Chapter 8 : Accessing Organizational Information- Data Warehouse

DATA WAREHOUSE FUNDAMENTALS

- A data warehouse is a logical collection of information-gathered from many different operational database-that supports business analysis activities and decision-making tasks.

- The primary purpose of a data warehouse is to aggregate information throughout an organization into a single repository in such a way that employees can make decisions and undertake business analysis activities.

- The data warehouse then send subsets of the information to data mart.

- A data mart contains a subsets of data warehouse information

*Figure above show compiles information from internal database or transactional database and external database through extraction, transformation and loading (ETL) which a process that extracts information from internal and external database, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.

MULTIDIMENSIONAL ANALYSIS AND DATA MINING

- A cube is the common term for the representation of multidimensional information.

- Data Mining is the process of analyzing data to extract information not to offered by the raw data alone. It is known as 'knowledge discovery'

- To perform data mining user needs data mining tools 

- Data Mining Tools use a variety of techniques to find patterns and relationships in large volumes in information and infer rules from them that predict future behaviour and guide decision making. 

INFORMATION CLEANSING OR SCRUBBING

- Information cleansing or scrubbing is a process that weeds out and fixes or discards inconsistent, incorrect or incomplete information.

- It occur during ETL process and second on the information once if is in the data warehouse

BUSINESS INTELLIGENCE

- Business Intelligence refers to application and technologies that are use to gather, provide access to, and analyze data and information to support decision-making efforts. 

Enabling Business Intelligence

- Technology

- People

- Culture

Chapter 7: Storing Organizational Information-Databases

RELATIONAL DATABASE FUNDAMENTALS

 - A database maintains information about various types of objects (inventory), events (transaction), people (employees) and place (warehouses).

- Hierarchical database model is information is organized into tree-like structure that allows repeating information using parent/child relationships in such a way that it cannot have too many relationships.

- The network database model is a flexible way of representing objects and their relationships.

-The relational database model is a type of database that stores information in the form of logically related two-dimensional tables.

ENTITIES AND ATTRIBUTES

- A entity in the relational database model is a person, place, thing, transaction or event about which information is stored.

-Attributes called fields or columns are characteristics or properties of an entity class

KEYS AND RELATIONSHIPS

-A primary key is a field (group/fields) that uniquely identifies a given entity in a table.

-A foreign key is a primary key of one table that appears as an attributes in another table and acts to provide a logical relationships between the two tables.

RELATIONAL DATABASE ADVANTAGES

* Increased Flexibility

* Increased Scalability and Performance

* Reduced Information Redundancy

* Increased Information Integrity (Quality)

* Increased Information Security

Increased Flexibility

- Database provide flexibility in allowing each user to access the information in whatever way best suits his or her needs.

- The distinction between logical and physical views is important in understanding flexible database user views.

-The physical views of information deals with the physical storage of information on a storage device such as a hard disk.

- The logical views of information focuses on how users logically access information to meet their particular business. 

 Increased Scalability and Performance

- Only a database could 'scale' to handle the massive volumes of information and the large numbers of users required for the successful launch of the Ellis Island website.

- Scalability refers to how well a system can adapt to increased demand.

- Performance measures how quickly a system performs a certain process or transaction.

Reduced Information Redundancy

 - Redundancy is the duplication of information, or storing the same information in multiple places.

- Redundant information occurs because organizations frequently capture and store the same information in multiple locations.

- The primary problem with redundant information is that it is often inconsistent which make it difficult to determine which values are the most current or most accurate.

Increased Information Integrity (Quality)

- Information integrity is a measures the quality of information

- Within a database environment, integrity constraints are rules that help ensure the quality of information. It can be defined and built into the database design.

- Two types of integrity constraints are :

• Relational integrity constraints- rules that enforce basic and fundamental information-based constraints
• Business-critical integrity constraints- enforce business rules vital to an organization's success and often require more insight and knowledge than relational integrity constraints.

Increased Information Security

- Information is an organizational asset.

- Database offer many security features such as

        * Passwords - provide authentication of the user

        * Access levels - determines who has access to the different types of information

        * Access control - determines types of user access such as customer service representatives                                               might read-only access

- Database can increase personal security as well as information security

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DATABASE MANAGEMENT SYSTEMS

- A database management systems (DBMS) is software through which users and application programs interact with a database.

Data-Driven Websites

- A data-driven website is an interactive website keep constantly updated and relevant to the needs of its costumer through the use of a database.

Data-Driven Website Advantages

• Development : Allows the website owner to make changes any time
• Content management : A static website requires a programmer to make updates.
• Future expandability : Having a data-driven website enables the site to grow faster than would be possible with a static site.
• Minimizing human error 
• Cutting production and update costs
• More efficient
• Improved stability

INTEGRATING INFORMATION AMONG MULTIPLE DATABASE

- An integration allows separate systems to communicate directly with each other.

