Study Guide
Exam March 4, 2026 4-5pm
Strategic Initiatives for Implementing Competitive Advantages
3.1 Explain the value of business processes for a company and differentiate between customer facing and business-facing processes.
Companies pride themselves on providing breakthrough products and services for customers. However there will always be annoying customers. A company must ensure its processes, like a well-oiled machine, work smoothly to keep customers happy and maintain its competitive edge.
Business Process: A standardized set of activities that accomplish a specific task, such as processing a customer’s order.
Study definition: A series of tasks to accomplish a goal.
Their are four strategic initiatives for implementing competitive advantages: Business process analysis, supply chain management, customer relationship management, and enterprise relationship management.
Business process analysis: transforms sets of inputs into sets of outputs of goods and services for another person or process by using people and tools. This process allows managers to envision how the entire company operates.
What is the primary goal of improving the efficiency and effectiveness of business processes? To improve the firm’s value chain. (optimizing the entire sequence of business activities)
Sample Business Processes
Accounting and Finance which create financial statements, paying of accounts payable, and collecting of accounts receivable.
Marketing and Sales: Promoting of discounts, communicating marketing campaigns, attracting customers, processing sales.
Operations Management: Ordering inventory, creating production schedules, manufacturing goods
Human Resources: Hiring employees, enrolling employees in health care, tracking vacations and sick time.
The sample shoes how programming process may not be contained within a single department, most organizations seems to have a cross-functional or cross department process.
Steps in the Order to Delivery Business Process
step one: create campaign, check inventory
step two: place order, notify production, check credit
step three: manufacture goods
step four: deliver goods, bill customer
step five: support sale
Business-facing processes (back-office process): invisible to the external customer but essential to the effective management of the business; they include goal setting, day-to-day planning, giving performance feedback and rewards, allocating resources.
ex: the chef who prepares the meals in the kitchen
Customer-facing processes (front-office processes): Result in a product or service received by an organization’s external customer. They include fulfilling orders, communicating with customers, and sending out bills and marketing information.
ex: the waiter who serves and communicates with the diners.
These processes ensure order fulfillment, bills are sent and customers receive marking information enhancing satisfaction and loyalty.
Value Chain Analysis: Views a firm as a series of business processes that each add value to the product or service.
Value chain map explanation: Creating a value chain map is like crafting a detailed roadmap for an entire industry. It extends beyond a single firm's boundaries, highlighting critical success factors and business processes. This map helps identify where value is added, ensuring that every step from raw material to finished product is optimized, much like tuning an orchestra for a perfect symphony.
Core Process: Business processes, such as manufacturing goods, selling products, and providing service, that make up the primary activities in a value chain
Dynamic Process: Continuously changing and provides business solutions to changing business operations. As the business and strategies change, so do the dynamic processes. Examples of dynamic processes include managing layoffs of employees, changing order levels based on currency rates, and canceling business travel due extreme weather. flexible and quick responses to external changes, ensuring businesses remain efficient and competitive in a dynamic environment.
Static Process: Uses a systematic approach in an attempt to improve business effectiveness and efficiency continuously. Managers constantly attempt to optimize the statics process. Examples of static processes include running payroll, calculating taxes, and creating financial statements.
3.2 Explain supply chain management and its role in business
Supply chain: consists of all parties involved, directly or indirectly, in obtaining raw materials or a product.
Five Basic Supply Chain PLAN Activates:
Plan: prepare to manage all resources required to meet demand
Source: Build relationships with suppliers to procure raw materials
Make: Manufacture products and create production
Deliver: Plan for transportation of goods to customers
Return: Support customers and product returns
Supply chain management (SCM): The management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and corporate profitability.
supply chain management systems manage and enhance these relationships with the main goal of creating fast, efficient, and low-cost network of business relationships that take products from concept to market.
three main business processes:
materials flow from suppliers and their upstream suppliers at all levels.
materials are transformed into semifinished and finished products- the organization’s own production processes.
products are distributed to customers and their downstream customers at all level
3.3 Explain operational and analytical customer relationships management.
Customer relationship management (CRM): involves managing all aspects of a customer’s relationships with an organization to increase customer loyalty and retention and an organization’s profitability.
Allows an organization to gain insights into customers’ shopping and buying behaviors in order to develop and implement enterprise wide strategies.
Key Initiatives of CRM:
Find new profitable customers: CRM can highlight the most impressionable customers, find a way to locate them for mailing and other opportunities.
