BBDM 3294 SBL L6

Trend in Information Technology

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 BBDM 3294 SBL L6 STUDY
GUIDE
E) Technology and Data Analytics

E1 Cloud and mobile technology

a) Discuss from a strategic perspective the need to explore opportunities for
adopting new technologies such as cloud and mobile technology within an
organisation
b) Discuss key benefits and risks of cloud and mobile computing
c) Assess and advise on using the cloud as an alternative to owned hardware
and software technology to support organisation information system needs.
E2 Big data and data analytics
d) Discuss how IT and data analytics can effectively be used to inform and
implement organisation strategy
e) Describe big data and discuss the opportunities and threats big data
presents to organizations
f) Identify and analyse relevant data for decisions about new product
developments, marketing and pricing

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 Cloud Computing
• Cloud Computing is a general term used to describe a new
class of network based computing that takes place over the
Internet,
– basically a step on from Utility Computing
– a collection/group of integrated and networked hardware,
software and Internet infrastructure (called a platform).
– Using the Internet for communication and transport
provides hardware, software and networking services to
clients
• These platforms hide the complexity and details of the
underlying infrastructure from users and applications by
providing very simple graphical interface or API (Applications
Programming Interface).
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 Cloud Computing (2)
• In addition, the platform provides on demand
services, that are always on, anywhere,
anytime and any place.
• Pay for use and as needed, elastic
– scale up and down in capacity and functionalities
• The hardware and software services are
available to
– general public, enterprises, corporations and
businesses markets

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 Cloud computing (3)
• Cloud hosting services offer remote storage and data management
solutions. Example, Microsoft OneDrive, Dropbox and Google Drive allow
users to store their files online and access them from any device connected
to the Internet
• Software as a service (SaaS) provides access to software application hosted
on a central server. Users pay a monthly charge to use the software (on
subscription basis) rather than an upfront license fee for “owning” the
software on the users’ own devices
• Infrastructure as a service (IaaS) provides a complete architecture service
for a customer’s systems which are accessed over the Internet. Example,
Amazon Web Services provide the technology (website , storage) to other
businesses that wish to start e-commerce.
• Platform as a service (PaaS) offers a platform for programmes to develop
applications very quickly, without the complexity of building the
infrastructure typically associated with developing and launching new apps.

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• https://
www.youtube.com/watch?v=uYGQcmZUTaw
• Cloud Computing: What is Cloud Computing?

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 Cloud computing (4) -
Technology and Strategic Opportunities

New technology such as cloud and mobile

technology are a disruptive force that can change
entire industries: IT can assist strategies such as:
• Cost leadership
• Differentiation
• Develop new ways of doing business
• Expand production and services
• Forge strategic alliance

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 Cloud computing (5) - Evaluation

Benefits Risks
• Flexibility and scalability • Data security
• Ease of setup
•
• Reliance
Reliability
• No regular maintenance as • System outages
cloud provider will take care (malfunction)
of this
• Can be used to back up data • Intellectual property
– extra layer of security and
no need backed-up data

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 Cloud computing (6) – Cloud alternative
Infrastructure
• Machines including Internet servers and clients (devices
that connect to the server such as PCs and mobile devices)
• Software
• Network and communications
• Physical facilities such as server rooms
• Data and software is stored on hardware owned by the
cloud provider
• The cloud provider also owns the software licences
• Savings on physical facilities (eg no need for air-
conditioned server rooms)

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 Cloud computing (7) – factors to consider
• Cost (cloud cheaper because service providers benefit from
large economies of scale)
• Cash flow (hardware and software require upfront investment.
Cloud services are revenue expenditure rather than capital
expenditure)
• Change needs (if biz and processes change fast, cloud
flexibility could cater for this)
• Security (cloud providers usually have much better security
procedure in place)
• Selection of suppliers (Established suppliers, no financial
problem, quality of service)
• Speed (transactions can be processed quicker)

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• https://www.youtube.com/watch?v=36zducU
X16w
• Cloud Computing Services Models - IaaS PaaS
SaaS Explained

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 Information and Data Analysis:
Data to support strategy
Information for developing strategy:
• macro external environment
• Competitors
• Regulations
• Historic financial information used to plan future activities
• Financial and non-financial performance measures used
to assess the performance of different divisions and made
decisions about them
• Sales analyses used to identify market segment on which
to focus.

