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Term Exam II

Management Information System

Hesty Oktariza | 014200900073

BF1/Monday Morning Class

1. In the future, AI system will be increasingly applied to data warehouse processing. Which AI systems do you think might be helpful? For which tasks, or situations, might they best be applied? Do you think that AI systems will someday play a greater role in the design of database and data warehouse? Why or why not?

In its history, in 1956, the father of Artificial Intelligence, John McCarthy , organized a conference to gather many intellectuals in order to learn about the AI system. This foundation then was developed up to now. The application of AI is being used in a very wide and various activities, despite the fact that the discipline itself is still in the early stages of development. For example, Al is being applied in management and administration, science, engineering, manufacturing, financial and legal areas, military and space endeavors, medicine, and diagnostics. It has already used to automate and replace some human functions with computer-driven machines. Based on this fact, the advancement of AI system is not unlikely to play a greater role in the future, specifically regarding the design of database and data warehouse.

Data warehouse, based on Wikipedia, is defined as database used for reporting. It is a process of centralized data management and retrieval. This definition of the data warehouse focuses on data storage. The main source of the data is cleaned, transformed, catalogued and made available for use by managers and other business professionals for data mining, online analytical processing, market research and decision support (Marakas & OBrien 2009). However, the means to retrieve and analyze data, to extract, transform and load data, and to manage the data dictionary are also considered essential components of a data warehousing system. Furthermore, there are several systems of AI that might be increasingly applied in the data warehouse processing.

Today, the hottest area of artificial intelligence is neural networks, it is an artificial intelligence system that is capable of finding and differentiating patterns. Neural networks are proving successful in a number of disciplines such as voice recognition and natural-language processing. It is well suited to the analize data warehouse information for tasks of discovering information by discerning patterns.

Other system in AI is intelligent agents, are already being used as data mining agents, since their strength lies in searching through data warehouses to find and retrieve information in order to assist or act on the behalf of the users. For instance, Volkswagen uses it that acts as an early-warning system about market condition to make sure the companys strategy is still valid. The exploitation of intelligent agent software is expected to rise over time as other enabling personalization technologies also grow in prominence.

Moreover, the artificial intelligence systems that might be helpful on processing the data warehouse is intelligent agents, it imitate the evolutionary, survival-of-thefittest process to generate increasingly better solutions to a problem. A genetic algorithm could be applied to a data warehouse in situations where there are many characteristics of inputs that should be combined into best-resulted output.

In the early 1980s, the expert systems, which defined as an artificial intelligence system that applies reasoning capabilities to reach a conclusion, were expected to represent the future of artificial intelligence and of computers in general. Unfortunately, they are not really match with those expectations. Many expert systems help human experts in such fields as medicine and engineering, but they are very expensive to produce and are helpful only in special situations.

In summary, some of the AI systems have great possibility to increase their role in designing data warehouse regarding to their strength to work in such conditions that strongly related with searching, analyzing, and combining information in data warehouse design process. As demand of using data warehouse in business intelligence increasing, any advancement on those AI system will lead to a better performance of data warehouse management itself.

2. In your opinion, according to Porters Five Forces Model, has competition increased or decreased overall as a result of the internet and e-commerce? Specifically address each of the five forces Porters model.

From time to time, people are looking for ways to reduce their business costs, increase efficiency, reduce production time and make business practice easier by eliminating redundancies. They provide a forum where products are bought and sold in greater volume, this forum then comes out through the media of internet as it so called e-commerce. The ease that internet provide in helping buyers met sellers then attract more participants, as a result, increasing of competition occurs both in conventional commerce and electronic commerce.

Porters Five Forces Model can clearly explain the impact of internet and ecommerce to the increasing of competition as follow.

Obviously, buyer power become stronger. There are several factor for a greater bargaining power of buyers, which are : there are few dominant buyers and many sellers in the industry, products are standardised, buyers threaten to integrate backward into the industry while suppliers do not threaten to integrate forward into the buyer's industry , and the industry is not a key supplying group for buyers.

Let us underline the first factor, where internet allows buyers to have more options since there are many sellers are emerging from many places accross countries that were impaired by distance before. It is now easier for the sellers to enter their target industries and reach more potential target customers. For instance, buyer from Indonesia might buy a PC from eBay, or Kaskus or many websites that provides online trading where the suppliers can come from anywhere as well as the customer.

