Exam 1 Review

September 11, 2013

Intro to IT Management

Technologies & business functions• Supply Chain Management (SCM) Systems

– Refer to a category of IS that support the activities related to business supply chain.

• Typical activities supported:– Procurement / purchase of supplies– Tracking orders from suppliers– Taking/Handling customers orders– Invoicing– Tracking customers orders

• SCM systems are typically part of Enterprise Resource Planning (ERP) systems

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Technologies & business functions

• Customer Relationship Management (CRM) Systems– Refer to a category of IS that support the activities related to managing and

nurturing a company’s interactions with customers, clients, and sales prospects.

– Help increase organizational effort by multiple departments like marketing, sales, support division, and customer service to improve customer relations

– Goals are to help : (1) find, attract, and win new clients – (2) nurture and maintain existing customers – (3) entice former customers back into the fold

• Typical activities supported:– Managing Sales teams

– Tracing potential customers

– Running MKT campaigns

– Analyzing sales

• SCM systems are typically part of ERP systems

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IT, IS, MISInformation technology (IT) refers to

a field concerned with the use of technology in managing and processing information

Computer-based tools used to capture, store, protect, process, retrieve, and transmit information

IT is a main part of Business IntelligenceBusiness Intelligence is a broad array of applications

and technologies used to gather, provide access to, and analyze data and information to support decision making

Information technology is an important enabler of business success and innovation

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IT, IS, MIS (cont.)

Management information systems (MIS) :Is a business function and academic discipline Deals with the application of information systems

and information technology to solve business problems

MIS is a business function, similar to Accounting, Finance, Operations, and Human Resources

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IT, IS, MIS (cont.)Information Systems – systems designed for

use by organizations in order to transform raw data into information that can help workers do their job and managers make decisions.

An information system has the following key components: People Technology Procedures

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TechnologyHardwareSoftware

DatabasesNetworks

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All IS are IPO systems

• The output of one system can be an input for another system

I P O

Rate = $10/hourHours = 45

Mrs. Johnson’s weekly salary is $450.

WS = numeric variableWS = 10 * 45

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Information system vs. Information Technology

Information System

Information Technologies

Hardware Software

Databases

Network

Information

IT and Competitive Advantages

GAINING COMPETITIVE ADVANTAGEOrganizations watch their competition through

environmental scanning e.i., the acquisition and analysis of events and trends in

the environment external to an organization

Socrates Technology-based Competitive Strategy system (1983-1990) – Used by the U.S government

SWOT analysis – Strengths, Weaknesses, Opportunities, Threats (Stanford Research Institute 1960-70)

Porter’s Five-Force Model Porter, M.E. (1979) How Competitive Forces Shape

Strategy, Harvard business Review, March/April 1979 Porter, Michael (1985) Competitive Advantage, Free

Press, New York.11

PORTER’S FIVE FORCES MODEL

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Threat of New Entrants Entry barriers

- Customers’ switching cost- Capital Requirements- Access to distribution channels- Economies of scale

Industry Growth rate

Buyers Power Buyers’ switching Cost Buyers concentration Threat of backward integration Threat of forward integration Buyers volume

Suppliers Power Suppliers concentration Cost of switching supplier Substitute inputs Threat of forward integration

Threat of Substitutes Relative quantity of substitutes Relative price of substitutes Buyers’ switching cost

Rivalry # of competitors &

industry concentration Buyers volume Market growth Exit barriers

Buyers’ switching cost

Rivalry Among Existing competitorsIndustry Concentration

– % of market held by largest firms– Bureau of Census’ Concentration Ratios (CR)– CRs measure market share held by the 4, 8, 25, 50 largest firms in

sector– High CR Few competitors, less attractive industry, less rivalry(?)

Market growth– Slow market growth Increased rivalry

Exit barriers– High cost abandoning a product Firm must compete

Switching cost– Low buyer switching cost More intense rivalry

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Rivalry # of competitors & Industry concentration Buyers volume Market growth Exit barriers Buyers’ switching cost

Buyer PowerAssessed by analyzing the ability of buyers to directly

impact the price they are willing to pay for an item.

High Buyers’ switching cost Less Buyer power

Buyers concentration Few buyers with large market share More buyer power

Buyer’s Threat of backward integration Example: Large automakers vs. Tire manufacturers

Seller’s Threat of forward integration Example: Movie producers vs. Movie theaters

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Buyers Power Buyers’ switching Cost Buyers concentration Threat of backward integration Threat of forward integration Buyers volume

Supplier Power

Assessed by the suppliers’ ability to directly impact the price they are charging for supplies

High Supplier concentration More supplier power Example: Drug industry vs. Hospitals

High cost to switch supplier More supplier power

Presence of substitute inputs Less supplier power

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Suppliers Power Suppliers concentration Cost of switching supplier Substitute inputs Threat of forward integration

