Strategic Management of Information Systems by Pearlson & Saunders - BulletPoints

Chapter 1- Making sure information systems are in line with strategy and the organization

• The Information System Strategy Triangle is a framework for understanding the impact of IS on organizations. It relates business strategies with IS strategy and organizational strategy. See Figure 1.1 on page 24

• The Information System Strategy Triangle implies that a successful firm has an overriding business strategy that drives both organizational and IS strategy. The business IS and organizational strategies must constantly be adjusted to be in balance.

• Strategy = A coordinated set of actions to fulfil objectives, purposes, and goals. The essence of a strategy is setting limits on what the business will seek to accomplish. Strategy starts with a mission.

• Mission = A clear and compelling statement that unifies an organization’s effort and describes what the firm is all about. In a few words the mission statement sums up what is unique about the firm.

• Business strategy = A plan articulating where a business seeks to go and how it expects to get there. Management constructs this plan in response to market forces, customer demands, and organizational capabilities. Market forces create the competitive context for a business.

  • Michael Porter’s framework helps managers to understand the strategies they may choose to build a competitive advantage. Porter claims that the “fundamental basis of above-average performance in the long run is sustainable competitive advantage”. He identified three primary strategies for achieving competitive advantage:

    • Cost leadership

    • Differentiation

    • Focus

      • Cost focus

      • Differentiation focus

  • Markets are characterized more and more by fast-changing circumstances. Hypercompetition models suggest that the speed and aggressiveness of the moves and countermoves in any given market create an environment in which advantages are “rapidly created and eroded”

• Organizational strategy = The organizational design, as well as the choices it makes to define, set up, coordinate, and control its work processes. It must complement business strategy.

  • Porter’s business diamond = Identifies the crucial components of an organization’s plan as its information/control, people, structure and tasks.

  • Managerial levers strategy = Suggests that the successful execution of a business’s organizational strategy comprises the best combination of organizational, control, and cultural variables. These variables are managerial levers.

• IS strategy = The plan an organization uses to provide information services. IS allow a company to implement its business strategy. IS help to determine the company’s capabilities.

Chapter 2- The strategic use of information resources

• Information resources = The available data, technology, people, and processes within an organization to be used by the manager to perform business processes and tasks. Information resources can either be assets or capabilities.

  • IT Asset = Anything, tangible or intangible, that can be used by a firm in its processes for creating, producing, and/or offering its products.Two major types of IT assets:

    • IT infrastructure = Includes each of an information resource’s constituent components

    • Information repository = Data that is captured, organized, and retrievable by the firm.

  • IT Capability = Something that is learned or developed over time for the firm to create, produce, or offer its products.

    • Technical skills = Are applied to designing, developing, and implementing information systems.

    • IT management skills = Are critical for managing the IT function and IT project.

    • Relationship skills = Can either be externally focused or spanning across departments:

• How can companies use their information resources strategically?

  • Five competitive forces model by Michael Porter

    • Potential threat of new entrants

    • Bargaining power of buyers

    • Bargaining power of suppliers

    • Threat of Substitute products

    • Industry Competitors

  • The value chain = Addresses the activities that create, deliver, and support a company’s product or service.

    • Primary activities

    • Support activities

  • The resource-based view = Useful in determining whether a firm’s strategy has created value. The RBV has been applied in the area of IS to help identify two subsets of information resources:

    • Those that enable a firm to attain competitive advantage

    • Those that enable a firm to sustain the advantage over the long term

• A strategic alliance = An inter-organizational relationship that affords one or more companies in the relationship a strategic advantage.

• Co-opetition = A strategy whereby companies cooperate and compete at the same time with companies in its value net. The value net includes a company and its competitors and complementors, as well as its customers and suppliers, and the interactions among all of them.

• Complementor = A company whose product or service is used in conjunction with a particular product or service to make a more useful set for the customers.

