Major risks to the organization when implementing and using IT
Major risks to the organization when implementing and using IT
Order Instructions:
It is important to pay close attention to grammatical errors and sentence structure as you compose this paper. you must also try to use research to support your examples. Use the resources below to help you in completing this paper. Also take note that they are a series of questions asked hear and you must clearly respond to each one of them in essay form and remember that a paragraph cannot be anything less than 5 sentences
IT Risk Mitigation
You have examined the role of IT within the organization, including its impact on the structure of the company and the ability to increase competitive advantage. But with the new opportunities that IT can create, there are risks and threats that must be addressed.
– What are the major risks to the organization when implementing and using IT?
– To what degree are IT security risks and business risks interrelated?
– What disadvantages might a business encounter from a “locked-down” IT environment, and how can these be balanced against the disadvantages of a security breach?
– Also include in your discussion the topic of ethics as it relates to handling consumer or patient data and intellectual property.
Be sure to include examples from your own experience or research you have done in your discussion.
Resources
Course Text
• Management Information Systems for the Information Age
Chapter 8, “Protecting People and Information: Threats and Safeguards,” pages 356–365
This chapter discusses privacy, intellectual property, copyright, fair use, and pirated software.
Articles
• Tran, E., & Atkinson, M. (2002). Security of personal data across national borders. Information Management & Computer Security, 10 (5). Retrieved from ABI/INFORM Global database.
This article discusses how national laws regarding personal data can impact transnational companies.
• Halliday, S., Badenhorst, K., & Solms, R. (1996). A business approach to effective information technology risk analysis and management. Information Management & Computer Security, 4(1). Retrieved from ABI/INFORM Global database.
This article connects business risk analysis with information technology risk analysis.
Farahmand, F., Navathe, S. B., Sharp, G. P., & Enslow, P. H. (2005). A management perspective on risk of security threats to information systems. Information Technology and Management, 6(2–3). Retrieved from ABI/INFORM Global database.
This article takes a management, rather than IT, point of view on security threats to information systems
SAMPLE ANSWER
What are the major risks to the organization when implementing and using IT?
Cyber criminality is increasingly becoming sophisticated every day. The ever growing cleverness in the hacking industry has literally become a critical challenge that organisations are faced with. A survey on cyber security demonstrates that more than 55% of survey correspondents indicated that cyber molestation and the general criminal activities have grown immensely. More than 30% of organisations witnessed negative monetary damage resulting from attacks like hacking and phishing in a period of one year. Organisations should now compete with a range of hi-tech attacks orchestrated by well structure monetarily driven criminals (Halliday, Badenhorst & Solms, 1996).
Data violations can culminate to embarrassing disclosures, the threat of clientele identity theft, and fines or legal dilemmas. In addition cryptographic keys can fall in wrong hands, granting unauthorized individuals or applications entry to sensitive or important information. Based on a particular nature of the information, the loss of cryptographic keys can culminate into critical mishaps that are likely to disorient business operations, the loss of clients and legal implications. Application-centered key control procedures present only limited security, leaving sensitive codes and information they safeguard, susceptible to assault. Propagation of fragmented key control systems can enhance the intricacies and security cost control, leading to business procedures that are complex to administer and scale. The complexity of reporting obligations can be enhanced with poorly documented key control.
To what degree are IT security risks and business risks interrelated?
As firms globally take advantage of ICT to curtail cost and enhance performance, digital data can be shared or accessed through interlinked information structures, the threat of information violation in increasingly concerned (Farahmand et al. 2005). Various major threats that concern ICT experts and business investors include system malfunctioning, disaster recovery, data reliability, which are equally concerns of the potential business threats. Security issues subsist from all assaults that include; connectivity such as; IP spoofing, spamming, and malicious programs. Such intrusions end up tampering with data, data modification, data disclosure and service interruption on power grids and even physical harms like was the case of Staxnet, which dealt a heavy blow on the Iranian nukes. In fact, malware technology has become so lethal that it can now create a physical destruction. With the enormity of such security threats in an IT setting, the business fraternity remain vulnerable especially in the absence of security analysis. Firms will still be vulnerable if they fail to implement a comprehensive security plan. As Tran and Atkinson (2002) state, business environments are fitted with some proficient security measures like data encryption, security socket layer (SSL) protocol to encode the transmission, and biometric validation that manages the physical entry.
What disadvantages might a business encounter from a “locked-down” IT environment, and how can these be balanced against the disadvantages of a security breach?
Firms that are run on heavy computerized networks would be disadvantaged with a locked down IT setting. Nonetheless, the limitation of such backdrops is the rigidity of application updates. IT experts should come in to decide a balance between practicality, fee, comfort, as well as safety measures as the “locked down” IT environment expects managerial leadership. Information and Technology experts require utmost support from the managerial that should comprehend the potential threats. By and large, implementing a locked down IT framework will be instrumental for the business. Most companies should take advantages of Microsoft Windows 2008 to ensure security is guaranteed. Apart from the Cisco firewall, online activities should be validated with SSL apart from static web server (Tran and Atkinson, 2002). Moreover, the issue of security can be enhanced by redirecting emails through virus interceptors and spam filters prior to hitting the front end substitution of all incoming emails. While personal emails should not be allowed within the corporate systems, the organization should implement programs that filter spamming and safeguard web traffic.
Ethics as it relates to handling consumer or patient data and intellectual property
The truth is that humans tend to abuse the technology per se by simply abusing the best practices. Human virus can alter how applications work, like tampering with payroll information to enhance the wage bill. This can be done by administrators on the back-end, to alter figures without any documentation. This is to say personnel represent the highest risks particularly when they abuse their rights and professional ethics (Farahmand et al. 2005). At that point, it becomes paramount to implement safety assessment in almost all structures and networks through an independent party to preclude the issue of unethical behaviors as well as practices.
References
Farahmand, F., Navathe, S. B., Sharp, G. P., & Enslow, P. H. (2005). A management perspective on risk of security threats to information systems. Information Technology and Management, 6 (2–3).
Halliday, S., Badenhorst, K., & Solms, R. (1996). A business approach to effective information technology risk analysis and management. Information Management & Computer Security, 4(1). Retrieved from ABI/INFORM Global database.
Management Information Systems for the Information Age Chapter 8, “Protecting People and Information: Threats and Safeguards,” pages 356–365
Tran, E., & Atkinson, M. (2002). Security of personal data across national borders. Information Management & Computer Security, 10 (5)
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IT Systems Case Study
Email, intranets, voice over internet protocol (VoIP), and web-based applications that manage everything from enterprise resource planning to the supply chain have made communication across and between organizations nearly seamless. This has inevitably affected the way organizations are structured. There has been a steady move away from top-down hierarchical structures toward flat, decentralized, virtual organizations with units that maintain an increasing measure of independence from direct central control.
Two articles in your reading this week, one by Hitt and Brynjolfsson and the other by Lucas and Baroudi, offer different, yet complementary, analyses of the impact of technology on organizational structures. The former presents an empirical study supporting the idea that information technology necessarily drives firms to decentralize authority within the organization, while the latter concludes that IT design and organizational design are inextricably linked.
Your task is to read the case study “The Effect of Technological Innovation on Organizational Structure: Two Case Studies of the Effects of the Introduction of a New Technology on Informal Organizational Structures” and, applying the research in your readings this week, write an essay that addresses the following questions:
• What specific challenges faced each of the universities relating to the new technology?
• What type of strategic responses did the universities attempt to implement in response, and which ones led to greater success?
• Do you think social action theory is a useful framework for understanding the relative success or failure of each of these universities?
• Considering that universities are often very traditional in structure and have remained relatively unchanged compared to other types of organizations, what are the implications of this case study for organizations that are less bound by tradition?
• To what degree does this case study confirm or deny the research presented in this week’s journal articles?
Your paper should comprise 3–5 pages in APA format.
Resources for this paper.
Course Text
• Management Information Systems for the Information Age
Chapter 7, “Enterprise Infrastructure, Metrics, and Business Continuity Planning: Building and Sustaining the Dynamic Enterprise”
This chapter discusses the value of service-oriented architecture and hardware and software considerations of an organization, analyzes commonly used metrics for assessing IT systems, and describes business continuity planning.
Articles
• Mukherji, A. (2002). The evolution of information systems: Their impact on organizations and structures. Management Decision, 40(5/6). Retrieved from ABI/INFORM Global database.
This article provides a brief history of the development of information systems and how these systems have changed organizations.
• Hitt, L.M., & Brynjolfsson, E. (1997). Information technology and Internet firm organization: An exploratory analysis. Journal of Management Information Systems, 14. Retrieved from Computers & Applied Sciences Complete database.
This article offers an empirical study supporting the idea that information technology drives firms to decentralize authority within the organization.
• Lucas, H.C., & Baroudi, J. (1994). The role of information technology in organization design. Journal of Management Information Systems, 10(4). Retrieved from Computers & Applied Sciences Complete database.
This article concludes that information technology design and organizational design are inextricably linked.
Kahn, R.L. (2000). The effect of technological innovation on organizational structure: Two case studies of the effects of the introduction of a new technology on informal organizational structures. Journal of Business and Technical Communication, 14(3). Retrieved from ABI/INFORM Global database.
This article compares the outcomes at two university campuses related to the implementation of technological innovation in their administrative offices.
Sor, R. (2004). Information technology and organisational structure: Vindicating theories from the past. Management Decision, 42(1/2). Retrieved from ABI/INFORM Global database.
This article reflects on the impact of information technologies on organizational structures.
SAMPLE ANSWER
Information Technology Systems Case Study
What specific challenges faced each of the universities relating to the new technology as illustrated in the case study?