Exceed current customer expectations: CRM helps in creating a personalized experience for the customers.
Eliminate competition: CRM can determine sales trends, enabling the company to provide customers with special deals and outsmarting its competition.
Customer Relationships Management Key Player:
Lead: A person or company that is unknown to your business.
Account: An existing business relationship exists and can include customers, prospects, partners, and competitors.
Contact: Specific individual representing the account.
Sales Opportunity: An opportunity exists for a potential sale of goods or services related to an account or contact.
CRM system processes customers interaction and uses this information to personalize experiences, predict needs, and efficiently manage customer relationships across all departments, enhancing communication and service delivery.
Customer contact points: text/instant messages, voice mail/call, email/letter, web/phone order, meeting or customer service call, twitter, Facebook, blog.
3.4 Summarize the importance of enterprise resource planning system
Enterprise resource planning (ERP): Integrates all departments and functions throughout an organization into a single system so that employees can make decisions by views enterprise wide information on all business operations.
ERP software integrates these various business functions into one complete system to streamline business processes and information across the entire organization. ERP helps employees do their jobs more efficiently by breaking down barriers between business units.
Common data repository: Allows every department of a company to store and retrieve information in real time, making information more reliable and accessible.
Module software design: Divides the system into a set of functional units (named modules) that can be used independently or combined with other modules for increased business flexibility.
ERP is a guide that each department with synchronized and accurate information.
Measuring the Success of Strategic Initiatives
4.1 Define the primary MIS roles along with their associated responsibilities
Chief information officer (CIO): Responsible for overseeing all uses of information systems and ensuring the strategic alignment of MIS with business goals and objectives. They must have a solid and detailed understanding of every aspect of an organization coupled with tremendous insight into the capability of MIS. Broad functions of a CIO includes:
managers- ensure the delivery of all MIS projects, on time and within budget
leaders- ensure the strategic vision of MIS is in line with the strategic vision of the organization.
communicator- advocate and communicate the MIS strategic vision of the organization.
Chief data officer (CDO): Responsible for determining the type of information the enterprise will capture, retain, analyze, and share.
Chief technology officer (CTO): responsible for ensuring the throughput, speed, accuracy, availability, and reliability of an organizations information technology. (efficiency)
Chief security officer (CSO): Responsible for ensuring the security of MIS systems and developing strategies and MIS safeguards against attacks from hackers and viruses. Possess detailed knowledge of networks and telecommunications because hackers and viruses usually find their way into MIS systems through networked computers.
Chief privacy officer (CPO): Responsible for ensuring the ethical and legal use of information within an organization.
Chief knowledge officer (CKO): Responsible for collecting, maintaining, and distributing the organization’s knowledge. Designs programs and systems that make it easy for people to reuse knowledge. The CKO must continuously encourage employee contributions to keep the systems up-to-date. The CKO can contribute directly to the organization’s bottom line by reducing the learning curve for new employees or employees taking on new roles.
Executive Levels that may be created within the next decade:
Chief automation officer: Determines if a person or business process can be replaced by a robot or software. As we continue to automate jobs, a member of the core leadership team of the future will be put in charge of identifying opportunities for companies to become more competitive through automation.
Chief intellectual property officer: Manages and defends intellectual property, copyrights, and patents. The world of intellectual property law is vast and complicated as new innovations continually enter the market. Companies in the near future will need a core leadership team member who can not only wade through the dizzying sea of intellectual property laws and patents to ensure their company’s compliance but also remain vigilant to protect their company from infringement.
Chief sustainability officer: Oversees the corporation’s “environmental” programs, such as helping adapt to climate change and reducing carbon emissions.
Chief user experience officer: Creates the optimal relationship between user and technology. User experience used to be an afterthought for hardware and software designers. Now that bulky instruction manuals are largely (and thankfully) a thing of the past, technology companies need to ensure that their products are intuitive from the moment they are activated.
MIS Skills gap: The difference between existing MIS workplace knowledge and the knowledge required to fulfill the business goals and strategies.
Closing the MIS skills gap by aligning the current workforce with potential future business needs is a complicated proposition. Common approaches to closing an MIS skills gap include social recruiting, off-site training, mentoring services, and partnerships with universities.
4.2 Define critical success factors (CSFs) and key performance indicators (KPIs), and explain how managers use them to measure the success of MIS project
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 goal.