• When information systems are chosen as the tool to outpace their firm’s competitors, executives should be aware of the many risks that may surface:

  • Awaking a sleeping giant

  • Demonstrating bad timing

  • Implementing IS poorly

  • Failing to deliver what users want

  • Web-based alternative removes advantages

  • Running afoul of the law

Chapter 3- Managerial levers

• In order for IS to support an organization in achieving its goals, they must reflect the business strategy and be coordinated with the organizational strategy. 3 components of organizational strategy:

  • Organizational design

  • Management control systems

  • Organizational culture

• Organisational design = Is about making sure that decision rights are properly allocated in the structure of formal reporting relationships.

Business processes = The set of ordered tasks needed to complete key objectives of the business.

Organizational structures

• Formal reporting relationships = The structure set up to ensure coordination among all units within the organization; reflects allocation of decision rights.

  • Hierarchical = Bureaucratic form with defined levels of management

  • Flat = Decision making pushed down to the lowest level in the organization

  • Matrix = Workers are assigned to 2 or more supervisors in an effort to make sure multiple dimensions of business are integrated

  • Networked = Formal and informal communication networks that connect all parts of the company.

• Informal network = Mechanism, such as ad hoc groups, which work to coordinate and transfer information outside the formal reporting relationship.

• Social network = An IT-enabled network that links individuals together in ways that enable them to find experts, get to know colleagues, and see who

• has relevant experience for projects across traditional organization lines.

• Management control = Concerned with how planning is performed in organizations and how people and processes are monitored, evaluated, and compensated or rewarded. IS offer new opportunities for collecting and organizing data for 3 management control processes:

  • Data collection

  • Evaluation

  • Communication

Planning and IS

Data collection and IS

Performance measurement and evaluation

Incentives and rewards

• Culture = A set of share values and beliefs that a group holds and that determines how the group perceives, thinks about, and reacts to its various environments. Culture has been compared to an iceberg: only a small part of the culture is visible from the surface.

  • Beliefs = The perceptions that people hold about how things are done in their community.

  • Values = Reflect the community’s aspirations about the way things should be done.

  • Observable artefacts = The most visible level of culture

  • Espoused values = Are the explicitly stated should be consistent with the preferred organizational values enacted values (ideally)

  • Enacted values = Which are the values and norms that are actually exhibited or displayed in employee behaviour.

  • Assumptions = Are unobservable since they reflect organizational values that have become so taken for granted that they guide organizational behaviour without any of the group members thinking about them.

Culture can be found in countries, organizations, or even within organizations. IS development and use can be impacted by culture at all these levels. IS can even play a role in promoting it. Variations across national cultures may lead to different perceptions and approaches to IS development
>> Geert Hofstede studied national cultures and came to five dimensions on which national cultures differ

• Uncertainty avoidance = Extent to which society tolerates uncertainty and ambiguity

• Power distance = Degree to which members of an organization or society expect and agree that power should be equally shared

• Individualism/Collectivism = Degree to which individuals are integrated into groups

• Masculinity/Femininity = Degree to which emotional roles are distributed between genders.

• Confucian work dynamism = Extent to which society rewards behaviour related to long- or short-term orientations

Chapter 4- Work design that enables global collaboration

• Key questions for identifying where IS can affect how the work is done

  • What work will be performed? The value chain model helps understand the workflow for key tasks that are performed. Work is increasingly demanding for knowledge

  • Who is going to do the work? Work can sometimes be automated, but may also require a skilled individual, or a diverse team with people from different departments

  • Where will the work be performed? Information Systems allow for flexible locations of doing the work. Work can be done at the office, but sometimes at home or on the road as well

  • When will the work be performed? Does the work require a 9-5 schedule, or can it be performed at night as well?

• The IT support for communication is considerable and growing

• Collaboration is a key task in many work processes, and IS greatly changes how collaboration is done.

• How IT changes the nature of work

  • Creating new types of work

  • Changing communication patterns

  • Changing organizational decision making and information processing

  • Changing collaboration

>> Modern multinational organizations face the challenge of managing people that are dispersed across the world and are not under constant supervision. IT led to changes in the supervision, evaluations, compensation and hiring of people.

