIONS AND

ANSWERS

Q1: Difference between Porters 5 forces theory and D'aveni's Theory.

Q2: Value Chain Concept: How can we use it?

Telecommuting: Factors, Concerns of Telecommuting?

Q3: Outsourcing: Reasons 4 Outsourcing (Inshore, Off-Shore); what should you do as a Gov. to

outsource more?

Q4: CIO: Duties, 8 Core Activities and Responsibilities

Q5: 3 theories of Ethics; what does PAPA policy mean? If ethics are overlooked, then what will

happen to the company?

Q6: 3 Methods of Funding, Positive and Negative Impact, In what circumstances is funding

important?

Q7: Application of Knowledge management .


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QUESTION 1: (CHAPTER 2)

MICHAEL PORTERS 5 FORCES:

General Managers can use the five competitive forces model to:

- Identify the key forces currently affect competition

- Recognize uses of IR to influences forces

- Consider likely changes in these forces overtime

This model provides a way to think about how IR can create competitive advantage for a business

unit and for the firm, even can reshape a whole industry.

Threats of New entrants from the possibility of new firm coming into company market: IR can be

used to build barriers that discourage competitors from entering the industry.

E.g.: Zaras IT supports its tightly knit group of designers, market specialist, production managers,

and production planners. New entrants are unlikely to provide IT to support relationships that have

been built over time. Furthermore, it has a rich information repository about customers that would be

hard to replicate.

Bargaining Power of Buyers: Switching costs can be any aspect of a buyer purchasing position that

decreases the likelihood of switching his or her purchase to a competitor. IR can be used to build

switching costs that make it less attractive for customers to purchase from competitors.

E.g.: Amazon.com One click encourages return purchases by making buying easier. Similarly,Apples ITunes simple to use interface and proprietary software on the iPod make it difficult for

customers to use other formats and technologies than the iPod.

Bargaining Power of Suppliers are the ability of buyers to use their market power to decrease a

firms competitive position. The company can use IR to reduce the dependence to the supplier.


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E.g.: - Steel firms lost some of their power over the automobile industry because car manufactures

developed technologically advanced quality control systems. Manufactures can now reject steel from

suppliers when it does not meet the required quality levels.

- Through the Internet, firms continue to provide information for free as the attempt to increase their

share of visitors to their Web sites. This decision reduces the power of information suppliers and

necessitates finding new ways for content providers to develop and distribution information.

Threats of substitute Products Manager must watch for potential substitutes from many different

sources to fully manage this threat.

E.g.: Consider how digital cameras have made film (and the cameras that use them) obsolete. CDs

and more recently digitally based MP3 files have made vinyl records (and the record players that usethem). IR can create advantages by reducing the threat of substitution.

E.g.: eBay brought out Pro-Stores, a service to help all sellers build their own Website. eBay

managers noticed that many sellers did not have any Web presence other than eBay, and the move

was another way to lock in these customers to the eBay environment. The more those sellers are

locked into an eBay environment, the less likely they will work with rivals. For competitors to be

successful, they needed to offer not just a substitute, but also a better service to these sellers. So far

none has.

INDUSTRY COMPETITORS

One way competitors differentiate themselves with an otherwise undifferentiated product is through

creative use of IS. Information provides advantages in such competition when added to an existing

product. E.g.: FedEx was able to take an early lead in the industry by adding information such as

deliver time, the place for receipts etc. to its delivery service. Information helped its differentiate its

offerings from competitors.

The firms must focus on the competitive actions of a rival to protect market share. Intense rivalry in

an industry ensures that competitors respond quickly to any strategic actions. The banking industry

illustrates this point. Several smaller competitors joined forces and shared information sources to


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create a competing network as the large Philadelphia based bank developed ATM network. This

made the large bank unable to create a significant advantage from its system and had to carry the full

cost of developing networks itself. As a result, IR was committed quickly to achieve neutralizing

results due to the high level of rivalry that existed between the local bank competitors in

Philadelphia.

As firms within an industry begin to implement standard business processes and technologies often

using enterprise wide system such as those of SAP and Oracle the industry becomes more

attractive to consolidation through acquisition. Standardizing IS lowers the coordination costs of

merging two enterprises and can result in a less competitive environment in the industry.

