Week 2 Questions

Explain information technology’s role in business?

Information Technology is everywhere in the business world today. It helps to measure, structure and forecast many aspects in business including accounting, finance, human resources, sales, marketing, operations management, and management information systems. A good understanding of information technology is a great asset to anyone who is interested in business.

What are Efficiency and Effectiveness Metrics? Provide some examples of each.

Efficiency Metric measures the performance of the IT system itself. Examples: the responding time/speed of some websites; how directly/easy the sites are guiding viewers.

Effectiveness Metric measures the impact IT has on business processes and activities. Examples: How much they help to achieve customers' satisfaction; how well it helps to operate the business.

What does Porter’s Five Forces Model attempt to explain? How does the internet affect the model?

1. Potential new entrants - Internet makes the entry easier for many industries because information is easy to obtain.

2. Buyers - Internet provides many more choices for the consumers in prices, products and producers.

3. Suppliers - Internet may provide more channels for suppliers but at the same time, they usually need to cut price if the market is competitive.

4. Substitutes - Internet provides many alternatives to a product so that products could easily be replaced.

5. Rivalry - Internet can heat up the competition with its open and fast information.

Describe the relationship between business processes and value chains?

The value chain approach sees an organization as a series of business processes which are standardized sets of activities that accomplish specific tasks. Each process adds value to the product or service for each customer.The value chain must enable the organization to provide unique value to its customers to create a competitive advantage.

Textbook: Baltzan, Phillips, Lynch & Blakey, Business Driven Information Systems, 1st Australian/New Zealand ed, chapter 1