by Samuel Lai 13 years ago
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Company - Accounting firm
IT requirements:
Accounting software for bookkeeping
Accounting software for tax computations
Accounting software for auditing checklists
Clients - large firms.
Hence,
Broad collaboration - applicable
Broad communication - applicable?
Collective estimation - applicable
Metadata creation - not so applicable
Social graphing - not so applicable
Highly likely to be used within own company objectives in desiring responses from own employees.
Info requirements will be driven by the effect of info driven by value. Info flow. Value chain concentrates on value, supply chain concentrates on product.
Buyer groups - coopetition between plants, usually if suppliers are monopolistic. problem is info needs to travel between the plants, if its very slow it won't work.
Districts - based on districts. companies within same industry are neighbours. cooperate and trust each other. can b geographical or "virtual". in the past, esp for production, many geographical. now, globalization not so. if virtual, communication must improve. to do that, must use IT.
Assignment: reading; choose 1 or 2 of the structures we discussed, analyse if and how tech described in reading makes sense to me within the context of the company chosen.
Focus on one specific applicaton of web 2.0. See if it is useful for company's info needs.
Direct observation -- value chain -- APQC
(in terms of detail)
APQC detailed but too long, hard to identify. Similar to value chain. Based on processes. Value chain is good for teaching, because it is very general, and easy to identify, however you end up with weird names for the processes. eg. inbound logistics sounds like raw materials warehouse. problem of using value chain in real life brings contradiction, supposed to support process based view by transforming raw materials into end products, but if you look carefully they are also functions. Value chain refers to process based perspective, but not good to identify and analyse business processes. APQC is good if you need to do that.
Analyse companies by function based view is much better. Easy to recognize functions because just identify groups of people. Harder to identify groups of processes.
Structure: Using the pyramid grid, can identify information needs to identify the IT needs. Might spend money in a certain way which may not be the best. Using the box thing, processes based to see where to spend IT, another POV.
1st mistake: Use IT as a tool for single parts. (eg buying a comp for each person to improve each person's efficiency)
2nd mistake: IT is bought in order to achieve improvement in efficiency and effectiveness in the very short run.
Hidden assumption: Organizations are static.
Do not take note then when IT is purchased, will change information needs, contributing to business transformation and development. IT can be planned either through luck or skill, such that u can plan how IT will transform your organization.
IT should participate in strategic activities.
Assignment:
use APQC checklist and identify relevant processes that characterise the company. the core processes.
excel: processes, sub-processes, sub-sub-processes.
APQC.org
Choose the criteria, then choose the processes.
Function-based was no good by categorizing functions together because it is hard to target the information required. Function-based view will give rewards based on each function separatedly, people are motivated to remain isolated using this view.
Process-based better by analysing input and output, starting from clients. eg. if engineers were the only ones to take charge of a technological product, there are other factors that will not be taken into account like marketing factors. Focusing on the collaboration of the functions to deliver the best output. This will look into business performance, not function performance, which was the problem of the function based view.
Not important to have highly specialized function in each information system. What matters is the ability of the IS to inter-connect the different areas of your company.
Enterprice Resource Planning (ERP)
- process based information system, database integrating all the different functions. buy one or more modules, each module can communicate to the other modules because they share the same database.
However, there are different perspectives. The huge hype about ERP systems made companies employ ERP systems but later finding out it didn't suit their information system requirements, and wasting alot of money, which reverted them back to function-based systems, i.e. EAI (Enterprise Application Integration)
So now, hire consultant to see your processes because processes are usually obscure. Analyse ---- Check-list
pay more -> higher precision -> more time
RFiD tag - innovation but not the main innovation
Main innovation is in the RFiD system!
Rotate RFID - structure of the system slide 90deg, and u get:
Process
Applications
Database
Server
Reader
RFID tags
which is the standard systemic structure. the system actually refers to the organization structure rather than the IT structure.
eg. should i buy iphones or netbooks or blackberries etc for employees? have to look at whole structure! look at strategy, process, applications to be used, etc.
How to define standards in IT
1. Institution defines the standards (ISO, UFI etc)
- eg. if u wanna build new sockets, you must follow the specs etc.
- more top-down, wanna codify info into RFID, top will impose
2. Standard De Facto (typical for IT)
- eg. standards that derive from facts
- everyone company pushes their own product for their own standard. One company will prevail
- this is bottom-up, market decided the standard
NB:
- if something does not become the standard fast enough, the S-curve will change and go downwards instead.
RFID tags are located within EZ-Link cards and readers.
EZ-Link cards work as a smart card for payments made in Singapore on a wide range of areas. They have also been hybrid-ized with NETS to form NETS EZ-Link which allows a greater range of payment methods.
These areas include:
Payments for ERP, all forms of public transport, Mcdonalds, food in foodcourts, 7-11, etc etc.
EZ-Link cards with personal identification may be used for identification purposes too.
These areas include:
Enlisting for national service, borrowing books from the library, taking attendance at schools, concessionary rates for public transport for students, online shopping etc.
IT
EZ-Link card readers are the main form of hardware, other than the cards themselves. Most merchants and many other institutions are required to have the card readers for scanning.
Information Flow
A whole truckload of information is being transmitted, especially with regards to EZ-Link person identification. Information on number of books borrowed, systems within institutions that require personal identification, amount of cash within the EZ-Link card when checked online, etc etc all mean information is flowing all the time to the main EZ-Link system, with huge databases.
How it works + uses
RFID tags are located within the ERP hardwares.
IT
Hardware is required for ERP, such as the ERP gantries' scanners, and every RFID card reader to be installed in all Singapore-registered cars.
