M is lecture6_final
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The document discusses the importance of information and information systems for gaining competitive advantage. It states that the efficiency of managing information determines business success today. It also describes several competitive forces that shape businesses and generic strategies like low-cost leadership, product differentiation, and strengthening customer intimacy that can be enabled through information systems.
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M is lecture6_final
- 1. Use of information for competitive advantage Information and its use has become the competitive advantage of today’s world. The efficiency with which a firm manages its information determines its success in the marketplace. This enormous power of information unleashed in today’s world has brought down reaction times for decision-making of managers, made customers more aware, competitors more efficient and regulators more alert Computerization is required to make the information supplied to be timely and accurate, which are critical factors for success in these competitive times.
- 2. Michael Porter's competitive forces model describes five competitive forces that shape the fate of the firm. 1.Traditional competitors: Existing firms that share a firm's market space 2.New market entrants: 3.Substitute products and services: These are substitutes that your customers might use if your prices become too high. 4. Customers: The power of customers grows if they can easily switch to a competitor's products and services, 5. Suppliers: The more different suppliers a firm has, the greater control it can exercise over suppliers in terms of price, quality, and delivery schedules.
- 3. There are four generic strategies used to manage competitive forces, each of which often is enabled by using information technology and systems: 1.Low-cost leadership: Use information systems to achieve the lowest operational costs and the lowest prices. For example, a supply chain management system 2.Product differentiation: Use information systems to enable new products and services, or greatly change the customer convenience in using your existing products and services. 3.Focus on market niche: Use information systems to enable a specific market focus and serve this narrow target market better than competitors. 4.Strengthen customer and supplier intimacy: Use information systems to tighten linkages with suppliers and develop intimacy with customers.
- 4. MIS as an Instrument for Organizational Change The MIS plays the role of information generation, communication, problem identification and helps in the process of decision making. The MIS, therefore, plays a vital role in the management, administration and operations of an organization. External Change 1.MIS has made world smaller 2.Worldwide reorganization environment and attempt to control the calamity. 3.Change in the work lifestyle for better result 4.Creating Knowledge is an asset
- 5. Internal Change 1.MIS will change the Business Process 2.MIS will change the old standards and set new standards 3.MIS key for Continuous improvement Process 4.MIS will reduce operation cost. 5.MIS focus on “Shared information”. 6.MIS will accelerate restructure work flow 7.MIS will bring change in Authority and power by merit and not by age or number of years of experience. 8.MIS brings cultural change. 9.MIS measures the results and performance. 10.MIS brings Continuous addition to Organizational knowledge base.
- 6. Information Technology Characteristics and emerging trends, •Diffusion of e-governance on a large scale. •The development of Information Technology has made education system simpler, easier, and widespread. Now, people of remote areas can also use technology for their children’s education and also avail the benefits of adult education. •Development of remote areas. •Participation of public in governance and policy making. •The judiciary and other administrative services can also take the help of technology to make work easier and faster. •Technology helps the police in nabbing the criminals. •Highly beneficial for the common people, as they can access their rights and can take legal action against the person who violates his/her rights. •It increases the happiness and prosperity of not only an individual, but rather the society as a whole. •Fast economic development.
- 7. Digital proficiency -improve operations and increase revenue. -An IT organization with digital proficiency can devote more attention to what organizations really care about – leveraging information for gaining business insight and putting technology to business advantage. - A digital IT organization with high digital proficiency plays a crucial role in building a high-responsive, high-intelligent and high-mature digital business by interpreting business issues into technology-enabled solutions and leveraging necessary resources to solve well-defined business problems effectively. -IT needs to take the wise steps in doing consolidation, modernization, automation, integration and optimization for improving its overall digital maturity. -IT management should be in the continuous tuning mode to streamline processes and tighten coordination and collaboration with the business partners.
- 8. Simplexity Simplexity is an emerging theory that proposes a possible complementary relationship between complexity and simplicity. – Digital Era Innovativeness To move up digital maturity, businesses are looking for IT to add new innovative methods for management of complexity, improving quality and driving digital transformation. The available digital technologies just make innovation easier to do now than in the past – less costly and more easily accessible. Innovation can be categorized as -breakthrough innovation (push something to the new level), -sustainable innovation (better version of products or services), -efficiency innovation (process improvement), -“soft innovations” (communication or culture innovation). -IT can drive all sort of innovation to improve business revenue growth and lift organizational maturity.
- 9. IT enabled services. ITES, Information Technology Enabled Service, is defined as outsourcing of processes that can be enabled with information technology and covers diverse areas like finance, HR, administration, health care, telecommunication, manufacturing etc. Armed with technology and manpower, these services are provided from e-enabled locations. This radically reduces costs and improve service standards. In short, this Internet service provider aims in providing B2B e- commerce solutions.
- 10. Objectives of ITES ITES was formerly known as IndoNet. •» Enabling business strategy •» Achieving an organization's business goals Some of the services offered include : •• Document Processing •• Data Entry and Processing •• Data Warehousing •• IT Help Desk Services •• Application Development •• Enterprise Resource Planning •• Telecommunication Services
- 11. BENEFITS: 1. Increases company’s flexibility: Through Business Process Outsourcing (BPO) which is a part of ITeS the companies will increase their flexibility. ITeS contributes to a company’s flexibility is that a company focuses on its core competencies. ITeS increases organizational flexibility is by increasing the speed of business processes. Using techniques such as linear programming we can decrease the production time and inventory levels, which can increase effectiveness and controls or decreases cost. Supply chain management (SCM) with the effective use of chain partners and business process outsourcing increases the speed of several business processes. THREATS: Risk is the major threat with ITeS. Outsourcing an Information system, can cause security risks both from part of communication and from privacy.
- 12. Transaction Processing System: Characteristics and its importance Transaction processing systems (TPS) are the basic business systems that serve the operational level of the organization. A transaction processing system is a computerized system that performs and records the daily routine transactions necessary to conduct business. Examples are sales order entry, hotel reservation systems, payroll, employee record keeping, and shipping. TPS collect, store, modify and retrieve the transactions -Transaction is an event that generates or modifies data to be stored in an information system -Examples: Point of Sale, credit card payments, -Designed in conjunction with the organisation's procedures -Main processes are collecting and storing
- 13. Characteristics of transaction processing systems The four important characteristics include •Rapid response Turnaround time from transaction input to the production output must be a few seconds or less •Reliability -Failure rates must be low -If failure occurs, recovery must be quick and accurate •Inflexibility -Flexibility results in too many opportunities for non standard operations, resulting in problems due to different transaction data •Controlled processing -Must support an organisation's operations
- 14. Two types, Batch and real time Batch transaction processing -Collects the transaction data as a group and processes it later -Has a time delay(hours, days) -low processing costs per transaction --Disadvantages •Processing must wait until a set time •Errors cannot be corrected during processing Real-time transaction processing -immediate processing of data -Instant confirmation of a transaction but does require access to an online database -large number of users simultaneously perform transactions(requests are also simultaneous) --Disadvantages Expensive
- 15. Components of a transaction processing systems •Users •Participants •People Example : When you withdraw money from an ATM, you are a participant of a TPS