HYPERCOMPETITION FRAMEWORK (DAVENIS THEORY)

Those models focus on creating and sustaining competitive advantage, whereas hyper competition

model suggest that speed and aggressiveness of the moves and countermoves in any given market

create an environment in which advantages are rapidly created and eroded. It suggests seven

approaches and organization can take in its business strategy: superior stakeholder satisfaction,

strategic soothsaying, positioning for speed, position for surprise, shifting the rules of

competition, signaling strategic intent, simultaneous and sequential strategic thrusts.

THE DIFFERENCES BETWEEN PORTERS THEORY AND D AVENIS 7 S MODEL:

FRAMEWORK KEY IDEAL APPLICATION TO

INFORMATION SYSTEM

Porters Genetic Strategic

framework

Firms achieve competitive

advantage through cost

leadership, differentiation, or

focus

Understanding which strategy is

chosen by a firm is critical to

choosing IS to complement the

strategy


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DAvenis Hyper competition

Model

Speed and aggressive moves

and countermoves by a firm

create competitive advantage

The 7Ss give the manager

suggestions on what moves and

countermoves to make. IS are

critical to achieving the speed

needed for moves and

countermoves. IS are in a

constant state of flux or

development.

1) Competitive advantages contributed to sustainability (The role of IS in building and

sustaining competitive advantages)

Porter competitive forces framework argues that competitive advantages can be created by

manipulating the industrys forces. The resource-based view maintains that competitive advantages

come from the information and other resources of the firm. Additionally, while value chain model

focuses on a firms activities that can add value the firm in order to create competitive advantages,

this view focuses on the resources including information resources that it can manage and create the

competitive advantages of the firm.

Information resources include data, technology, people, and processes within an organization.

Information resources can be either assets or capabilities. They not only enable a firm to attain

competitive advantage but also enable the firm to sustain the advantage over the long term. The only

way to be sustainable for a firm is to continue to innovate or to protect against resource imitation,

substitution, or transfer.

E.g.: Wal-marts complex logistics management is deeply embedded in both its own and its

suppliers operations that imitation by other firm is unlikely. UPS was able to build a competing

information system to the one FedEx uses, but by the time it was up and running, FedEx has

innovated far beyond and continued to enjoy advantages.


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From IS perspective, some types of resources such as relationship skills are better than other for

creating attributes that enable a firm to attain and sustain competitive value (i.e., value, rarity, low

substitutability, low mobility, low imitability). Some IT management skills are general enough in

nature to make them easier to transfer and imitate relationship skills. They require not only themanagement of internally oriented resources such as IS infrastructure, systems development, and

running cost effective IS operation; but also the understanding of critical processes, social complex

working relationships as well as changes of business environments. Moreover, some technical

skills, such as knowledge of a firms use of technology to support business processes and

technology integration skills are not easily moved to another firm.

Another information resource is information repository. It requires to be filled with internally

oriented information designed to improve the firms efficiency as well as the external environment

and contain significant knowledge about the industry, competitors and customers

QUESTION 2

VALUE CHAIN : The value chain highlights how information system add value to the

primary and support activities of a firms internal operations, as well as to customers

activities, and other components of its supply chain.

The Value Chain model suggests that competition can come from two sources:

- Lowering the cost to perform an activity => Lowering activity cost only achieve an

advantage if the firm possesses information about its competitors cost structures (even


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though reducing isolated costs can improve profits temporarily, it does not provide a clear

competitive advantage unless a firm can lower its costs below a competitors).

- Adding value to a product or service so buyers will be willing to pay more. => adding

value is a strategic advantage if a firm possesses accurate information regarding its customer

such as: which products are valued? Where can improvements be made?

Much of the advantage of supply chain management comes from understanding how information is

used within each value chain of the system. Opportunities also exist in the transfer of information

across value chains.

E.g.: Amazon.com created a new paradigm for its competitors about how their value chain works

with the value offered to their customers through their traditional business. It began selling booksdirectly to customers over the Internet and bypassing the traditional industry channels. Customers

who valued time saved by shopping from home rather than driving to physical retail outlets flocked

to Amazon.coms website to buy books.

Linking many value chains into a value system can extend the value chain model. This value system

is a collection of value chains connected through a business relationship and through technology.

TELECOMMUTING (WHICH IS COMBINED FROM

TELECOMMUNICATION AND COMMUTING)

DRIVING FACTORS

Drivers Effects

The shift to knowledge-based

work

Eliminates requirement that

certain work can be performed in

a specific place

- Equipped with the right IT,

Employees can create,

assimilate and distribute

knowledge as effectively at


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home (or any place) as they

can at office.Changing demographics and life-

style preferences

Provide workers with the

geographic and time-shifting

flexibility.