Mission/Strategy
Government mission is to reduce congestion during peak hours on roads leading to and from commercial areas within Singapore.
The strategy of implementing the system would be to designate the Land Transport Authority with rights to decide areas for implemention, outsourcing to technological companies to construct the system.
Process
Government implements this system by outsourcing the technology to Phillips Corporation in installation of hardware.
Eg. RFID tag in handphone to buy coffee.
Who/what is involved:
1. Users
2. Merchants - must have NFC readers
3. Government infrastructure will have to be extended, considering that this is probably to be used in many govt institutions with regards to public services
4. Public awareness activities
5. Banks or telecommunication companies (depending on decided system of who is gonna charge and how) must have a system in place for NFC for debit charging of items through NFC
6. Hardware production, selling
Shazan
Mobile application for identifying music.
Shazan -- Wireless - programme, process, requiring internet
Software
Hardware -- Internet -- Server
- connects to internet then to server
- needs to transmit signals fast to the server. to transmit signals, alternatives are WIFI, bluetooth, interconneccting devices (router), 3G (UMTS)
- eg. WIFI (LIUC LAN), 3G (VODAFONE, TIM)
Quality of internet connection determines quality of activity.
All levels must be good for the best experience. One screwed up area means the whole process will be bad.
Factors to be considered - speed, range of connection, cost
GPS Navigation
GPS has become a widely used aid to navigation worldwide, and a useful tool for map-making, land surveying, commerce, scientific uses, tracking and surveillance, and hobbies such as geocaching and waymarking. Also, the precise time reference is used in many applications including the scientific study of earthquakes and as a time synchronization source for cellular network protocols.
How it works
Organizational structure
Process
To support supply chain management and mobile commerce.
Windows
Nokia
Apple
WAN - wide area network (eg 3G)
MAN - metropolitan area network (eg WIFI)
LAN - local area network (eg router)
PAN - personal area network (eg bluetooth)
- this is just a question of range, and unprecise.
Wireless cocktail
- different technologies may increase in range and shift within the model
ORGANIZATION
Mission
Strategy
Processes (eg. marketing, production)
Information flow
IT
Software applications
Hardware devices
Communication between different areas of organizational structure
Between:
i) Strat/Processes - Collaboration
ii) Information - Communication
iii) Software applications - Data transfer
iv) Hardware - Signal Transmission
ISD FINAL ASSIGNMENT
Samuel Lai, 901023
Components of Maybelline’s Information System
An example for each component of Maybelline’s IS according to the “systemic approach” would be:
Collection of data from sales reps and input (event) Company Database Sales managers, district manager etc. (info users) Feedback
Strategy of Maybelline
The strategy of Maybelline would be to employ an efficient product marketing feedback system. This is done by employing of sales reps to its retail stores to obtain information about the products.
IT Innovation
The IT innovation Maybelline adopted was to replace its IVR system with MSP.
The advantages of the new system are the direct information exchanging between managers and reps - manager can electronically send daily schedules and other important information to each rep, reports include inventory-scanned data from retail stores, decision support, ability to capture more detail information about product and market analysis, reducing reps errors, elimination of gap between time of capturing information by reps and it’s receiving by managers and decreases employees stress-level.
Previously, in the IVR system, the information that was being transmitted back to the company by the sales rep through answers to the voice response system. The IVR consolidated information and delivered it to top management as hard copy. The new system allows a more efficient, more effective and more actual information flow between the reps and the managers. The new system also has the ability to perform market analysis that enables managers to optimize merchandising and customer service efforts. This is very important because as compared to the old system which could not do that, this new capability could possibly redefine the company’s strategy. Whereas in the past managers were the ones synthesizing the gathered information, the new IT system MSP are the ones doing it, and the role of these managers might change significantly.
IT and Organization
By applying a APQC-type checklist, we can single out Maybelline’s marketing and sales investigation. Within retail process into sub-processes. Firstly, reps are sent out to the various stores. Secondly, reps input data into the PDA systems. The data includes inventory-scanned data from retail stores, and reasons for the success or failure of its products, and how competitors products were doing. Thirdly, the results are synthesized by management and further processes by the various other functions of Maybelline can proceed. The fact that functions have now changed provide strong indication that the new MSP system shapes the strategy of the company. For example, the new MSP system enables inventory-scanned data from retail stores, which can be processed quickly by the shipment function for delivery of shipment for inventory replenishment, something the old system did not allow due to its slow rate of information delivery. The shipment function in the old system relied on its old system of obtaining information for delivery. This shows that from a shift from a function-based system in Maybelline, it is now a highly processed-based view. Functions have integrated and Maybelline has an integrated set of various users, who have contributed to the company’s objectives. And looking at the initial feedback strategic objective as described above, which is to gain information about its products, the integration of inventory shipment has incorporated the inventory function into its strategy, i.e. by quic delivery of shipment, products can be replenished at a faster rate, and sales will not be affected by lack of stock, which contributes to the ultimate profit-making motives of the company.
If we apply a hierarchical-based view, we can see that the pyramid is not longer as much separated due to the integration of activities. The basic activities of selling and control, sending reps to retail outlets to obtain information, have been fused with the planning and control because of the new system. MSP’s ability to perform a market analysis means that managers have greater information requirements in their decision to plan the distribution of resources. The replacement of various functions through the use of IT frees up resources elsewhere, and roles of various jobs will change because of this integration. The organization roles of the various departments would now have a greater part to play in the general direction of the company.
