DSS 200 Chapters 1-3 Study Guide

Chapter 1 –

Intelligent – How AI is seeping into virtually every technology.

Digital – Blending the virtual and real worlds to create an immersive digitally enhanced and connected
environment.

Mesh – The connections between an expanding set of people, business, devices, content and services to
deliver digital outcomes.

Business Drivers of Information Systems –

o Firms invest in information systems in order to:

- Achieve operational excellence (Efficiency and Profitability)
- Develop new products and services
 Alibaba Group (No Inv) connect buyers with sellers, the value lies in the software
interface, not the products
- Attain customer intimacy and service (Know your Customers/Suppliers)
- Improve decision making (Real time data improves ability of managers to make better
decisions
- Promote competitive advantage (Doing things better than your Competition)
- Ensure survival (Necessities for doing Business)

Information Technology (IT) – The hardware and software a business uses to achieve objectives.

Information System – Interrelated components that manage information to:

- Support decision making and control

- Help with analysis, visualization, and product creation

Data – Streams of raw facts (video, numbers, text).

Information – Data shaped into meaningful, useful form.

Activities in an Information System that Produce Information –

o Input – Captures or collects raw data from within the organization or from its external
government.
o Processing – Converts this raw input into a meaningful form.
o Output – Transfers the processed information to the people who will use it or to the activities
for which it will be used.
o Feedback – Output that is returned to appropriate members of the organization to help then
evaluate or correct the input stage.
The Role of People and Organizations –
 Information Systems Literacy – Includes behavioral and technical approach to studying
information systems.

Computer Literacy – Focuses mostly on knowledge of IT.

Management Information Systems (MIS) – Issues surrounding development, use, impact of

information systems used by managers and employees.

Dimensions of Information Systems –

o Organizations – Coordinate work through structured hierarchy and business processes.

- Business Processes – Related tasks and behaviors for accomplishing work.
 Ex: Fulfilling an order, hiring an employee, etc.
- Culture – Fundamental set of assumptions, values, and ways of doing things.
 Ex: UPS’s concern with placing service to customer first.

o People – Information system require skilled people to build, maintain, and use them.
 Employee attitudes affect ability to use systems productively

o Technology –
- IT Infrastructure – Foundation or platform that information systems built on:
 Computer Hardware
 Computer Software
 Data Management Technology – The software governing the organization of data
on physical storage media.
 Networking and Telecommunications Technology – Consisting of both physical
devices and software, links the various pieces of hardware and transfers data from
one physical location to another.

Problems: Need Strategy to Address These –

Organizational Problems –

- Outdated business processes

- Unsupportive culture and attitudes

People Problems –

- Lack of employee training

- Difficulties of evaluating performance

Technology Problems –

- Insufficient or aging hardware, outdated software

- Inadequate database capacity
A Model of the Problem Solving Process –

1. Problem Identification
- Agreement that problem exists
- Causes of problem
2. Solution Design
- Often many possibilities
3. Solution Choice
- Cost
- Feasibility given resources and skills
- Length of time needed to implement solution
4. Implementation
- Building or purchasing solution
- Testing solution, employee training
- Change management
- Measurement of outcomes

Problem Solving is a Continuous Process, Not a Single Event

Four Elements of Critical Thinking –

1. Maintaining Doubt and Suspending Judgement

2. Being Aware of Different Perspectives
3. Testing Alternatives and Letting Experience Guide
4. Being Aware of Organizational and Personal Limitations
 Chapter 2 -

Business – Formal organization that makes products or provides a service in order to make a profit.

Four Basic Business Functions –

1. Manufacturing and Production

2. Sales and Marketing
3. Finance and Accounting
4. Human Resources

Business Processes – Logically related set of tasks that define how specific business tasks are performed.

- Some processes tied to functional area

- Some processes are cross-functional

How IT Enhances Business Processes –

- Automation of Manual Processes

- Change the Flow of Information
- Replace Sequential Processes with Simultaneous Activity
- Transform how a Business Works
- Drive new Business Models

Managing a Business and Firm Hierarchies –

- Firms coordinate work of employees by developing hierarchy in which authority is

concentrated at top
 Senior Management
 Middle Management (Tactical Issues)
 Operational Management (Knowledge workers, data workers, etc.)

Systems for Different Management Groups –

o Transaction Processing Systems (TPS) – Keep track of basic activities and transactions of
organization.
- Server operational managers
- Process data is a form of transaction data
- Monitor status of internal operations and firm’s relationship with external environment
o Management Information Systems (MIS) – Provide middle managers with reports on firm’s
performance, to help monitor firm and predict future performance.
- Summarize and report on basic operations using data from TPS
- Typically, not very flexible systems with little analytic capability
o Decision Support Systems (DSS) – Focus on problems that are unique and rapidly changing.
- Server middle managers
- Support nonroutine decision making
 - Deal with semi-structured or unstructured problems
- Often use external information as well from TPS and MIS
o Executive Support Systems (ESS or EIS) – Help senior management address strategic issues and
long-term trends.
- Address nonroutine decision making
- Typically use portal web interface, or digital dashboard

Systems for Linking the Enterprise –

o Enterprise Applications (cross-functional) – Systems that span functional areas, focus on

executing business processes across the firm, and include all levels of management.
- Four Major Types:
 Enterprise Systems – Integrate data from key business processes into single
comprehensive data repository by many parts of the business.
 Enable managers to assemble overall view of operations
 Supply Chain Management Systems (SCM) – Manage relationships with suppliers,
purchasing firms, distributors, and logistics companies, also manage shared
information about orders, production, inventory levels, etc.
 Customer Relationship Management Systems (CRM) – Enterprise application that
helps manage relationship with customers.
 Goals:
 Optimize Revenue
 Improve Customer Satisfaction
 Increase Customer Retention
 Increase Sales
 Knowledge Management Systems (KMS) – Enterprise application to manage
processes for capturing and applying knowledge and expertise.
 Collect relevant knowledge and make it available wherever needed in the
enterprise to improve business processes and management decisions
 Link firm to external sources of knowledge
Intranets – Internal networks based on internet standards.