Organizational structures of many organizations have received tremendous revolution from the case study. The study noticed that universities were faced by many challenges connected to the introduction of the new technology. One of the challenges was that they were dependent to the central control center. Therefore, they lacked independence to make innovations. Another challenge that universities faced was unavailability of business intelligence. Business intelligence aids an organization to obtain resources from digital data for firm business-production mechanism (Kahn, (2000). Universities were also frequented with non-elaborative and disorderly electronic records. This denied them chances to go through various records to update the existing technology. Most of the universities information methodology to efficiently improve communication and correlation of various information sources was poor. According to (Kahn, (2000), information technology, that is mainly appropriated in communication, does not affect human data processing capabilities as human can analyze the information produced by computers. Heavily built bureaucratic structures hindered universities from accessing relevant agencies so as to improve their current technological status (Kahn, (2000).
What type of strategic responses did the universities attempt to implement in response and which ones led to greater success?
The universities came up with three strategic responses in the attempt to implement responses to the challenges faced relating to the new technology. One of the strategies was normativistic communication. This type of communication, as proposed by the universities, has the pro to be regulated and precise, but on the other hand, it was very fixed and this could halt the spontaneous rising of initiatives from the base of the organization. Descriptivist communications was also devised by the universities to overcome the challenges (Müller, (2003). The advantage of this response strategy was that it was being bidirectional, by the fact that data came from more than one source. The universities asserted that this would promote participation from the background and the ability for the top management to detect the mood of the whole firm. The setbacks from this form of response were that that there could arouse dispute at top-level management (Müller, (2003). The management could take into account the responses from the basis but not necessarily meaning that the lower levels are satisfied with the outcome. The areas of disappointment to the juniors could emanate from the feeling that their suggestion have to follow clearly stated procedures that are biased from the top management’s stand, even if they pretend to be neutral (Müller, (2003).
Constructivist communication was another response technique proposed by the universities to overcome the challenges. The response was commendable as it had the advantage of being isolated from imposed procedures. This type of response ensured that communication matters are solely left to the actors involved in the process. The effect of this response was that it affected new and predictable outcomes and creating space for innovations and inventions (Information Resources Management Association., & Khosrow-Pour, (2006). The universities noticed that the response was frequented with certain drawbacks. The response was associated with aspects such as communication being fuzzy and could not be controlled. This made the top management unable to extract the findings of these processes, as they are frequently not available. Constructivist communication gave remarkable results as it calls for isolation of management to other stakeholders. It enabled universities to gather diverse information which promoted discoveries in technological advancements (Information Resources Management Association., & Khosrow-Pour, M. (2001).
Do you think social action theory is a useful framework for understanding the relative success or failure of each of these universities?
Social action theory is quite important in understanding the comparative success or failures of these universities. It agrees and support that human beings have the ability to act differently in different social contexts. The correlation between organizational structure and technology anatomy is reinstated by social action theory approval on technology as well as information technology (Sor, (2004). Social action literature governs universities leaders to apprehend the relationships between technology and information formation and the university’s response to transformations (Sor, (2004). Arguably, this correlation is established in the case study where certain universities uphold decentralized form of record management. The institution embraces the result of the spontaneous change in budgetary system due to computerized financial regulation system.
Sor, (2004) attest that embracing of new technology prompted universities to start new alliances by sending email text messages, announcing of online workshops and seminars and disbursing information to other campuses. Social contract theory also exhibits itself in the case study with the actions of other universities that declined to accommodate the new technology. These universities never formed alliances through internet and continued to apply the traditional practices of technology (Sor, (2004). These activities are emanating from the perceptive that social action theory is accountable for rearrangement of work duties, production of communication networks, transformation in leadership and the decentralization of power process. The case study concludes that social action is effective. The case study also proposes that organizations (universities) facing technological revolution should revitalize communication between workmates, decentralization of power and authority and boundary-bridging regulation techniques (Sor, P. (2004).
Considering universities are often very traditional in structure and have remained relatively unchanged compared to other types of organization, what are the implications of this case study for organizations that are less bound by tradition?
Organizations that are bound to traditional structure prone themselves to so many challenges. One of the challenges is that they will be in vicious cycle of high cost and consequently will decrease in productivity in their operations as it is less likely to form alliances to enable it to appropriately use new technology (Information Resources Management Association., & Khosrow-Pour, (2001). Concentration on old forms of organization structure kills innovation. This is as a result of unavailability of information which acts as raw materials to inventions. Dependency is propagated by the fact that universities will always wait for other institutions to feed them with information (Information Resources Management Association., & Khosrow-Pour, (2001).
To what degree does this case study confirm or deny the research presented in this week’s journal articles?
According to week’s journal articles, despite many organizations upholding the virtue of new technology, traditional elements of communication are still being used. The articles appears to contradict the case study on the impacts of the orientation of new technology on informal organizational structure by arguing that the modern form of technology incorporates both traditional and modern aspects of technology (Information Resources Management Association., & Khosrow-Pour, (2001). The journal articles calls for incorporation of both technologies, but not discard of the traditional type as it acts as the reference point to the new technology. The case study denies the allegations by putting forth arguments that a complete configuration of organization to modern world must do away with the native methods of information structure (Information Resources Management Association., & Khosrow-Pour, 2006).
References
Information Resources Management Association., & Khosrow-Pour, M. (2001). Managing information technology in a global environment. Hershey, PA: Idea Group Publishing.
Information Resources Management Association., & Khosrow-Pour, M. (2006). Emerging trends and challenges in information technology management. Hershey, Penn: Idea Group.
Kahn, R. (2000). The effect of technological innovation on organizational structure: Two case studies of the effects of the introduction of new technology on informal organizational structures. Journal of Business and Technical communication, 14 (13). Retrieved from ABI/INFORM Global database.
Müller, R. (2003). Communication of information technology project sponsors and managers in buyer-seller relationships. S.l.: Dissertation.com.
Salazar, A. J. (2007). Handbook of information technology in organizations and electronic markets. New Jersey: World Scientific.
Problem Description (Refined version of Assignment 4):
You’re developing the software for a company that monitors home alarm systems. After reviewing some of the your outline of patterns you would use, our customer that you create a couple diagrams of what you architecture looks like using the notations described in our book “Software Architectures in Practice” and that you apply the techniques described in Chapter 14 to analyze your architecture to verify that the architecture will satisfy the requirement of the system. The have provided a revised description (next paragraph), with some more details.
There will be one sensor for each door or window in the home that detects when they are opened. If the home alarm system is activated, the home (sub)system must (1) turn on the alarm within 5 seconds of sensing the opening of any opening other than a door next to a control pad, which allow 30 for the user disarm code to be entered before the alarm is turned on, and (2) send an alarm to the Alarm Monitor Company’s central monitoring location within 15 seconds for an opening other than a door next to a control pad, and 45 seconds for a door next to a control pad. The system at the central monitoring location, (1) records the event, and (2) notifies a human
operator what’s happening within 30 seconds of receipt of the alarm sent from the local home monitoring system, and (3) automatically dial the home, within 45 seconds of receipt of the alarm sent from the local home monitoring system, and hands-off the call to the operator, who will to attempt to verify that there is a break-in. If no one answers, or someone answers but doesn’t give the agreed to safe-word or give the in-trouble word, then the operator will notify the police within 1 minute if no one answers, or 2 minutes if call is answered. All actions taken are recorded.
Part 1 (5 points): Create an architecture
Create an architecture for the whole system based on the patterns you choose in the last exercise. (Is you decide to change patterns, describe the changes including why.) Your description should include the following:
1. A diagram showing the Company’s Central Monitoring Center, and multi-homes being monitored.
2. A diagram of the architecture for the Central Monitoring Center.
3. A diagram of the architecture in a typical Home.
4. A short description of each software component.
Use the notation described in the SWAIP book for now.
Part 2 (5 points): Describe the qualities that are important for the system.
Apply the appropriate techniques from Chapter 14 (or in the pattern description, if any) to verify that you architecture is likely to produce a system that achieves the quality goals you identified in Assignment 4 (i.e., minimums & maximums) and satisfies any constraints in the customer description (this constrains are qualities that you must achieve). If you need certain values, e.g. execution speed of the CPU or how many cores in the CPU, then either do some research on reasonable values make a list of the values you obtain from your research or any assumptions you made and give a reference to the source.
If you determine that for some reason, your architecture does not achieve your quality goals, then explain why. (You may find that some goals are not achievable).
Create a PDF file with your results for part 1 & 2.
SAMPLE ANSWER
Software Architecture
Introduction
A home security alarm is a system designed to detect intrusion and/or unauthorized entry into a building or area. They are often used in residential and commercial properties for protection against property damage or burglary (theft). The most basic alarm consists of one or more sensors to detect intruders, and an alerting device to indicate the intrusion. However, a typical premises security alarm employs the following components: Premises control unit (PCU), or panel, Sensors, Alerting devices, Keypads, Interconnections and Security devices.
Architectural Structure
The architectural structure of the home alarm system design is shown in the block diagram below. The central system will handle all the sensors and keypad input, output information to LCD screen, indicate system status on LED, and make buzz or voice alarm.
Figure 1: Architectural Structure
Hardware & Software Tradeoffs
The IR motion sensor is quite inexpensive hence it should be bought for this design. It is also necessary to acquire one of the smoke detector from home to be used to sound the alarm in case of smoke detection. The architectural structure of our design is shown in the block diagram shown in figure 1 above. The central system will handle all the sensors and keypad input, output information to LCD screen, indicate system status on LED, and make buzz or voice alarm. Besides some necessary resistor and capacitor connections to the ISD1420 chip, the software makes the major part of the work mainly to ensure that home alarm system if fully customizable and consists of a lot of features. It need to monitors all the sensors, and time the appropriate seconds in order to play certain voice pattern (ex. “Temperature, smoke error, please…” “Door or window error, please…”) depending on which sensor goes wrong. It also needs to handle the user interface via keypad and LCD screen.