IT & Strategy
IT has the ability to a) improve decisions at strategic level, b) fulfill the strategy c) redefine the strategy. Without doubt, MSP has the ability to do the A and B as described above. I am of the opinion that MSP has the ability to fulfill C. Based on the model of IT, strategy and IS having co-related arrows to and from each other, Maybelline must realize the significant impact of MSP with regards to IT in strategic decision making. Because of the integration of many functions, the re-defined strategy must take into account all its other functions of shipping (as explained), financial (due to the financial information of pricing and quantity being delivered quick to managers by MSP), HR (quality of life of employees improved, hence key performance indicators and compensation information are indirectly affected) etc. The Head of IT has to be there because the impact of MSP that he has chosen and implemented is responsible for synching all these various information flows throughout the model, i.e. the whole information system depends on MSP.
If you apply and information intensity matrix on Maybelline, u will realize that the point Maybelline’s products and process stood have increased on both axes. The point is shifted because information is now a lot more relevant and intense in both product and process. From a mere feedback system from EDI to the multi-networked information flow of MSP, information requirements would be a lot more vast and important. For example, where in the past information about the products in retail stores were based on over 50 questions, the new system allows sophisticated interactive voice response to capture data for special situations. Not only is a new department required by Maybelline to organize and synthesize this newly gathered data, information requirements have changed from not-needed/overlooked special circumstantial information to one that is required by the new department.
Conclusion
To conclude, as I have attempted to explain, information requirements have changed majorly, integration of all the various functions within the company have been impacted upon by the implementation of MCS. All this serves to show that Maybelline has used IT as a re-definer of the strategy, and the strategy has been changed. It is important that Maybelline recognizes this and implements changes in its organizational structure and aligns strategies of the various departments into meeting its main profit-making goal.
In preparation for last class, consider result of the information intensity matrix and the value matrix of the company. Discuss/convince Aurelio which IT innovation should the company invest into, if any. Could discuss using concepts like standards, network effects, hype cycles. In preparation for last class, consider result of the information intensity matrix and the value matrix of the company.
Ans:
PwC should strongly consider investing in cloud computing as an IT strategy.
As the world’s largest accounting firm providing services in bookkeeping, audit, tax and compliance and mergers and acquisitions, with a client base consisting of the world’s largest companies, cloud computing could redefine PwC’s strategy of providing quality bookkeeping, auditing, tax and M&A services by further enhancing its highly informational-related services.
I will proceed to explain further taking its main profit-making business unit, audit and assurance, as the unit I will concentrate on in explaining cloud computing’s potential in enhancing the services PwC could provide.
Using the information intensity matrix, PwC’s audit department ranks extremely high on both axes of the graph. The auditing process, as applied in the APQC excel chart, shows the main process as follows: 1) Client engagement, 2) Preliminary Audit, 3) Risk assessment 4) Audit 5) Final declaration of validity and reliability of financial statements. Processes 3, 4 and 5 are the main components of its auditing service. These 3 processes show that the auditing business unit has an extremely high product and process information intensity. The process of risk assessment includes requiring information on clients’ financial statements, identifying items with potential risks of material misstatements, and planning of the audit. The process of audit involves performing substantive and analytical procedures on these items to test on the assertions at risk. If items do not meet the main assertions, communication with clients will be essential in finding out the reasons and possible solutions. Lastly, the final conclusion of the financial statements determine if the financial statements are reliable and valid. All these processes require a strong degree of information being processed on the part of the auditors, and information transferring to and fro between PwC and its client company. The final product of audit involves an almost fully informational product, in which a declaration is made before being released to investors. This shows that a potential IT application may be introduced in order to ensure information flow between the various subdivisions are effective, efficient and relevant.
Using the value matrix, PwC’s audit department shows major ticks in the service column of gathering, organizing, selecting, synthesizing and distributing information. As an audit service, the processes as described above show that information has to be organized, certain informational items has to be selected for checking, synthesizing of financial statements in order to perform analytical procedures such as calculating financial ratios and lastly for the final financial statements to be declared and distributed to investors. Again, this shows that an IT application may potentially be introduced in order to ensure a smooth process flow.
Cloud computing has many potential uses. Utility computing, web services in a cloud, platform as a service, and managed service providers are but to name a few.
Looking into its use as utility computing, cloud computing offers storage and virtual servers that separate parties can access on demand. This may be applied into PwC’s auditing department. Currently, the audit process involves auditors travelling to and fro between PwC and the client company in order to gather and select information for use before further synthesizing. Cloud computing can greatly increase the efficiency of this. By having a virtual storage “database”, clients can upload all its bookkeeping accounts into the server for access by auditors. This has many social advantages as currently, auditors are usually placed in a room provided by the clients in order to perform the audit, and are provided with the information the auditors ask for on demand by the client, which usually inconveniences the client. With cloud computing, auditors may continue to use PwC’s auditing software and store the information in the cloud. Although auditors may still have to go down to the client’s headquarters in order to obtain information for substantive procedures to test the risk of material misstatement through receipts, checking of inventory, or other means, many of these travelling times may be eliminated if the client company is able to scan these information into the cloud, and physical checking may actually be reduced. For example, if an automated RFID to cloud system is in place, all inventory is automatically scanned by RFID into the cloud system, and perhaps only one trip may be made to the warehouse for physical checking of the inventory as a whole as evidence that the inventory count is valid and correct, rather than physical counting of the whole inventory. Another advantage would be that fewer auditors might be required as per client as processes are made more efficient.