• How IT changes where and when work is done and who does it

  • Telecommuting, sometimes called teleworking, refers to work arrangements with employers that allow employees to work from home, at a customer site, or from other convenient locations instead of coming into the corporate office.

  • Mobile workers are those who work from wherever they are.

  • Virtual teams = Geographically and/or organizationally dispersed co-workers that are assembled using a combination of telecommunication and information technologies to accomplish an organizational task.

• Employees may resist changes if they view the changes as negatively affecting them.

Chapter 5- Building and changing global business processes

• What processes may look like;

  • Silo perspective = Many think of business by imagining a hierarchical structure organized around a set of functions. In a hierarchy, each department determines its core competency and then concentrates on what it does best. (e.g. operations, marketing, finance, etc.)

  • Process perspective = Keeps the big picture in view and allows the manager to concentrate on the work that must be done to ensure the optimal creation of value.

    • Process = An interrelated, sequential set of activities and tasks that turns inputs into outputs, and includes the following:

• To stay competitive and consistently meet changing customer demands, organizations build dynamic business processes or agile business processes.

  • Agile business processes = Are designed with the intention of simplifying redesign and reconfiguration. They are designed to be flexible and easily adaptable to changes in the can easily be changedbusiness environment.

  • Dynamic business processes = Reconfigure themselves as they learn and are utilized in the business.

• Two techniques are used to transform a business:

  • Radical process, business process reengineering (BPR)
    Radical change enables the organization to attain aggressive improvement goals. The goal of radical change is to make a rapid, breakthrough impact on key metrics. Radical change typically faces greater internal resistance than does incremental change. Therefore, radical change processes should be carefully planned and only used when major change is needed in a short time.

  • Incremental, continuous process improvement, total quality management (TQM)

    • Total Quality Management = A very popular approach to change, as it incorporates methods of continuous improvement.

    • Six Sigma = A data-driven approach and methodology for eliminating defects from a process.
      >> Six Sigma DMAIC = A process of Defining, Measuring, Analysing, Improving and Controlling. Six Sigma DMAIC helps the organization to outline a plan for eliminating defects on already existing products
      >> Six Sigma DMADV = A process of Defining, Measuring, Analysing, Designing and Verifying a new process or product at Six Sigma quality levels

• Tools that help changing and building processes;

Workflow = A series of connected tasks and activities done by people and computers that, together, form a business process.

Workflow diagram = A picture, or map, of the sequence and detail of each process step.

• Business process management (BPM) = To have truly dynamic or agile business processes it requires a well-defined and optimized set of IT processes, tools, and skills called BPM. BPM helps managers to manage workflows in the business by tracking document-based processes where people executed the steps of the workflow.

• Enterprise System (ES) = A set of information systems tools that many organizations use to enable this information flow within and between processes. ES help to ensure integration and coordination across functions within the company, like accounting, production and customer management.

  • Enterprise Resource Planning = Help large companies to manage the fragmentation of information stored in hundreds of individual desktop, department, and business unit computers across the organization. Information is made immediately available to all departments in the company.
    >> ERP II Systems = Makes company information available to external stakeholders like customers and suppliers or partners. ERP II Systems also incorporate social and collaboration features

  • Customer Relationship Management (CRM) = A set of software programs that support management activities performed to obtain, enhance relationships with, and retain customers. They include sales, support and service processes.

  • Supply Chain Management (SCM) = Support processes and communication between different parts of the supply chain. The supply chain of a business begins with raw materials and ends with a product or service that is ready to be delivered. The activities that transform raw materials into a product or service are part of the supply chain, but transport activities as well

  • Product Lifecycle Management systems automate the steps that take ideas for products and turn them into real products. PLM starts with the idea and then turns them into real products. It includes innovation activities, new product development and management, design, and product compliance.

Chapter 6- Architecture and Infrastructure of an Information System

• Architecture translates strategy (something abstract) into infrastructure (something concrete);

  • IT architecture = Provides a blueprint for translating business strategy into a plan for IS.

  • IT infrastructure = Everything that supports the flow and processing of information in an organization, including hardware, software, data, and network components.

Figure 6.2 on page 171 illustrates how a strategy is transformed into an infrastructure.

