ADMS 2511

Management Information
Systems
Session 2

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 Constant connectivity?
 Is constant connectivity the way that you live?
 This video – Digital junkie , explains the impact of
Information Overload http://www.youtube.com/watch?v=VxfGuZ5Bsgk
 There are many reasons for being online: Big Ten Network
boosts college gaming, Toronto Star, p. B7, by E. Novy-
Williams, January 23, 2017

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 Session 2 (and Chapter 2)
Learning Objectives
2.1 Role of business processes and business
process reengineering, management and
improvement
2.2 Examine worldwide changes that have created the modern organization,
the resulting business pressures and organizational responses using IT
2.3 Describe Porter’s competitive forces and value chain models and how
they relate to competition and strategies for competitive advantage
2.4 Discuss how organizations implement their IT planning using IT
Governance and effective IT-business alignment

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 What is a business process?
 A business process is a collection of related activities that
produce a product or a service of value to the organization,
its business partners, and/or its customers.
 A process uses inputs and resources to produce outputs,
and its activities can be measured. Cross-functional
processes happen in multiple areas of an organization, such
as product development, which involves design,
engineering, manufacturing, marketing, and distribution.
Other processes involve only one functional area.

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 Competitive advantage
 An Organizational strategy is a planned approach that the
organization takes to achieve its goals and its mission
statement
 Competitive advantage is an advantages over competitors
in some measure such as cost, quality, or speed; it leads to
control of a market and to larger-than-average profits
 Often, effective use of IT is needed to operationalize an
organization’s strategy

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 Changes to operations are
new processes
 Do you use automated banking to deposit cheques? In 2016,
TD Bank implemented envelope-free deposits that
optionally provide images of your cheques on your receipt
 How did this likely change business processes at the bank?
 What are efficiencies for the bank? For the depositor?

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Business processes are what
organizations DO
 Table 2.1 from our text p. 32 gives us examples of business
processes in several functional areas:
• Accounting: managing accounts payable & receivable
• Finance: Producing business forecasts
• Marketing: Handling customer complaints
• POM: Processing physical inventory
• Human Resources: Overseeing workplace safety
• MIS: Training computer users

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 Business processes connect to
customers and others: Fig. 2.1, p. 34

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 What could go wrong?
 One way to better understand BPM is to think about what
could go wrong in a process.
 Review Figure 2.1, ordering an e-ticket and make a list that
describes FIVE errors or other problems could occur in the
process. This is part of risk analysis.
 Pause your system while you do so and then listen again
after you have made your list

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 Do the processes need to
improve?
 Better business processes enable organizations to improve: the execution of a
process, capturing and storing process data, and monitoring process
performance
 Consider efficiency and effectiveness using criteria (metrics)
 Efficiency: reducing costs or time to complete a process, while maintaining
quality, “doing things well”
 Example: moving from one process to the next without delay or waste of resources
 Effectiveness: ensuring that the desired outcome is achieved and assessing
whether the outcome is important, “doing things that matter”
 Example: producing high-quality products

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 BPR, BPI and BPM
(Text Section 2.2, p. 37)

 BPR = “starting from scratch” or “clean sheet” to evaluate and

redesign business processes to be more efficient and effective
 BPI = “incremental changes” that organize work around business
processes rather than individual tasks or activities
 BPM = “includes methods and tools to support … continuous
optimization …” i.e. ongoing evaluation and improvement
 Consultants and software help organizations to improve their
business processes, for examplehttp
://www.ibm.com/ibm/ca/en/national_agenda/ (IBM Canada consultants)

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 Practice Question #1
 Read Case 2.1 BlackBerry Meets Android, p. 30
 Answer the questions listed on the Answer Sheet (in class)
or posted online (Internet section)
 For best results, do the practice problem before looking at
the answers.
 Answers will be posted after the classroom sections are
completed working on the problems.

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 Session 2 (and Chapter 2)
Learning Objectives
2.1 Role of business processes and business process reengineering,
management and improvement

2.2 Examine worldwide changes that have created the

modern organization, the resulting business pressures
and organizational responses using IT
2.3 Describe Porter’s competitive forces and value chain models and
how they relate to competition and strategies for competitive
advantage
2.4 Discuss how organizations implement their IT planning using IT
Governance and effective IT-business alignment
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 Business Pressures, Fig.2.2, p. 42
We will use your role as a student – think about why you came
to York.

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 Market (economic)
pressures
 Global economy and strong competition; the need for real-
time operations. Three eras of globalization according to
Thomas Friedman:
http://www.youtube.com/watch?v=lp4znWHvsjU

 The changing nature of the workforce

 Powerful customers

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 The retail world changes
daily?
 Walls that show toys you can buy online, for example
Walmart in the Brookfield Rotunda in the PATH (an
underground walkway in Toronto) Source: People’s Insights: Volume 1, Issue
50, Jan 5, 2013 http://www.slideshare.net/mslgroup/peoples-insights-volume-1-issue-50-la

 What retail innovation have you seen lately?

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 Technology pressures
 Technological innovation and obsolescence
 Information overload
 Example: How were older versions of the camera replaced
with digital?

