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Week 5 - Creating Business with IT

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by

Peter Zhao

on 25 November 2014

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Transcript of Week 5 - Creating Business with IT

Business Information Systems Journey
Analyse Case Study
CBV - step 2, 3 and 4
Conclusion
Glossary

Creating Business Value with IT
Learning Unit 5

Methodology (4 step process)
Creating Business Value with IT
Purpose
CBV 4 step Framework
Case Study: Australian Bicycles
Using the appropriate analytical tools and following the 4 step CBV methodology (explained in the lecture) to:
identify the problem(s) an organisation is experiencing

determine which of the 9 processes of the organisation needs to be improved

formulate possible solution(s) which allows the organisation to deal with the problem(s) and become more competitive.

identify information systems which could be used to assist with solution

identify the IT requirements for the selected information system
Australian Bicycles is a small bicycle company that builds and sell specialist racing bicycles in Australia. It has been in business for over 50 years and hasn't changed much in that time. When purchasing parts to assemble the bicycles the owner has always just purchased 20 of everything needed, whether or not the bicycles need more than one of each part (e.g. each bicycle has two wheels but only one seat).

This has worked ok for many years, since the owner has just kept the extra parts as spare or waited until he did another bulk order if he was running low on particular parts. Times have changed though and the bicycle business is now much more competitive. Australian Bicycles has to compete with new local businesses such as
"Bikes 4 U"
that just import ready built bicycles.

The staff at Australian Bicycles are IT savy, they have developed, maintained and created multiple information systems for the business but currently the shop is looking at expanding and all staff are very busy
4 Step Methodology
Step 1 – Perform Value Chain Analysis

Step 2 – Determine Business Strategy & Processes

Step 3 – Determine Information System Needed

Step 4 – Determine ICT Infrastructure Requirements

Step 1 – Perform Value Chain Analysis
Purpose - explain the relvance of this step

Tools - identify which of the tools are to be used in the analysis
must
justify
selection by
relating it to the case study
(this shows you are able to perform the analysis and that is was not just a lucky guess)
identify the dominate for
or the strengths and weakness

VCR - Apply Value Chain Rule to determine where to add value (i.e., Supporting activity processes, specifically which of the four, Demand Side, Supply Side or ERP).

Problem
What needs to be fixed? Again, justify response by
relating it to the case study
.
Step 2 – Determine Business Strategy & Processes
Purpose - explain the relvance of this step

Strategy - identify
what needs
to be done to achieve desired goals and overcome the problem identified
(if the problem identified, in step 1, is incorrect, the strategy is likely to be incorrect)
A strategy is not very detailed
must
justify
strategy by
relating it to the case study
(this shows you are able to perform identify the problem and develop an appropriate solution)

Processes - Formulate procedures to achieve the strategy or strategies
Processes are detailed (explain
how
the strategy or strategies are to be achieve)

Develop several processses (at least 2 for each strategy)
This shows you are thinking outside the box For example, getting home from a night out, the strategy is to get home (i.e., what is to be achieved), but how you get home may vary (i.e., processes)

Although you may only choose one process in the end you need to show that you are able to achieve the goal by thinking of some possible alternatives.
Step 3 – Determine Information System Needed
Purpose - explain the relvance of this step

Information System - Name and explain the purpose of the selected information
Identify how this information system supports the strategies and processes identified in step 2)
Relate to the new strategies and processes in step 2
Step 4 – Determine ICT infrastructure requirements
Purpose - explain the relvance of this step

Identify the hardware and software requirements necessary to support the information system
Hardware
Input device
Output device
Communication device
Storage device
Software
Software for processing
Software for communication

Identify how the chosen information system will be implemented (i.e.,
insourced or outsourced
and explain why this method was chosen
refer to the insourcing / outsourcing matrix to explain your answer
Highlight important areas in the case study
Refer to the 4 step framework, which sections of the case study is needed?
Step 1 – Perform Value Chain Analysis
Purpose - Analyse the internal and external factors affecting the business and determine where to add value in order to gain the most return on investment.

Tools - Porters 5 forces, identifies the relative attractiveness of an industry. The dominant for is
Threat of New entrants
as the case study states new

local competitors such as
Bikes 4 U
have entered the

market as such we need to increase value of support activities.

Value / Improvements must be made to the supporting processes, particularly FI, HR and Procurement Firm infrastructure deals with,
information
). As stated in the case study, the owner orders 20 of everything regardless whether they are needed. This indicates poor record keeping.

