business driven technology: January 2016

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 granularity 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 granularity of organizational information

THE VALUE OF TRANSNATIONAL AND ANALYTICALLY INFORMATION

Transaction information verses analytically information
THE VALUE OF TIMELY INFORMATION

- 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 decisions

- You never want to find yourself using technology to help you make a bad decision faster

- Characteristics of high-quality information include;

- Low quality information example;

UNDERSTANDING THE COSTS OF POOR INFORMATION

- The four primary sources of low quality information include;

- Online customers intentionally enter inaccurate information to protect their privacy

- Information from different systems have different entry standards and formats

- Call center operators enter abbreviated or erroneous information by accident or to save time

- Third party and external information contains inconsistencies, inaccuracies and errors

- 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 nonexistent 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.
- Timeliness is an aspect of information that depends on the situation

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.

INFORMATION TECHNOLOGY 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.

Average CIO compensation by industry

Industry	Average CIO Compensation
Wholesale/Retail/Distribution	$ 243,304
Finance	$ 210,547
Insurance	$ 197,697
Manufacturing	$ 190,250
Medical/Dental/Health Care	$ 171,032
Government	$ 118,359
Education	$ 93,750

· What concerns CIOs the most

Percentages %	CIOs Concerns
94	Enhancing customer satisfaction
92	Security
89	Technology evaluation
87	Budgeting
83	Staffing
66	ROI analysis
64	Building new applications
45	Outsourcing hosting

o Chief Technology Officer (CTO) – responsible for ensuring the throughput , speed, accuracy, availability and reliability of IT

o Chief Security Officer (CSO) – responsible for ensuring the security of IT systems

o Chief Privacy Officer (CPO) – responsible for ensuring the ethical and legal use of information

o Chief Knowledge Officer (CKO) – responsible for collecting, maintaining and distributing the organization’s knowledge

THE GAP BETWEEN BUSINESS PERSONNEL AND IT PRSONNEL

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 AND SECURITY

Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful
In recent years, such event as the 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 issues;

Privacy – the right to be left alone when you want to be to have control ever your own personnel possessions and not to be observed without your consent

Issues affected by technology advances

Intelligent 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 lock 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 personnel privacy is a top concern for Americans in the 21^st century
2.	Among Internet users, 37 percent would be “a lot” more inclined to purchase a product on a websites that had a privacy policy
3.	Privacy/security is the number one factors that would convert Internet researchers into Internet buyers

SECURITY – HOW MUCH WILL DOWNTIME COST YOUR BUSINESS??

Sources of Unplanned Downtime
Bomb threat	Hacker	Snowstorm
Burst pipe	Hail	Sprinkler malfunction
Chemical spill	Hurricane	Static electricity
Construction	Ice storm	Strike
Corrupted data	Insects	Terrorism
Earthquake	Lightning	Theft
Electrical short	Network failure	Tornado
Epidemic	Plane crash	Train derailment
Equipment failure	Frozen pipe	Smoke damage
Evacuation	Power outage	Vandalism
Explosion	Power surge	Vehicle crash
Fire	Rodents	Virus
Flood	Sabotage	Water damage (various)
Fraud	Shredded data	Wind

· How much will downtime cost your business??

PROTECTING INTELLECTUAL ASSETS

· 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 crates tremendous information security risks for organization

Percentage of IT Budget Spent on Information Security

Average Reported Computer Security

Expenditure/Investment per Employee

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).