Another huge advantage of utility computing would be that client companies have consistent, up-to-date information on the audit process. Many times, clients treat auditors with disgust due to the nature of its work and because audits are rather secretive and interrogative processes in which the client feels unsure if the auditors’ scrutinizing will result in a negative impact on the reliability and validity of financials. If PwC auditors upload the information on the cloud on the spot whenever data is keyed into the system, clients may access and analyze the information themselves to see where they stand in the audit process. This might have a huge impact on the strategy of providing quality auditing services. Traditionally, auditing services are just that; traditional audit in which the resulting financial statements are allowed by the respective government authorities to be released to investors. With cloud computing, traditional auditing services might evolve because a new service is developed, in which clients have consistent up-to-date audit information available on its accounts. This will be of great service to clients because they can immediately reconsider their own processes and aim to improve their processes. For example, if in the middle of the preliminary audit, inventory is shown to have a huge risk of error misstatements, the clients would be in an earlier advantageous position to rectify its inventory system, rather than waiting till the audit findings are released to the clients. This might result in a positive cycle, client rectifies inventory system and corrects it, resulting in auditors having an easier job in the actual audit, and both PwC and client benefits in effectiveness and efficiency of the audit process. Also, and importantly, as market leader in the accounting sector, PwC investing in cloud computing possesses the actual impact of changing the standards in accounting. Although essentially the audit process remains the same, with this semi-new service provided to its clients, PwC might gain the competitive advantage earlier in its services and gain more clients who desire that additional services. It is likely that its three other main competitors, namely KPMG, D&T and E&Y will follow suit, the clients it potentially can gain might remain loyal to PwC and PwC can further its market share.
However, PwC investing in cloud computing is highly dependent on the clients’ willingness to invest in cloud computing. Should cloud computing become the market standard of major companies in all industries, PwC will be in a highly advantageous position to have invested in it. PwC’s audit process requires information flow between PwC and its clients, and hence if the clients refuse to use it, the strategy will fail.
a) Value matrix the company's business unit.
Ans:
BU: Audit
Whole service side
b) Go back to IT innovations and convince Aurelio that u shd invest in one of the IT innovations discussed by using the value matrix.
Ans:
Service – Gather, organize, select, synthesize, distribute
Cloud computing would be a good IT innovation investment because of its ability to store offsite data on the “cloud”. If a cloud service is produced, accounting company and client company will be able to access the whole audit process and its information from the cloud. In the audit process, the first step is gathering information from client company. If client company puts up the company information such as its financial accounts in the cloud, trips by auditors to the company’s headquarters can be minimized to obtain these information. Gathering process will be made more efficient. Auditors can then proceed to organize the information and select the key items for analyzing for risk of material misstatements. All this can be done with up to date information from the cloud. Synthesizing can then be done on accounting programmes and stored on the cloud. The processed information can be obtained by the client company which would be useful if any items are in doubt, or even for financial analysis purposes by the client company, which the accounting company could extend its services not just from a typical audit, but with processed information, because synthesizing includes calculating financial ratios for analysis. Lastly, distribution will be up to date and useful should any changes in the audit be made, or further discussions be made with the client company in clarifying items in the financial statements.
In preparation for last class, consider result of the information intensity matrix and the value matrix of the company. Discuss/convince Aurelio which IT innovation should the company invest into, if any. Could discuss using concepts like standards, network effects, hype cycles.
Metcalfe's law:
Value of tool increases as more have the same capabilities to use the applications thru the network.
3 big players - Apple, Google, Nokia
2 next big players - Microsoft & RIM
They are competing on operating system on smartphones. http://en.wikipedia.org/wiki/Smart_phones
The more users that choose one technology, the more potential it has for the technology to become the standard.
Network effect - firm A mkt share go up, firm B mkt share go down, all the way.
A product that uses one firm's network has a risk of going down along with that firm and vice versa. This reaches a compatiblity, more convenient to be compatible with you.
Interlining - alignment of choices of people towards just one product
For info intensive products, having the more popular compatibility with that winning network product will be important.
Value matrix - again to help drive your IT strategy decisions. Use this to access if IT can redefine strategy, knowing where your x-es are on the matrix.
a)
Identify one or more business units and position them on the Porter-Millar's information intensity matrix.
Ans:
Business unit = Audit
Assuming matrix has axis maximum of 10 each side, coordinates are (10,10)
Product = approval of reliability and validity of financial statements of client. almost pure informational.
Process = checking of reliability and validity of items in the financial statement through checking of financial ratios, physical inventory and receipts etc. checking process is almost purely informational.
b)
Provide examples of how you're gonna use the potential to improve the company.
Ans:
Since company is high on both product and process information intensity, information flow should be as smooth efficiency and effective as possible. To improve the information flow between client company and accounting company, accounting company should computerize all information recording and reduce reliance on hardcopies. Accounting auditing software should be implemented and used for the company, specially designed for the company's procedurial structure.
Checklists are vital for work processes. All checklists should be computerized and updated at all times such that people who require information, such as clients, or managers, may look to see work progress on the checklists. Cloud computing may be used such that all such information is shared between interested parties.
Also, security of information is highly important due to its confidential nature. IT systems like cloud computing can be used to improve security.
Notes about porter:
Objective: Process
Subjective: Clients -> products
Combined: Value
Porter says if wanna improve value, u either work on the process (objective) or to work on the clients/products (subjective) which is to improve the perception of value.
Cost leadership:
Process -> reduce cost, make investments to achieve aim of lowerin price. Idea is to sell more, increase sales volume.
Differentiation:
Clients/products -> increase quality -> to increase the price -> to increase the value perceived
So, strat initiatives should be made in either one or the other.