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 Mobile Technology *
• It refers to technology that is portable
• Devices include: laptops, tablet computers, smartphones, GPS
technologies
• Communicative features include: Wi-Fi connectivity, Bluetooth and 4G
technologies
• Benefits and risks of mobile technology (refer to BPP workbook page
269)
• ‘Internet of things’ – relates to sensors embedded in physical objects
which are capable of creating, communicating and sharing data across
wired and wireless networks that function in a similar way to the Internet.

* Refer to “Internet Research” (Emerald journal) article by Carter and Yeo

(2016).

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• https://
www.youtube.com/watch?v=uEsKZGOxNKw
• Internet of Things explained simply

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 Disruptive Technology
• Technology that is used to fundamentally change and ‘disrupt’ the
existing business model in an industry. Example: Uber, Grab
• The two largest growth sectors for disruptive technology are in health
services and financial services. Financial technology (Fintech) is
completely disrupting the traditional banking sector – a highly technical
and highly regulated industry.
• Fintech businesses exist which can provide investment advice, offer
banking services, transfer money internationally, provide mortgages and
loans, exchange currency etc. These are typically big earners for
traditional financial institutions.
• Goldman Sachs estimates that upstarts could steal up to $4.7 trillion in
annual revenue, and $470 billion in profit, from established financial
services companies

• Login:https
://richtopia.com/emerging-technologies/11-disruptive-technology-exa
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mples
• https://
www.youtube.com/watch?v=mbPiAzzGap0
• The Explainer: Disruptive Innovation

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 Big Data
• Big data is the term used to describe the growth
of structured and unstructured data. Some
experts argue that big data may be as important
to business as the internet.
• Laney suggests that big data can be defined by
considering the three V's:
• Volume
• Velocity
• Variety
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 Big Data-Volume
• Volume – The vast volume of data generated is a key feature
of big data. The main benefit of big data analytics comes from
the ability to process very large amounts of information.
• The bigger the data, the more potential insights it can give in
terms of identifying trends and patterns, and in terms of
getting a deeper understanding of customer requirements.
• For example, as more customers use the internet, smart
phones and social media in their everyday lives, these can now
also be sources of data for organizations alongside any data
they may capture internally – for example, from customer
loyalty cards or the transactions recorded in EPOS tills.

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 Big Data- Velocity
• Velocity – refers to the speed at which 'real time' data is being streamed
into the organisation, and with which it is processed within the
organisation.
• Online retailers are able to compile records of each click and interaction
a customer makes while visiting a website, rather than simply recording
the final sale at the end of a customer transaction. Moreover, retailers
who are able to utilise information about customer clicks and interactions
quickly – for example, by recommending additional purchases – can use
this speed to generate competitive advantage.
• It is important to recognise that the competitive advantage an
organisation can gain from 'velocity' relates to the speed with which data
is processed and the velocity of a system's outputs, as well as the speed
with which data initially flows into it.

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 Big Data - Variety
• Variety (or variability) – A common theme in relation to big data is
the diversity of source data, with a lot of the data being
unstructured (ie not in a database).
• For example, keywords from consversations people have on Facebook
or Twitter, and content they share through media files (tagged
photographs, or online video postings) could be sources of
unstructured data.
• This variety presents a challenge to organisations as they need to find
ways of capturing, storing and processing the data. If data is too big,
moves too fast, or doesn't fit with the structures of an organisation's
existing information systems, then in order to gain value from it, an
organisation needs to find an alternative way to process that data.

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 Big Data – Data analytics
Big data analytics
• Big data analytics refers to the ability to analyse and reveal insights in data
which had previously been too difficult or costly to analyse, due to the
volume and variability of the data involved.

• The aim of big data analytics is to extract insights from unstructured data or
from large volumes of data.

• Being able to extract insights from the data available is crucial for
organisations to benefit from the availability of big data – for example, to
help them understand the complexity of the environment in which they are
operating, and to respond swiftly to the opportunities and threats presented
by it; or to develop new insights and understanding into what customers
need or want.

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*See Illustration 1 insurance companies, BPP workbook, page 272
 Importance of Big Data
The strategic importance of big data
• Historically, only the largest corporations have had sufficient
resources to be able to process big data. Now, however, it is
becoming possible for all organisations to access and process
the volumes of big data potentially available to them, due to
cost-effective approaches such as cloud-based architectures
and open source software.

• In a June 2011 report, 'Big data: The next frontier for

innovation, competition and productivity' issued by the
McKinsey Global Institute, it was suggested that, 'big data
has now reached every sector in the global economy. Like
other essential factors of production such as [physical]
assets and human capital, much of modern economic
activity simply couldn't take place without it'.
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 Importance of Big Data
• Big data would likely to become important strategic resources
for organisations.
• Making effective use of big data could confer competitive
advantage on an organisation.
• Competitors who fail to develop their capabilities to use big
data and information as strategic resources could be left behind
by those who do.
• Big data can certainly create value for organisations through its
ability to drive innovation.
• It can also help organizations to gain greater and faster insight
into their customers.

