Week Two Questions - Information Systems in Business

1. Explain information technology's role in business and describe how you measure success?

A.
Information technology (IT) has a role to play in almost all functional areas of business. IT allows a greater understanding of a businesses practices through greater communication and providing more information for departments to work from. Through the use of this information a business can reduce costs, improve productivity and generate greater growth.

Measuring the success of IT can be very difficult. A standard measure of success is the return on investment (ROI) measure. This measure does not give an accurate value of IT as in some circumstances IT is used a precautionary device. Instead the success of IT can be measured by benchmarks, a goal which the system seeks to obtain or key performance indicators (KPIs) these can be used to evaluate current practices. It is also evaluated on wether the system is both efficient and effective, 4 areas that are considered when determining the effectiveness are Usability, Customer satisfaction, Conversion rates and Financial


2. List and describe each of the forces in Porter's Five Forces Model?

A.
1. Buyer Power: This refers to the range of suppliers available to a buyer. Where there are a number of suppliers for a buyer to choose, the buyer power is high
2. Supplier Power: This is affected by the power a supplier has over an industry, the supplier power is high where they have a direct influence over the industry.
3. Threat of Substitute Products or Services: This pressure is high when there are a wide range of alternatives available to a customer.
4. Threat of New Entrants:Where it is easy for a new competitor to enter the market the pressure is high, if there are barriers in place to restrict new competitors then the pressure is low.
5. Rivalry among existing competitors: Where the industry is intensively competitive the pressure is high.


3. Describe the relationship between business processes and value chains?

A.
Business processes and value chains are both inextricably linked together. A business process is an activity that is undertaken to complete a specific task. When are number of these activities are linked together to achieve a set goal they are referred to as a value chain. Micheal porter describes a value chain as series of activities, each adding value to the final product. This shows the relationship between that business process and value are interdependent as one goes into the other to complete the product or service.


4. Compare Porter's three generic strategies?

A.
1) Broad Cost Leadership: This strategies offers a wide range of products, that are targeted at a large low cost demographic.
2) Broad Differentiation: This strategy also targets a large market segment. However it offers a more selective product that usually come with specialised features and a higher price.
3) Focused Strategy: This strategy focus on a niche market either offering high end quality products or a cheaper product.