New technologies with the

bandwidth

Makes remotely performance

work practical and cost effective

Reliance on Web Provides workers with ability to

stay connected to coworkers and

customers, even on a 24/7 basis

Energy concerns Reduces the cost of commuting

for the commuters and reduces

energy cost associated with real

estate for companies.

a. CONCERNS

o Management concerns: managers may feel that they may lose

control of their employees and be challenged in addressing the

performance evaluation and compensation.

o Remote workers need to be self-disciplined to get works done, get

out of high-level of distractions such as personal issues, personal

calls, visitors, familys

o It is difficult for employees to separate works from their familys

issues. Consequences are they will experience more stress or need

more time to fulfill the jobs.


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o Working remotely can disconnect an employee from his or her

companys culture and make them feel isolated. Consequently,

employee needs to take a special effort to stay connected.

o Offshoring problems: Authorities may find hard to manage work thathave done by workers from outside of country.

b. SUMMARY OF TELECOMMUTINGS ADVANTAGES AND

DISADVANTAGES .

QUESTION 3: (CHAPTER 7)

1) OUTSOURCING

DEFINITION : The purchase of a good or service that was previously provided internally, or

that could be provided internally.

Drivers (reasons) include (see the following table):


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a. Keep core competencies in-house.

b. IS service or product that requires considerable security or confidentiality?

c. Time available in-house to complete IS projects.

d. In-house IT personnel.

Challenges to insourcing :

e. Getting needed IT resources from management.

f. Finding a reliable competent outsource provider.


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HOW DOES A GOVERNMENT ENCOURAGE FOREIGN

COMPANIES TO DO OUTSOURCING IN ITS COUNTRY?

- Invest in a substantial infrastructure: human capital, telecommunications and technology

parts. Most important, a groundwork must be laid in science and technology education,

especially IT education.

- Give marketing assistance to offshore vendors: assist firms in attaining recognized standards

of quality in the global marketplace.

- Promote collaborate efforts between government, software companies, financial institutions

and university.

- Offer specific incentives to companies that are considering their country as an offshoring

destination. They can, for example reduce/eliminate various taxes or ease bureaucratic

process required for the company.

- Ensure political stability for their country.


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QUESTION 4

RESPONSIBILITIES OF CIO:

The following responsibilities often define the role of the CIO:

1. Championing the organization: Promoting IT within the enterprise as a strategic tool for

growth and innovation.

2. Architecture management: Setting organizational direction and priorities.

3. Business strategy consultant: Participating in executive-level decision making.

4. Business technology planning: Bridging business and technology groups for purposes of

collaborating in planning and execution.

5. Application development: Overseeing legacy and emerging enterprise initiatives, as well

as broader strategic business unit (SBU) and divisional initiatives.

6. IT infrastructure management (e.g., computers, printers, and networks.): Maintaining

current technologies and investing in future technologies.

7. Sourcing: Developing and implementing a strategy for outsourcing (versus retaining in-

house) IT services and/or people.

8. Partnership developer: Negotiating relationships with key suppliers of IT expertise and

services and making sure everyone is working toward mutual goals.


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9. Technology transfer agent: Providing technologies that enable the enterprise to work

better with suppliers and customers both internal and external and consequently,

increase shareholder value.

10. Customer satisfaction management: Understanding and communicating with both

internal and external customers to ensure that customer satisfaction goals are met.

11. Training: Providing training to IT users, as well as senior executives who must

understand how IT fits with enterprise strategy.

12) Business discontinuity/disaster recovery planning: Planning and implementing strategies to limit

the impact of natural and human-made disasters on information technology and, consequently, the

conduct of business.

MANAGERS EXPECTATION FROM THE IS ORGANIZATION

Managers can expect 8 core activities from the IS organization so they can plan and implement

business strategy accordingly

1. Anticipating new technologies.

IT must keep an eye on emerging technologies.

Work closely with management on decisions.

Weigh risks and benefits of new technologies.

2. Participating in setting strategic direction.

IS can act as consultants to management.

Educate managers about current technologies/trends.

3. Innovating current processes.

Review business processes to innovate.


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Survey best practices.

4. Developing and maintaining systems.

Build or buy software.

5. Supplier management.

Carefully manage outsourced IT.

6. Architecture and standards.

Be aware of incompatibilities.

Inconsistent data undermines integrity.

7. Enterprise Security

Important to all general managers.

Much more than a technical problem.