Program & Hardware Design
Program Detail
The timing is the hardest part of the program. This implies that when any sensor goes wrong, the program has to wait for a number of seconds as set by the user, and then make ISD1420 chip play back the necessary voice pattern as envisaged. The voice playback chip does not have a very fast internal clock, so the delay function has to be played manually in the program after setting the address bits, and then making the chip play. Besides, we also need to implement the keypad function so it acts accordingly when the LCD is displaying certain menu. In the system there are 12 submenus. For example, set temp defines the lowest temperature allowable prior to sounding the alarm (70~120F, with a 1F step size). The Sec. Allow is the time in second before the voice alarm goes off (0~30sec, with step size of 5 seconds). The submenus are shown in the table below:
1.Enable System
2.(*)Temp Sensor
3.(*)Mot. Sensor
4.(*)Smk. Sensor
5.(*)Mag. Switch
6.Set Temp: 100F
7.(*)Voice Alarm
8.(*)Buzz Alarm
9.New Pswd:
A. Buzz Freq: 7
B. Buzz Skim: 3
C. Sec. Allow: 10
There is also a simple de-bounce feature for the keypad, and it will sound a buzz when any key is pressed. Also the backspace feature is implemented so that when a wrong password is entered by the user, it is possible to use this key to delete the number entered previous previously. The password is masked on LCD for a safer purpose.
Hardware Detail
The first sensor we have is the temperature sensor. This is done using a digital thermometer utilizing the same circuit. This was achieved through incorporation of the National Semiconductor LM34 temperature sensor, together with National Semiconductor LMC7111 OpAmp chip for the amplification of the output voltage going into ADC. The final connection of our circuit looks like the following.
Figure 2: Main Connections
The second sensor is the motion sensor which has some IC components as well as a few NPN transistors in the circuit. The base pin together with ground are taken and connected to the ADC pin input, however, the alarm goes off when the voltage exceed VTH (threshold voltage). The other sensor is the smoke detector which is equipped with piezoelectric buzzer, which has F (feed back), M (metal plate) three pins, and C (main electrode). The piezoelectric buzzer consists of an internal crystal and it sounds the alarm if small current is applied (voltage drop).
The final sensor is the magnetic switches and it is normally closed meaning that when the switch is right next to each other, the resistance is zero. So the switch is driven with a 10K pull-up resistor, and connects the output to the ADC. A simple AND/OR gate was built by using 1 74LS00 chip since we have two magnetic switches.
Result of the Design
Speed of Execution
The speed of the execution is very well. At start the system boots up with default password 1234 allowing the user to navigate through menu, and enabling or disabling each type of sensor. If a particular sensor is enabled, the LCD screen will output a * symbol just immediately before the sensor name. Enable/disable voice, the alert temperature, or buzzer alarm can be set by the user, and even specify the ring tone and frequency of the buzzer alarm as well as the time needed prior to the voice alarm goes off. The button de-bounce scheme also works fine so users can navigate through the menu and use the keypad perfectly. This is highly essential because it usually bring with itself convenience to the user as well as enabling timely operation of the home alarm system while at the same time making sure that the system is easy to use. This is an essential feature for easy working or operation of the system which enables the highest level of the system operation at all times.
Accuracy
After the user enables the security system, the green status LED will lid to indicate the system status. User can now enter proper password to unlock the system. If any sensor goes wrong, the LCD will output ERROR and with proper initial for the sensor (T for temperature, M for motion, S for smoke, D for door or window magnetic switch). The red led light be will flashing at 4Hz to indicate such event. If the buzz alarm is enable, it will sound the tone that user choose. If the voice alarm is enabled, it will wait for few seconds (user specified), if the system is still not locked, then it will start playing voice to indicate which sensor goes wrong. (For example, “Temperature Error, please check and unlock the security system.”) If another sensor goes wrong after that, the system will also act accordingly and indicate that in the voice alert in addition to the LCD screen. (“Temperature Motion Error, please check and unlock the security system.”)
Safety
As soon as user enters the correct password, the system will be unlocked and the buzzer and voice playback will stop. The user can now navigate through our menu and make any changes in the settings.
Usability
The home alarm system is very practical. It can be used not only in the home environment but also in a business environment too and works by monitoring the surrounding for not only protection of property as well as lives. Besides, the system is also highly customizable for the purpose of suiting each one’s need and preference.
Expectation and Improvement
The result of the home alarm system design meets the expectation whereby every sensor is supposed to be working and will sound specific alarm when the system goes into alert status. The keypad and LCD also offer great interface and users can be familiar with the system in less than few seconds. The system also has 4 output patterns using all 8 pins. The designed home alarm system is envisaged to effectively work in order to prevent intrusion or property damage which can further be improved subsequently for better performance.
An architectural structure of the designed home alarm system is shown in the prototype shown in the diagrams shown below.
References
Trimmer, H. W. (1981). Understanding and Servicing Alarm Systems. Stoneham: Butterworth.
Walker, P. (1985). Electronic Security Systems. Cambridge, UK: University Press
Weber, T. L. (1985). Alarm Systems and Theft Protection (2nd ed.). Stoneham, MA: Butterworth.
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Impacts of MIS on the Organization: Connecting the Dots
Order Instructions:
This paper is a continuation of 111287 so its important that the writer take note of what was written in that paper before written this paper. Alll discussions are about Amazon the topic chosen in the first paper , and it is noted hear in this questions that “You are required to include research from at least two first-person interviews and at least two peer-reviewed practitioner or scholarly journals”. This interviews must be conducted just as in the first part of this paper.
The second half of this paper , you will examine various ways in which MIS impacts your organization,( Amazon) as a whole, including decision making, organizational structure, data security, and the impact of emerging trends in IT. A key element of this Paper is the identification and framing of an organizational problem that relates to the topics covered in the course such as
Information Technology for Competitive Advantage
Storing and Accessing Information and Knowledge
Electronic Commerce
Information Systems Development
Information Systems and Decision Making
Your research should lead you to identify possible solutions to the problem(s) you identify. You will apply knowledge gained in the course in order to present advantages and disadvantages of various approaches to the problem(s).
Your task is to “connect the dots” in order to show the ways in which MIS shapes the strategic direction of the organization. In your paper, include a discussion of the following:
1. How has the organization leveraged IT to assist in its decision making? Which systems provide the clearest support for analyzing data and determining strategic direction?
2. How has technology impacted the organization’s structure? If modifications were made, were they explicit (that is, planned) or implicit (that is, changes emerged without planning)?
3. What security risks have IT systems created that were not there before and how has the organization addressed these issues? Has it implemented a planned risk management approach? What business risks are involved, if any, and how did/does the organization respond?
4. What new technologies will most likely directly impact the organization’s business? Will the organization be likely to adopt new technologies to achieve a competitive edge or take a wait-and-see attitude? What are the advantages and disadvantages of each approach?
This Paper 2 will comprise 8–10 pages in APA format. One to three diagrams and presentation slides may be included, but they will be additional to the required length of the paper. You are required to include research from at least two first-person interviews and at least two peer-reviewed practitioner or scholarly journals.
Resources to be use
Course Text
• Management Information Systems for the Information Age
Chapter 7, “Enterprise Infrastructure, Metrics, and Business Continuity Planning: Building and Sustaining the Dynamic Enterprise”
This chapter discusses the value of service-oriented architecture and hardware and software considerations of an organization, analyzes commonly used metrics for assessing IT systems, and describes business continuity planning (BCP).
Articles
• Mukherji, A. (2002). The evolution of information systems: Their impact on organizations and structures. Management Decision, 40(5/6). Retrieved from ABI/INFORM Global database.
This article provides a brief history of the development of information systems and how these systems have changed organizations.
• Hitt, L.M., & Brynjolfsson, E. (1997). Information technology and Internet firm organization: An exploratory analysis. Journal of Management Information Systems, 14. Retrieved from Computers & Applied Sciences Complete database.
This article offers an empirical study supporting the idea that information technology drives firms to decentralize authority within the organization.
• Lucas, H.C., & Baroudi, J. (1994). The role of information technology in organization design. Journal of Management Information Systems, 10(4). Retrieved from Computers & Applied Sciences Complete database.
This article concludes that information technology design and organizational design are inextricably linked.
Kahn, R.L. (2000). The effect of technological innovation on organizational structure: Two case studies of the effects of the introduction of a new technology on informal organizational structures. Journal of Business and Technical Communication, 14(3). Retrieved from ABI/INFORM Global database.
This article compares the outcomes at two university campuses related to the implementation of technological innovation in their administrative offices.
SAMPLE ANSWER
Impacts of MIS on the Organization: Connecting the Dots
Three leaders from Amazon participated in interviews for this report, they are the Web Services Director, Andrew Jassey, the Business Development Director, Jeffrey Blackburn, and the Consumer Business Director, Jeffrey Wilke. I incorporated their views as part of this report.
How has the organization leveraged IT to assist in its decision making?
Amazon has implemented an IT customer services strategy that allows its customers to post reviews about products they have purchased on their website whether the reviews were negative or positive. Amazon was the first retailer to implement such a strategy way back when it started in 1994, which many in the book selling industry criticized because they thought that allowing customers to post negative comments about their purchases would reduce sales (Cecez-Kecmanovic, Kautz & Abrahall, 2014). However, Jeff Bezos did not falter as his motivation for implementing the feature as part of the company’s strategy was to give customers access to as much information as they wanted that would assist them in making their buying decisions.
It is no wonder that up to now Jeff has a public email that all Amazon customers can use to get in touch with him about any complaints that they may have. All managers at the company live in perpetual fear of emails about customer complaints that are forwarded to them by Jeff usually with an additional question mark, which gives them just a few hours to resolve the complaint. It is not difficult to see how IT has drastically impacted how the company makes decisions because according to Jeff, the customer is always right, which has driven many crucial changes in the company. Jeffrey Wilke, the Consumer Business Director remembers vividly an incident where Jeff Bezos, the founder, wanted them to scrap the whole email marketing system just because of one customer complaint. Which systems provide the clearest support for analyzing data and determining strategic direction?
Amazon’s customer feedback system is the most important part of their strategic decision making process as the company uses available data to make all its strategic decisions such as the introduction of Kindle e-readers and most of its products. Amazon uses information management systems as their core decision-making system as they take into account all the available information regarding customers, suppliers and their business partners to decide on what future strategies to implement. The company also tracks the information related to both their direct and indirect competitors, which is a key factor when they are deciding on what companies to buy and what partnerships they should enter into.