Furthermore, as a result of technology advancement, supplier power are decreasing. The reason is, now because buyers now have more choices, they can buy products through e-marketplace or reverse auction that allows for easier and greater opportunity to find the supplier that could offers the lowest price.

Internet and e-commerce then increase threat of new entrants. However, the threat of new entrants largely depends on the barriers to entry. This key barriers include economies of scale, capital or investment requirements, customer switching costs, access to industry distribution channels, and finally the likelihood of retaliation from existing industry players. Specifically, due to IT, entry barriers to many industries, such as geographical barrier, are lessened. In addition, e-commerce also require lower capital to start up the business. As a result, it is easier to enter a market. For example, to establish your own shop, you only need register your website to the server that asking for smaller amount of money compare with if you open the shop in a department store.

Next forces that push the tight competition is the threat of substitute products or services. The threat of substitute products or services has increased. Internet opens more opportunities for buyers to switch into alternative products and service. For example, instead of buying a hardcopy of CD of musics, people can easily download its alternative soft copy through iTunes or SnapSter.

The last forces that increase the competition is the increase of rivalry among existing companies. The intensity of rivalry between competitors in an industry will depend on: the structure of competition, degree of differentiation, switching costs, strategic objectives , exit barriers and so on. The impact of internet create tougher rivalry for several characteristic that has been explained above.

In summary, the use of internet and e-commerce in business has created a higher level of competition. It increase the bargaining power of buyer, decrease the supplier power, increase threat of new entrants and subtitutions, and increase rivalry among existing business itself.

3. How can B2C e-commerce business use the internet to further enhance their CRM initiatives? Does it become easier or harder to maintain relationship with customers as business move toward more e-commerce? Why? In this new era companies are focusing on managing customer relationship in order to effectively maximizing revenues. Today marketing is not only developing, delivering and selling, it is moving toward developing and maintaining long-term relationship with customers. To do so, effective Customer Relationship Management (CRM) has become a staretegic initiative to obtain customer satisfaction. Companies are moving closer to their customers, spending more effort in finding new ways to create values for their customers, and transforming the customer relationship into one solution finding and partnering rather than just selling or order taking. One way to easier maintain relationship with customers, I believe, is going toward the movement into more e-commerce use.

The first role of internet and technology in general to further enhance their CRM initiatives is, B2C e-commerce businesses can use the Internet to create more personal relationship with their customers, especially with those who are impaired by distance and time.

In the age of the global economy, customers want to buy your product or service when it is convenient for them. They are willing to have complete descriptions, images and details about your products online is driven by customer demand. That demand is only half the battle, the customer then wants to be able to instantly purchase that product and of course, get it right away, after all your competitor can offer that to them. Todays e-commerce solutions have graduated to a level far beyond a simple shopping cart. Customers want the ability to manage all aspects of the purchase and their relationship with you through this means. Perhaps the most important to this phenomenon is the experience the customer receives after the order confirmation is complete. Order execution to the customer and if necessary back to you, must be simple, quick and seamless.

Furthermore, the use of internet in B2C businesses offers an unparralleled opportunity to personalize services, provide multiple choice for customer support, track customer satisfaction and deliver loyalty programs.

An effective web site, for example, can help build relationships between an organization and its stakeholders. Without a doubt, customers are the primary stakeholders of any organization. CRM can be used to gain clearer insight and more intimate understanding of customers' buying behaviors, thus helping to build an effective competitive advantage. Blue-chip companies are investing millions in software products from CRM leaders like Epiphany Kana Communications and Siebel.

However, an effective CRM needs more than application technology; it involves a change in philosophy and attitudes. The new method is to do what it takes to delight the customer. In the other hand, an effective e-business strategy requires B2C business to provide customer value that is superior to that of the competition. The internet promised customers personalization and customization; it promised marketers deeper insights into the habits, feelings, likes and dislikes of customers. But has it lived up to these promises? CRM drives relationships and purchases and drives brand loyalty by fostering trust. Therefore, that is why internet and ebusiness, could facilitate the emergence of new distribution channels and enhance sales and marketing as well as effectiveness and efficiency of customer relationship management.

4. There are seven phases in the system development life cycle. Which one do you think is the hardest? Which one do you think is the easiest? Which one do you think is the least important? If you had to skip one of the phases, which one would it be and why?