Record Keeping or inventory needs to be fixed. Procurement procedures need to be fixed. Staffing issues need to be fixed.
Step 2 – Determine Business Strategy & Processes
Purpose - Determine New strategies and processes to overcome the identified problems

Strategy - Method of keeping accurate and up-to-date records of inventory to ensure we have correct information when placing product orders. Not to simply order 20 of everything

Processes - at least two
Examples
Stocktake to identify current inventory

Accurately record sales information

Update inventory information when items are sold

Strategy - Determine staff needs
Processes - at least two
Examples
identify staff needs by?
Train Staff
Employee new staff
Step 3 – Determine Information System Needed
Purpose - Determine available information systems which could support the new strategies and processes

Information System - Transaction Processing Information System
A transaction information System allows for recording of sales and updating of inventory

Staff at Australian Bicycles can use the transaction Processing Information System to record the sales of products and maintain and accurate record of inventory. This information would be relevant for the ordering process.

Information System - HRM Information System
Identify staff roles, qualifications, responsibilities.
Australian Bicycles can use the HRM information system to determine staff availability, skills and responsibilites
Step 4 – Determine ICT infrastructure requirements
Purpose - Determine the ICT infrastructure required to support the new information System

Hardware
Scanner - input device to enter sales information
Printer - output device to discplay sales, inventory information
Modem, Router, Fax - communication device to share information
Database, hard drive - Storage device to record all sales and inventory information
Software
Sales Software - sales management information software
Inventory Software - inventory management software
Email - communicaiton software to share information
HRM software

Outsource
IT savy - competence high
TPS - differentiation low
Staff all very busy with as the shop is looking to expand (deciding factor)
Questions?
1. What do we know?
3. Where is the issues?
Business
?
Business
Customer
?
Business
Supplier
?
Business
Supplier
?
Customer
?
?
2. Which of the 9 processes are affected and why?
Firm Infrastructure?
Human Resource
Research and Technology
Procurement
Receive and Store raw materials
Make the product or service
Deliver the product or service
Market and sell the product or service
Service after the sale
1. What do we know?
Purchase 20 of everything whether or not the parts are needed
Industry now much more competitive
New local Businesses (Bikes 4 U)
Staff IT Savy
Staff very Busy
Think? why?
Tool?
Dominant force?
Strength or weakness?

Information about staff?
Insourcing or outsourcing?

2. Which of the 9 processes are affected any why?
Firm Infrastructure
HR
Procurement
Why?
What does FI include (refer to lecture notes)
3. Where is the Issue?
Business
?
Business
Supplier
?
Business
Customer
?
Business
Supplier
?
Customer
?
?
Relating to?
Business
or
Business and Supplier
or
Business and Customer
or
more than one
Business and Supplier + Business
Busines and Customer + Business
VCR
1. What do we know?
Purchase 20 of everything whether or not the parts are needed
Industry now much more competitive
New local Businesses (Bikes 4 U)
Staff IT Savy
Staff very Busy
Think? why?
Tool?
Dominant force?
Strength or weakness?

Information about staff?
Insourcing or outsourcing?

Not sure about own inventory
Porters 5 forces
Dominant Force - Threat of New entrants
Cannot answer this yet. No information about differentiation
2. Which of the 9 processes are affected any why?
Firm Infrastructure
because firm infrastructure deals
Information.
In the case the problem is record keeping (i.e., keeping the correct information)
3. Where is the Issue?
Firm Infrastructure
is a supporting process.
Specifically it is a problem within within the business
Business
?
Justification "applying VCR"
Putting it all together !!
Analyse Case Study
Leads to step 2
Step 2 - Determine Strategy and Processes
Need to identify:
Strategy
This is the goal we want to achieve (the WHAT)
WHAT
is the problem?
WHAT
do we want to do?

Processes
This is the
HOW
(there may be many possibilities we may take to achieve the same goal)
HOW
will we achieve our strategy / goal
Generally many possibilities may exist and businesses will identify the advantages and disadvantages of each possibility
What are can we do in this instance? how many possibilities can you identify?
Please identify at least 2 (This shows that you are thinking and understand that there is no one correct method)
Step 3 - Determine the Information System
Need to identify:
What Information System is available to support the new strategy and processes ?
Name
- name of the information system
Describe
- Explain the purpose of the information system
Relate
(to step 2) - Explain how the information system supports your new strategy and processes
Step 4 - Determine the ICT
Need to identify:
The hardware required for the IS
Input device
Output device
Communication device
Storage device
The software required for the IS
Software for processing
Software for communication
Insourcing or outsourcing
Use the Insourcing and outsourcing matrix to explain
Putting it together
TPS does this

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