The early partnerships, which Amazon with established retailers such as Target, enabled the company to wield a unique advantage over its competitors by increasing their distribution networks significantly. In the company’s initial years it used basic information systems to keep track of customer behaviors, which paid of drastically as the company introduced new innovative solutions such as same day shipping for in-stock orders. The company’s information management systems are responsible for most of the strategic decisions made by Amazon as it has always used the data collected through the system to chart future strategies.
How has technology impacted the organization’s structure?
Technology has a huge impact on Amazon’s organizational structure given the fact that it is an online retailer and makes most of its sales through its various websites. One of the crucial changes the technology has had on the company is evident in the introduction of programs such as the associate program, which has contributed greatly to Amazon’s success through sales generated by its affiliates. Business Development Director, Jeffrey Blackburn states that technology enabled Amazon to host numerous websites operated by members of the affiliate program to make sales without which the company could not have generated the amount of sales and growth that it continues to experience up to date. Technology has also been crucial in the introduction of web services as Amazon has invested in web technologies so as to compete with companies such as Google and Hewlett Packard in the technology market especially by offering cloud services (Chen, Ramamurthy & Wen, 2012). The launch of the Kindle Fire and other Kindle devices has also been crucial in advancing Amazon’s strategy of increasing its market share given that the designers of the Kindle Fire tablet device wanted it to drive online sales made from tablets while at the same time competing with Apple’s iPad. The introduction of all these new products and services has affected the company through the creation of new departments such as the Web Services department, which has increased Amazon’s market share.
Technology continues to be the main avenue through which the company is diversifying its products and services creating numerous jobs and departments within the company as it keep expanding across many industries. Technology can have a significant impact on a company’s organizational structure given that just by the mere fact that a company is experiencing growth in its size, operations and market share the need for the adoption of information management systems keeps increasing (Cecez-Kecmanovic, Kautz & Abrahall, 2014). Initially when the company started there was no human resources department as Jeff managed all the company employees who operated from his garage and later on at an industrial park. However, if he tried to do the same today with the significant size of the company’s operation and a workforce of 132,600 employees as of June 2014, he would be a miserable failure at such a task. Amazon employees the best human resources to manage its huge workforce not forgetting that the department is largely dependent on information management systems to keep track of all its employees and address employee issues. Without information management systems, Amazon would not be a profitable organization like it is right now.
What security risks have IT systems created that were not there before and how has the organization addressed these issues?
Cloud security systems risks
The advent of cloud services that are catching up with other technologies for storing data in the market has been touted as a rick free way of storing data and accessing it easily on demand at less cost than storing it yourself (Cecez-Kecmanovic, Kautz & Abrahall, 2014). However, recent studies indicate that cloud services are not as impenetrable as they were once thought to be and that hackers can still illegally access cloud servers that are not properly protected. According to Andrew Jassey Amazon’s Director of the Web Services, this is a new security threat that is facing Amazon as they recently launched their web services division and are providing cloud services to both their individual consumers and corporations such as Dell. Other affiliates using the company’s web infrastructure are also at risk because these systems utilize cloud computing systems.
Social engineering risks
Social engineering threats involve the use of methods such as phishing by cyber criminals to get access to financial information, which they can exploit and steal mostly from consumers and innocent web users (Géczy, Izumi & Hasida, 2014). Phishing involves the use of mirror sites that are identical to the real Amazon site to dupe customers into thinking that they are purchasing products from Amazon, while on the contrary, it is the cyber-criminal who is taking their money. Phishing sites have greatly increased, especially after Amazon launched different sites in countries such as the UK and Germany, which attackers are finding easier to copy. Another major contributor to this threat is the fact that domain names nowadays contain characters in Japanese, Hindi and other languages.
Mobile devices risks
Mobile devices make up the newest frontier in terms of security threats in IT systems especially given the fact that more and more consumers are making purchases from mobile devices such as smart phones and tablets (Briggs, 2014). In most cases it is difficult to implement the same level of security in a mobile device because of limited processor capacity and memory space, which is what cyber criminals are using to their devices. This threat is extremely relevant to Amazon given that Kindle purchases in recent years have exceeded purchases through its main website. Amazon also has iPhone and iPad applications in addition to android applications that are extremely vulnerable to cyber-attacks because of limited security.
Malware risks
Although malware is not a new problem since it has been present since the invention of computers it has kept evolving with hackers developing newer viruses designed to beat even the most sophisticated computer security systems (Géczy, Izumi & Hasida, 2014). The impact of malware on information systems is as crucial today as it was decades ago given that it is the most effective way to profits from cyber-crime by infecting an organization’s information system and acquiring information, which the cyber-criminals use for financial fraud. Although Amazon has one of the best if not the best firewall systems in the world, which is higher than military grade software, it is still vulnerable to malware attacks.
Misuse of web applications
Another threat faced by Amazon is the misuse its web applications, especially those hosted by third parties where the company has no control over the security systems used for such applications. Amazon has tried to reduce this risk by controlling the security of those web applications hosted and operated by third parties, mostly be acquiring rights to the applications or by acquiring the third party itself.
Has Amazon implemented a planned risk management approach?
Amazon has implemented a planned risk management system of which a great portion focuses on the security of its information systems, while the rest is dedicated to the security of its other business assets such as its distribution networks and its brand (Spears & Barki, 2010). The core principle of its information security risk management strategy involves continuous monitoring and evaluation of its firewalls and the hacking threats made to penetrate the firewalls on a daily basis (Géczy, Izumi & Hasida, 2014). Amazon has also implemented intruder detection systems at all access points to its information systems so that in case an intruder penetrates and access the entry point of the system the systems security department is notified of such intrusions that are quickly addressed. However, the bigger part of the risk management system is based on the preventative measures of continuous evaluation and improvement of existing systems so as to prevent the occurrence of the identified security systems and any new threats.
Amazon’s risk management flowchart
What business risks are involved, if any, and how did/does the organization respond?
The main business risks that face Amazon are technology risks, which is an external risk, while other internal risks include financial, employee, innovation and strategic risks (Deng, & Chi, 2012). The most prominent risks are the financial, innovation and strategic risks. For many years Amazon operated at a loss given that its priority was on increasing its market share instead of making profits. This was especially worrying for its investors in the late nineties as many dotcoms went bankrupt and lost significant amounts of investors’ capital. The company averted this risk briefly in 2001 when it made its first net profits in the fourth quarter. However, profitability has not been consistent through the years, but Jeff and the company executives have always maintained a positive outlook with the support of their investors who have seen the value of Amazon shares increasing over the years. The company has responded adequately to the financial risks by constantly increasing the annual sales of the company up to $74.5 billion in 2013. The company keeps taking calculated strategic risks as it ventures into new industries based on the driving principle of selling everything at affordable prices, which has seen it recently launch the Kindle Fire to compete with Apple’s iPad and other similar tablets.
What new technologies will most likely directly impact the organization’s business?
New technologies that are most likely to impact the organization’s business are extremely likely to be in the mobile devices industry, which is the next frontier of technology growth in the near future (Hui, Hui & Yue, 2012). However, the company is already way ahead of its direct competitors in the retail industry in terms of mobile technology through its highly advanced mobile platforms and applications, not forgetting its innovative Kindle devices. Given its diverse portfolio of products and services it is highly unlikely that any new technologies could drastically disrupt the company’s operations, especially under the leadership of their CEO, Jeff Bezos, who is a believer in innovation. It is hard to foresee any new technologies catching Amazon executives by surprise given the nature of their operations, what is more likely to happen is that Amazon will create new disruptive technologies that will cement its position as a market leader.
Will the organization be likely to adopt new technologies to achieve a competitive edge or take a wait-and-see attitude?
The most likely scenario is that if any new technologies come into the market, Amazon will be among the very first companies to adopt the new technologies so that they can gain a competitive advantage over their rivals. This prediction is based on the fact that Amazon has embraced many new technologies and even used those to launch new products such as the web services division, which offers cloud services that are not part of the general retail industry. All the three directors interviewed strongly support the fact that Amazon would never adopt a wait-and-see attitude in any of the industries it operates in given that it has always prided itself on being a pioneer and market leader.
What are the advantages and disadvantages of each approach?
The main advantage of a wait-and-see approach is that it allows a company to adopt a new technology when others in the industry have already adopted the technology and it is working quite effectively for those who have adopted it. However, there is a downside to this approach in that a company may wait for too long before adopting a technology only for it to lose significant market share as its competitors benefit from adopting the new technologies much earlier. The main advantage of quickly adopting new technology is that the company can jump ahead of its competitors and capture new markets created by the introduction of the new technologies way before it can face stiff competition from other competitors (Twyman, Elkins, Burgoon & Nunamaker, 2014). The main disadvantage associated with this approach is that a company might adopt a new technology way too early, invest significant resources in the new technology only for the technology to become obsolete. Such scenarios are extremely common as was evidenced in the dotcom bubble burst of the late 1990s and the financial crash of 2008. However, Amazon has benefitted greatly from taking significant risks and this should not change in future.
References
Cecez-Kecmanovic, D., Kautz, K., & Abrahall, R. (2014). Reframing Success and Failure of Information Systems: A Performative Perspective. MIS Quarterly, 38(2), 561-588.
Hui, K., Hui, W., & Yue, W. T. (2012). Information Security Outsourcing with System Interdependency and Mandatory Security Requirement. Journal Of Management Information Systems, 29(3), 117-156.
Géczy, P., Izumi, N., & Hasida, K. (2014). Analytics-Based Management of Information Systems. Review of Business & Finance Studies, 5(2), 55-65.
Twyman, N. W., Elkins, A. C., Burgoon, J. K., & Nunamaker, J. F. (2014). A Rigidity Detection System for Automated Credibility Assessment. Journal Of Management Information Systems, 31(1), 173-202.
Briggs, R. O. (2014). Special Section: Information Systems Support for Shared Understanding. Journal of Management Information Systems, 31(1), 107-110.