System Development Life Cycle is a process of gradual refinement, meaning that it is done through several development phases. It always creates the project starting from scratch. Each phase continues and refines whats done in the previous phase. The traditional systems development life cycle (SDLC) contains seven phases: (1) planning, (2) analysis, (3) design, (4) development, (5) testing, (6) implementation, and (7) maintenance.

Although it suppose to have seven phases, but commonly known development phases in SDLC are mainly grouped into:

Planning. It is the process of understanding why the system should be built and defining its requirements. It also includes feasibility study from several different perspectives, technical, economic, and organization feasibility aspects.

Analysis. This phase includes activities such as problems identifying and analysis, and even predicting potential problems that may arise in the future regarding the system. The deliverables / products of this phase will determine how the system will be built and guide the developers works.

Design. System analysis leads to design decision, which exactly drives how the system operates in terms of process, data, hardware, network infrastructures, user interface, and other important factors in the system environment.

Implementation. This is perhaps the most resource-, cost-, and time-consuming phase of all. This is when the system is actually built, tested, and finally installed. It also includes activities such as user training and system maintenance. However the four phases are the most commonly known and accepted steps.

The hardest phases overall in my opinion is actually can not be determined easily. All phases are important. Despite the fact that SDLC contstruct a program from the scratch, therefore, I think the design might be the first phases to be prioritized in designing the new system with SDLC. The activities focused on this phases include the design the technical architecture required to support the system and the design system models. Although most of the strategic decisions about the system were made in the development of the system concept during the analysis phase, the steps in the design phase determine exactly how the system will operate. The design phases works as transitional phases of business process expert into quality control analyst. Moreover, IT specialist must complete most of the task in design phase. The second last phases of the cycle, which is the implementation phases could be the easiest one. It conducts the task to monitor and support the new system to ensure it continues to meet the business goals. Your main role in this phases are only for attending and perform training. I cant say which phases are the least important one, as well as which one that is the least prioritized and can be skipped. Since SDLC phases and steps proceed in a logical path from start to nish. But if I have to, perhaps I will skip the testing phases. The main objective in testing is ensuring the quality, however, I think in the several previous phases, such as designing and development have started this testing function earlier. Skipping this phases will not significantly affect the whole system unless errors happened in the other steps and it didnt be detected earlier.

5. You are talking to another student who is complaining about having to learn about the system development cycle, because he is not going to work in an IT department. Would you agree with this student? What would you say to him to convince him that learning about the systems development cycle is important no matter where he works?

I disagree with this student regarding several aspects. First, it is not impossible that in your future career, no matter where you work, you will find yourself involved in systems development, perhaps: as a worker whose job is being re-organised, or as part of a team involved in developing a new system or adapting an existing system; or with responsibility for specifying requirements for a new system.

In fact, the system development life cycles are 'process' models - they outline recognised steps for successfully completing complex tasks. You can use these steps as guidelines for completing projects at work and at home. For instance, buying a personal computer system, or doing a final year project. Therefore, even if the student will not work in an IT department, he can get benefitted from learning the system development life cycles as well.

Furthermore, this benefit will be very helpful when you were asked to develop the self-sourcing. Selfsourcing is the internal development and support of IT systems by knowledge workers with minimal contribution from IT specialists. Knowledge workers develop and utilize their own IT systems, instead of contracting out the work in the opposed process known as outsourcing. Your position here is as the knowledge worker, although you are not an IT specialist, but you can develop and utilize your IT knowledge in the workplace.

The self sourcing comes out with several advantages. By self-sourcing, knowledge workers can take part in determining the requirements for the system by telling what they want. By working from their own thoughts, the knowledge workers will have a very good understanding of what they want the system to become. Therefore, there is greater chance for success in terms of the purpose of the system.

In addition, if you can develope the system by yourself, you will take more pride in the system and are more likely to put more effort into its completion. This will give you as the knowledge worker a greater sense of ownership and can lead to increase your morale. Whereas, Increased morale can be infectious and lead to great benefits in several other areas.

The last advantage of developing self-sorcing is, it increase the speed of systems development. Many smaller systems do not require the step-by-step approach and a huge amount of time and resources concentrated on a smaller system. By insourcing and going through every step and with the IT specialists analyzing every move, it may in fact be timeconsuming and counterproductive. Selfsourcing can be much faster for smaller projects that do not require the full process of development.

In summary, the system development life cycle would not be useless to be learned. Because in fact, we probably will face certain condition where our knowledge in IT is required, especially in developing self-sourcing.