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 Book publishing transforms:
how do you read books?
 Hundreds of thousands of books are self-published but only about 40
authors “did well” according to Amazon: https://
claudenougat.wordpress.com
/2016/02/07/only-40-self-published-authors-are-a-success-says-amazon/
 Nicholas Hoare book stores close, Chapters/Indigo struggles by
increasing its product lines, while a new web site about Canadian books
opens. Sources:
http://www.thestar.com/business/2013/03/08/publishers_embrace_social_media_as_bricks_and_m
ortar_outlets_fade_away.html
and http://49thshelf.com

 Vampire story writer rapid millionaire as she sells hundreds of thousands

of self-published vampire books. Source: http://www.worldofamandahocking.com/

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 Societal/political/legal
pressures
 Social responsibility
 http://one.laptop.org/about/mission/
One laptop per child

Check out the following video for a more Canadian perspective on the
digital divide.
http://www.youtube.com/watch?v=b5E-Fe1kf_A
 Compliance with government regulations (and deregulation)
 Protection against fraud or terrorist attacks
 Ethical Issues

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 Competition laws apply to
the Internet (too)
 Global news reported that Amazon was fined $1.1 million because
it did not accurately show “how much consumers would save” on
its web site when showing its pricing. Based upon a two year
analysis of Amazon data. The company was also charged
$100,000 to cover legal costs. ttp
://business.financialpost.com/news/retail-marketing/amazon-canada-fined-1-million-plus-costs-for-
misleading-price-claims-on-
website

 Google was fined the huge sum of $2.4 billion Euros (about
$3.575 billion Canadian) for anti-competitive search result
behaviours with respect to Google Shopping
http://www.cnbc.com/2017/06/27/eu-hits-google-with-a-record-antitrust-fine-of-2-point-7-
billion.html

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 IT-Based Organizational
responses
 Strategic systems
 Customer focus
 Make-to-order and mass customization
 Reebok http://www.reebok.ca
 Video: Bodymetrics
http://www.youtube.com/watch?v=BU4PW51PVzE
 Video: Healthcare customization
http://youtube.com/watch?v=Hai9LchP5jc
 E-business and e-commerce

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Let’s do Practice Question
#2
 Review the BlackBerry case, we will be answering some
additional questions relating to this organization.
 Answer the questions listed on the Answer Sheet (in class)
or posted online (Internet section)
 For best results, do the practice problem before looking at
the answers.
 Answers will be posted after the classroom sections are
completed working on the problems.

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 How has your dentist
changed?
 When was the last time you visited a dentist?
 What technology and software were they using?
 Do some research online to find three different types of
technology used by dentists. What major innovations did
you find?
 Here is an example: Invisalign factory:

https://www.youtube.com/watch?v=vsR0_wTR2a8

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 Session 2 (and Chapter 2)
Learning Objectives
2.1 Role of business processes and business process
reengineering, management and improvement

2.2 Examine worldwide changes that have created the modern

organization, the resulting business pressures and organizational
responses using IT

2.3 Describe Porter’s competitive forces and value

chain models and how they relate to competition
and strategies for competitive advantage
2.4 Discuss how organizations implement their IT planning using IT
Governance and effective IT-business alignment
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 Porter’s competitive forces
model, Fig. 2.3, p. 50
 The following interview with Michael Porter explains how
his model works. Video:
https://www.youtube.com/watch?v=mYF2_FBCvXw&list=PL6823FE92CFCC2553

 How is his model affected by the Internet?

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 Porter’s value chain model
 The value chain model is used to describe what
organizations do and how they “add value,” i.e. make their
products and earn profits.
 As our text explains (See Figure 2.4, p. 52), this value chain
has relationships with customers and suppliers.  
 See also: https://www.youtube.com/watch?v=uhS_Ujij8Jk

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Let’s do Practice Question
#3
 Read IT’s About Business 2.5 Off-Target Target, p. 56
 Answer the questions listed on the Answer Sheet (in class)
or posted online (Internet section)
 For best results, do the practice problem before looking at
the answers.
 Answers will be posted after the classroom sections are
completed working on the problems.

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 Furniture value chain
practice
 What is the value chain for a furniture manufacturing
company?
 Using Figure 2.4 on page 52, Section 2.4 of our text, create
a table for each item in the chain, and write down or think
about an example that could apply to a furniture company.

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 Strategies for competitive
advantage (see also Figure 2.5, p. 54)
 Cost Leadership. Produce products and/or services at the lowest
cost in the industry.
 Differentiation. Offer different products, services or product
features.

 Innovation. Introduce new products and services, add new features

to existing products and services or develop new ways to produce
them.

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 Strategies for competitive
advantage (continued)
 Operational Effectiveness. Improve the manner in which
internal business processes are executed so that a firm
performs similar activities better than its rivals.

 Customer-orientation. Concentrate on making customers

happy.

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 Session 2 (and Chapter 2)
Learning Objectives
2.1 Role of business processes and business process reengineering,
management and improvement

2.2 Examine worldwide changes that have created the modern

organization, the resulting business pressures and organizational
responses using IT

2.3 Describe Porter’s competitive forces and value chain models and how
they relate to competition and strategies for competitive advantage

2.4 Discuss how organizations implement their IT

planning using IT Governance and effective IT-business
alignment
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 Information technology
governance
 The purpose of IT Governance is to provide effective
oversight over the use of technology
 This is enabled, for example, by using an IT steering
committee. Video: IT Steering Committees in a Municipal
Setting: http://www.youtube.com/watch?v=nzRuPpVTGtM

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 Business-information
technology alignment
 Using custom-designed robots and software to clean
sewers makes profits for LiquiForce Group in
Kingsville, Ontario. This is a clear match between
business purpose and technology creation. Source:
https://liquiforce.com/
 What other companies do you know that clearly match their
IT to their business purposes?

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 Study tip #2 – releasing
mental clutter
 Have you ever sat down to do something and found your
head swirling with all of the things that you need to do
today or the next week?
 Take a break, write them all down, i.e. “dump” the contents
of your mind.
 Look at the list and decide what needs to be done today.
 Now study using effective reading and writing techniques.
You will find that there is less clutter in your mind.

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 What key topics did we
cover today?

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