CHAPTER 7 : STORING ORGANIZATIONAL INFORMATION

RELATIONAL DATABASE FUNDAMENTALS

• Information is everywhere in an organization.
• Information is stored in databases

               - Database = maintains information about various types of objects (inventory), events                                                (transactions), people (employees) and places (warehouses).

• Database models include :

1. Hierarchical database model - information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too many relationships.
2. Network database model - a flexible way of representing objects and their relationships.
3. Relational database model - stores information in the form of logically related two-dimensional tables.

ENTITIES & ATTRIBUTES

* Entity - a person, place, thing, transaction, or event about  which information is stored

• The rows in each table contain the entities
• In Figure 7.1 CUSTOMER includes Dave's Sub Shop and Pizza Palace entities

*Attributes (fields,columns) - characteristics or properties of an entity class

• The columns in each table contain the attributes.
• In Figure 7.1 attributes for CUSTOMER include Customer ID, Customer Name, Contact Name

KEYS & RELATIONSHIPS

Primary keys and foreign keys identify the various entity classes (tables) in the database.

• Primary key - a field (or group of fields) that uniquely identifies a given identity in a table
• Foreign key - a primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables.

Potential relational database for Coca-Cola

RELATIONAL DATABASE ADVANTAGES

Database advantages from a business perspective include

• Increased flexibility
• Increased scalability and performance
• Reduced information redundancy
• Increased information integrity (quality)
• Increased information security

INCREASED FLEXIBILITY

*A well-designed database should :

• Handle changes quickly and easily
• Provide users with different views
• Have only one physical view

                *Physical view - deals with the physical storage of information on a storage device

• Have multiple logical views

                *Logical view - focuses on  how users logically  access information

INCREASED SCALABILITY & PERFORMANCE

*A database must scale to meet increased demand, while maintaining acceptable performance levels.

• Scalability - refers to how well a system can adapt to increased demands
• Performance - measure how quickly a system performs a certain process of transaction

REDUCED INFORMATION REDUNDANCY

• Databases reduce information redundancy.

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

• Inconsistency is one of the primary problems with redundant information.

INCREASED INFORMATION INTEGRITY (QUALITY)

Information integrity - measures the quality of information

Integrity constraint - rules that help ensure the quality of information.

• Relational integrity constraint
• Business-critical integrity constraint

INCREASED INFORMATION SECURITY

-Information is an organizational asset and must be protected.

-Databases offer several security features including :

• Password - provides authentication of the user
• Access level - determines who has access to the different types of information
• Access control - determines types of user access, such as read-only access

DATABASE MANAGEMENT SYSTEMS

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

DATA-DRIVEN WEB SITES

• Data-driven Web sites - an interactive Web site kept constantly updated and relevant to the needs of its customers through the use of a database.

DATA-DRIVEN WEB SITE BUSINESS ADVANTAGES 

• Development
• Content Management
• Future Expandability
• Minimizing Human Error
• Cutting Production and Update Costs
• More Efficient
• Improved Stability

DATA-DRIVEN BUSINESS INTELLIGENCE 

• BI in a data-driven Web site

INTEGRATING INFORMATION AMONG MULTIPLE DATABASES

INTEGRATION - allows separate systems to communicate directly with each other.

• Forward integration - takes information entered into a given system and sends it automatically to all downstream systems and processes.
• Backward integration - takes information entered into a given system and sends it automatically to all upstream systems and processes.

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

THE VALUE OF TRANSACTIONAL & ANALYTICAL INFORMATION

• Transactional information verses analytical information

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


THE VALUE OF QUALITY INFORMATION

• Business decisions are only as good as the quality of the information used to make the decisons.
• You never want to find yourself using technology to help you make a bad decision faster.
• Characteristics of high-quality information include :

          ACCURACY = Are all the values correct? For example, is the name spelled correctly? Is                   the dollar 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

• The four primary sources of low quality information include :

1. Online customers intentionally enter inaccurate information to protect their privacy.
2. Information from different systems have different entry standards and formats.
3. Call center operators enter abbreviated or erroneous information by accident or to save time.
4. Third party and external information contains inconsistencies,inaccuracies and error.

• 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 non existent 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 : ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES

ORGANIZATIONAL STRUCTURES

• Organizational employees must work closely together 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 Officer (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.

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 Officer (CKO) - responsible for collecting, maintaining and distributing the organization's knowledge.

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 & 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

= Intangible creative work that is embodied in physical form.

• Copyright

= The legal protection afforded an expression of an idea, such as a song, video game, and some types  of proprietary documents.

• Fair use doctrine

= In certain situations, it is legal to use copyrighted material.

• Pirated software

= The unauthorized use, duplication, distribution, or sale of copyrighted software.

• Counterfeit software

= Software that is manufactured to look like the real thing and sold as such.

*One of the main ingredients in trust is privacy.