When developing a framework for transforming business strategy into architecture and then into infrastructure these basic components should be considered:

• Hardware; The physical components that handle computation storage, or transmission of data.

• Software; The programs that run on hardware to enable work to be performed.

• Network; Components of software and hardware that create a path for communication and data sharing

• Data; The electronic representation of numbers and text

There are three common configurations of IT architecture:

• Centralized architecture = Everything is purchased, supported, and managed centrally, usually in a data centre, to eliminate the difficulties that come with managing a distributed infrastructure.

• Decentralized architecture = The hardware, software, networking and data are arranged in a way that distributes the processing and functionality between multiple small computers, servers, and devices and they rely heavily on a network to connect them together

• Service-oriented architecture (SOA) = An architecture in which larger software programs are broken down into services that are then connected to each other, in a process called orchestration, to form the applications for an entire business process.

• There are also more and more systems that do not have to be designed exclusively for a specific firm:

  • Peer-to-peer = Allows networked computers to share resources without a central server playing a dominant role.

  • Wireless (mobile) infrastructures = Allow communication from remote locations using a variety of wireless technologies.

  • Web-based architectures = Are architectures in which significant hardware, software, and possibly even data elements reside on the Internet. Web-based architectures offer even more flexibility when used as a source for capacity-on-demand = The availability of additional processing capability for a fee.

  • Bring Your Own Device = Employees are able to connect their own devices to the corporate network. Issues like capacity, security and compatibility, however, do arise here. Corporate applications may not be designed for the small screens of tablets and mobile phones for example.

  • Consumerization of IT = The drive to port applications to personal devices and ensuring issues to make them work.

• Enterprise architecture = A “blueprint” for all IS and their interrelationships in an enterprise. Enterprise architecture is the term used for the organizing logic for the entire organization, often specifying how information technologies will support business processes. The components of an enterprise architecture typically include 4 key elements:

  • Core business processes

  • Shared data

  • Linking and automation technologies

  • Customer groups

• Virtualisation = Physical corporate data centers that are rapidly being replaced by a virtual infrastructure. Five core components: servers, storage, backup, network and disaster recovery.

• Cloud computing = An architecture based on services provided over the Internet. Based on the concept of a virtual infrastructure. Entire computing infrastructures are available in the cloud.

• Other very important considerations around IT architecture and infrastructure;

  • The strategic timeframe Understanding the life span of an IT infrastructure and architecture is critical. How far into the future does a strategy extend? How long can the architecture and infrastructure fulfil strategic goals?

  • Adaptability When a company is facing hyper competition, any architecture must be designed with maximum flexibility and scalability to ensure it can handle the imminent business changes.

  • Scalability A frequently used criterion for selecting an architecture or infrastructure is scalability. To be scalable refers to how well an infrastructure component can adapt to increased, or in some cases decreased, demands.

  • Standardization Another important feature deals with commonly used standards. Hard- and software that uses common standard, as opposed to a proprietary approach, are easier to plug into an existing or future infrastructure or architecture because interfaces often accompany the standard.

  • Technical issues

    • Maintainability

    • Security

  • Financial Issues Payback from IT investments is often difficult to quantify. Some effort can and should be made to quantify the return on infrastructure investments.

Chapter 7- Recovering the costs of an Information System

• Different firms need to do different things when it comes down to IT, because firms have different goals (thus need to act in a different way)

• Chief information officer (CIO) = The senior-most executive in the enterprise responsible for technology vision and leadership for designing, developing, implementing, and managing

• Also business technology strategist, who uses technology as the core tool in creating competitive advantage and aligning business and IT strategies.

• Building a business case

Business case = A structured document that lays out all the relevant information needed to make a go/no-go decision. It is also a way to establish priorities for investing in different in different projects, an opportunity to identify how IT and the business can deliver new benefits, gain commitment from business managers, and create a basis for monitoring the investment.

• Executive summary, which describes the overall business case in one or two pages

• Overview and introduction; Brief background and the current situation

• Assumptions and rationale; Issues driving the proposal

• Program summary; Detailed description of the project

• Financial discussion and analysis; Costs, revenues, benefits, financial metrics, etc.