Class assignment: Company, IT strat initiatives ideas on both sides.
a) Cost leadership: Implementing the latest most powerful accounting software. This might reduce manpower costs and increase efficiency of auditing/tax process. This will hopefully drop the price and PwC is enable to increase client base.
b) Differentiation: Initiating a cloud computing storage system that allows PwC to store all information regarding client, such as work in progress on bookkeeping, auditing or tax work done, in the cloud where client can access accounting information about itself as when it needed. This goes in the name of greater security features, thus increasing "quality". This will give reason to increase price of client fees.
FLOW:
1) STRAT --> IS --> IT
2) Triangle: STRAT <--> IS <--> IT <--> STRAT
in coherence with
HIERACHY:
1) IT CIO same level or even below other depts like MKT and OPERATIONS
2) IT CIO same level as HR, just below main boss
TYPE OF CIO:
1) triangle
2) octagon
Individual
Activity
Decision
Info - 1. speed of gathering (quick decisions), 2. completeness, accuracy (good decisions), 3. reducing costs and hence cheap products
One better strat decision has bigger impact than one better decision on individual level.
Business analytics - Software to help executives to provide synthetic but complete and accurate info about org. Data mining - data warehouse. This term is linked to CRMS. Easier to have data related clients. Powerful because likely to provide good predictions, compared to CRMS which were good at analysing past data.
TPS - transaction processing systems. bottom of the pyramid. cashier. transaction - any interaction between software application and a database. real time with a database.
This is diff from data warehouse. not for real time applications. it's based on past data, like for analysing trends of sales. Periodic/batch collection of data.
Cashier transaction -- (realtime) -- DB-- (periodic) -- DW -- Datamining by software system (such as CRMS, BI, BA)
Given 10m euro, say 6m on marketing, 3 on people, 2 on mktg agency, 1m goes to IT but not obvious where. And must be parallel with the expenditure on the other compnents. Not a qn of how much money you spend, but what is the effect.
Note:
Based on Strat/IS/IT 3 arrow correlation figure. Normally in decisions, IT just normal dept not invited to strategic decision making. HR usually up there at top of hierachy because of need to know individuals within company. Key is to shift IT up there along with HR in strategic meetings. However, it is a war. CIO (IT) not used to be there, other people must deal with it, costs money to pay CIO.
Sell ERP to CEO. Assertion - dramatic increase in competitive advantage. How to convince CEO of strat?
IT strategy - IT influences tthe achievement of strat objectives.
IT useful for a strategy: (not IT enabling of a strategy!)
- Ability to connect whole company through one database.
- Realtime application, no redundant data.
- Quick in making decisions, hence CA.
eg. iphone - good engineers, good intepretation of market, combined tog, CA.
Company : small accounting firm, 35 employees
Operational decision:
To decide if company should continue using excel for its tax computations or to implement a accounting tax software.
1. Types of software
With the many accounting softwares available, research must be done to obtain lists of accounting tax softwares and the benefits and cons of each software to be able to decide which one fits the coy's operation goal best.
2. Cost of software and soft-ware related costs
Coy needs to know total costs of software, implementation of software, training of the potential users of the software, and maintenance and breakdown costs.
3. Budget
Coy needs to know if it has the monetary resources to pay for the software, implementation of the software, and training for its employees.
4. Computing infrastructure
Coy needs to know if it has the computing infrastructure to support the new software, such as if current hardware has the ability to support the software, and suitable network link support.
Strategic decision:
To decide the type of market coy wants to target. Market group includes clients based on size of company, nature/industry of company, foreign or local based company, clients based on relationship with coy etc.
1. List of potential clients based on size
2. List of potential clients based on local/foreign based
3. List of potential clients based on industry
4. Financial statements of clients based on each of the above-mentioned lists
choose a company not belonging to the IT industry and create a reasonable example of how its its information system works:
1. idenitify an organizational role and describe it in terms of:
- the activity it performs
- the decision it is expected to take
- the related information requirements
2. identify an event (internal or external to the organization) that may bring raw information that can contribute to create an information item meeeting one or more of the information requirements identified in 1.
and describe this event in terms of raw information
3. briefly describe how this raw information should be transformed into useful information to meet the information requirements
4. identify how raw information could be transformed into useful information, the processes, the organizational rules, the people and the IT that may be involved in this transformation.
Information from event:
1. Clients' latest financial statements
2. Clients' new forecast of cash flows
3. Clients' future operational and budget plan
4. Meeting with client
Process of info from event:
Head of tax dept will have to review the new financial statements, compare them to the old ones, singling out key items such as revenue and expenses. By finding out the differences, economic crisis impacts can be seen in terms of financial values to see if impact is small or large. Synthesizing: Key financial ratios from both pre-econ crisis and post-econ crisis will also be drafted out for evaluation and comparison. After comparison, head of tax dept will have to take financial factors into account to see if client company will eventually be able to sustain itself in order to pay for its tax services.
Head of tax dept will then look at clients' new forecast of cash flows to see if they are realistic and achievable based on knowledge of industry and experience. If realistic and achievable, head of tax will then have to evaluate the new forecast to see if company has continued ability to pay for its tax services.
Head of tax dept will then look at overview of clients' future operational and budget plan. Client is likely to only provide a overview for accounting firm's review. Head of tax dept will have to study plan to see if client has continued ability to pay for its tax services.
Head of tax dept will have to meet the client to discuss if client wishes to continue engaging PwC for its tax services.