Core Metrics: Critical success factors (CFSs) and Key performance Indicators (KPIs)
Critical success factors (CSFs): The crucial steps companies perform to achieve their goals and objectives and implement their strategies
Key performance indicators (KPIs): The quantifiable metrics a company uses to evaluate progress toward critical success factors. KPIs are far more specific than CSFs.
The purpose of using KPIs is to focus attention on the tasks and processes that management has determined are most important for making progress toward declared goals and targets.
The relationship between the two: Think of CSFs as the destination on a roadmap, like improving graduation rates at a college. KPIs are the mile markers showing progress, such as average grades or dropout rates. Each KPI provides a measurable glimpse into how close you are to achieving the CSF, ensuring the journey is on track.
Managers use CSFs & KPIs to track and measure MIS project success.
Market share: The proportion of the market that a firm captures.
Return on investment (ROI): Indicates the earning power of a project.
Best practices: The most successful solutions or problem-solving methods that have been developed by a specific organization or industry. Measuring MIS projects helps determine the best practices for an industry.
Efficiency MIS metrics: Measure the performance of MIS itself, such as throughput, transaction speed, and system availability.
Effectiveness MIS metrics: Measure the impact MIS has on business processes and activities, including customer satisfaction and customer conversion rates.
Efficiency and effectiveness are definitely related. However, success in one area does not necessarily imply success in the other. Efficiency MIS metrics focus on the technology itself. Although these efficiency MIS metrics are important to monitor, they do not always guarantee effectiveness. Effectiveness MIS metrics are determined according to an organization’s goals, strategies, and objectives.
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 procedures to improve system performance.
4.3 Explain why a business would use metrices to measure the success of strategic initiatives
What is a metric? A metric is nothing more than a standard measure to assess performance in a particular area. Metrics are at the heart of a good, customer-focused management system and any program directed at continuous improvement. A focus on customers and performance standards shows up in the form of metrics that assess the ability to meet customers’ needs and business objectives.
Strategic initiatives cost money.
Example:
Company spends $3 million implementing ERP.
Executives will ask:
Did operating costs decrease?
Did productivity increase?
Did revenue improve?
Metrics allow companies to calculate:
Return on Investment (ROI)
Payback period
Cost savings
Without metrics, leadership cannot defend the investment to shareholders.
Technology should support business strategy.
Metrics ensure:
IT projects support financial goals
Technology improves customer value
Operational improvements translate into profit
Example:
Goal: Improve customer satisfaction.
Metric: Increase Net Promoter Score from 70 to 85.
If score doesn’t improve → strategy misaligned.
Metrics act as early warning systems.
Example:
A company implements automation to improve efficiency.
If:
Error rate increases
Customer complaints rise
Processing time increases
Metrics reveal the strategy is failing before damage becomes severe.
Without measurement, problems go unnoticed until major losses occur.
Business leaders want to monitor key metrics in real time to actively track the health of their business.
A web-centric metric is a measure of the success of web and ebusiness initiatives.
Organizational Structure That Supports Strategic Initiatives
5.1 Explain the ethical issue associated with the use of information technology.
Ethics: The principles and standards that guide our behavior toward other people.
Ethical dilemmas in information technology is when their are different goals and responsibilities such as privacy or security. Organizations must figure out which to follow know that either path may be correct but leads to different outcomes.
Information Ethics in the Information Age Overview:
Confidentiality: The assurance that messages and information remain available only to those authorized to view them.
Information Ethics: Govern the ethical and moral issues arising from the development and use of information technologies as well as the creation, collection, duplication, distribution, and processing of information itself or without the aid of computer technologies.
Privacy: The right to be left alone when you want to be, to have control over your personal possessions, and not to be observed without your consent.
Ethical Issues in the Information Age
Copyright: The legal protection afforded an expression of an idea, such as a song, book, or video games.
Counterfeit Software: software that is manufactured to look like the real thing and sold as such.
Dight rights management: a technological solution that allows publishers to control their digital media discourage, limit, or prevent illegal copying and distributions
Intellectual Property: Intangible creative work that is embodied in physical form and includes copyrights, trademarks, and patents.
Patent: An exclusive right to make, use, and sell an invention and is granted by a government to the inventor.
Pirated software: the unauthorized use, duplication, distribution. or sale of copyright software.
Data scraping is one of the most efficient ways to get data from the web and, in some cases, to channel that data to another website.
Data scraping (web scraping): The process of extracting large amounts of data from a website and saving it to a spreadsheet or computer.