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 Big Data
• McKinsey's 2011 report, 'Big data: The next
frontier for innovation, competition and
productivity' suggests five ways in which big
data can create value for organisations:
• Creating transparency
• Performance improvement
• Market segmentation and customisation
• Decision making
• New products and services
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The value of big data – Creating transparency
Creating transparency

• Making data more easily accessible to relevant stakeholders, in a timely

manner, can create value in its own right – for example, by revealing insights
from data which had previously been too costly or complex to process.

• Furthermore, improved transparency in data should help organisations

during the process of strategic implementation and the achievement of
corporate objectives.

• For example, consider a manufacturing company which is operating in a

highly competitive market where innovation and speed in product
development are considered critical to success. The company has a
corporate objective 'to deliver products the customer demands at the
time they are required', and as a result, the company is pursuing a
strategy of ongoing product development.
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 The value of big data – Performance improvement
• The increasing amount of transactional data they store in digital
form provides organisations with an increasing amount of accurate
and detailed performance data – in real or almost real time. By
analysing the variability in performance – and the causes of that
variability – organisations then manage performance to higher
levels.

• For example, improving profitability is often a key financial objective

for most commercial organizations. The use of big data analytics can
help organisations monitor strategies aimed at improving
profitability by allowing management to identify why certain
product lines sell more slowly than expected.
• Operational managers can either take action to improve sales of
those lines, or else divert resources into more popular product lines.

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 The value of big data – Market segmentation and
customisation
• The volume and variety within big data enables organisations to create
highly specific segments within its markets and to tailor its products and
services precisely to meet the needs of customers in those segments.

• The idea of market segmentation is already a key concept within

strategic marketing, However, big data could facilitate the real-time
micro-segmentation of customers for targeted promotions and
advertising.

• McKinsey also highlights that big data could also be valuable in

segmenting public sector markets. Traditionally, public sector markets
have not segmented citizens (service users) in the same way that private
sector companies have segmented customers and potential customers.
However, big data could enable public sector organisations to pursue
strategies which build upon the effective tailoring of products and
services.
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 The value of big data –Decision making
• The sophisticated analytics tools which are used to uncover
previously hidden patterns and trends

• For example, trends identified in in-store and online sales for a

retailer – in real time – could be used to determine inventory and
pricing strategies. In some cases, decisions will be made by managers
in store (based on analytics from the datasets) but in other cases, the
decisions themselves could even become automated.

• For example, a retailer could use algorithms to optimise decisions

about inventory levels and pricing in response to current and
predicted sales data.

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 The value of big data –New products and services
• Companies can use data about social trends and consumer behaviours to create
new products and services to meet customer's needs, or to enhance existing
products and services so that they meet customers' needs more exactly.
• For example, the emergence of real-time location data, from traffic light
sensors and satellite navigation systems, could enable insurance companies to
refine the pricing of their insurance policies according to where, and how, people
drive their cars.

• Big data could also provide new business opportunities in its own right. For
example, Facebook's advertising business incorporates analysis of a user's
actions as well as their friends' actions.

• Amazon could be seen as an example of a company which has built its business
strategy using data and analytics; for example, through the way it makes
recommendations for customers linked to the purchases made by other
customers with similar interests.

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 Short case scenario: MC
• MC is a mobile (cellular) phone network provider, offering
mobile phones and services on a range of different tariffs to
customers. The company enjoyed financial success until
three years ago but increasing competitive pressure has led to
a recent decline in sales. There has also been an increase in
level of complaints regarding customer service provided and
the company’s churn rate (the number of customers leaving
the company within a given time frame) is at an all time high.

• Discuss how an understanding of big data can drive the

strategic direction of MC

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 Data Exploration
• It uses transactional data and attempts to predict
future behaviour by indentifying attributes that
managers may not previously have considered
• Cluster analysis is a technique that may be used
to identify:
• -customer (market) segments that marketing
departments may not even be aware of
• - behavours common to groups of people with
similar attributes.