Deng, X., & Chi, L. (2012). Understanding Postadoptive Behaviors in Information Systems Use: A Longitudinal Analysis of System Use Problems in the Business Intelligence Context. Journal Of Management Information Systems, 29(3), 291-326.
Chen, Y., Ramamurthy, K. K., & Wen, K. (2012). Organizations’ Information Security Policy Compliance: Stick or Carrot Approach? Journal Of Management Information Systems, 29(3), 157-188.
Spears, J. L., & Barki, H. (2010). User Participation in Information Systems Security Risk Management. MIS Quarterly, 34(3), 503-A5.
Three leaders from Amazon participated in interviews for this report, they are the Web Services Director, Andrew Jassey, the Business Development Director, Jeffrey Blackburn, and the Consumer Business Director, Jeffrey Wilke. I incorporated their views as part of this report.
How has the organization leveraged IT to assist in its decision making?
Amazon has implemented an IT customer services strategy that allows its customers to post reviews about products they have purchased on their website whether the reviews were negative or positive. Amazon was the first retailer to implement such a strategy way back when it started in 1994, which many in the bookselling industry criticized because they thought that allowing customers to post negative comments about their purchases would reduce sales (Cecez-Kecmanovic, Kautz & Abrahall, 2014). However, Jeff Bezos did not falter as his motivation for implementing the feature as part of the company’s strategy was to give customers access to as much information as they wanted that would assist them in making their buying decisions.
It is no wonder that up to now Jeff has a public email that all Amazon customers can use to get in touch with him about any complaints that they may have. All managers at the company live in perpetual fear of emails about customer complaints that are forwarded to them by Jeff usually with an additional question mark, which gives them just a few hours to resolve the complaint. It is not difficult to see how IT has drastically impacted how the company makes decisions because according to Jeff, the customer is always right, which has driven many crucial changes in the company. Jeffrey Wilke, the Consumer Business Director remembers vividly an incident where Jeff Bezos, the founder, wanted them to scrap the whole email marketing system just because of one customer complaint. Which systems provide the clearest support for analyzing data and determining strategic direction?
Amazon’s customer feedback system is the most important part of their strategic decision making process as the company uses available data to make all its strategic decisions such as the introduction of Kindle e-readers and most of its products. Amazon uses information management systems as their core decision-making system as they take into account all the available information regarding customers, suppliers and their business partners to decide on what future strategies to implement. The company also tracks the information related to both their direct and indirect competitors, which is a key factor when they are deciding on what companies to buy and what partnerships they should enter into.
The early partnerships, which Amazon with established retailers such as Target, enabled the company to wield a unique advantage over its competitors by increasing their distribution networks significantly. In the company’s initial years it used basic information systems to keep track of customer behaviors, which paid of drastically as the company introduced new innovative solutions such as same day shipping for in-stock orders. The company’s information management systems are responsible for most of the strategic decisions made by Amazon as it has always used the data collected through the system to chart future strategies.
How has technology impacted the organization’s structure?
Technology has a huge impact on Amazon’s organizational structure given the fact that it is an online retailer and makes most of its sales through its various websites. One of the crucial changes the technology has had on the company is evident in the introduction of programs such as the associate program, which has contributed greatly to Amazon’s success through sales generated by its affiliates. Business Development Director, Jeffrey Blackburn states that technology enabled Amazon to host numerous websites operated by members of the affiliate program to make sales without which the company could not have generated the amount of sales and growth that it continues to experience up to date. Technology has also been crucial in the introduction of web services as Amazon has invested in web technologies so as to compete with companies such as Google and Hewlett Packard in the technology market especially by offering cloud services (Chen, Ramamurthy & Wen, 2012). The launch of the Kindle Fire and other Kindle devices has also been crucial in advancing Amazon’s strategy of increasing its market share given that the designers of the Kindle Fire tablet device wanted it to drive online sales made from tablets while at the same time competing with Apple’s iPad. The introduction of all these new products and services has affected the company through the creation of new departments such as the Web Services department, which has increased Amazon’s market share.
Technology continues to be the main avenue through which the company is diversifying its products and services creating numerous jobs and departments within the company as it keep expanding across many industries. Technology can have a significant impact on a company’s organizational structure given that just by the mere fact that a company is experiencing growth in its size, operations and market share the need for the adoption of information management systems keeps increasing (Cecez-Kecmanovic, Kautz & Abrahall, 2014). Initially when the company started there was no human resources department as Jeff managed all the company employees who operated from his garage and later on at an industrial park. However, if he tried to do the same today with the significant size of the company’s operation and a workforce of 132,600 employees as of June 2014, he would be a miserable failure at such a task. Amazon employees the best human resources to manage its huge workforce not forgetting that the department is largely dependent on information management systems to keep track of all its employees and address employee issues. Without information management systems, Amazon would not be a profitable organization like it is right now.
What security risks have IT systems created that were not there before and how has the organization addressed these issues?
Cloud security systems risks
The advent of cloud services that are catching up with other technologies for storing data in the market has been touted as a rick free way of storing data and accessing it easily on demand at less cost than storing it yourself (Cecez-Kecmanovic, Kautz & Abrahall, 2014). However, recent studies indicate that cloud services are not as impenetrable as they were once thought to be and that hackers can still illegally access cloud servers that are not properly protected. According to Andrew Jassey Amazon’s Director of the Web Services, this is a new security threat that is facing Amazon as they recently launched their web services division and are providing cloud services to both their individual consumers and corporations such as Dell. Other affiliates using the company’s web infrastructure are also at risk because these systems utilize cloud computing systems.
Social engineering risks
Social engineering threats involve the use of methods such as phishing by cyber criminals to get access to financial information, which they can exploit and steal mostly from consumers and innocent web users (Géczy, Izumi & Hasida, 2014). Phishing involves the use of mirror sites that are identical to the real Amazon site to dupe customers into thinking that they are purchasing products from Amazon, while on the contrary, it is the cyber-criminal who is taking their money. Phishing sites have greatly increased, especially after Amazon launched different sites in countries such as the UK and Germany, which attackers are finding easier to copy. Another major contributor to this threat is the fact that domain names nowadays contain characters in Japanese, Hindi and other languages.
Mobile devices risks
Mobile devices make up the newest frontier in terms of security threats in IT systems especially given the fact that more and more consumers are making purchases from mobile devices such as smart phones and tablets (Briggs, 2014). In most cases it is difficult to implement the same level of security in a mobile device because of limited processor capacity and memory space, which is what cyber criminals are using to their devices. This threat is extremely relevant to Amazon given that Kindle purchases in recent years have exceeded purchases through its main website. Amazon also has iPhone and iPad applications in addition to android applications that are extremely vulnerable to cyber-attacks because of limited security.
Malware risks
Although malware is not a new problem since it has been present since the invention of computers it has kept evolving with hackers developing newer viruses designed to beat even the most sophisticated computer security systems (Géczy, Izumi & Hasida, 2014). The impact of malware on information systems is as crucial today as it was decades ago given that it is the most effective way to profits from cyber-crime by infecting an organization’s information system and acquiring information, which the cyber-criminals use for financial fraud. Although Amazon has one of the best if not the best firewall systems in the world, which is higher than military grade software, it is still vulnerable to malware attacks.
Misuse of web applications
Another threat faced by Amazon is the misuse its web applications, especially those hosted by third parties where the company has no control over the security systems used for such applications. Amazon has tried to reduce this risk by controlling the security of those web applications hosted and operated by third parties, mostly be acquiring rights to the applications or by acquiring the third party itself.
Has Amazon implemented a planned risk management approach?
Amazon has implemented a planned risk management system of which a great portion focuses on the security of its information systems, while the rest is dedicated to the security of its other business assets such as its distribution networks and its brand (Spears & Barki, 2010). The core principle of its information security risk management strategy involves continuous monitoring and evaluation of its firewalls and the hacking threats made to penetrate the firewalls on a daily basis (Géczy, Izumi & Hasida, 2014). Amazon has also implemented intruder detection systems at all access points to its information systems so that in case an intruder penetrates and access the entry point of the system the systems security department is notified of such intrusions that are quickly addressed. However, the bigger part of the risk management system is based on the preventative measures of continuous evaluation and improvement of existing systems so as to prevent the occurrence of the identified security systems and any new threats.
Amazon’s risk management flowchart
What business risks are involved, if any, and how did/does the organization respond?
The main business risks that face Amazon are technology risks, which is an external risk, while other internal risks include financial, employee, innovation and strategic risks (Deng, & Chi, 2012). The most prominent risks are the financial, innovation and strategic risks. For many years Amazon operated at a loss given that its priority was on increasing its market share instead of making profits. This was especially worrying for its investors in the late nineties as many dotcoms went bankrupt and lost significant amounts of investors’ capital. The company averted this risk briefly in 2001 when it made its first net profits in the fourth quarter. However, profitability has not been consistent through the years, but Jeff and the company executives have always maintained a positive outlook with the support of their investors who have seen the value of Amazon shares increasing over the years. The company has responded adequately to the financial risks by constantly increasing the annual sales of the company up to $74.5 billion in 2013. The company keeps taking calculated strategic risks as it ventures into new industries based on the driving principle of selling everything at affordable prices, which has seen it recently launch the Kindle Fire to compete with Apple’s iPad and other similar tablets.
What new technologies will most likely directly impact the organization’s business?
New technologies that are most likely to impact the organization’s business are extremely likely to be in the mobile devices industry, which is the next frontier of technology growth in the near future (Hui, Hui & Yue, 2012). However, the company is already way ahead of its direct competitors in the retail industry in terms of mobile technology through its highly advanced mobile platforms and applications, not forgetting its innovative Kindle devices. Given its diverse portfolio of products and services it is highly unlikely that any new technologies could drastically disrupt the company’s operations, especially under the leadership of their CEO, Jeff Bezos, who is a believer in innovation. It is hard to foresee any new technologies catching Amazon executives by surprise given the nature of their operations, what is more likely to happen is that Amazon will create new disruptive technologies that will cement its position as a market leader.
Will the organization be likely to adopt new technologies to achieve a competitive edge or take a wait-and-see attitude?
