chapter 6 : Valuing Organizational Information

Organizational Information

Information is everywhere in an organization

Employees must be able to obtain and analyze the many different levels, formats, and granularities of organizational information to make decisions

Successfully collecting, compiling, sorting, and analyzing information can provide tremendous insight into how an organization is performing

Levels, formats, and granularities of organizational information


Information Granularities

Refers to the extent of detail within the information (fine and detailed or “coarse” and abstract information)



The Value of Transactional and Analytical Information

Transactional information – encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks

Analytical information – encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks



Transactional information
E.g. withdrawing cash from an ATM, making an airline reservation, purchasing stocks
Compile a list of additional transactional information examples
These could include daily sales, hourly employee payroll, product orders, shipping an order

Analytical Information
also includes external organizational information such as market, industry, and economic conditions
Analytical information is used to make ad-hoc decision.
E.g. trends, sales, product statistics, and future growth projections
Compile a list of additional analytical information examples
These could include cost/benefit analysis, sales forecast, market trends, industry trends, and regulations

The Value of Timely Information

Timeliness is an aspect of information that depends on the situation
Real-time information – immediate, up-to-date information
Real-time system – provides real-time information in response to query requests
Some decisions require weekly information while others require daily information
Organizations such as 911 centers, stock traders, and banks require up-to-the second information

The Value of Quality Information

Business decisions are only as good as the quality of the information used to make the decisions

You never want to find yourself using technology to help you make a bad decision faster

Characteristics of High Quality Information





The Value of Quality Information

Low quality information example



Understanding the Costs of
Poor Information

The four primary sources of low quality information include:
Online customers intentionally enter inaccurate information to protect their privacy
Information from different systems have different entry standards and formats
Call center operators enter abbreviated or erroneous information by accident or to save time
Third party and external information contains inconsistencies, inaccuracies, and errors

Potential business effects resulting from low quality information include:
Inability to accurately track customers
Difficulty identifying valuable customers
Inability to identify selling opportunities
Marketing to nonexistent customers
Difficulty tracking revenue due to inaccurate invoices
Inability to build strong customer relationships

Understanding the Benefits of
Good Information

High quality information can significantly improve the chances of making a good decision

Good decisions can directly impact an organization's bottom line

Chapter 5 : Training - Ability to manage, train, and supervise employees.

~Organizational Structures~

Organizational employees must cooperate to develop strategic initiatives that create competitive advantages.
Ethics and security are two fundamental building blocks that organizations must base their businesses upon.

~IT Roles and Responsibilities~

Information technology is a relatively new functional area, having only been around formally for around 40 years

Recent IT-related strategic positions:
Chief Information Officer (CIO)
Chief Technology Officer (CTO)
Chief Security Officer (CSO)
Chief Privacy Officer (CPO)
Chief Knowledge Office (CKO)

Chief Information Officer (CIO) – oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives

Broad CIO functions include:
Manager – ensuring the delivery of all IT projects, on time and within budget
Leader – ensuring the strategic vision of IT is in line with the strategic vision of the organization
Communicator – building and maintaining strong executive relationships

Average CIO compensation by industry


What concerns CIOs the most


Chief Technology Officer (CTO) – responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT

Chief Security Officer (CSO) – responsible for ensuring the security of IT systems

Chief Privacy Officer (CPO) – responsible for ensuring the ethical and legal use of information

Chief Knowledge Office (CKO) - responsible for collecting, maintaining, and distributing the organization’s knowledge

Skills pivotal for success in executive IT roles


~The Gap Between Business Personnel and IT Personnel~

Business personnel possess expertise in functional areas such as marketing, accounting, and sales
IT personnel have the technological expertise. This typically causes a communications gap between the business personnel and IT personnel.

~Improving Communications~

Business personnel must seek to increase their understanding of IT.IT personnel must seek to increase their understanding of the business.It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel.

~Organizational Fundamentals – Ethics and Security~

Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful.

In recent years, such events as the Enron and Martha Stewart, along with 9/11 have shed new light on the meaning of ethics and security.

~Ethics~

Ethics – the principles and standards that guide our behavior toward other people

Privacy is a major ethical issue
Privacy – the right to be left alone when you want to be, to have control over your own personal possessions, and not to be observed without your consent

Issues affected by technology advances
Intellectual property
Copyright
Fair use doctrine
Pirated software
Counterfeit software

One of the main ingredients in trust is privacy
Primary reasons privacy issues lost trust for e-business


~Security~

Organizational information is intellectual capital - it must be protected

Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization

E-business automatically creates tremendous information security risks for organizations

past year question : October 2009 (part D)

QUESTION 1

The five competitive advantages used by AirAsia are it operates scheduled domestic and international flights and it using low fare, no frills airline. AirAsia pioneered low cost travelling in Asia.It is also the first airline in the
region to implement fully ticketless travel and unassigned seats.Next is AirAsia operates with the world's lowest unit cost and a passenger break-even load factor.

It has hedged 100% of its fuel requirements for the next three years, achieves an aircraft turnaround time of 25 minutes,has a crew productivity level that is triple that of Malaysia Airlines and achieves an average
aircraft utilisation rate of 13 hours a day.

QUESTION 2

The Porter's generic strategies were applied by AirAsia are cost leadership,differentiation and focused strategy.

For cost leadership,AirAsia is having when it use the lowest price in the target market segment.As example,AirAsia operates scheduled domestic and international flights and is Asia's largest low fare,no frills airline. AirAsia pioneered low cost travelling in Asia.

Next is differentiation.A differentiation strategy is appropriate where the target customer segment is not price-sensitive, the market is competitive or saturated, customers have very specific needs which are possibly under-served, and the firm has unique resources and capabilities which enable it to satisfy these needs in ways that are difficult to copy.As example,AirAsia operates with the world's lowest unit cost of US$0.023/ASK(available seat per
kilometer) and a passenger break-even load factor of 52%. It has hedged 100% of its fuel
requirements for the next three years, achieves an aircraft turnaround time of 25 minutes,
has a crew productivity level that is triple that of Malaysia Airlines and achieves an average
aircraft utilisation rate of 13 hours a day.

And the last one is focused strategy.This dimension is not a separate strategy per se, but describes the scope over which the company should compete based on cost leadership or differentiation. The firm can choose to compete in the mass market (like Wal-Mart) with a broad scope, or in a defined, focused market segment with a narrow scope. In either case, the basis of competition will still be either cost leadership or differentiation.As example,AirAsia will strengthen and enhance its route network by connecting all the existing cities in the region and expanding further into Indochina, Indonesia, Southern China (Kun Ming, Xiamen, Shenzen) and India. The airline will focus on developing its hubs in Bangkok
and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia.

QUESTION 3

Based on Porter's Five Force Model,AirAsia's buyer power is AirAsia has many competitors like Tiger Airways, Jetstar Asia, Nok Air, Lion Air and Cebu Pacific which make the buyer power will be high when buyers have many choices of whom to buy.That's why AirAsia try to be the first airline in the region to implement fully ticketless travel and unassigned seats to reduce the buyer power.

Next is supplier power,will be high when buyer have fewer choices to buy from and it will be low when their choices are many.Best practices of IT to create competitive advantage.AirAsia try to compete with the others by having unique resources and capabilities which enable it to satisfy these needs in ways that are difficult to copy.
AirAsia operates with the world's lowest unit cost,has a crew productivity level that is triple that of Malaysia Airlines and achieves an average aircraft utilisation rate of 13 hours a day.