• Benefits and impacts; All non-financial outcomes See Figure 7.6 on page 211 for a classification framework of benefits in a business case.

• Schedule and milestones; The schedule for the project and details of expected metrics at each stage

• Risk and contingency analysis; Details on risks and how to manage those risks

• Conclusion and recommendation

• Appendices

• IT portfolio management = Refers to evaluating new and existing applications collectively on an ongoing basis to determine which applications provide value to the business in order to support decisions to replace, retire, or further invest in applications across the enterprise.

  • Transactional systems

  • Infrastructure systems

  • Informational systems

  • Strategic systems

  • Valuing IT investments

• Monitoring IT investments

  • The balance scorecard = Focuses attention on the organization’s value drivers. Companies use it to assess the full impact of their corporate strategies on their customers and workforce, as well as their financial performance. See Figure 7.11 on page 219 for the balance scorecard perspectives.

  • IT dashboards = A snapshot of metrics at any given point in time. It summarizes the key metrics for senior managers in a manner that provides quick identification of the status of the organization. They provide frequently updated information on areas of interest within the IT department.

    • Portfolio dashboards

    • Business-IT dashboards

    • Service dashboard

    • Improvement dashboard

• Funding IT resources

  • Chargeback funding method = IT costs are recovered by charging individuals, departments, or business units based on actual usage and cost.

  • Allocation funding method = Recover cost based on something other than usage, such as revenues, login account, or number of employees. With this allocation system, it does not matter whether these employees use the IT; the department is still charged the same amount.

  • Corporate budget = Paying for IT costs by considering them all to be corporate overhead and pay for them directly out of the corporate budget. With this funding method, the costs fall to the corporate bottom line, rather than levying charges on specific users or business units.

• How much does it cost?

  • Activity-based costing (ABC) = Calculates cost by counting the actual activities that go into making a specific product or delivering a service.

  • Total cost of ownership (TCO) = Looks beyond initial capital investments to include costs associated with technical support, administration, training and system retirement.

Chapter 8- Governance of Information Systems

• Governance in the context of business enterprises is all about making “decisions that define expectation, grant power, or verify performance”.

• Organizational structures for IS evolved in a cyclic manner. At one end of the spectrum, centralized IS organizations bring together all staff, hardware, software, data, and processing into a single location. Decentralized IS organizations, on the other hand, scatter these components in different location to address local business needs. Federalism = A structuring approach that distributes power, hardware, software, data and personnel between a central IS group and IS in business units.

• Figure 8.4 on page 242 shows different combinations of decision rights and accountability:

  • Technocentric gap = A manager has a lot of decision rights, but low accountability.

  • Strategic norm = Here, a manager has a lot of decision rights and at the same time he is highly accountable for the decisions he makes

  • Support norm = The manager has few decision rights, but is not responsible for the decisions he makes

  • Business gap = A manager has very few decision rights, but is highly accountable for the decisions he makes

• 5 Critical decisions about information security that are frequently discussed in the security literature:

  • Information security strategy

  • Information security policies

  • Information security infrastructure

  • Information security education/training/awareness

  • Information security investments

• Many different types of mechanisms can be created to ensure good IT governance.

  • Review board = A committee that is formally designated to approve, monitor, and review a specific topic. This can be a very effective governance mechanism.

  • Steering committees = An advisory committee of key stakeholders or experts that provides guidance on important IT issues. Work especially well with the federal archetypes, which calls for joint participation of IT and business leaders in the decision-making process.

• Governance frameworks for control decisions

  • Sarbanes-Oxley Act (SoX) = Enacted in 2002 to increase regulatory visibility and accountability of public companies and their financial health.

    • The COSO is the Committee of Sponsoring Organisations of the Treadway Commission. Developed three control objectives for management and auditors, together with some other organizations:

      • Operations

      • Compliance

      • Financial reporting

  • COBIT = Control Objectives for Information and Related Technology, is an IT governance framework that is consistent with COSO controls.