The most likely scenario is that if any new technologies come into the market, Amazon will be among the very first companies to adopt the new technologies so that they can gain a competitive advantage over their rivals. This prediction is based on the fact that Amazon has embraced many new technologies and even used those to launch new products such as the web services division, which offers cloud services that are not part of the general retail industry. All the three directors interviewed strongly support the fact that Amazon would never adopt a wait-and-see attitude in any of the industries it operates in given that it has always prided itself on being a pioneer and market leader.
What are the advantages and disadvantages of each approach?
The main advantage of a wait-and-see approach is that it allows a company to adopt a new technology when others in the industry have already adopted the technology and it is working quite effectively for those who have adopted it. However, there is a downside to this approach in that a company may wait for too long before adopting a technology only for it to lose significant market share as its competitors benefit from adopting the new technologies much earlier. The main advantage of quickly adopting new technology is that the company can jump ahead of its competitors and capture new markets created by the introduction of the new technologies way before it can face stiff competition from other competitors (Twyman, Elkins, Burgoon & Nunamaker, 2014). The main disadvantage associated with this approach is that a company might adopt a new technology way too early, invest significant resources in the new technology only for the technology to become obsolete. Such scenarios are extremely common as was evidenced in the dotcom bubble burst of the late 1990s and the financial crash of 2008. However, Amazon has benefitted greatly from taking significant risks and this should not change in future.
References
Cecez-Kecmanovic, D., Kautz, K., & Abrahall, R. (2014). Reframing Success and Failure of Information Systems: A Performative Perspective. MIS Quarterly, 38(2), 561-588.
Hui, K., Hui, W., & Yue, W. T. (2012). Information Security Outsourcing with System Interdependency and Mandatory Security Requirement. Journal Of Management Information Systems, 29(3), 117-156.
Géczy, P., Izumi, N., & Hasida, K. (2014). Analytics-Based Management of Information Systems. Review of Business & Finance Studies, 5(2), 55-65.
Twyman, N. W., Elkins, A. C., Burgoon, J. K., & Nunamaker, J. F. (2014). A Rigidity Detection System for Automated Credibility Assessment. Journal Of Management Information Systems, 31(1), 173-202.
Briggs, R. O. (2014). Special Section: Information Systems Support for Shared Understanding. Journal of Management Information Systems, 31(1), 107-110.
Deng, X., & Chi, L. (2012). Understanding Postadoptive Behaviors in Information Systems Use: A Longitudinal Analysis of System Use Problems in the Business Intelligence Context. Journal Of Management Information Systems, 29(3), 291-326.
Chen, Y., Ramamurthy, K. K., & Wen, K. (2012). Organizations’ Information Security Policy Compliance: Stick or Carrot Approach? Journal Of Management Information Systems, 29(3), 157-188.
Spears, J. L., & Barki, H. (2010). User Participation in Information Systems Security Risk Management. MIS Quarterly, 34(3), 503-A5.
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Information Systems and Decision Making
Decision making, relating to information systems or any strategic considerations, is a critical managerial and leadership competency. Often, decisions require accurate and timely information about the organization, its resources, and its environment. For an organization that has grown too large for any one individual to be involved in its many initiatives, information can be difficult to access and analyze without the use of information technology. In these cases, decision support technologies can play a crucial role in the organization’s success. You will take a look at various types of decision support technologies, or systems, and examine how they can impact strategic decision making as well as day-to-day decisions. You will consider whether and how the available decision support models can be used to enhance strategic decision making.
To be completed:
• Identify various types of decision support systems and how they are used in the organization
• Assess the role of decision support systems in creating superior business strategy
Resources;
Course Text
Management Information Systems for the Information Age
Chapter 4, “Decision Support and Artificial Intelligence: Brainpower for Your Business”
This chapter discusses expert systems, neural networks and fuzzy logic, genetic algorithms, and the four types of agent-based technologies.
Articles
• Fazlollahi, B., & Vahidov, R. (2001). A method for generation of alternatives by decision support systems. Journal of Management Information Systems, 18(2). Retrieved from ABI/INFORM Global database.
This article discusses decision support systems and a method for generating alternatives by these systems.
• Wiederhold, G. (2000). Information systems that really support decision-making. Journal of Intelligent Information Systems, 14(2&150;3). Retrieved from ABI/INFORM Global database.
This article takes a look at which information systems can support real-world decision making.
• Edwards, J. S., Duan, Y., & Robins, P. C. (2000). An analysis of expert systems for business decision making at different levels and in different roles. European Journal of Information Systems, 9(1). Retrieved from ABI/INFORM Global database.
This article examines the use of expert systems at various decision-making levels in an organization.
• Atkin, J. A. D., Burke, E. K., Greenwood, J. S., Reeson, D. (2008). On-line decision support for take-off runway scheduling with uncertain taxi times at London Heathrow airport. Journal of Scheduling, 11(5). Retrieved from ABI/INFORM Global database.
This article examines the use and applicabililty of decision support systems at Heathrow airport.
Web Site
•Power, D. J. (March 10, 2007). A Brief History of Decision Support Systems. Retrieved from http://DSSResources.COM/history/dsshistory.html
SAMPLE ANSWER
Information Systems and Decision Making
Introduction
Decision support systems (DSS) are usually computer-based interactive software whose main function is to help decision makers through the use of data, knowledge and communication technologies to complete the decision-making process. Decisions support systems can be broadly grouped into the four categories below:
Data-driven DSS
Decision support systems that are data-driven are systems that are usually used to query a database for specific information that is required for a decision to be made. Such systems are used by managers, staff, and suppliers for purposes such as determining the levels of available stock so that supply orders can be made and similar decisions (Fazlollahi & Vahidov, 2001). Examples of such systems are computer-based databases that manage data on customers and suppliers and the fulfillment of customer orders.
Communication-driven DSS
Communication-driven decision support systems are basically computer-based communication systems that are mostly used within the organization to facilitate easy communication between teams (Wiederhold, 2000). An example of the application of such systems is in the case of multinational corporations that need to coordinate work between employees in various countries and continents where they implement a system of teleconferencing or even a webinar type of application to facilitate communication. Other examples of such systems include instant messaging systems, chats, Skype calls and net-meeting systems.
Knowledge-driven DSS
A knowledge-driven DSS is a special type of decision support system that provides specialized expertise, which is usually stored as facts, procedures, or rule to solve problems (Edwards, Duan & Robins, 2000). An example of such a system is the clinical decision support system.
Document-driven DSS
Decision support systems that are document-driven are basically used to manipulate information that is widely unstructured in various digital formats.
Model-driven DSS
Model-driven decision support systems are usually used to assist decision makers analyze a particular situation through the manipulation of statistical, simulation or financial models. Such systems usually rely on data provided by the users and the parameters set for the modeling to occur (Power, 2007). Such systems include the financial models used by investment experts to predict the future of stocks.
The role of decision support systems in creating superior business strategy
Decision support systems are being used extensively by businesses to create unique strategies that are superior to their competitors and set them apart from the rest. An example of such a corporation is the Canadian National Railway system that implemented a decision support system that assists the railway in managing the railway tracks. The DSS keeps track of the state of the railways tracks and identifies any tracks that are worn out or in bad repair after which the railway company performs maintenance on the tracks and they are restored. Using the DSS, the CNR was able to reduce the number of train derailments on their tracks, while across the region other railway companies were actually experiencing a significant increase in the number of derailments witnessed annually. Another effective application of DSS is within the medical industry where the Clinical Decision Support System (CDSS) is extremely effective in performing medical diagnosis, and has drastically increased the amount of time taken and resources used in medical diagnosis in the hospitals that use the CDSS. Most businesses use DSS to represent all the relevant information about the business in summary form using charts such that managers have an easy time making strategic decisions using the charts that contain all the necessary information in summarized form.
Conclusion
Decision Support Systems are crucial for businesses as they speed up the speed of the decision making process while at the same time increasing the personal efficiency of the decision makers. DSS also facilitates communication between internal teams, staff, and managers and provides new evidence that was not available without the DSS and the evidence provides enough reason for the decision makers to make certain strategic decisions
References
Fazlollahi, B., & Vahidov, R. (2001). A method for generation of alternatives by decision support systems. Journal of Management Information Systems, 18(2).
Wiederhold, G. (2000). Information systems that really support decision-making. Journal of Intelligent Information Systems, 14(2&150;3).
Edwards, J. S., Duan, Y., & Robins, P. C. (2000). An analysis of expert systems for business decision making at different levels and in different roles. European Journal of Information Systems, 9(1).
for this paper, they are 3 main questions to respond to, it is critical for the writer to clearly respond to this 2 main questions using scholarly sources to support the points and properly citing all work in APA format. Questions should be thoroughly responded.
Information Systems Development
once an organization makes the decision to implement an information systems technology, the next step is to determine whether the system should be developed internally or externally. There are risks and benefits to either approach. Internal development can be costly. On the other hand, it “bakes” into the organization the critical skills necessary to not only maintain the system but to also enhance it over time. External development, whether on- or offshore, can realize considerable savings and allow the company to focus on its own core competencies. The trade-off can be a system that is less customized or adaptable to existing systems, as well as a continued reliance on the vendor for maintenance and upgrades.
This week, you will explore the critical factors to take into consideration when making such a decision, bearing in mind organizational strategy as the primary context for the development of information systems.
There are advantages and disadvantages to in-sourcing and outsourcing, For this week’s paper, respond to the following:
• What are the critical success factors in taking the decision to outsource IT functions? Which functions, if any, can/should be outsourced? What are the risks associated with outsourcing or offshoring?
• What are the advantages and disadvantages of short cycle time development? Do these mitigate the decision to outsource?
• What cultural barriers exist when offshoring IT development? Can these barriers be overcome? If so, how?
Resources to be used for the paper
Articles
• Baskerville, R., & Pries-Heje, J. (2004). Short cycle time systems development. Information Systems Journal, 14(3). Retrieved from Business Source Premier database.
This article examines a new form of development referred to as short cycle time systems development.