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 Social analytics
• This is non-transactional data but uses social media sites (eg FB and Twitter).
Organizations may use social media to advertise new services and products.
Social analytics measures three aspects of a business’s presence on social media:
• (1) Awareness – of social media content (eg the number of times a video posted
on FB is viewed)
• (2) Engagement – activity initiated by the users (eg the number of visits to the
page)
• (3) Reach or word of mouth – the extent to which the content is sent by users to
other users (eg the number of times an item is shared on FB)
• Recent developments in social analytics allow organizations to identify high
“Klout” individuals (ie people who have a large following on a social media) and
whose messages are shared with others. These individuals are targeted as
“influencers” to help market a brand
• The disadvantage of social analytics is that measuring awareness and
engagement does not measure the effect that these have on revenue and profits

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 Illustration: Klout
• Virgin America offered 120 “influencers” free
flights on a new route to Toronto in the hope
that they would comment on their flight
experience on social media sites (they were
not obliged to).
• The campaign resulted in high brand
awareness of the new route

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 Decision Science
• This involves the analysis of non-transactional data for decision-
making. Example, releasing ideas about new products and
discovering how successful they might be by analysing discussions
about them on social media
Decision science can be supported by several tools
• -crowdsourcing – obtain ideas, services or content by collecting
contributions from a large community or specific group of people
(usually online)
• -Textual analysis – a data-gathering process that examines and
interprets the characteristics of narrative or other visual messages
• -Sentiment analysis – a type of textual analysis that aims to
analyse the mood of a community

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 Criticisms/Risks of big data
• An article in The Financial Times entitled 'Big data: are we making a big mistake', raised a number of
criticisms over the ability of big data to deliver the anticipated benefits.

• (a) Big data is simply a buzzword, a vague term that has turned into an obsession in large
organisations and the media. Very few examples exist where analysing vast amounts of data have
resulted in significant new discoveries.

• (b) There is a focus on finding correlations between data sets and less of an emphasis on causation.
Critics suggest that it is easier to identify correlations between two variables than to determine what
is actually causing the correlation.

• (c) A failure to understand the factors giving rise to a correlation mean that analysts have no idea
what factors may cause the correlation to break down.

• (d) Analysing a data set, regardless of its size is not necessarily representative of the entire data
population as a whole. The Financial Times suggests that, if an organisation wishing to understand
the public mood solely used the social networking site Twitter to analyse all of the tweets made, this
would not represent the views of all members of society. Research indicates that Twitter users tend
to be young, urban individuals.

• (e) The amount of data held about individuals raised concerns about privacy. Although many
countries are legislating on this, much personal data is gathered without permission or notification.
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• (f) Data security is a greater concern when large amount of personal information are being stored.
 Illustration: Prediction Errors
• In 2009, during a flu epidemic in the US, Google was
able to track the spread of flu across the US a week
faster than the government’s Centers for Disease
Control and Prevention, by analysing searches relating
to “flu remedies” in its search engine.
• In 2013, the same analysis overestimated the incidence
of flu by 100% due to people without flu searching for
flu remedies. Thus the original correlation between
people searching for flu remedies and people actually
having flu had changed. One explanation is that the
auto-complete function in Google search may have led
to people accidentally searching for flu remedies
without intending to.
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 Data for Product Development
• Conduct market research –it is vital for every
organisation to find out:
• -environmental scanning
• -customers
• -products
• -marketing
• - finance

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Data for Product Development (2)- Data source

Primary research Secondary /Desk Research

• Interviews
• Questionnaires
• Observation
• Simulation or experimental
method eg testing
• Company itself
• Government information
• Press
• Trade associations
• Specialist publications
• internet

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 Recap!
• Professional Skills

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 40

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 (1) Professional Skills - Communication

• A strategic leader must be able to communicate to a range

of audiences (e.g. a colleague, an external stakeholder or
a client) using a tone and style of communication tailored
to that audience, ensuring that the leader can effectively
inform, persuade or clarify. The leader should also be
sensitive to the needs of the intended audience.

• (1) Inform—to convey knowledge of a fact or

circumstance.
• Inform Exam context: Inform concisely, objectively and
unambiguously, while being sensitive to cultural
differences, using appropriate media and technology.
• The candidate may be required to convey relevant
information, and to use an appropriate tone (e.g. for an
organisation's board of directors).
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 (1) Professional Skills - Communication

