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:

(i) Chief Information Officer(CIO)
(ii) Chief Technology Officer(CTO)
(iii) Chief Security Officer(CSO)
(iv) Chief Privacy Officer(CPO)
(v) Chief Knowledge Office(CKO)

Chief Information Officer
-Oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives.
-Broad CIO function 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
-Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT.

Chief Security Officer
-Responsible for ensuring the security of IT systems.

Chief Privacy Officer
-Responsible for ensuring the ethical and legal use of information.

Chief Knowledge Office
-Responsible for collecting, maintaining, and distributing the organization's knowledge.

ORGANIZATIONAL FUNDAMENTALS

·                     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

o                  the principles and standards that guide our behavior toward other people

·                     Privacy is major ethical issue

o                  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

o                  intellectual property.

intangible creative work that is embodied in physical form. for example, from idea to something we can hold. 

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

o                  fair use doctrine

in certain situations, it is legal to use copyrighted materials. for example song from oversea to Malaysia.

o                  pirated software

the unauthorized use, duplication, distribution, or sale of copyrighted software. more cheap and free.

o                  counterfeit software

software that is manufactured to look like the real thing and sold as such. for example, buy antivirus, notify original but not original.

·                     One of the main ingredients in trust is privacy. the system is effective because customer will be satisfied but efficiency because the system can be slow.

·                     Security

o                  organizational information is intellectual capital - it must be protected.

·                     Information security

o                  the protection of information from accidental or intentional misuse by persons inside or outside an organization.

o                  the CSO who save the information.

·                     E-business automatically creates tremendous information security risks for organizations.

THANK YOU 

CHAPTER 4

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 sell-through increases

BENCHMARKING – BASELINE METRICS

·                      Regardless of what is measured, how it is measured, and whether it is for the sake of efficiency or effectiveness, there must be benchmarks –baseline values the system seeks to attain

·                      Benchmarking – a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and producers to improve system performance

-          Comparing efficiency IT and effectiveness IT metrics for the government initiatives 

THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVESS IT METRICS

-          Common types of efficiency IT metrics

	Efficiency IT Metrics
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 at 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…

	Effectiveness IT Metrics
Usability	The ease with which people perform transactions and/or find information. A popular usability metric on the Internet is degrees of freedom, which measures the number of clicks required to find desired information.
Customers satisfaction	Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer.
Conversion rates	The number of customers an organization “touches” for the first time and persuades to purchase its products or services. This is a popular metric for evaluating the effectiveness of banner, pop-up, and pop-under ads on the Internet.
Financial	Such as return on investment (the earning power of an organization’s assets), cost-benefit analysis (the comparison of projected revenues and costs including development, maintenance, fixed and variable), and break-even analysis (the point at which content revenues equal ongoing costs).

-          Security is an issue for any organization offering products or services over the Internet.

-          It is inefficient for an organization to implement Internet security, since it slows down processing.

·         However, to be effective it must implement Internet security.

·         Secure Internet connections must offer encryption and Secure Sockets Layers (SSL denoted by the lock symbol in the lower right corner of browser)

-          Interrelationships between efficiency and effectiveness. 

METRICS FOR STRATEGIC INITIATIVES

-          Metrics for measuring and managing strategic initiatives include;

·         Website metrics.

·         Supply chain management (SCM) metrics

·         Customer relationship management (CRM) metrics

·         Business process reengineering (BPR) metrics

·         Enterprise resource planning (ERP) metrics 

 

WEBSITE METRICS

SUPPLY CHAIN MANAGEMENT METRICS 

CUSTOMER RELATIONSHIP MANAGEMENT METRICS

BPR and ERP Metrics

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

THANK YOU !

CHAPTER 3: Strategic Initiatives for Implementing Competitive Advantages

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. The four basic components of supply chain management are:

1.            Supply chain strategy - the strategy for managing all the resources required to meet customer demand for all products and services.

2.            Supply chain partners -the partners chosen to deliver finished products, raw materials, and services including pricing, delivery, and payment processes along with partner relationship monitoring metrics.

3.            Supply chain operation - the schedule for production activities including testing,packaging and preparation for delivery. Measurements for this component include productivity and quality.

4.            Supply chain logistics - the product delivery processes and elements including orders,warehouse, carriers, defective product returns, and invoicing.  

Effective and Efficient Supply Chain Management's Effect on Porter's Five Forces

  Effective and efficient supply chain management 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 efficiency 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.

CRM overview

Based on the figure,its provides an overview of a typical CRM system. Customers contact an organization through various means including call centers, web access, email, faxes, and direct sales. A single customer may access an organization multiple times through many different channels. The CRM system tracks every communication between the customer and the organization and provides access to CRM information within different systems from accounting to order fulfillment. Understanding all customer communications allows the organizations to communicate effectively with each customer.

CRM Strategy

  

  It is important to realize that CRM is not just technology, but also a strategy that an organization must embrace on an enterprise level.Although there are many technological components of CRM, it is actually a process and business goal simply enhanced by technology. Implementing a CRM system can help an organization identify customers and design specific marketing campaigns tailored to each customer, thereby increasing customer spending. A CRM system also allows an organization to treat customers as individuals, gaining important insights into their buying preferences and behaviors and leading to increased sales, greater profitability,and higher rate of customer loyalty.

Business Process Re-engineering

  A business process is a standardized set of activities that accomplish a specific task, such as processing a customer's order. Business process re-engineering (BPR) is the analysis and redesigns of workflow within and between enterprises. The concept of BPR traces its origins to management theories developed as early as the 19th century. The purpose of BPR is to make all business process the best-in-class.

Seven Principles of Business Process Re-engineering

Finding Opportunity Using BPR

  Companies frequently strive to improve their business processes by performing tasks faster, cheaper, and better.

Better, Faster, Cheaper of BPR

  Based on the figure that displays different ways to travel the same road. A company could improve the way that it travels the road by moving from foot to horse and then from horse to car. However, true BPR would look at taking different path. A company could forget about traveling on the same old road and use an airplane to get to its final destination. Companies often follow the same indirect path for doing business, not realizing there might be a different, faster and more direct way of doing business.

Pitfalls of BPR 

  One hazard of BPR is that the company becomes so wrapped up in fighting its own demons that it fails to keep up with its competitors in offering new products or services. While American Express tackled a comprehensive re-engineering of its credit card business, MasterCard and Visa introduced a new product- the corporate procurement card. American Express lagged a full year behind before offering its customers the same service.

Enterprise Resource Planning

  Today's business leaders need significant amounts of information to be readily accessible with real-time views into their businesses so that decisions can be made when they need to be, without the added time of tracking data and generating reports.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.

Auto Insurance Claims Processes