• Tafti, M. H. A. (2005). Risks factors associated with offshore IT outsourcing. Industrial Management & Data Systems, 105(5/6), 549–560. Retrieved from ABI/INFORM global database.
This article presents a framework to assess risk factors associated with offshore outsourcing of IT development.
• Gottschalk, P., & Solli-Sæther, H. (2005). Critical success factors from IT outsourcing theories: An empirical study. Industrial Management & Data Systems, 105(5/6). Retrieved from ABI/INFORM global database.
This article applies 11 management theories to rank critical issues in IT outsourcing using case studies and interviews as its methodology.
• Meso, P., & Smith, R. (2000). A resource-based view of organizational knowledge management systems. Journal of Knowledge Management, 4(3). Retrieved from ABI/INFORM global database.
This article asserts that the only true strategic asset is intellectual capital and that IT development of knowledge management systems must take into consideration the “socio-technical” perspective.
SAMPLE ANSWER
Information Systems
When outsourcing IT functions, there are key success factors that should be taken into consideration. The first factor is the cost of outsourcing as compared to that of an in-built information system. However, the cost should not be the chief factor to consider as some information systems might be very cheap but not very effective according to an organization’s need. Another factor is the security of the organization’s information. Some information systems need to be managed locally and confidentially; therefore, outsourcing may compromise the security of the information. Specificity of assets is another factor that should be considered. One should consider the ability of the outsourced information system to fit the specific organization’s needs. Most outsourced systems are designed in such a way that they can be used by any organization. Degree of uncertainty of the information systems is another critical factor. The IT world is ever evolving, and when considering outsourcing, it is important to weigh between the ability of the outsourced system to be overtaken by technology against an inbuilt system. Frequency of transactions in this regard means how often the information system will be used. For instance, outsourcing may be effective for transactions, which are done once for a long period of time (Gottschalk & Solli-Sæther, 2005).
According to Tafti (2005), insecurity of information is one of the risks associated with outsourcing. The systems like payment processing system should never be outsourced at any instance. Another risk factor is unsuitability of the information system in regard to the organization’s objectives and needs. Each system has got its own specific users; outsourcing may not meet the specific needs of the users who may employ the outsourced system. For example, in a salary processing system, not all employees may be entitled to house allowance but most information systems include this as one of the details in processing the salary.
Short cycle time gives an organization the ability to distinguish a mediocre team from serious one. The short cycle time sets out a target to a team member on what is to be achieved within a given period of time. This helps reduce the risk of delayed delivery of customers’ software due to issues of incompleteness of the process. Short cycle time development helps in dealing with the factors of economic changes. When developing software for a long time it may be affected by changes in the economy for example inflation which may result to higher prices of hardware than the price that was planned for. The IT world of today undergoes changes now and again, short cycle time development helps in development of software at the right time when it’s relevant to the users before they are overtaken by other new inventions. The short cycle time development is very appropriate in delivering emergencies, software’s that are needed within a very short time. Its quick and this saves on time and cost through the consolidated efforts of team members (Baskerville, & Pries-Heje, 2004).
One disadvantage of the short cycle time system development is that the system can be developed within a very short time, not taking into consideration how it will serve for a long time. Some systems are developed and work out correctly at their initial time of introduction, but later on, it crashes down immediately after it is launched. Such problems occur because the system developers never take their time to fully analyze the system. Another disadvantage of the short cycle time development is that the period for user education may not be enough to full equip the users on how to use the new software before it’s launched. They may be trained but they may not be very confident enough in handling the new software. This does not mitigate the fact that a system can be in-built in order to meet the needs of the organization. Proper planning can be done and by employing the appropriate expertise, the system can be developed effectively (Baskerville, & Pries-Heje, 2004).
The bureaucratic nature of an organization can become a barrier in off-shoring IT development. This involves the procedures that are encountered in signing off the deliveries at the various stages in the system development lifecycle. Lack of management commitment can influence the software development and implementation. If the management lacks commitment then the whole project may fail due to issues such as financing of the project in a timely manner. Technophobia is also another barrier towards software development within an organization. If the users are technophobic then there may be a problem along the software development life cycle when they shall be required to test and be educated on the software before it is launched. It’s necessary that the management confirm and understand the necessity of the software before its development begins. They should commit fully towards financing the project and sustaining the project through continued maintenance.
References
Baskerville, R., & Pries-Heje, J. (2004). Short cycle time systems development. Information SystemsJournal, 14(3). Retrieved from Business Source Premier database.
Gottschalk, P., & Solli-Sæther, H. (2005). Critical success factors from IT outsourcing theories: An empirical study. Industrial Management & Data Systems, 105(5/6). Retrieved from ABI/INFORM
Meso, P., & Smith, R. (2000). A resource-based view of organizational knowledge management systems.Journal of Knowledge Management, 4(3). Retrieved from ABI/INFORM global database.
Tafti, M. H. A. (2005). Risks factors associated with offshore IT outsourcing. Industrial Management & Data Systems, 105(5/6), 549–560.Retrieved from ABI/INFORM
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It is important to note that this paper is in two sections , and it is critical that the writer follow every bit of instructions noting that this is a continues paper of which another section will be coming in the weeks ahead. They are resources at the end of the paper that can also aid in the completions of the paper.
The Current State of IT in Your Organization: A Snapshot
For this paper you will have an opportunity to examine theoretical, practical, and empirical points of view regarding the use of IT to establish competitive advantage. This exercise will allow you to apply the knowledge you have gained to the MIS situation in your own organization, or one you know well. You will conduct first-person research, so choose an organization where this will be possible. You will conduct an assessment of the “state” of IT within your organization, or the organization you have chosen to investigate, including an analysis of the organization’s key MIS initiatives, in which you evaluate the current MIS strategy and its impacts. A key element of the Praxis Paper is the identification and framing of an organizational problem that relates to the topics covered in the course. Your research should lead you to identify possible solutions to the problem(s) you identify. You will apply knowledge gained in the course in order to present advantages and disadvantages of various approaches to the problem(s).
The Praxis Paper 1 will comprise 8–10 pages in APA format. One to three diagrams and presentation slides may be included, but they will be additional to the required length of the paper. You are required to include research from at least two first-person interviews and at least two peer-reviewed practitioner or scholarly journals. For this paper, you will submit 2 sections to your Instructor:
As you identify and analyze key MIS initiatives, strategies, issues, and/or problems unique to your chosen organization in your paper, be sure to incorporate a discussion on subjects such as :
• Any ethical concerns related to managing and communicating data or information that may be confidential or protected, such as customer information or intellectual property.
• The types of knowledge that your organization is attempting to or would like to encode in KM systems.
• Issues related to knowledge management and sharing across business units such as products, services, and sales.
• The impact of database management and knowledge management on business objectives.
SECTION A
Write details about the organization you have chosen and the individuals you plan to interview
For this section identify three individuals in your chosen organization whom you will interview for the purposes of this assignment. They should be individuals who understand the organization’s strategic use of IT to achieve competitive advantage in the marketplace and are willing to meet with you to discuss these initiatives. Please be aware that you will also interview individuals in your chosen organization for the Praxis Paper 2 . Please ensure that you properly schedule your interviews based on the individuals’ availability.
For this section , analyze
• The company you have chosen to examine and an explanation for your choice.
• The names, titles, and details of availability for the individuals you will interview.
SECTION B
This section should include a complete draft of your paper in order to receive and incorporate feedback from your Instructor
As you identify and analyze key MIS initiatives, strategies, issues, and/or problems unique to your chosen organization in your paper, be sure to incorporate a discussion of the themes found in this week’s topics, where appropriate. These may include:
• Any ethical concerns related to managing and communicating data or information that may be confidential or protected, such as customer information or intellectual property.
• The types of knowledge that your organization is attempting to or would like to encode in KM systems.
• Issues related to knowledge management and sharing across business units such as products, services, and sales.
• The impact of database management and knowledge management on business objectives.
Resources
Course Text
Haag, S., & Cummings, M. (2008). Management information systems for the information age (Laureate Education, Inc., custom ed.). Boston: McGraw-Hill/Irwin.
Chapter 1, “The Information Age in Which You Live: Changing the Face of Business”
Articles
• Carr, N. G. (2003). IT doesn’t matter. Harvard Business Review, 81(5). Retrieved from the Business Source Premier database.
This article claims that IT within the business environment is becoming less important as it becomes more widespread and the costs associated with it decrease.
• Bhatt, G., & Grover, V. (2005). Types of information technology capabilities and their role in competitive advantage: An empirical study. Journal of Management Information Systems, 22(2). Retrieved from Business Source Premier database.
This article presents an empirical study of firms that have invested in IT capabilities and the impact those capabilities had on establishing competitive advantage. This article identifies concrete and practical results of IT investment. It is a refutation of Carr’s article (2003) in the Harvard Business Review.
SAMPLE ANSWER
The Current State of IT in Your Organization
The Current State of IT at Amazon
Amazon.com is an internet giant and one of the fastest large-scale retail companies selling its products online through their website. As such, it will offer a good case study for analysis of the state of IT in earning competitive advantage within the industry. Since its 1995 inception, it has grown to become the largest internet retailer globally. Amazon has special interest in innovation in business strategy as well as the management of information systems. The two aspects of business, innovation and management of IS, are interconnected at Amazon with its business innovations being driven by the huge investment the company has in information systems.
The founder, Jeff Bezos, took advantage of the business opportunity being offered by the internet back in 1995 to start Amazon as a website for selling books online directly to customers. The idea was to store as many books as possible, which would not have been possible through a physical bookstore. The concept of the virtual bookstore presented this opportunity, and he was able to offer lower prices since he did not have to maintain much inventory rather operating through distributors. Consequently, he did not have to pay for the maintenance of a physical storefront or a large sales staff. Through online tracking and shipping information, ability to pay for purchases using a single-click and a credit card, and telephone and e-mail customer support, the company is able to provide superior customer service. 1n 1998, Amazon expanded its sales and revised its business strategy to include other products such as music, CDs, DVDs, and videos as well as electronics, gourmet food, jewelry, personal care, apparel, and home improvement equipment (Thompson, 2013).
