1. One of the major problems that organisations face is to allocate fixed costs among different IT tasks. Fixed costs refer to costs that remain the same regardless of any change in the activity level.
Another complication regarding the assessment of costs of IT is that the cost of a system does not end when the system is installed.Maintaining, debugging, and improving the system can result in an accumulation of costs over many years.
2. Intangible benefits from IT are difficult to quantify. In such cases, it is most likely that an inputwill be requested about the intangible benefits that an information system provides for you.
3. NPV stands for net present value. NPV method is used to convert future values of benefits to their present value equivalent by “discounting” them at the organisation’s cost funds. The method works best when the costs and benefits are well defined enough to be converted into monetary values.
Return on Investment (ROI) measures management’s effectiveness in generating profits with its available assets. The ROI measure is a percentage, and the higher the percentage return,the better.
Business case approach refers to a written document that managers use tojustify funding one o more specific applications or projects. It describes what you do, how you do it, and how a new system could better support you. A business case also provides the bridge betweenthe initial plan and its execution.
4. Outsourcing services are provided by:
· Software companies such as IBM and Oracle, who offer services for developing, operating, and maintaining IT applications.
· IT outsourcers such as EDS
· Large CPA companies
· Management consultants
5. An application service provider (ASP) is an agent or a vendor who assembles the software needed by enterprises and packages the software with services such as development, operations, and maintenance. Next, the customer accesses these applications via the Internet or VANs through a standard Web browser interface.
The advantages of ASP include:
· save costs
· reduce software maintenance and upgrades
· reduce user training
· make the company more competitive by reducing time-to-time market and enhance the company’s ability to adapt to changing market conditions.
6. ASP also has some disadvantages:
· ASPs might not offer adequate security protection.
· Software might not be perfect fit for the desired application.
· Company must make certain that the speed of the Internet connection between the customer and the Asp is adequate to handle the requirements of the application.
7. The selection and management of vendors and software packages is a major aspect of developing an IT application. The steps are as follows:
Step 1: Identify Potential Vendors. Through various sources such as software catalogs, web searches, peers in other companies, lists provided by hardware vendors, and technical and trade journals, companies can identify potential software.
Step 2: Determine the Evaluation Criteria. A vital part in evaluating a vendor and a software package is to develop a well defined set of evaluation criteria.
Step 3: Evaluate Vendors and Packages. The goal of the evaluation is to determine the gaps between the company’s needs and the capabilities of the vendors and their application packages.
Step 4: Choose the Vendor and Package. Once the company has narrowed down the list of potential suppliers, it can begin negotiations with these vendors to determine how their packages might be modified to remove any discrepancies with the company’s IT needs.
Step 5: Negotiate a contract. The contract with the software vendor is vital and specifies both the price of the software and the type and amount of support that the vendor agrees to provide.
Step 6: Establish a Service Level Agreement. A service level agreement (SLA) is a formal agreement that specifies how work is to be divided between the company and its vendors.
8. A request for proposal (RFP) is a document that is sent to potential vendors inviting them to submit a proposal describing their software package and how it would meet the company’s needs.
Thursday
Week 11: Chapter 9 - Managerial Support Systems
1. The decision process proposed by Simon composed of three major phases: intelligence, design, and choice.
The intelligence phase involves managers examining a situation and identifying and defining the problem.
In the design phase, decision makers construct a model that simplifies the problem. The model is constructed by making assumptions that simplify reality and by expressing the relationships among all relevant variables.
The choice phase involves selecting a solution that is tested “on paper”.
2. Managers need IT support to make good decisions with valid and relevant information.
3. The decision matrix consists of nine cells that comprises of three primary classes of problem structure and three broad categories of the nature of decisions.Lower-level managers usually perform the structured and operational control-oriented tasks (cells 1, 2 and 4). The tasks in cells 3. 5,and 7 are usually the responsibility of middle managers and professional staff. The remaining cells 6, 8, and 9 refer to the tasks normally undertaken by senior executives.