• (2) Persuade
• To cause somebody to do or believe something through sound
reasoning
• Exam context: The candidate may be required to persuade using
compelling and logical arguments demonstrating the ability to
counterargue when appropriate (e.g. persuade the chairman of
the board to appoint more non-executive directors).
• (3)Clarify
• To make a statement or situation less confusing and more
comprehensive
• Exam context: The candidate may be asked to clarify and simplify
complex issues to convey relevant information in a way that
adopts an appropriate tone and is easily understood by the
intended audience (e.g. clarifying the agency relationships
affecting the organisation).
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 (2) Professional Skill – Commercial Acumen
• A strategic leader must show awareness of
wider business and external factors affecting an
organisation and use commercially sound
judgement and insight to resolve issues.
(1)Demonstrate Awareness
To clearly show knowledge or perception of a
situation or fact
• Exam context: The candidate may be required
to demonstrate awareness of organisational or
wider external factors affecting an organisation
(e.g. the key risks affecting it).
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 (2) Professional Skill – Commercial Acumen
(2) Use Judgement
• To demonstrate a deep and accurate understanding of a situation.
• Exam context: To identify key issues when determining how to
address or resolve problems and in proposing and recommending
the solutions to be implemented (e.g. the candidate should use
judgement when evaluating the relative merits of applicants for
the position of chief executive).

(3) Show insight

• To demonstrate a deep and accurate understanding of a situation.
• Exam context: The candidate may be required to show insight and
perception to identify problems and demonstrate acumen in
suggesting appropriate solutions (e.g. to resolve).

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 (3) Professional Skill : ANALYSIS

A strategic leader must be able to select relevant information from a variety of sources,
deeply analyse that information and then reflect on what is discerned.
• (1) Investigate
• To carry out a systematic inquiry to discover the facts of a situation.
• Investigate Exam context: The candidate may be required to review information from a
wide range of sources and use a variety of analytical techniques to establish the causes
of problems, or to identify opportunities. The examiner may also award professional
skills marks for using the most appropriate framework for analysing the situation.
• (2) Scrutinise
• To inspect closely, thoroughly and critically.
• Exam context: The candidate may be required to look at something in detail and judge it
(e.g. to scrutinise the performance of an organisation's senior management).
• (3) Consider
• To reflect deeply before coming to a conclusion, making a decision or giving a
recommendation
• Exam context: The candidate may be required to consider information, evidence,
analysis and findings carefully, reflecting on their implications for the organisation (e.g.
to consider the outlook for an organisation).

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 (4) Professional Skill - Scepticism
• Scepticism
• An attitude that includes a questioning mind, being alert to
conditions which may indicate possible misstatement due to
error or fraud, and a critical assessment of evidence.
• The concept of professional scepticism is assumed
knowledge from earlier studies of Audit and Assurance:
• This professional skill is closely inter-related to the
fundamental principle of objectivity, which applies to all
professional accountants. A strategic leader must exercise a
healthy degree of scepticism and not just accept
information at its face value. A leader should probe issues,
question assumptions and challenge the status quo. He
should express any scepticism in a courteous manner,
explaining any concerns clearly.
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 Professional Skill - Scepticism
• (1) Probe - to search into or examine something thoroughly
• Probe Exam context: The candidate may be required to probe
deeply into the underlying reasons for issues and problems, beyond
what is immediately apparent

• (2) Question - to express doubt about something or somebody.

• Exam context: The candidate may be required to question facts,
opinions and assertions, by seeking justifications and obtaining
sufficient evidence for their support and acceptance (e.g. to question
assertions made by the chief executive during a company's board
meeting).

• (3) Challenge - To dispute the truth or validity of something

• Exam context: The candidate may be required to challenge
information presented or decisions made, where this is clearly
justified, in a professional and courteous manner.
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 (5) Professional Skill - Evaluation

• Evaluation
• A strategic leader needs to make valid assessments of
available information and to forecast future trends.
Evaluation also involves being able to appraise
proposals, leading to appropriate conclusions and
recommendations.
• (1)Assess-to judge the amount, value, quality or
importance of something.
• Assess Exam context: The candidate may be required
to assess organisational issues or the implications of
decisions made (e.g. assess the role and value of non-
executive directors). An assessment often requires a
discussion of the advantages and disadvantages of
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 Professional Skill - Evaluation

• (2) Estimate
• To roughly calculate the amount or value of something
• Exam context: The candidate may be required to estimate
trends or make reasoned forecasts of the effects of external
and internal factors on the organisation or about the
outcomes of decisions available to the organisation (e.g. to
estimate the effect of fraud).
• (3) Appraise
• To place a monetary value on something
• Exam context: The candidate may have to consider facts,
opinions and findings objectively with a view to balancing
the costs, risks, benefits and opportunities before making or
recommending solutions or decisions (e.g. to appraise a
project's benefits, costs and risks).
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• END OF LECTURE 6

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