Taking all the different information, processing it and analysing it, Head of taxation dept will then make a decision on whether to keep client company engaged, to lower taxation fees, or to disengage the company,
Information from event:
1. Clients' latest financial statements
2. Clients' new forecast of cash flows
3. Clients' future operational and budget plan
4. Meeting with client
Clients will have their financial statements, forecast of future cash flows and operational budgeting plan drastically affected by the new economic crisis. New forecasts, operation and budgeting plans will have to be formed in order to handle the crisis and ensure client companies remain in operation.
Economic crisis hits Asia, major drop in profitibility of all companies in the world.
Information required:
1. Clients' yearly financial statements (either direct from client or from PwC's bookkeeping department)
2. History of clients' financial statements and notes to financial statements
3. Company laws of country (especially absolvency and taxation laws)
4. Yearly meeting minutes with client.
Activity:
To do a yearly review of clients' profitability to see if they have client company has the ability to pay for tax computation and submission services done by PwC.
Decision:
To decide if client company should continue to be contractually engaged to pay for taxation services offered by PwC.
1. Any medium-large accounting firm, eg Moore-Stephens
a) Organizational role: Head of Taxation
Activity: To approve all tax returns, manage tax department, evaluate employees performance, participate in budgeting process of company
Decisions: as described above.
Information required: information on tax returns from employees, information on clientele expenses profit and financial situation, information from tax law of country, information on company's performance and budgeting
b) Economic crisis in asia
Head of Tax must now re-evaluate all clients' financial situation to see profitability of clients, which will in turn affect profitability of moore-stephens. All clients' engagements must be reviewed by obtaining information on their financial statements, review of past performances to see continued profitability, and consequences of potential disengagements.
c) These raw information will in turn be processed by the Head of Tax and/or with help by lower-level employees by analysing important relevant financial ratios, making forecasts of future cash flows of client companies, and a final decision to be made on retaining/disengaging client. Processed information will then be reverted up to higher level management for final decision approval.
Flow:
activity -> decision -> info requirements (t)
Information requirements are not stable. This is not obvious in many companies. Change continuously. Hence, it is a system not a store. Changes because output does not remain the same.
Info is a resource because of the relation to this logic.
IS delivers info that satisfies info requirements internal and external of the company.
USER of INFO vs END-USER
eg.
truck arrives
- amount of material
- type of material
- time
- cost
Inputs must be very good, then good processing for good output. If not, time and money will be wasted on processing if raw information is not relevant.
IS:
Managing info (CxO)
- store
- process/analyze
- exchange
When you talk about IS, definitions depend on background and type of work person is doing at the moment. So, there might be different defns when talking with someone else about IS in business.
Square = specialized ppl
Circle = holistic ppl
Problem is to link both sets of ppl.
Hexagon = more sides more edges, the more u do it it becomes a circle (analogy)
Many projects fail because of the lack of/difficulty of this link.
Fidelity card - loyalty card. why? first is to increase customer loyalty. More importantly, to gain customer knowledge on items they buy, sequence of choosing things, This helps companies to organize, change layout of the market, marketing campaigns such as specific offers for customers of different tastes, budgeting.
Systems: CRMS (customer relationship management system) BI (business intelligence systems)
Buying IT resources - approach: info has to be treated like ppl. like ppl, selection process, trading process, outplacement process (HR management).
Buy IT vs manage IS
INFO is a RESOURCE
INFO needs to be MANAGED (proc, store, xchange)
IS is the SYSTEM that manages INFO
We assume info is always present, so it is always managed to some extent. Hence, IS that is good to some extent always exists. Change info to people. People always present, so to some extent they are managed, so exists a people system which is good to some extent. This assertion is questionable, you don't want good to some extent, you want perfect. This is obvious for a people system, but much less obvious for an IS.
Feedback - controlling, understanding
Processing - list/synthesize/select
Synthesize - graphicalize, tablelize, summarize etc.
Transfer - exchange
Processing procedures depend on characteristics/deadlines or user. More time to work, may require more detailed less synthesizing info. Therre is no good standard procedure, quality of procedure depends on the usefulness of the user. Also, organizational entity affects procedures. Eg, company says all info on individuals shd be stored on paper and never transfered in electronic form for privacy. Due to organizational rules, processes, even if provided by software vendor, cannot be standardized in some template.
eg. Meeting
Raw info before mtg, discussed and processed during mtg, finalized in report and reported to a decision-maker. Taking a company with dozens of mtgs per day, synthesizing contents of mtg may be expensive, so organization rule states report of meeting generated automatically by software.
Assignment:
Try to describe what cloud computing is, and what it is for.
Cloud computing features:
- servers available over the internet
- no physical infrastructure (no capex on hardware and software)
- works as a service, pay per use, consumption billed per utility
- servers not left idle
- multi-tenancy allows sharing of resources, hence centralization of infrastructure (in places of lower cost), peak load capacity increased, and efficiency in utilization.
- security of data might improve through centralization of data
- easier to maintain
Cloud services can include anything from calendar and contact applications to word processing and presentations. Almost all large computing companies today, including both Google and Microsoft, are developing various types of cloud services.
With a cloud service, the application itself is hosted in the cloud. An individual user runs the application over the Internet, typically within a web browser. The browser accesses the cloud service and an instance of the application is opened within the browser window. Once launched, the web-based application operates and behaves like a standard desktop application. The only difference is that the application and the working documents remain on the host's cloud servers.
What types of applications are available via cloud computing? Perhaps the best and most popular examples of cloud computing applications today are the Google family of applications—Google Docs, Google Calendar, Gmail, and the like. All of these applications are hosted on Google's servers, are accessible to any user with an Internet connection, and can be used for group collaboration from anywhere in the world. None of these apps require software to be downloaded and installed on a user's computer.
