CHAPTER 5 : ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES

Organizational Structures:

Organization must work closely together to develop strategic initiatives that create competitive advantages.

1) IT Roles and Responsibilities:

Chief Information Officer (CIO)- responsible for overseeing all uses of information technology and ensuring the strategic alignment of IT with business goals and objectives.

Chief Technology Officer (CTO)- responsible for ensuring the throughput, speed, accuracy, availability, and reliablity of an organization's information technology.

Chief Security Officer (CSO)- responsible for ensuring the security of IT systemand developing strategies and IT safeguards againts attacks from hackers and viruses.

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.

2) The Gap Between Business Personnel and IT Personnel

- Business personnel posses expertise in fuctional areas such as marketing, accounting, sales, and so forth.

- IT personnel have the technological expertise. 

- Unfortunately, a communications gap often exists between the two.

Improving Communication:

- Business personnel must seek to increase their understanding of IT. IT personnel must understand the business if the organization is going to determine which technologies can benefit (or hurt) the business.

It is the responsibility of the CIO to ensure effective communication between business and IT personnel.

Ethics

 

the principles and standards that guide our behavior toward other people.

Privacy

- the right to be left alone when you want to be, to have control over your own personnel possessions, and to not be observed without your consent.

CHAPTER 4 : MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

1) Measuring information technology success.

 - Key performance indicator – measures that are tied to business drivers

 - Metrics are detailed measures that feed KPIs

- Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor 

business centered, but requires input from both IT and business professionals

2) Efficiency and effectiveness

·         Efficiency IT metric – measures the performance of the IT system itself including throughput, speed, and availability

·         Effectiveness IT metric – measures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases.

3)Bench-marking - base-lining metrics

- Regardless of what is measured, how it is measured, and whether it is for the sake of efficiency or 

effectiveness, there must be 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) The interrelationship of efficiency and effectiveness IT metrics

- Efficiency IT metrics focus on technology and include:

• Throughput -  the amount of information that can travel through a system at any point
• Transaction speed - the amount of time a system takes to perform a transaction
• System availability -  the number of hours a system is available for users
• Information accuracy - the extent to which a system generates the correct results when executing the same transaction numerous times
• Web traffic -  includes a host of benchmarks such as the number of page views, the number of unique visitors, and the average time spent viewing a Web page
• Response time - the time it takes to respond to user interactions such as a mouse click

- Effectiveness IT metrics focus on an organization’s goals, strategies, and objectives and include:

• Usability - The ease with which people perform transactions and/or find information. A popular usability metric on the Internet is degrees of freedom, which measures the number of clicks required to find desired information.
• Customer satisfaction - Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer.
• Conversion rates - The number of customers an organization “touches” for the first time and persuades to purchase its products or services. This is a popular metric for evaluating the effectiveness of banner, pop-up, and pop-under ads on the Internet.
• Financial - Such as return on investment (the earning power of an organization’s assets), cost-benefit analysis (the comparison of projected revenues and costs including development, maintenance, fixed, and variable), and break-even analysis (the point at which constant revenues equal ongoing costs).

5) Metrics for Strategic Initiatives

Metrics for measuring and managing strategic initiatives include:

• Web site metrics
• Supply chain management (SCM) metrics
• Customer relationship management (CRM) metrics
• Business process reengineering (BPR) metrics
• Enterprise resource planning (ERP) metrics

6) Website metrics

- Web site metrics include:

• Abandoned registrations
• Abandoned shopping cards
• Click-through
• Conversion rate
• Cost-per-thousand
• Page exposures
• Total hits
• Unique visitors

7) Supply chain management metrics

• Back order : An unfilled customer order. A back order is demand (immediate or past due) against an item whose current stock level is insufficient to satisfy demand.
• Customer order promised cycle time : The anticipated or agreed upon cycle time of a purchase order. It is a gap between the purchase order creation date and the requested delivery date.
• Customer order actual cycle time : The average time it takes to actually fill a customer’s purchase order. This measure can be viewed on an order or an order line level.
• Inventory replenishment cycle time : Measure of the manufacturing cycle time plus the time included to deploy the product to the appropriate distribution center.
• Inventory turns (inventory turnover) : The number of times that a company’s inventory cycles or turns over per year. It is one of the most commonly used supply chain metrics.

     

CHAPTER 3: STRATEGICS INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

       In this chapter, there are 4 types high-profile strategic initiatives that an organization can undertake to help it gain competitive advantages and business efficiency, which is:

Supply Chain Management (SCM)

        SCM involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. There are 4 basic of SCM include:


1) Supply chain strategy - strategy for managing all resources to meet customer demand.
 
2) Supply chain partner - partners throughout the supply chain that deliver finished products,                                                                    raw materials, and services.
3) Supply chain operation - schedule for production activities.

4) Supply chain logistics - product delivery process.

Effective and efficient supply chain management systems:

•  Decrease the power of its buyer.
•  Increase its own supplier power.
• Increase switching costs to reduce the threat of substitute products or services
• Create entry barriers thereby reducing the treat new entrants.
• Increase efficiency while seeking a competitive advantage through cost leadership.

Customer relationship management (CRM)

        Customer Relationship Management (CRM) involves managing all aspects of customer‘s relationship with an organization to increase customer loyalty and retention and an organization’s profitability.

       Customer Relationship Management (CRM) allows an organization to gain customer’s shopping and buying behaviors to develop and implement enterprise wide strategy. Customer can contact an organization through various type of technology such as:

§     - Call centers

§     -Web access

§     -Email

§      -Faxes

§     -Direct sales

That provide access to Customer Relationship Management (CRM) information within different system from

• Accounting system
• Order fulfillment system
• Inventory system
• Customer service system        

Then, Customer Relationship Management (CRM) allow us to communicate effectively with each customer, understand customer product and service.   

        Customer Relationship Management (CRM) is not just technology but also a strategy an organization must embrace on an enterprise level. Implementing a Customer Relationship Management (CRM) system:

# Help an organization identify customer                   # To treat customer as an individual

# Design specific marketing campaign                       # Understand customer buying behaviors

Business Process Reengineering (BPR)

A business process is a standardized set of activities that accomplish a specific task, such as processing a customer’s order.

Then, what is business process reengineering? Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprise. Finding opportunity using BPR. 

For example:

- A company can improve the way it travels the road by moving from foot to horse and then horse to car.

- BPR looks at taking a different path, such as an airplane which ignore the road completely.

Progressive Insurance Mobile Process

7 PRINCIPLES OF BUSINESS PROCESS REENGINEERING

Enterprise Resource Planning (ERP)

Enterprise resource planning (ERP) – integrates all departments and functions throughout an 

organization into a single IT system so that employees can make decisions by viewing enterprise wide 

information on all business operations.

# Keyword in ERP is “enterprise”

                                                                           

	# ERP systems collect data from across an organization and correlates the data generating an enterprise wide view Thank you very much. That's all for this chapter 3...