A computer-based information systems (CBIS) is an information system that uses computer technology to perform some or all of its intended tasks. Although not all information systems are computerized, today most are.
An Application is a computer program designed to support a specific task or business process. Each functional area or department within a business organization uses dozens of application programs. E.g. the HR department sometimes uses one application for screening job applicants and another for monitoring employee turnover.
2. What are strategic information systems?
A Strategic Information System (SIS) provides a competitive advantage by helping an organisation implement its strategic goals and increase its performance and productivity. Any information system that helps an organisation gain a competitive advantage, or reduce
Strategic information system is different from other systems as: -
- they change the way the firm competes.
- they have an external (outward looking) focus.
- they are associated with higher project risk.
- they are innovative (and not easily copied).
3. According to Porter, what are the five forces that could endanger/enhance a firm’s position in its industry or marketplaces?
- The threat of entry of new competitor’s. Threat is high when easy to enter your market and low when significant barriers exist.
- The bargaining power of suppliers. Supplier power is high when buyers have few choices of whom to buy and low when buyers have many choices. Therefore, organizations would rather have more potential suppliers to be able to better negotiate price, quality, and delivery terms.
- The bargaining power of customers (buyers). Buyer power is high when buyers have many choices from whom to buy and low when few choices.
- The threat of substitute products or services. If there are many substitutes, then the threat of substitutes is high. Today technologies create substitute products very rapidly.
- The rivalry among existing firms in the industry. Threat from rivalry high when intense competition among firms in an industry.
4. In relation to Porter's value chain model, what is meant by primary activities and support activities, and how does IT support these activities?
Primary activities are those business activities that relate to the production and and distribution of the firm’s products and services, thus creating value for which customers are willing to pay. Involve purchasing materials, processing materials into products, and delivering products to customers.
There are 5 primary activities:
1. Inbound logistics (inputs)
2. Operations (manufacturing and testing)
3. Outbound logistics (storage and distribution)
4. Marketing and sales
5. Services
Support activities don’t add value directly to the firms products or services. Rather, they contribute to the firm’s competitive advantage by supporting the primary activities.
Support activities consist of:
1. The firms infrastructure (accounting, finance, management)
2. Human resources management
3. product and technology development (R&D)
4. Procurement
5. Discuss the logic of building information systems in accordance with the organizational hierarchical structure.
The Mckinsey Strategy
- Strategy - what are we going to do?
- Structure - who is going to do it?
- Systems - whats systems will be used?
- Skills - what core knowledge is required?
- Staff - what people will we hire, what money will be spent on training?
6. How has the Internet affected each of the five forces in Porter’s competitive forces model.
- The threat of new competitors. Reduce traditional barriers to entry, such as the need for sales force or a physical storefront to sell goods and services. Today, competitors need only to set up a Web site.
- Bargaining power of suppliers. Buyers can find alternative suppliers and compare prices more easily, reducing the suppliers bargaining power. Companies also use the internet to integrate their supply chains, and prosper by locking in customers.
- The threat of substitute products or services. Any industry in which digitalized information can replace material goods (books, music, software) must view the internet as a threat because the internet can convey this information efficiently at a low cost.
- The rivalry among existing firms in the industry. Competition is affected by the low variable cost of digital products. The costs in physical (CD, DVD) distribution channel are much higher than the costs involved in delivering the songs over the internet in digital form.
The internet has changed the nature of competition. Porter concludes that the overall impact of the internet is to increase competition, which has a negative impact on profitability.
Rainer, R. & Turban, E. (2009). Introduction to Information Systems: Supporting and Transforming Business. 2 Ed. John Wiley & Sons
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