Cloud services offer many advantages to users. If the user's PC crashes, it doesn't affect either the host application or the open document; both remain unaffected in the cloud. In addition, an individual user can access his applications and documents from any location on any PC or portable device, via an Internet connection. He doesn't have to a copy of every app and file with him when he moves from office to home to remote location. Finally, because documents are hosted in the cloud, multiple users can collaborate on the same document in real time, using any available Internet connection. Documents are no longer machine-centric; instead, they're always available to any authorized user.
On the downside, web-based applications are typically less robust than their traditional software counterparts. For example, Google Docs offers far fewer formatting features than does Microsoft Word, which can be inhibiting to more sophisticated users. In addition, cloud services can only be accessed when a user has a live Internet connection; they're not suited for instances where no Internet connection is available.
One of the primary uses of cloud computing is for offsite data storage. With cloud storage, data is stored on multiple third-party servers, rather than on the dedicated servers used in traditional networked data storage.
When storing data, the user sees a virtual server—that is, it appears as if the data is stored in a particular place with a specific name. But that place doesn't exist in reality; it's just a pseudonym used to reference virtual space carved out of the cloud. In reality, the user's data could be stored on any one or more of the computers used to create the cloud. The actual storage location may differ from day to day or even minute to minute, as the cloud dynamically manages available storage space. But even though the location is virtual, the user sees a "static" location for his data—and can actually manage his storage space as if it were connected to his own PC.
Cloud storage has both financial and security advantages over traditional storage models. Financially, the cloud's virtual resources are typically cheaper than dedicated physical resources connected to a personal computer or network. As for security, data stored in the cloud is secure from accidental erasure or hardware crashes, because it is duplicated across multiple physical machines; because multiple copies of the data are kept continually, the cloud continues to function as normal even if one or more machines go offline. If one machine crashes, the data is duplicated on other machines in the cloud.
That said, the ultimate reliability and security of cloud storage is yet to be determined. While companies offering cloud services tout their security features, there are many stages in the process where security could be breached, just as with a traditional network. And access to your data could be compromised if the cloud storage provider has a service outage or goes out of business—both of which have happened in recent months. It may be too early in the adoption process to recommend that a company store its data exclusively in the cloud, without some sort of traditional physical backup.
Cloud - metaphor used to represent the internet in a cloud drawing, with its networks in the "cloud"
"collection of computers and servers that are publicly accessible via the Internet."
Wiki def: "a computing capability that provides an abstraction between the computing resource and its underlying technical architecture (e.g., servers, storage, networks), enabling convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction."
Other def: "a large group of interconnected computers that typically extends beyond a single company or enterprise. The applications and data served by the cloud are available to a broad group of users using different operating system platforms; access is via the Internet."
5 characteristics: on-demand self-service, broad network access, resource pooling, rapid elasticity, and measured service.
Internet integration
The integration of cloud-based services is in its early days. OpSource, which mainly concerns itself with serving SaaS providers, recently introduced the OpSource Services Bus, which employs in-the-cloud integration technology from a little startup called Boomi. SaaS provider Workday recently acquired another player in this space, CapeClear, an ESB (enterprise service bus) provider that was edging toward b-to-b integration. Way ahead of its time, Grand Central -- which wanted to be a universal "bus in the cloud" to connect SaaS providers and provide integrated solutions to customers -- flamed out in 2005.
Today, with such cloud-based interconnection seldom in evidence, cloud computing might be more accurately described as "sky computing," with many isolated clouds of services which IT customers must plug into individually. On the other hand, as virtualization and SOA permeate the enterprise, the idea of loosely coupled services running on an agile, scalable infrastructure should eventually make every enterprise a node in the cloud. It's a long-running trend with a far-out horizon. But among big metatrends, cloud computing is the hardest one to argue with in the long term.
Service commerce platforms
A hybrid of SaaS and MSP, this cloud computing service offers a service hub that users interact with. They're most common in trading environments, such as expense management systems that allow users to order travel or secretarial services from a common platform that then coordinates the service delivery and pricing within the specifications set by the user. Think of it as an automated service bureau. Well-known examples include Rearden Commerce and Ariba.
MSP (managed service providers)
One of the oldest forms of cloud computing, a managed service is basically an application exposed to IT rather than to end-users, such as a virus scanning service for e-mail or an application monitoring service (which Mercury, among others, provides). Managed security services delivered by SecureWorks, IBM, and Verizon fall into this category, as do such cloud-based anti-spam services as Postini, recently acquired by Google. Other offerings include desktop management services, such as those offered by CenterBeam or Everdream.
Platform as a service
Another SaaS variation, this form of cloud computing delivers development environments as a service. You build your own applications that run on the provider's infrastructure and are delivered to your users via the Internet from the provider's servers. Like Legos, these services are constrained by the vendor's design and capabilities, so you don't get complete freedom, but you do get predictability and pre-integration. Prime examples include Salesforce.com's Force.com, Coghead and the new Google App Engine. For extremely lightweight development, cloud-based mashup platforms abound, such as Yahoo Pipes or Dapper.net.
Web services in the cloud
Closely related to SaaS, Web service providers offer APIs that enable developers to exploit functionality over the Internet, rather than delivering full-blown applications. They range from providers offering discrete business services -- such as Strike Iron and Xignite -- to the full range of APIs offered by Google Maps, ADP payroll processing, the U.S. Postal Service, Bloomberg, and even conventional credit card processing services.