4. Data mining involves searching for valuable business information in a large database, data warehouse, or data mart. It performs two basic functions: predicting trends and behaviours and identifying previously unknown patterns. Data mining addresses why it is happening and provides predictions of what will happen in the future.
5. A digital dashboard provides rapid access to timely information and direct access to management reports. It is very user friendly and is supported by graphics. Most importantly it allows managers to examine exception reports and drill-down reports.
The intelligence phase involves managers examining a situation and identifying and defining the problem.
In the design phase, decision makers construct a model that simplifies the problem. The model is constructed by making assumptions that simplify reality and by expressing the relationships among all relevant variables.
The choice phase involves selecting a solution that is tested “on paper”.
2. Managers need IT support to make good decisions with valid and relevant information.
3. The decision matrix consists of nine cells that comprises of three primary classes of problem structure and three broad categories of the nature of decisions.Lower-level managers usually perform the structured and operational control-oriented tasks (cells 1, 2 and 4). The tasks in cells 3. 5,and 7 are usually the responsibility of middle managers and professional staff. The remaining cells 6, 8, and 9 refer to the tasks normally undertaken by senior executives.
4. Data mining involves searching for valuable business information in a large database, data warehouse, or data mart. It performs two basic functions: predicting trends and behaviours and identifying previously unknown patterns. Data mining addresses why it is happening and provides predictions of what will happen in the future.
5. A digital dashboard provides rapid access to timely information and direct access to management reports. It is very user friendly and is supported by graphics. Most importantly it allows managers to examine exception reports and drill-down reports.
Monday
Week 10: Chapter 8 - Organisational Information Systems
Section 8.1 - Before You Go On…
1. What is a Transactional Processing and the role of TP systems. State the key objective of TP/TPSs.
A transaction processing system (TPS) monitors, collects, stores, and processes data generated from all business transactions. It provides input to the organisation’s database. It is also input to the functional information systems, decision support systems, customer relationship management, knowledge management, and e-commerce.
Section 8.2 - Before You Go On…
1. What is a functional area information system? List its major characteristics.
A functional area information system provides information mainly to lower and middle level managers in the functional areas.
The information provided is used planning, organizing, and controlling operations.
2. How does an FAIS support management by exception? How does it support on-demand reports?
Exception reports include merely informationthat falls outside certain threshold standards. In order to support management by exception, management must firstly create performance standards. Next, the company sets up systems to observe performance, compare actual performance to the standards, and identify predefined exceptions.
Ad-hoc reports, also known as on-demand reports, are out-of-the-routine reports requested for information that is needed at different times outside the times when routine reports are performed.
Section 8.3 - Before You Go On…
1. Define ERP and describe its functionalities.
Enterprise resource planning (ERP) systems incorporate the planning, management, and use of all of an organisation’s resources. Their main objectives are to securely integrate the functional areas of the organisation and to enable information to flow impeccably across the functional areas. ERP systems provide the information necessary to control the business procedures of the organisation.
2. List some drawbacks of ERP software.
As advantageous ERP is, it also has some drawbacks. First of all, EPR can be tremendously complex, expensive, and time consuming to enforce. Another drawback is the predefined nature of the business processes of the software, meaning businesses may need to change existing business processes to suit it. Finally, ERP must be bought as a whole software package, even if the organisation only needs a few modules.
Section 8.5 - Before You Go On…
1. Define a supply chain and supply chain management (SCM).
A supply chain is the flow of materials, information, money, and services from raw material suppliers, through factories and warehouses to the end consumers. It also involves he organisation and processes that create and deliver products, information and services to end customers.
The role of supply chain management (SCM) is to plan, organize, and optimize the supply chain’s activities. SCM uses information systems. Its goal is to reduce friction along the supply chain.
