Information Systems in Business
Explain information technology’s role in business and describe how you measure success?
As IT operates to the further the success of the business the evaluation of the overall effectiveness can be determined through keys questions which should be asked by executives. These underpin the maintenance of IT as well possible strategies to improve the use of IT including the need to outsource operations or identifying possible risk factors within IT projects. Other means of measuring success include the Efficiency Metric to determine the performance of the system and the Effectiveness Metric to determine the influence of IT systems on the business process. The Efficiency Metric solely focuses on the technology including the availability, throughput speed, response time and web traffic whereas Effectiveness Metrics is concerned with the influence of IT on the aims of the organisation such as customer satisfaction, usability, finance and conversion rates.
List and describe each of the forces in Porter’s Five Forces Model?
The forces in the Porter’s Five Forces Model are :
Buyer Power
Seller Power
Threat of Substitute Products or Services
Threat of new entrants
Rivalry amongst existing competitors
Describe the relationship between business processes and value chains?
Within the business the activities involved in completing specific tasks are referred to as the business processes. The value chain is a succession of the processes compiled to form a chain which are involved in increasing the value of the product. The value chain can be separated into primary activities which are involved in the manufacture; distribution and customer support such as acquiring raw materials, buying, selling and after sales service and support value activities. Support value activities are those which provide a foundation for the primary activities such as administration technology development and human resource management. There is a direct relationship between the business processes and value chains as they both determine the profit for the product or service. The cost of the business processes must be lower than the cost which a customer is willing to pay.
Compare Porter’s three generic strategies?
Porter’s three generic strategies are an outline for competitors seeking to maintain a competitive advantage in a market. The strategies focus on the differentiation of the products, the cost at which the organisation produces their products or the scope of the market which the product is aimed.
The broad cost leadership strategy seeks to gain a competitive advantage by maintaining the lowest production rate. This strategies sole focus is on cost advantage through a low price product often ‘no frills’ to appeal to a wide market or the business may also produce quality products or services with effective marketing. This strategy often relies on constant evaluation in reducing production costs in order to achieve offer the lowest price with a considerable profit.
The differentiation strategy aims to produce a product that is unique through brand, design, technology, features or customer service whilst this may compromise price. The loyalty of customers separates those who choose not to spend above average price and seeks to bring about a higher than average return as the increased cost is passed onto the buyer.
The focus strategy seeks to forfeit a large number of possible customers in an attempt to better fulfil the needs of a smaller more concentrated market. In this strategy a business will attempt to further innovate products to suit a smaller secular market rather than produce products on efficiency.
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