- A forward integration takes information entered into a given system and sends it automatically to all downstream processes.

- A backward integration - takes information entered into a given systems and sends it automatically to all upstream systems and processes

Chapter 6 : Valuing Organizational

Organizational Information

• When addressing a significant business issue, employees must be able to obtain and analyse all the relevant  information so they can make the best decision possible
• Information granularity refers to the extent of detail within the information
• Successfully collecting, compiling, sorting, and finally analysing information from multiple levels, in varied formats, exhibiting different granularity can provide tremendous insight into how an organization is performing

The Value Transactional and Analytical Information

• Transactional Information encompasses all of the information contain 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 tasks

The Value of Timely Information

• Real-time information means immediate, up-to-date information
• Real-time systems provide real-time information in response to query requests

The Value of Quality Information

• Accuracy - Are all the values correct? For example, is the name spelled correctly? Is the amount recorded properly?
• Completeness - Are any of the values missing? For example, is the address complete including street, city, state and zip code
• Consistency - Is aggregate or summary information in agreement with detailed information? For example, do all total fields equal the true total of the individual fields?
• Uniqueness - Is each transaction, entity, and event represented only once in the information? For example, are there any duplicate customers?
• Timeliness - Is the information current with respect to the business requirements? For example, is information updated weekly, daily or hourly?

- Understanding the costs of poor information - wrong information can lead to making the wrong decision that can cost time, money, and even reputations

• Inability to accurately track customers, which directly affects strategic initiatives such as CRM and SCM
• Difficulty identifying the organization's most valuable customers
• Inability to identify selling opportunities and wasted revenue from marketing to non-existing customers and non-deliverable mail
• Difficulty tracking revenue because of inaccurate invoices
• Inability to build strong relationship with customers

Chapter 5 : Organizational Structure That Support Strategic Initiatives

IT Roles and Responsibilities

• Chief information officer (CIO) - responsible for overseeing all uses of information technology and ensuring the strategic alignment of IT with business goals and objectives
• Manager - ensure the delivery of all IT projects on time and within the budget
• Leader - ensure the strategic vision of IT is in line with the strategic vision of the organization
• Communicator - advocate and communication that IT strategy by building and maintaining strong executive relationships
• Chief technology officer (CTO) - ensuring the throughout,speed, accuracy, availability,and reliability of an organization's information technology
• Chief security officer (CSO) - ensuring the securities of IT systems and developing strategies and IT safeguards against attacks from hackers and viruses
• Chief privacy officer (CPO) - ensuring the ethical and legal use of information within an organization
• Chief knowledge officer (CKO) - responsible to collect, maintain and distribute the organization's knowledge

The Gap between Business Personnel and IT Personnel

• Business personnel - posses expertise in functional areas such as marketing, accounting, sales, and so forth
• IT personnel - the technological expertise

Organizational Fundamentals - Ethics and Security

1.    Ethics - the principles and standards that guide our behaviour toward other people

2.   Privacy - 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

• Although natural disasters may appear to be the most devastating causes of IT outages, they are hardly the most frequent or biggest threats uptime
• Sources of unplanned downtime

Chapter 4 : Measuring the Success of Strategic Initiatives

1. Measuring Information Technology's Success - key performance indicators (KPIs) are the measures that are tied to business drivers. Metrics are the detailed measures that feed those KPIs. Performance metrics fall into a nebulous area of business intelligence that is neither technology-nor business-centred, this area requires input from both IT and business professionals to find success

• Effectiveness IT metrics - measure the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases
• Efficiency IT metrics - measure the performance of the IT system itself including throughput, speed, and availability
• Benchmarking - a process continuously measuring systems results, comparing those results to optimal system performance, and identifying steps and procedures to improve systems performance

     2. The Interrelationship of Efficiency and Effectiveness IT Metrics

• Common types of efficiency IT metrics

• Common types of effectiveness IT metrics

     

     3. Metrics for Strategic Initiatives

• Website metrics

• Supply Chain Management (SCM) Metrics

• Customer Relationship Management (CRM) Metrics

• Business Process Re engineering (BPR) and Enterprise Resource Planning (ERP) Metrics
• Balanced scorecard  is a management system, in addition to a measurement system, that enables organizations to clarify their vision and strategy and translate them into action
• The balanced scorecard views the organizations from four perspectives :
• The learning and growth perspective
• The internal business process perspective
• The customer perspective
• The financial perspective

Chapter 3 : Strategic Intiatives For Implementing Competitive Advantages

Strategic Initiatives

Organization can undertake high-profits strategic initiatives including :-

SUPPLY CHAIN MANAGEMENT(SCM)

• Involve the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.
• Four basic components of SCM includes :-

Effectiveness and efficient SCM system can enable an organization to :

• Decrease the power of its buyers.
• Increase its own supplier power.
• Increase switching costs to reduce the threat of substitute products or services.
• Create entry barriers thereby reducing the threat of new entrants.
• Increase efficiencies while seeking a competitive advantage through cost leadership

CUSTOMER RELATIONSHIP MANAGEMENT(CRM)

• Involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability.
• Many organizations. such as Charles Schwab and Kaiser Permanente, have obtained great success through the implementation of CRM systems.
• CRM is not just technology, but a strategy, process, and business goals that an organization must embrace on an enterprisewide level.