- Often are private access area in company’s website

Extranets – Company websites accessible only to authorized vendors and suppliers.

E-Business (Electronic Business) – Use of digital technology and internet to drive major business
processes.

E-Commerce (Electronic Commerce) – Buying and selling goods and services through internet.

E-Government – Using internet technology to deliver information and services to citizens, employees,
and businesses.
The Time/Space Collaboration and Social Tool Matrix!! – Figure 2.11 (Pg. 66) –

The Information Systems Department –

- Programmers
- System Analysists
- Information Systems Managers
- Senior Managers: CIO, CKO, CDO
- End Users
 Chapter 3 –

Porters Competitive Forces Model – Figure 3.1 (Pg. 81) –

Five Competitive Forces Model (Shape Fate of Firm) –

1. Traditional Competitors
- Barrier to Entry – A product or service feature that customers have learned to expect from
organizations in a certain industry.
- Switching Costs – The costs, in money and time, imposed by a decision to buy elsewhere
(ex: contracts with smartphone providers).
 Strong linkages to customers and suppliers increase switching costs
2. New Market Entrants
3. Substitute Products/Services
4. Customers
5. Suppliers

IS Strategies for Dealing with Competitive Forces –

1. Basic Strategy – Align IT with Business Objectives –

- Identify business goals and strategies
- Break strategic goals into concrete activities and processes
- Measure actual performance
2. Low-Cost Leadership –
- Use information systems to achieve the lowest operational costs and the lowest prices
- Internet Technology: Makes it easy for rivals to compete on price alone (Walmart)
3. Product Differentiation – Use information systems to enable new products and services, or
greatly change the customer convenience in using your existing products and services
4. Focus on Niche Market – Use information systems to enable specific market focus and server
narrow target market better than competitors
5. Strengthen Customer and Supplier Intimacy – Strong linkages to customers and suppliers
increase switching costs and loyalty

The Internets Impact on Competitive Advantage –

- Enables new products/services

- Encourages substitute products
- Lowers barrier to entry
- Changes balance of power of customers and suppliers
- Transforms some industries
- Smart products and the Internet of Things (IoT)
The Business Value Chain Model – Figure 3.2 (Pg. 89) –

o Primary Activities
o Support Activities
o Benchmarking – Measures the performance of the company’s chain by considering quantity,
value and time. It enables comparisons of the efficiency and effectiveness of a firm’s business
processes against strict standards.
o Best Practices – Most successful solutions or methods for achieving a business objective…

The Value Web – Figure 3.3 (Pg. 91) –

o A firm’s value chain is linked to the value chains of its suppliers, distributors, and customers
o Value Web – Collection of independent firms that use information technology to coordinate
their value chains to produce a product collectively.

Synergies, Core Competencies, and Network-Based Strategies –

o Information systems improve performance of business units by promoting:

- Communication
- Synergies – When output of some units can be used as inputs to other units or when two
units can pool markets and expertise.
- Core Competencies (What you do Best) – An IS can enhance core competencies by
encouraging the sharing of knowledge across business units.

Network-Based Strategies –

o Network Economics – Marginal costs of adding another participant are near zero, whereas
marginal gain is much larger (Netflix subscriptions)
- When the value of a good/services increases when others buy the same good/service
o Virtual Company – Uses networks to link people, resources, and ally with other companies to
create and distribute products without traditional organizational boundaries or physical
locations.

Disruptive Technologies –

- Technologies with disruptive impact on industries and businesses, rendering existing

products, services and business models obsolete

The Internet and Globalization –

- The internet drastically reduces costs of operating globally

- Globalization Benefits:
 Scale economies and resource cost reduction
 Higher utilization rates, fixed capital costs, and lower cost per unit of production
 Speeding time to market
Quality –

o Total Quality Management (TQM) – Quality control end in itself

- All people, functions responsible for quality
o Six Sigma – Measure of quality: 3.4 defects/million opportunities

How IS Improve Quality –

- Reduce cycle time and simplify production

- Benchmark: What is the standard for good performance?
- Use customer demand to improve products and services
- Improve design quality and precision
- Improve production precision and tighten production tolerances

Business Process Management (BPM) –

- Organizational changes often necessary

 Minor changes in work processes
 Redesigning entire business processes
- Aims to continuously improve processes

Steps in BPM –

1. Identify Processes for Change

2. Analyze Existing Processes
3. Design New Process
4. Implement New Process
5. Continuous Measurement

Business Process Reengineering – A radical form of fast change, not continuous improvement, but
elimination of old processes, replacement with new processes, in a brief time period