At Amazon, the three individuals to be involved in the interview are Jeffrey Blackburn; Business Development Director, Andrew Jassey; the Web Services Director, and Jeffrey Wilke; Consumer Business Director. The three directors were chosen for the interview because of their availability and the fact that on request they agreed to participate in the study. Again, the three leaders are well versed with the company’s strategy pertaining to IT and the competitive advantage it offers the company.
Section B
Commenting on how they are able to maintain a competitive advantage over rivals, Jeffrey Blackburn in charge of the company’s Business Development talks of benchmarking the business processes against competitors and consequently identifying best industry practices. They do this by comparing the effectiveness and efficiency of their business processes against strict standards and then embarking on measuring performance against those standards. This sets the platform for the improvement of the business strategies and processes through operational excellence, improving profit margins, lowering costs, and fostering a closer relationship with suppliers and customers. He further notes that by working with all the people involved in the company and information systems, Amazon is able to gather customer information from all available avenues and harness this electronically and to use it to improve the customer experience. For instance, at Amazon, they have systems that make it easy for suppliers to open stores and display goods on their website. The company has a well-developed system that coordinates the shipment of goods to the customers. Moreover, the shipment tracking system enables them to access customer information for use in benchmarking.
For Jeffrey Wilke, the Consumer Business Director, the customer tracking strategy where they are able to customize customer’s experience is an effective way of gaining a competitive advantage for the company. By analyzing the information gathered through the knowledge management strategy, they are able to recommend certain products for existing clients every time they visit their website. Wilke affirms that Amazon is able to offer personalized customer service based on an analysis of their past purchases. The company also adopts the direct Amazon-to-buyer approach to sales.
Andrew Jassey is the Director in charge of the Web Services in the company notes that their multi-leveled e-commerce strategy is what offers them a competitive advantage that they enjoy over others in the industry. The company has an application on their Website that allows potential sellers to use their platform to reach out to customers. Through the application, Amazon allows the sellers or associates to build websites on their platform. Jassey notes that this application allows the growth of a very rich database of applications and products accessible by customers. At Amazon, Jessey further notes that IT plays a powerful role in establishing business ecosystems. The company through the use of IT systems has developed IT-based platforms that other companies can use. Amazon’s offers their online store business platforms to other companies such as Fortune 500 firms like Dell to sell directly to the customers. IT has enabled Amazon to create highly synchronized industry specific value chains. The value webs are a collection of independent companies using IT to coordinate their value chains so as to produce a product for the market collectively.
The value web diagram:
(Goh & Kauffman, 2013).
Strategic IT systems have the capacity to change a company as well as its operating procedures and products, driving it into new behavioral patterns. Amazon has had to change their business strategy a number of times so as to reflect new technologies, procedures, and products as the company expands. The case of Amazon demonstrates that successful use of MIS is a challenging task that calls for precise coordination of the management, organizations, and technology. According to Goh and Kauffman (2013), companies using the MIS strategy to earn a competitive advantage over others in the industry are faced with the challenge of losing it over time as other companies have access to the same and can easily copy and adopt the systems. As such, there is a need for continuous and aggressive adoption of new strategies and technologies to keep ahead of others. This should, however, be coupled with effective management strategies and other organizational elements such as unique corporate culture as is the case at Amazon.
One of the ethical dilemmas facing Amazon is on the ownership of the company data. Customer information is such a crucial asset for Amazon, which poses a challenge in safeguarding it from potential theft by employees or system hackers. Such intrusions by criminals could lead to comprise of crucial customer information and great losses for the company (Goh & Kauffman, 2013). The company has a mandate to safeguard customer information from any intrusions. Amazon’s knowledge management strategy treats knowledge component of their business activities as an explicit concern of business and reflected in their business strategy, policy, and practice at all the levels of the company. This has been made collaborative and integrated process directed towards creating, capturing, organization, and access of the intellectual assets. Through the knowledge management process, customer information is turned to actionable knowledge and electronically made available in a usable form to the various departments.
Some scholars have in the past claimed that IT no longer earns businesses a competitive advantage. Nick Carr in his article “IT Doesn’t Matter,” for the first time challenged the strategic value of IT. His argument is that the opportunities for gaining competitive advantage through it are dwindling. The idea is that most of the best practices that most can be built into software and for IT-spurred transformations has already happened or is in the process of happening. Carr instead advocated for less spending on IT as a means of reducing costs and decreasing the risk of buying the equipment that are fast turning obsolete (Carr, 2003). During the time of writing the article, IT companies were in a hurry to sell latest server models seen then as a key to strategic advantage. Companies were in turn in a hurry to position their business on the cutting-edge of infrastructure. One thing though is certain; Carr got people thinking about the direction that IT application was going. For instance, the main challenge of companies concerning their It department has shifted to cloud computing. Companies are now restructuring their IT departments in an effort to form them around cloud systems and applications.
The skeptic view of IT in earning a competitive advantage for companies, in other studies and by several scholars, has been widely refuted. Scholars postulate firms can achieve a better understanding of the IT-based competitive advantage by demarcating specific forms of capabilities. Specifically, companies need to clearly distinguish between dynamic, competitive, and value capabilities as the three distinct types of capabilities. Moreover, within each of the categories specific capabilities can be identified as IT business experience, It infrastructure, intensity of organizational learning, and relationship infrastructure.
Bhatt and Grover in 2005 conducted an empirical study involving chief IT executives from 202 manufacturing firms. The aim of undertaking this analysis was to test the model describing the relationship between the three distinct types of capabilities and competitive advantage. The findings of the study revealed that the relationship infrastructure and the quality of IT business expertise had a significant effect on competitive advantage. In addition, the intensity of organizational learning was also shown as significantly correlated with the capabilities. As such, the results point to the significance of delineating capabilities that can create differentiation in the marketplace and the dynamic capabilities as important antecedents to IT capacity building (Bhatt & Grover, 2005).
In another study, Roberts and Grover investigated how IT facilitates a company’s customer agility and in so doing competitive advantage. The study conducted in 2012 involved 1200 marketing managers working in high-tech companies. The results showed that a Web-based customer infrastructure to a great extent facilitated the capability of a company in customer-sensing. They also identified that systems integration moderates the relationship between the capability of a company to respond to customers and the inter-functional coordination positively. In addition, they found out that agility alignment also affects the efficacy of an organization’s competitive actions. Information systems play a crucial part in facilitating a firm’s knowledge creating synergy derived from the interaction between a firm’s analytical ability and its Web-based customer infrastructure. In turn, the alignment between a company’s customer-sensing capacity and its customer-responding capacity greatly impacts its competitive advantage (Roberts & Grover, 2012). The study confirmed claims that IT capability to create knowledge and enhance processes can be a great step towards facilitating a company’s ability to sense and respond to market opportunities. By facilitating a company’s customer agility, IT promotes competitive advantage. Agile organizations are in a position to adapt and perform well even in rapidly changing environments through capitalizing on opportunities for competitive action and innovation such as developing strategic alliances, entering new market segments, and launching new products. The advancement of IT presents a unique opportunity for companies to engage their customer agility. Customers can generate ideas for new products and use IT-based tools to provide end-user product support on the online environment. As a result, the social relationships developing between the different entities in online communities generate a continuous flux of very valuable knowledge. Consequently, companies that are able to absorb this external knowledge effectively are better able to sense and respond to opportunities.
As Luse and Mennecke (2014) note, other studies have revealed positive linkages between IT investment and productivity attributing the scenario to improvement in business structures, processes, and practices needed to leverage technologies. This is contrary to the earlier discussed assertions by Carr that It is ubiquitous, costly, and accessible to all companies and as such cannot provide differentiation advantage. In this regard, what companies need is to distinguish between undifferentiated IT assets as the ability to manage the assets. Effective managing of the IT assets is a capability capable of creating uniqueness and providing competitive advantage.
Information Technology strategy:
(Goh & Kauffman, 2013).
In economic sense, IT alters both the cost of information and the relative costs of capital as a factor of production substituting the traditional labor and capital. As such, It should be seen to reduce the cost of production in terms of labor and cost of certain capitals such as buildings and machinery. The use of networks is helpful in lowering the cost of market participation making it worthwhile for companies to contract external suppliers instead of the use of internal sources. Arguing from the Agency Theory perspective, IT can also reduce the internal costs of management. According to this theory, a firm is conceptualized as a nexus of contracts that is in existence among self-interested individuals in it rather than a unified, profit-maximizing entity. The principle owner then employs agents to perform work on his behalf. Nevertheless, agents will require constant management and supervision, and as firms grow in size, the agency costs rise (Luse & Mennecke, 2014). By reducing the cost of gathering and analyzing information, IT allows companies to reduce the agency cost since it becomes easier for the management to oversee greater number of agents.
The interaction between IT and an organization is dependent on several mediating factors such as organizational culture, structure, business processes, politics, management decisions, and surrounding environment. Information systems have in the modern marketplace become an integral, online, interactive tool in the daily operations of organizations. They have over the past decade fundamentally altered the way activities are carried out within organizations, thus, greatly impacting on the possibilities of conducting business.
References
Bhatt, G. D., & Grover, V. (2005). Types of Information Technology Capabilities and Their Role in Competitive Advantage: An Empirical Study. Journal Of Management Information Systems, 22(2), 253.
Carr, N. G. (2003). IT doesn’t matter. Harvard Business Review, 81(5). Retrieved from the Business Source Premier database.
Goh, K., & Kauffman, R. J. (2013). Firm Strategy and the Internet in U.S. Commercial Banking. Journal Of Management Information Systems, 30(2), 9.
Luse, A., & Mennecke, B. (2014). IT can matter: co-evolution fostering IT competitive advantage. Management Research Review,37(6), 574.
Thompson D. The Riddle of Amazon: the global shopping behemoth is beloved by investors despite practically nonexistent profits and a bewildering grand strategy. What exactly is Jeff Bezos trying to build?. The Atlantic [serial online]. 2013:26.
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