Chapter 9. Sourcing around the world

• Sourcing Decision Cycle Framework, There are three choices:

1. Make- or-buy?  Buy means outsourcing. Make means inhouse development
2. Where: Domestic (inshoring) or foreign outsourcing (offshoring)
3. If the decision is offshoring, the third choice is nearby or far away?

• Drivers insourcing

1. Good for inhouse development of core competencies

2. More security when dealing with confidential or sensitive IT systems

3. Insourcing is preferred when enough time is available for inhouse development of sofware

4. Insourcing provides the opportunity to train inhouse employees or benefit from highly trained, specialised and experienced IT professionals

• Drivers outsourcing

1. Cost – reduction

2. Desire to focus on core-business components in the headquarters

3. Consolidation of data-centres leads to greater focus.

4. Potentially faster transitioning to new technologies

5. Cash infusion through the sale of equipment to the outsourcing partner

• Full-outsourcing: complete transfer of IT-functions to providers. Management can thus focus on other company proceses.

• Selective outsourcing: Transfer of some functions and applications, while maintaining some (core) applications inhouse. This is sometimes also referred to as Strategic Outsourcing, as the company can choose what activities to retain and what to grant to an outside provider.

• Best-of-breed: Suppliers, potential providers are selected based on their expertice in specific technology areas such as Mobile applications, Social IT services, business application development or webiste hosting (amongst others compentencies).

• Application service provider (ASP), or Software as a Service (SaaS): Providing cloud-based access to company software. The client does not have to purchase the software, but gains access to functionalities and support through online means.

• Cloud Sourcing: Outsourcing through the cloud. Psysical relocation of the development team or acquiring a captive centre is not necessary.

• Crowd sourcing:Outsourcing development to a non-select group through open (often online) dialogue. Often participants contribute voluntarily, combining their collective intellegence or creativity. This is a form productivity enhancing methods often used by companies to gain scale-advantage.

Chapter 10- Project management

• A project = A temporary endeavour undertaken to create a unique product or service. Temporary means that every project has a definite beginning and a definite end. Unique means that the product or service is different is some distinguishing way from all similar products or services.

  • Project stakeholders = The individuals and organizations that are either involved in the project, or whose interests may be affected as a result of project.

  • Project management = The application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectation from the project.

• Project management always involves continual trade-offs. Trade-offs can be subsumed in the project triangle, which highlights the importance of balancing (1) scope, (2) time and (3) cost.

There are 4 project elements:

• Project management

• Teamwork

• A project cycle plan

• A common project vocabulary

• IT project development methodologies

  • SDLC = Typically refers to the process of designing and delivering the entire system. SDLC refers to a process in which the phases of the project are well documented, milestones are clearly identified, and all individuals involved in the project fully understand what exactly the project consists of and when deliverables are to be made.

  • Agile development = One of the dangers developers face is expecting a predictable development process when in reality, it is not predicable at all. In response to this challenge, agile development methodologies are being championed.

  • Prototyping = A type of evolutionary development, the method of building systems where developers get the general idea of what is needed by the users, and then build a fast, high-level version of the system as the beginning of the project.

  • Rapid applications development (RAD) = Similar to prototyping in that it is an interactive process, in which tools are used to drastically speed up the development process.

  • Joint applications development (JAD) = A version of RAD or prototyping in which users are more integrally involved, as a group, with the entire development process up to and, in some cases, including coding. J

  • Object-oriented development = Becoming increasingly popular as a way to avoid the pitfalls of procedural methodologies. Object-oriented development, unlike more traditional development using the SDLC, builds on the concept of objects.

  • Open sourcing approach = The process of building and improving free software by an internet community. Software is open source software (OSS) if it is released under a license approved by the Open Source Initiative.

• Managing project risk requires taking into account the following three variables;

  • Complexity

  • Clarity

  • Size

Chapter 11- Business analytics and knowledge management

• Knowledge management = Includes the processes necessary to generate, capture, codify, and transfer knowledge across the organization to achieve competitive advantage.