*Primary reasons privacy issues lost trust for e-business

1. Loss of personal privacy is a top concern for Americans in the 21st century.
2. Among Internet users, 37 percent would be ''a lot'' more inclined to purchase a product on a Web site that had a privacy policy.
3. Privacy/security is the number one factor that would convert Internet researchers into Internet buyers.

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.

CHAPTER 4 : MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

MEASURING INFORMATION TECHNOLOGY'S SUCCESS

• Key performance indicator - measures that are tied to business drivers.
• Metrics are detailed measures that feed KPIs.
• Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionals.

EFFICIENCY AND EFFECTIVENESS

• Efficiency IT metric - measures the performance of the IT system itself including throughput, speed and availability.
• Effectiveness IT metric - measures the impact IT has on business processes and activities including customer satisfaction, conversion rates and self-through increases.

Efficiency IT metrics focus on technology and include :

• Throughput  

- The amount of information that can travel through a system at any point.

• Transaction speed 

 - The amount of time a system takes to perform a transaction.

• System availability 

 - The number of hours a system is available for users.

• Information accuracy 

 - The extent to which a system generates the correct results when executing the same transaction numerous times.

• Web traffic  

- Includes a host of benchmarks such as the number of page views, the number of unique visitors and the average time spent viewing a Web page.

• Response time  

- The time it takes to respond to user interactions such as a mouse click.

Effectiveness IT metrics focus on an organization's goals, strategies and objectives and include:

• Usability  

- The ease with which people perform transactions and/or find information.

• Customer satisfaction  

- Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained and increases in revenue dollars per customer.

• Conversion rates (actual buying)

- The number of customers an organization ''touches'' for the first time and persuades to purchase its products or services.

• Financial  

- Financial return to the company. Such as return on investment, cost-benefit analysis and break-even analysis.

METRICS FOR STRATEGIC INITIATIVES

Metrics for measuring and managing strategic initiatives include :

1. Web site metrics
2. Supply chain management (SCM) metrics
3. Customer relationship management (CRM) metrics
4. Business process reengineering (BPR) metrics
5. Enterprise resource planning (ERP) metrics

*Web site metrics include :

• Abandoned registrations  = Number of visitors who start the process of completing a registration page and then abandon the activity.
• Abandoned shopping cards = Number  of visitors who create a shopping cart and start shopping and then abandon the activity before paying for the merchandise.
• Click-through = Count of the number of people who visit a site, click on an ad, and are taken to the site of the advertiser.
• Conversion rate = Percentage of potential customers who visit a site and actually buy something.
• Cost-per-thousand (CPM) = Sales dollars generated per dollar of advertising. This is commonly used to make the case for spending money to appear on a search engine.
• Page exposures = Average number of page exposures to an individual visitor.
• Total hits = Number of visits to a Web site, many of which may be the same visitor.
• Unique visitors = Number of unique visitors to a site in a given time. It can tell the visitors specific locations.

*Supply chain management (SCM) metrics :

• Back order  

- An unfilled customer order. A back order is demand (immediate or past due) against an item whose current stock level is insufficient to satisfy demand.

• Customer order promised cycle time  

- The anticipated or agreed upon cycle time of a purchase order. It is a gap between the purchase order creation date and the requested delivery date.

• Customer order actual cycle time  

- The average time it takes to actually fill a customer's purchase order. 

• Inventory replenishment(restock) cycle time   

- Measure of the manufacturing cycle time plus the time included to deploy the product to the appropriate distribution center.

• Inventory turns (inventory turnover)   

- The number of times that a company's inventory cycles or turns over per year. It is one of the most commonly used supply chain metrics.

*Customer relationship management (CRM) metrics

Customer relationship management metrics measure user satisfaction and interaction and incude

• Sales metrics
• Service metrics 
• Marketing metrics

*Business process reengineering (BPR) & Enterprise resource planning (ERP) metrics

• The balanced scorecard enables organizations to measure and manage strategic initiatives.

CHAPTER 3 : STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

Organizations can undertake high-profile strategic initiatives including :

• Supply chain management (SCM)
• Customer relationship management (CRM)
• Business process reengineering (BPR)
• Enterprise resource planning (ERP)

SUPPLY CHAIN MANAGEMENT

• Supply Chain Management (SCM) - involves 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 supply chain management include :

1. Supply chain strategy - strategy for managing all resources to meet customer demand.
2. Supply chain partner - partners throughout the supply chain that deliver finished products, raw materials and services.
3. Supply chain operation - schedule for production activities.
4. Supply chain logistics - product delivery process.

Effective and efficient SCM systems 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

• 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 goal that an organization must embrace on an enterprise wide 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

• Business process - a standardized set of activities that accomplish a specific task, such as processing a customer's order.
• Business process reengineering (BPR) - the analysis and redesign of workflow within and between enterprises.
• The purpose of BPR is to make all business processes best-in-class.

ENTERPRISE RESOURCE PLANNING

• Enterprise Resource Planning (ERP) - integrates all departments and functions throughout an organization into a single IT systems so that employees can make decisions by viewing enterprisewide information on all business operations.
• Keyword in ERP is "enterprise".