Rule 41: The part of the U.S. Federal Rules of Criminal Procedure that covers the search and seizure of physical and digital evidence.
the four quadrants where ethical and legal behaviors intersect. The goal for most businesses is to make decisions within quadrant I that are both legal and ethical. There are times when a business will find itself in the position of making a decision in quadrant III, such as hiring child labor in foreign countries, or in quadrant II, when a business might pay a foreigner whose immigration status is getting approved because the company is in the process of hiring the person. A business should never find itself operating in quadrant IV. Ethics are critical to operating a successful business today.
Digital trust: The measure of consumer, partner, and employee confidence in an organization’s ability to protect and secure data and the privacy of individuals.
5.2 Describe information security and the difference between hackers and viruses.
Downtime: Refers to a period of time when a system is unavailable.
Cybersecurity: Involves prevention, detection, and response to cyberattacks that can have wide-ranging effects on the individual, organizations, and community and at the national level
Cyberattacks: Malicious attempts to access or damage a computer system. Cyberattacks have the following attributes: Use computers, mobile phones, gaming systems, and other devices. Include identity theft. Block your access or delete your personal documents and pictures. Target children. Cause problems with business services, transportation, and power.
Cyberattacks can lead to loss of money, theft of personal information, and damage to your reputation and safety.
Information security: A broad term encompassing the protection of information from accidental or intentional misuse by persons inside or outside an organization.
Hackers: Experts in technology who use their knowledge to break into computers and computer networks, either for profit or simply for the challenge.
Drive-by hacking: A computer attack by which an attacker accesses a wireless computer network, intercepts data, uses network services, and/or sends attack instructions without entering the office or organization that owns the network
Ethical hacker: A person who hacks into a computer system to find vulnerabilities to help a company test its security. An ethical hacker hacks without malicious or criminal intent
One of the most common forms of computer vulnerabilities is a virus.
Virus: Software written with malicious intent to cause annoyance or damage. Some hackers create and leave viruses, causing massive computer damage.
Malware: Software that is intended to damage or disable computers and computer systems.
Botnets: Malware that causes a collection of connected devices to be controlled by a hacker. Botnets perform distributed denial-of-service attacks, steal data, send spam, and allow the hacker to access devices without the owner’s knowledge.
Worm: Spreads itself not only from file to file but also from computer to computer.
The primary difference between a virus and a worm is that a virus must attach to something, such as an executable file, to spread. Worms do not need to attach to anything to spread and can tunnel themselves into computers
Valuing and Storing Organizational Information —Database
6.1 Explain the four primary traits that determine the value of data
Timeliness is an aspect of data that depends on the situation. In some firms or industries, data that is a few days or weeks old can be relevant, whereas in others, data that is a few minutes old can be almost worthless.
Real-time data: Means immediate, up-to-date data.
Real-time systems: Provide real-time information in response to requests.
Accuracy → Data is correct and error-free
Completeness → All required data is present
Consistency → Data is the same across systems
Timeliness → Data is current and accessible
6.2 Describe a database, a database management system, and the relational database model
The core component of any system, regardless of size, is a database and a database management system.
Database: Maintains data about various types of objects (inventory), events (transactions), people (employees), and places (warehouses).
Database management system (DBMS): Creates, reads, updates, and deletes data in a database while controlling access and security.
Data models: Logical data structures that detail the relationships among data elements by using graphics or pictures.
For flexibility in supporting business operations, managers need to query or search for the answers to business questions, such as which artist sold the most albums during a certain month.
Relational database model: Stores data in the form of logically related, two-dimensional tables.
Relational database management system: Allows users to create, read, update, and delete data in a relational database. The relationships in the relational database model help managers extract this data.
6.3 Identify the business advantages of relational database
Redundant data can cause storage issues along with data integrity issues, making it difficult to determine which values are the most current or most accurate.
Data redundancy: The duplication of data, or the storage of the same data in multiple places.
Data streaming into a database must be validated and checked to ensure it is accurate beyond just being entered into the system.
Business rule: Defines how a company performs certain aspects of its business and typically results in either a yes/no or true/false answer.
Data integrity: A measure of the quality of data.
Integrity constraints: Rules that help ensure the quality of data
Relational integrity constraints: Rules that enforce basic and fundamental information-based constraints.
Business-critical integrity constraints: Enforce business rules vital to an organization’s success and often require more insight and knowledge than relational integrity constraints.
The database had to be scalable to handle the massive volumes of information and the large numbers of users expected for the launch of the website.
Data latency: The time it takes for data to be stored or retrieved.