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)
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