• Business intelligence (BI) = The term used to describe the set of technologies and processes that use data to understand and analyze business performance.

• Business analytics = The term used to refer to the use of quantitative and predictive models and fact-based management to drive decisions. (It is a subset of BI)

• Intellectual capital = Knowledge that has been identified, captured, and leveraged to produce higher-value goods or services or some other competitive advantage for the firm.

• Intellectual property = Allows individuals to own their creativity and innovation in the same way that they can own physical property.

• Data = Specific, objective facts or observations. Standing alone, such facts have no intrinsic meaning, but can be easily captured, transmitted, and stored electronically.

• Information = Data endowed with relevance and purpose. People turn data into information by organizing them into some unit of analysis (dollar, dates, customers etc.)

• Knowledge = A mix of contextual information, experiences, rules, and values. It is richer and deeper than information and added his or her own unique experience, judgment, and wisdom.

  • Tacit knowledge = Personal, context-specific, and hard to formalize and communicate. Example: Explain verbally how to swim or ride a bicycle is almost not possible.

  • Explicit knowledge: knowledge that can be easily collected, organized, and transferred through digital means.

• Knowledge management involves 4 main processes.

  • Knowledge generation = Includes all activities that discover new knowledge, whether such knowledge is new to the individual, firm or entire discipline.

  • Knowledge capture = Involves continuous processes of scanning, organizing, and packaging knowledge after it has been generated.

  • Knowledge codification = The representation of knowledge in a manner that can be easily accessed and transferred.

  • Knowledge transfer = Involves transmitting knowledge from one person or group to another, and the absorption of knowledge.

• Companies that compete successfully using their business analytics have these 5 capabilities: Hard to duplicate; Unique; Adaptable; Better than the competition; Renewable.

• 4 components of business analytics.

  • Data repositories = Data used in the analytical processes must be gathered, cleaned up, integrated, and stored for easy access.

  • Software tools = Applications and processes for statistical analysis, forecasting, predictive modelling, and optimization.

  • Analytics environment = Organizational environment that creates and sustains the use of analytics tools. Reward system that encourages the use of the analytics tools; willingness to test or experiment.

  • Skilled workforce = Workforce that has the training, experience, and capability to use the analytics tools.

• Big data = The term used to describe techniques and technologies that make it economical to deal with very large datasets at the extreme end of the scale.

Chapter 12- Ethical considerations in the use of information

• They need to consider information ethics = The ethical issues associated with the development and application of IT.

• 3 theories of ethical behaviour in the corporate environment that managers can develop and apply to the particular challenges they face.

  • Stockholder Theory = According to the stockholder theory, stockholders advance capital to corporate managers, who act as agents in furthering their ends. The nature of this contract binds managers to act in the interest of the shareholders.

  • Stakeholder Theory = Stakeholder theory holds that managers, although bound by their relation to stockholders, are entrusted also with a responsibility, fiduciary or otherwise, to all those who hold a stake in or a claim on the firm.

  • Social Contract Theory = Social contract theory derives the social responsibilities of corporate managers by considering the needs of a society with no corporations or other complex business arrangements. The social contract comprises two distinct components:

    • Social welfare term

    • Justice term

• Corporate social responsibility (CSR). There are 2 types

  • Green computing = Concerned with using computing resources efficiently. The need for green computing is becoming more and more obvious.

  • Organizations are also facing a dilemma reconciling their corporate policies with regulations in countries where they want to operate. Managers need to adopt much different approaches across nationalities to counter the effects of what they perceive as unethical behaviours.

• PAPA: Privacy, accuracy, property and accessibility

  • Privacy = Has long been considered “the right to be left alone”. In today’s information-oriented world, it has been defined as: “the ability of the individual to personally control information about one’s self”.

  • Accuracy = Or the correctness, of information assumes real importance for society as computers come to dominate in corporate record-keeping activities. Over time it becomes increasingly difficult to maintain the accuracy of some types of information.

  • Property = The question is who owns the data. Do organizations have the right to share data with others to create a more accurate profile of an individual?

  • Accessibility = The ability to obtain the data, becomes increasingly important.