CRM can enable an organization to :

•  Identify types of customers
• Design individual customer marketing campaigns
• Treat each customer as an individual
• Understand customer buying behaviors

CRM Overview

 BUSINESS PROCESS REENGINEERING

(BPR)

• BUSINESS PROCESS - A standardized set of activities that accomplish a specific tasks, such as processing a customer's order.
• BPR - The analysis and redesign of workflow within and between enterprises.
• The purpose of BPR is to make all business processes best-in-class.

                                    Seven Principles of business Process Reengineering

Finding Opportunity Using BPR

• A company can improve the ways it travels the road by moving from foot to horse and the horse to the car.

 BPR looks at taking a different path, such as an airplane which ignore the road completely.

Progressive Insurance Mobile Claims Process

The Benefits and Magnitude of Change

ENTERPRISE RESOURCE PLANNING
(ERP)

• Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise wide information on all business operations.
• ERP systems collect data from across an organization and correlates the data generating an enterprise wide view

Chapter 2: Identify Competitive Advantage

What is Competitive Advantage?

• Competitive Advantage is a product or service that an organization's customers lace a greater value on the similar from competitor.
• It is temporary because competitors keep duplicate the strategy.
• The company should start the new competitive advantage.

Five Forces Model   

Michael Porter's  Five Forces Model is useful tool to aid organization in challenging decision whether to join a new industry or industry segment :

BUYER POWER

• The ability of buyers to affect the price they must pay  for an item.
• High : when buyers have many choices of whom to buy.
• Low : when their choices are few.
• To reduce buyer power (and create competitive advantage) an organization must make it more attractive to buy from the company not from the competitors.
• Best practices of IT based : Loyalty program in travel industry. For example, rewards online on free airline tickets or hotels.

THE COMPETITIVE ENVIRONMENT

Bargaining Power of Customers/Buyer Power

-Customers can grow large and powerful as a result of their market share.

-Many choices of whom to buy from.

-Low when comes to limited items.

-Example : Used loyalty programs ( Jusco card, tesco card - being a members to get the discount)

SUPPLIER POWER

• Consists all parties involved, directly or indirectly in obtaining raw materials or a product.
• High : when buyers have few choices of whom to buy.
• Low : when their choices are many.
• Best practices of IT to create competitive advantage : B2B marketplace- private exchange allow a single buyer to posts it needs and then open the bidding to any supplier who would care to bid.Reverse auction is an auction format in which increasingly lower bids.

AN ORGANIZATION WITHIN THE SUPPLY CHAIN

•  Supplier power is the converse of buyer power.

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES

• High : when there are many alternatives to a product or service.
• Low : when there are few alternatives from which to choose.
• Ideally, an organization would like to be on a market in which there a few substitutes of their product or services.
• Best practices of IT : Electronic product- same function different brands.

THE COMPETITIVE ENVIRONMENT

 Threat of Substitutes.

• To the extent that customers can use different products to fulfil the same need, the threat of substitute exists.
• Example : Electronic products- same function different brands.
• Switching Cost : costs can make customer reluctant to switch to another product or service.

THREAT OF NEW ENTRANCE

• High : when it easy for new competitors to enter a market.
• Low : when there are significant entry barriers to entering a market.
• Entry barriers is a product or service feature that customers have come to expect from organization and must be offered by entering organization to complete and survive.
• Best practice of IT : New bank must offers online paying bills, acc monitoring to compete.

THE COMPETITIVE ENVIRONMENT

Threat of New Entrants

• Many threats come from companies that do not yet exist or have a presence in a given industry or market.
• The threat of new entrants forces top management to monitor the trends, especially in technology, that might give rise to new competitors.
• Example : New bank (online paying bills, acc monitoring to compete)

RIVALRY AMONG EXISTING COMPANIES

• High : when competition is fierce in a market.
• Low : when competition is more complacent
• Best practice IT : Wal Mart and its suppliers using IT enabled system for communication and track product at aisles by effective tagging system.
• Reduce cost by using effective supply chain.

THE COMPETITIVE ENVIRONMENTRivalry Among Existing Firms

• Existing competitors are not much of the threat : typically each firm has found its "niche".
• However, changes in management, ownership, or "the rules of the game" can give rise to serious threats to long term survival from existing firms.

3 GENERICS STRATEGIES

RELATIONSHIP BETWEEN BUSINESS PROCESS AND VALUE CHAIN

• Supply chain : a chain or series of process that adds value to product and service for customer.
• Add value to its products and services that support a profit margin for the firm