MGMT 382

Lecture Notes Condensed

Fact

The confirmation or validation of an event or object

Information Age

Present day, during which infinite facts are widely available to anyone who can use a computer

Examples of business and technology

Amazon, Netflix, Zappos

Internet of Things

A world where interconnected devices with Internet access have the ability to collect and share data without human intervention

Machine-to-Machine (M2M)

Refers to devices that connect directly to other devices

Core drivers of the information age

Data, information, business intelligence, knowledge

Data

Raw facts that describe the characteristics of an event or object

Structured data

Stored in a traditional system such as a relational database or spreadsheet

Unstructured data

Not defined and does not follow a specified format

Machine-generated data

Created by a machine without human intervention

Human-generated data

Data that humans, in interactions with computers, generate

Big data

A collection of large, complex data sets, including structured and unstructured data, which cannot be analyzed using traditional database methods and tools

Snapshot

A view of data at a particular point in time

Four characteristics of data

Variety, veracity, volume, velocity

Variety

Different forms of structured and unstructured data

Veracity

The uncertainty of data (biases, noise, abnormalities)

Volume

The scale of data

Velocity

The analysis of streaming data as it travels around the Internet

Information

Data converted into a meaningful and useful context

Report

A document containing data organized in a table, matrix, or graph allowing users to easily comprehend and understand information

Static report

Created once based on data that does not change

Dynamic report

Changes automatically during creation in real-time

Business intelligence

Information collected from multiple sources that analyzes patterns, trends, and relationships for strategic decision making

Analytics

The science of fact-based decision making

Business Analytics

The scientific process of transforming data into insight for making better decisions

Descriptive analytics

Techniques that describe past performance and history

Predictive analytics

Techniques that extract information from data and use it to predict future trends and identify patterns

Prescriptive analytics

Techniques that create models including the best decision to make or course of action to take

Knowledge

Skills, experience, and expertise coupled with information and intelligence that creates a person’s intellectual resources

Knowledge worker

Individual valued for their ability to interpret and analyze information

Business departments

Accounting, finance, HR, marketing, operations management, sales

MIS Solution

Common departments working interdependently

Goods

Material items or products to satisfy a good or need

Services

Tasks performed by people that customers will buy to satisfy a want or need

Production

The process where a business takes raw materials and processes them or converts them into a finished product for its goods or services

Systems thinking

A way of monitoring the entire system by viewing multiple input being processed or transformed to produce outputs while continuously gathering feedback on each part

Systems thinking

Input —> Process —> Output —> Feedback

MIS

A business function like accounting and HR which moves information across the company to facilitate decision making and problem solving

CIO

Oversees all uses of information and ensures strategic alignment of MIS with business goals and objectives

CDO

Responsible for determining the types of information the enterprise will capture, analyze and share

CTO

Responsible for ensuring the throughput, speed, reliability of information

CSO

Responsible for ensuring the security of MIS systems

CPO

Responsible for ensuring the ethical and legal use of information

CKO

Responsible for collecting, maintaining, and distributing the organization’s knowledge

Business strategy

A leadership plan that achieves a specific set of goals or objectives

Competitive advantage

A product or service that an organization produces at a higher value than competitors

First-mover advantage

Occurs when an organization can significantly impact its market share by being first to market with a competitive advantage

Business tools

SWOT Analysis, Five Forces Model, Value Chain Analysis, Three Generic Strategies

SWOT Analysis

Evaluates strengths, weaknesses, opportunities, and threats

Five Forces Model

Substitutes, Buyer Power, New Entrants, Supplier Power, Rivalry

Buyer power

Ability of buyers to affect the price of an item

Switching cost

Manipulating costs that make customers reluctant to switch to another product

Loyalty program

Rewards customers based on the amount of business they do with a particular organization

Supplier power

The suppliers’ ability to influence the prices they charge for supplies

Supply chain

Consists of all parties involved in the procurement of a product or raw material

Threat of Substitutes

High when there are many alternatives

Threat of New Entrants

High when there is low barriers to entry

Entry barrier

A feature of a product or service that must be cleared for entry

Rivalry

High when competition is fierce in the market

Porter’s Three Generic Strategies

Cost Leadership, Differentiation, Focused Strategy

Business process

A standardized set of activities that accomplish a specific task, such as a specific process

Value chain analysis

Views a firm as a series of business processes that each add value to the product or service

Primary value activities

Logistics, operations, marketing, sales, customer support

Support value activities

HR, tech department, infrastructure, procurement

Decision Making Process

Problem identification, Data collection, Solution generation, Solution test, Solution selection, Solution implementation

Operational decision making

Employees develop, control and maintain core business activities required to run the day-to-day operations

Structured decisions

Situations where established processes offer potential solutions

Managerial decision making

Employees evaluate company operations to identify, adapt to, and leverage change

Semistructured decisions

Occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite decision

Strategic decision making

Managers develop overall strategies, goals and objectives

Unstructured decisions

Occurs in situations in which no procedures or rules exist to guide decision makers toward the correct choice

Project

A temporary activity a company undertakes to create a unique product, service, or result

Metrics

Measurements that evaluate results to determine whether a project is meeting its goals

Critical success factors (CSFs)

The crucial steps companies make to perform and achieve their goals and objectives and implement strategies

Key performance indicators (KPIs)

The quantifiable metrics a company uses to evaluate progress toward critical success factors

External KPI

Market share (portion of market a firm captures)

Internal KPI

ROI (earning power of a project)

Efficiency MIS metrics

Measure performance of MIS itself

Effectiveness MIS

Measures the impact MIS has on business processes

Benchmark

Baseline values a system seeks to attain

Benchmarking

A process of continuously measuring system results and comparing them to benchmarks

Model

A simplified representation or abstraction of reality

Transaction Processing System (TPS)

Basic business system that serves operational level

Online Transaction Processing (OLTP)

Capturing of transaction and event information using technology to process, store, and update

Source document

The original transaction record

Online Analytical Processing (OLAP)

Manipulation of information to create business intelligence in support of strategic decision making

Decision Support System (DSS)

Models information to support manager and business professionals during the decision making process

Quantitative models

What-if analysis, sensitivity analysis, goal-seeking analysis, optimization analysis

Executive Information System (EIS)

A specialized DSS that supports senior executives

EIS offerings

Consolidation, drill-down, slice-and-dice, pivot

AI

Simulates human intelligence such as the ability to reason and learn

Weak AI

Machines make decisions based on reasoning and past sets of data (majority of AI today)

Strong AI

Works towards providing brainlike powers to AI machines

Expert systems

Computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems

Genetic Algorithm

AI system that mimics survival of the fittest process

Case-based Reasoning

New problems are solved based on solutions to past cases

Mutation

The process within a genetic algorithm of randomly trying combinations and evaluating the success or failure of the outcome

Machine learning

A type of artificial intelligence that enables computers to both understand concepts and also learn

Data augmentation

Occurs when adding additional training examples

Overfitting

Occurs when a machine learning model matches the learning data too closely and thus is not an effective predictor