Utility computing
The idea is not new, but this form of cloud computing is getting new life from Amazon.com, Sun, IBM, and others who now offer storage and virtual servers that IT can access on demand. Early enterprise adopters mainly use utility computing for supplemental, non-mission-critical needs, but one day, they may replace parts of the datacenter. Other providers offer solutions that help IT create virtual datacenters from commodity servers, such as 3Tera's AppLogic and Cohesive Flexible Technologies' Elastic Server on Demand. Liquid Computing's LiquidQ offers similar capabilities, enabling IT to stitch together memory, I/O, storage, and computational capacity as a virtualized resource pool available over the network.
1. SaaS
This type of cloud computing delivers a single application through the browser to thousands of customers using a multitenant architecture. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting. Salesforce.com is by far the best-known example among enterprise applications, but SaaS is also common for HR apps and has even worked its way up the food chain to ERP, with players such as Workday. And who could have predicted the sudden rise of SaaS "desktop" applications, such as Google Apps and Zoho Office?
Internet is a communication channel for things
Hardware:
Pallet + RFID tag + microsensor
--
Router
--
Pallet + RFID tag + microsensor
eg. RFID tag on carrot (certain temp wanted consistently), sensor takes temperature of carrot
hence, sensor takes information in a smart way on the environment about a target item
eg. accelerator-monitor - used in car airbags, robots
Things that can take decisions completely independently from the presence of human beings
Strat <--> strat partnership <--> strat (Co-opetition)
Companies <--> co-laboration/co-operation <--> companies/clients
Competition - either you increase market share, or increase market size and keep market share. So now many companies, some areas compete, some areas co-operate.
Enablers - enable processes, whether wanna do the process or not is another thing. necessary conditions but not sufficient conditions
Marketing guerrila - strategy. using platforms like blogs or facebook that can provide information about products like covering damage by adding information
Article precinct:
Economic value is created when technology is combined with new ways of doing business.
7. Putting more science into management
- exploit info explosion with diverse set of management techniques
8. Making businesses from information
- info-based biz opportunities
- advantage: reduce problem of info assymetry, inability to obtain data
5. Expanding the frontiers of automation
- automate processes
- many processes stil unautomated
- advantages: lower costs and improve time-span of customers obtaining what they want
- disadvantages: challenge of finding right balance between raising profit margins and keeping customers happy
6. Unbundling production from delivery
- breaking down of processes into smaller segments with accurate measuring and metering use of each to result in effective allocation and capacity planning
1. Distributing cocreation
- outsourcing various functions to business networks
- decentralized innovation good for software and editorial content
- advantages: lower production costs
- disadvantages: lost of creative control and intellectual property
2. Using consumers as innovators
- eg. Wiki
- eg. Threadless
- advantages: better insight into customer needs and behavior
- disadvantages: might be influenced by vocal minority, focused on long-term rather than immediate needs of customers
3. Tapping into a world of talent
- decentralize work to specialists, free agents, talent networks
- made less costly by internet etc.
- new talent-development models emerge
- new pricing models
- might be popularised in segmentable industries
- competitive advantage to companies able to breakdown and recompose tasks
4. Extracting more value from interactions
- advantage: efficiency increases
- disadvantages: creating right incentives for employees
Wirth's law: Software is slowing faster than hardware is accelerating
- 1995
- accusation on microsoft: as speed of calculation increases, amount of calculation needed per function increases, resulting in less gains for user
- "feature bloat": inflated software features unusable if not for hardware advances
- tolerated bcoz i) embarassment of computer riches ii) consumers' inability to discern useful and uselessness despite influence on software design
- root cause argued as caused by software companies
- programmes don't require massive manuals, but if they do, keep clients in the long haul
- competitive pressure prevents meticulous pruning of software design
Metcalfe's law: network value grows proportionately to no. of users squared
- 1993
- eg. telephone value increases per user
- not all "users" add value, some contaminate, eg. cold calling, spam emails
- 4 probs of networks: saturation, cacophony, clustering & search
i) saturation: valuable information saturated
ii) cacophony: too complex interplay btwn members eg. forums
iii) clustering: users only in parts of network, end up communication with each other
iv) search: riches of network remain inaccessible in practice
- solutions to probs: recruit new members with valuable assets, combat clustering thru deliberate subdivision of units, filter to combat saturation
- not as practically true as Metcalfe's law
Machrone's law: the pc u wanna buy will always be $5k
- 1984
- statistics show approximate fixed price ranges per time period of approximately a decade
- total pc sales revenue continue to increase despite falling unit costs due to factors such as usage for online services
Rock's Law: Cost of semiconductors x2 every 4 years
- mid 1990s
- actual: 1980s - fabs increased yield, 1990s - increasing throughput (rate of production) 2000s - increasing throughput
- cost not impt, more impt is value of product
- essentially rate of production has increased with economies of scale
- resulting in changes in prices of PCs -> Machrone's law
Moore's law: No. of transistor chips x2 annually
- 1965
- no tech barriers to tech advancements, trend will continue
- basis: cost per elec. component inversely proportional to no. of elec. component in simple circuits
- implies econ limit to tech longevity
- yield rate (ie. monetary returns to semiconductor producers from chips produced) will eventually reach a point of econ constraint
- econ end but not tech end
- no exponential trend lasts forever? arguable, i.e. postponement
- semiconductors at least 15 years from now. might move on to nanotech
- legal status: does law describe reality or create it?
- hence, econ basis means law comes down to Rock's law of fabrication costs of semiconductors
Aurelio says
NEW hardware performance --> NEW faster applications and features --> for OLD activities, need to innovate,
HENCE,
Moore’s law exists because new transistors are required those who require /or produce faster transistors, by all industries.