8. Business continuity planning

Disaster recovery.

What if scenarios.


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QUESTION 5

3 THEORIES OF ETHICS

STOCKHOLDER THEORY

-Stockholders advance capital to corporate managers who act as agents in advancing theirends.

- Managers are bound to the interests of the shareholders (maximize shareholder value).

Managers duties :

- Bound to employ legal, non-fraudulent means.

- Must take long view of shareholder interest.

STAKEHOLDER THEORY


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Managers are entrusted with a responsibility (fiduciary or other) to all those who hold a stake

in or a claim on the firm.

Stakeholders are

Any group that vitally affects the corp. survival and success.

Any group whose interests the corp. vitally affects.

Management must enact and follow policies that balance the rights of all stakeholders

without impinging upon the rights of any one particular stakeholder.

SOCIAL CONTRACT THEORY

- Consider the needs of a society with no corporations or other complex business

arrangements.

- What conditions would have to be met for the members of a society to agree to allow a

corporation to be formed?

- Corporations are expected to create more value to society that it consumes.

- Social contract:

o 1. Social welfare corporations must produce greater benefits than their

associated costs.

o 2. Justice corporations must pursue profits legally, without fraud or deception,

o and avoid actions that harm society.


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TO SUMMARIZE

PAPA PRINCIPLES

PRIVACY

- Those who possess the best information and know how to use it, win.

- However, keeping this information safe and secure is a high priority (see Figure 9.2).

- Privacy the right to be left alone.

- Managers must be aware of regulations that are in place regarding the authorizedcollection, disclosure and use of personal information.

ACCURACY

- Managers must establish controls to insure that information is accurate.


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- Data entry errors must be controlled and managed carefully.

- Data must also be kept up to date.

- Keeping data as long as it is necessary or legally mandated is a challenge.

PROPERTY

- Mass quantities of data are now stored on clients.

- Who owns this data and has rights to it is are questions that a manager must answer.

- Who owns the images that are posted in cyberspace?

- Managers must understand the legal rights and duties accorded to proper ownership.

ACCESSIBILITY

- Access to information systems and the data that they hold is paramount.

- Users must be able to access this data from any location (if it can be properly secured

and does not violate any laws or regulations).

- Major issue facing managers is how to create and maintain access to information for

society at large.

o This access needs to be controlled to those who have a right to see and use it

(identity theft).

o Also, adequate security measures must be in place on their partners end.


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PAPA AND MANAGERS

- Managers must work hard to implement controls over information highlighted by PAPA.

- Limit access to data avoid identify theft, and respect customers privacy.

- FTC requires more disclosure of how companies use customer data.

o Gramm-Leach-Bliley Act (1999)

- Information privacy guidelines must come from above: CEO, CFO, etc.

a. Supporting you do things in your company without any concern about ethics.

QUESTION 6

Funding IT

a. 3 METHODS OF FUNDING

o Chargeback method

- IT costs are recovered by charging individuals, departments, or business units

- Rates for usage are calculated based on the actual cost to the IT group to run the system

and billed out on a regular basis


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QUESTION 7

Knowledge Management Process:

A.1. Knowledge Generation

Concerns the intentional activities of an organization to acquire/create new knowledge.


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2. Identify existing knowledge necessary to achieve strategic intent.

3. Evaluate existing knowledge for usefulness and the ability to be codified.

4. Determine the appropriate medium for codification and distribution.

A.4. Knowledge Transfer

Involves transmitting knowledge from one person or group to another and the absorption of

that knowledge.

Four different modes of knowledge transfer are:

1. Socialization: from tacit knowledge to tacit knowledge

2. Externalization: from tacit knowledge to explicit knowledge

3. Combination: from explicit knowledge to explicit knowledge

4. Internalization: from explicit knowledge to tacit knowledge


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Tacit Knowledge Explicit knowledge

Tacit

Knowledge

Socialization

Transferring tacit knowledge

through shared experiences,

apprenticeships, mentoring

relationships, on-the-job training,

and talking at the water cooler.

Externalization

Articulating and thereby

capturing tacit knowledge

through use of metaphors,

analogies, and models.

Explicit

knowledge

Combination

Converting explicit knowledge

into tacit knowledge; learning by

doing; studying previously

captured explicit knowledge

(manuals, documentation) to gain

technical know-how.

Internalization

Combining existing explicit

knowledge through exchange

and synthesis into new explicit

knowledge.

FRO

TO

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Final Doc(for Revision)