2. List the major components of supply chains.
The major components of supply chains are upstream, internal, and downstream. Upstream refers to the sourcing or procurement from external suppliers occurs. The internal component is where packaging, assembly, or manufacturing takes place. Downstream is where distribution takes place, commonly by external distributors.
3. What is the bullwhip effect?
The bullwhip effect refers to erratic shifts in orders up and down the supply chain.
Section 8.6 - Before You Go On…
1. Define EDI and list its major benefits and limitations
Electronic data interchange (EDI) is a communication standard that allows business partners to exchange routine documents, such as purchasing orders, electronically.
EDI can be quite advantageous as it minimizes data entry errors because a computer processes each entry. In addition, the length of the message can be shorter and the messages are secured. EDI also increases productivity, improves customer service, minimizes paper usage and storage, and reduces cycle time.
As beneficial as EDI can be, it also has some drawbacks. EDI can be initially a costly investment, it is inflexible, and it also requires a long start up period.
1. What is a Transactional Processing and the role of TP systems. State the key objective of TP/TPSs.
A transaction processing system (TPS) monitors, collects, stores, and processes data generated from all business transactions. It provides input to the organisation’s database. It is also input to the functional information systems, decision support systems, customer relationship management, knowledge management, and e-commerce.
Section 8.2 - Before You Go On…
1. What is a functional area information system? List its major characteristics.
A functional area information system provides information mainly to lower and middle level managers in the functional areas.
The information provided is used planning, organizing, and controlling operations.
2. How does an FAIS support management by exception? How does it support on-demand reports?
Exception reports include merely informationthat falls outside certain threshold standards. In order to support management by exception, management must firstly create performance standards. Next, the company sets up systems to observe performance, compare actual performance to the standards, and identify predefined exceptions.
Ad-hoc reports, also known as on-demand reports, are out-of-the-routine reports requested for information that is needed at different times outside the times when routine reports are performed.
Section 8.3 - Before You Go On…
1. Define ERP and describe its functionalities.
Enterprise resource planning (ERP) systems incorporate the planning, management, and use of all of an organisation’s resources. Their main objectives are to securely integrate the functional areas of the organisation and to enable information to flow impeccably across the functional areas. ERP systems provide the information necessary to control the business procedures of the organisation.
2. List some drawbacks of ERP software.
As advantageous ERP is, it also has some drawbacks. First of all, EPR can be tremendously complex, expensive, and time consuming to enforce. Another drawback is the predefined nature of the business processes of the software, meaning businesses may need to change existing business processes to suit it. Finally, ERP must be bought as a whole software package, even if the organisation only needs a few modules.
Section 8.5 - Before You Go On…
1. Define a supply chain and supply chain management (SCM).
A supply chain is the flow of materials, information, money, and services from raw material suppliers, through factories and warehouses to the end consumers. It also involves he organisation and processes that create and deliver products, information and services to end customers.
The role of supply chain management (SCM) is to plan, organize, and optimize the supply chain’s activities. SCM uses information systems. Its goal is to reduce friction along the supply chain.
2. List the major components of supply chains.
The major components of supply chains are upstream, internal, and downstream. Upstream refers to the sourcing or procurement from external suppliers occurs. The internal component is where packaging, assembly, or manufacturing takes place. Downstream is where distribution takes place, commonly by external distributors.
3. What is the bullwhip effect?
The bullwhip effect refers to erratic shifts in orders up and down the supply chain.
Section 8.6 - Before You Go On…
1. Define EDI and list its major benefits and limitations
Electronic data interchange (EDI) is a communication standard that allows business partners to exchange routine documents, such as purchasing orders, electronically.
EDI can be quite advantageous as it minimizes data entry errors because a computer processes each entry. In addition, the length of the message can be shorter and the messages are secured. EDI also increases productivity, improves customer service, minimizes paper usage and storage, and reduces cycle time.
As beneficial as EDI can be, it also has some drawbacks. EDI can be initially a costly investment, it is inflexible, and it also requires a long start up period.
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