Threat of Substitutes

More substitute products or services More demand elasticity More competition

Affordable substitutes More switching

Low switching cost More intense competition

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Threat of Substitutes Relative quantity of substitutes Relative price of substitutes Buyers’ switching cost

Threat of New Entrants

High when it is easy for new competitors to enter a market

Low when entry barriers are highEntry barriers are high with

significant capital requirements high switching cost Hard to access distribution channels

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Treat of New Entrants Entry barriers

- Customers’ switching cost- Capital Requirements- Access to distribution channels- Economies of scale

Industry Growth rate

Generic Competitive StrategiesThree basic strategies for pursuing

competitive advantage Cost leadership

– Exploiting all sources of cost advantage while complying with industry norms

Differentiation– Offering unique and distinctive product/service

through innovation

Focus– Targeting segments (niche markets) and

exploiting the under-performance of broad competitors in the segments through cost leadership or differentiation 18

StrategyPlanned set of actions to be taken in

order to achieve a strategic goalA good strategy is characterized by

– Uniqueness– Sustainability

All strategies are relative to the competitors

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Diffusion of Innovation Life Cycle1) New IT

2) Growth

3) Maturity

4) Decline

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IT Infrastructure: Hardware

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The Core Computer Components Four subsystems in a computer system:

1. Input subsystem 3. Output subsystem

2. Processing subsystem 4. I/O (Storage) subsystem

InputProcess

Output

Input/Output (storage)

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I/O or Secondary Storage devices Secondary compared to the main primary memory called RAM Nonvolatile1 storage of digital data - Could be Magnetic, Optical, Magnetic storage (i.e. data stored on magnetically coated surface)

Examples: Magnetic tape, Hard disk, floppy disk Sequential access (e.g. tape) or direct access (e.g. HDD) HDDs are electromechanical devices with spinning disks and movable disks

– Use standards/interfaces like• Parallel ATA (PATA) or IDE (Integrated Drive Electronics)• Serial ATA (SATA)2

• SCSI (Small Computer System Interface)– SCSI provides disk fault-tolerance by using RAID – Redundant Array of Inexpensive Disks;

that is multiple disks set together to provide continued service in case one disk fails.– Disk speed:

• Transfer rate in MBps (Megabytes per second) or GBps• Average Read Time (in milliseconds or ms)• Platter rotation speed in RPM (5400/7200/10,000/15,000)

State Solid Disks (SSD) use microchips which retain data in non-volatile memory chips No moving parts | Have lower access time and latency Can replace your existing HDD if same interface

1. Means that the stored data wouldn’t disappear (or be deleted) in case of power shortage2. In SATA and PATA, ATA stands for Advanced Technology Attachment

256GB Crucial m4 2.5-inch SATA 6GB/s

RPM = Revolution Per Minute = # complete turns in 1 minute

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Processing subsystemMotherboard: chipset that all components connect to

CPU Socket types Pin Grid Array (PGA) (CPU must have

pins to fit in the socket holes) Land Grid Array (LGA) with locks Zero Insertion Force (ZIP)

Note: CPU socket must of the same type as motherboard’s

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Processing subsystem (cont.)Two major components in processing subsys.

– CPU (Central Processing Unit) or Processor(s)– Primary Storage:

• Random Access Memory (RAM)• holds running programs and the data they use

• Read Only Memory (ROM)• contains critical programs such as those that boot

Busses that transfer data

CPU

Primary Storage

Othercomponents

on the Motherboard

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Central Processing Unit

Clock: generate time that synchronize other components

ICU: Fetches instructions from RAM

ALU: Execute instructions (arithmetic & logic operations)

Registers: Store control information, data, intermediate results

Processor

Clock

Instruction Control Unit

Arithmetic Logic Unit

Registers

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Front Side Bus and Northbridge

CPU

Northbridge(Memory Controller)

Southbridge(Memory Controller)

RAM

AGP Video Card

PCI bus

Real Time Clock

USB

Other devices

Front Side Bus

FSB: bi-directional data bus carrying data b/w CPU and Northbridge FSB speed is measured in Hz; e.g. 800 MHz FSB (or in GB Transfer/s in newer Intel – 4.8 GT/s = 4.8x2 = 9.6 GB/s )

Quad Core Intel® Xeon® W3530 2.80GHz, 8M L3, 4.8GT/s

Cache MemoryClock

CPU speed/Clock rate

Cache Memory

Quick Path Interconnect QPI/FSB speed

AMD Phenom II X4 955 3.20GHz, Socket AM3, 6MB Cache, 2GHz (4GT/s) FSB

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Grid ComputingConnecting geographically remote computers to

create a “virtual supercomputer”Takes advantage of fact that most computers use

about 25% of their CPU in average.

Advantages: Cost savings Speed Reliability (because if one fails,

the still system functions)