Information Systems in Business - Week 2 Questions

INFORMATION SYSTEMS IN BUSINESS

Weekly Questions – Week Two

Explain information technology’s role in business and describe how you measure success.

Information technology plays a significant role in business. Once IT systems are embedded within a business, the business is positively impacted as they are given the potential to improve and expand through their exposure to broader, global markets improving productivity, and reducing costs simultaneously. Additionally, this impact spreads throughout various aspects and departments of the business including HR, sales, marketing, accounting and operations not only as a resource of business processes, but also an enabler of business success.

This Diagram demonstrates how people, information. and information technology are linked.

The success of IT is difficult to measure, alongside the fact that they are used to simultaneously improve productivity and reduce costs within a business. In order to gain a substantial measurement of IT success within a business, Key Performance Indicators (KPI’s) and metrics are used. These methods are most suitable in obtaining a measurement of IT success, as today’s fast paced business environment requires nothing short of efficient and effective processes.

KPI Model

List and describe each of the forces in Porter’s Five Forces Model.

A diagram of Porter's Five Forces Model

Michael Porter’s Five Forces Model consists of the following forces that mark the foundation process of information systems;

Suppliers (supplier power) – this relates to the amount of other existing suppliers. The fewer suppliers within one’s target market, the stronger the supplier power, whereas multiple suppliers to the same market results in weak supplier power.

Potential Entrants (threat of mobility) – this relates to the opportunity for other suppliers to enter into the market. The easier it is to enter, the stronger the threat of mobility.

Buyers (buyer power) – this relates to the available choices that the buyer may have. The larger amount of choices they have, the stronger the buyer power, whereas lesser choices for the buyer results in weak buyer power.

Substitutes (threat of substitutes) – this relates to the availability of alternatives to one’s product. The more substitutes for one’s product available, the stronger the threat. 

Industry Rivalry – this relates to the level of competition within a particular market. Rivalry becomes higher as competition is more intense.

Describe the relationship between business processes and value chains.

A business process is a standardised set of activities that accomplish a specific task, for example, processing a customer’s order. The value chain approach views an organisation as a series of processes, each of which adds value to the product or service for each customer. The business process of an organisation and the value chain they create play an integral role in strategy execution, as the value chain can be used to evaluate the effectiveness of the organisation’s business process. This evaluation can create a competitive advantage, as the value chain must enable to organisation to provide unique value to its customers, bettering their business processes.

Compare Porter’s three generic strategies.

Porter’s three generic strategies, broad cost leadership, broad differentiation and focused strategy are all closely linked and have equal significance among one another. Porter believes that an organisation should follow only one of the three strategies when entering a new market, as aiming to be all things for all people and projecting a consistent image to the entire marketplace is extremely difficult. Broad strategies reach a large market segment, while focused strategies target a niche market and concentrate on either cost leadership or differentiation. 




The following link is a great explanation of these strategies:


http://marketingteacher.com/lesson-store/lesson-generic-strategies.html