Chapter 1

Business Driven Technology

MANGT 366 Information Technology for Business

Chapter 1: Management

Information Systems: Business Driven MIS

Class Focus this semester• Business Driven Technology

– Business initiatives should drive technology choices• Business needs first: technology supports those needs• Core business fundamentals are constant or get better: technology

changes

• Business Intelligence– How do we acquire it? How do we use it?– What do we do with it?– Defined: A broad category of applications and technologies for

gathering, storing, analyzing and providing access to data to help users make better business decisions.

• Data-driven decision making

– Also referred to as Business Analytics• Management 665 Business Analytics and Data Mining

Information Technology’s Role in Business

• Information technology is everywhere in business

Information Technology’s Impact on

Business Operations

• For a long time, the different parts of a business were organized by independent functional areas or functional silos: everyone thought that what happened in one part of the business was totally independent from other areas of the business.

While you might think that each of the different areas of a business are independent, they are actually interdependent because they require information from around the organization in order to operate. They do not exist in isolation.

Information Technology (IT) enables business success

• In order to be successful in business, you must understand how to use information technology to be innovative.– Using IT and/or spending lots of money on IT will not equal

business success.

• IT is used to leverage the talents of people– IT by itself does not get the job done.– IT is only useful if the right people know how to use it and

manage it effectively.

• IT is a TOOL (and if you don’t know how to use the tool, then you won’t be successful)

The function of the IT department is to get people, technologies and procedures to work together to solve business problems.

• In order for this to happen, it is important to understand– Data, information and business intelligence– IT resources

• Information technology is EVERYWHERE in business and if you want to be successful in business, you need to understand technology.

Data• Raw facts that describe the characteristic of an event • Data recording sales events in an Excel Spreadsheet

Without analyzing the data, it is just a bunch of names and numbers.

Information• Data converted into a meaningful and useful context is

information• Data turned into information

One person’s information might be another person’s data (store manager vs CEO)

You can analyze that data even further by running queries to gain deeper insights

Pivot tables help us gain a better understanding of our data and information: primary business analysis tool

Business Intelligence• The analysis of data and information from multiple sources to

gain a comprehensive picture of the factors impacting your business– Analyze patterns and trends– Attempt to determine relationships between variables– Predictive analytics (develop models to predict behavior)– Used in business decision-making (Data Analytics)

• These multiple sources include:– Suppliers Customers– Competitors Business partners– Data from industry Data from governmental sources

• Manipulate multiple variables from multiple sources (sometimes even manipulate hundreds of variables) to gain a better understanding of the data.

IT ResourcesPeople use

Information technology to work with

Information

• The single most important resource in any organization is its people. Your greatest asset is your brain/mind (your ability to think). – Information technology (IT) is simply a set of tools that helps

you work with and process information.

Important IT Skills for Functional Areas• Accounting

– Accounting Information Systems– Spreadsheet Modeling– Database Design and

Management– Web Research– Network Security/IT auditing

• Management– ERP software– Spreadsheet Analysis– Database Management– Web sites and web portals

• Finance– Spreadsheet Modeling– Statistical Analysis to identify and

measure risk.– Database Management– Web sites and Search Engines

• Marketing– Customer Relationship Management– Spreadsheet Software (what-if analysis)

– Database Management, Data Warehouses and Data Mining

– Communications software and desktop publishing

• Operations Management– Advanced Statistical techniques and advanced spreadsheet modeling– Scheduling software, ERP software, supply chain management software

The End

Opportunities for Knowledge Workers

VideoSegments 0:0-2:50Segment 5:15-6:40Segment 7:50-end

Video: IS Todayby Conoco Phillips

Accounting• Accounting Information Systems: almost all accounting

systems are computerized.

• Database Management: Accounting information is stored in databases and that info. is used to create accounting reports.

• Database Design: In order to audit accounting systems, accountants must understand the design of the database and be able to follow transactions through the system.

• Web Research: Accountants frequently consult rules and regulations available on the Internet: must be able to rapidly search for and apply information found.

• Network Security: Knowledge of a company’s computer systems and networks is required to assure the security of a company’s information.

• Spreadsheet modeling: financial projections and analyses require extensive use of electronic spreadsheets and accountants must be very skilled in the use of spreadsheets.

Finance• Spreadsheet modeling : advanced knowledge is essential as

you forecast cash flows and evaluate changes in assumptions.

• Statistical Packages and Statistical Analysis: Used to help decision makers identify and measure project risk.

• Database Management: Must be able to create, maintain and manipulate financial measures stored in a database.

• Internet Sites and Web Portals: Corporations use web sites to provide investors with company information. Automated bill paying impacts both accounts receivable and accounts payable.

• Search Engines: Must be able to accurately and efficiently gather required business information from external sources.

• Must understand the technological strategy and technological innovation being used in the industry. For example, what are banks doing?

Marketing• Must understand the use of Customer Relationship Management (CRM)

software and how it can be used to manage relationships with customers.

• Must understand Budget Analysis/Impact Software and Spreadsheet Software: Used to evaluate financial feasibility of new products and services, as well as advertising and promotion strategies. Must be able to run “What If” scenarios.

• Database Management: Marketers work with vast amount of information that is stored in databases, and you must know how that information is organized and how it can be accessed.

• Data Warehouses and Data-Mining Tools provide a way to summarize large amounts of information and understand it from a different perspective. Must be able to extract information from a data warehouse and be able to analyze it.

• Must be able to work with communications support software, including email and contact management software.

• Must be familiar with desktop publishing software which is often used to create marketing materials.

Management• Must understand the role of Enterprise Resource Planning

Systems (ERP) and how ERP systems promote the corporate-wide sharing and communication of information.

• Managers use spreadsheets to calculate value, display financial information and work with numbers.

• The information used by managers and the people that they supervise can be found in databases.

• Internet Sites and Web Portals: Corporations use web sites to display and access information, as well as link employees, recruiters and other institutions.

• One of the new areas of business is Electronic Commerce, and managers must understand the potential of information technology and the skills needed to be successful in business-to-business and business-to-consumer electronic commerce.

Production and Operations Management• For most careers in POM, a detailed knowledge of statistical tools and

techniques is essential.

• Advanced decision support spreadsheet functions, such as goal seeking, optimization, and statistical tools, provides support for many POM careers.

• A knowledge of Supply Chain Management Systems allows a person to work with each department of a company, integrating solutions to maximize customer value.

• Must have an understanding of Material Requirements Planning Software (part of ERP) and how the business operates from beginning to end and how to optimally model those operations.

• Must be able to use scheduling software to optimally schedule business resources (people, plant equipment, transportation modes, manufacturing operations).

• Must be proficient in the use of Data-Mining Tools and other statistical techniques in order to be able to find relationships in the information contained within data warehouses.