Information Systems and Digital Transformation Quiz

ICT in Business ISD 155

• The course is taught by Prof. Kwame Owusu Kwateng and Dr. Evans Amoah
• The course is offered by the Department of Supply Chain and Information Systems
• The course is offered at the KNUST School of Business, KNUST - Kumasi

Digital Transformation and Enterprise IT Architecture

• Digital transformation is a fundamental change process, enabled by digital technologies and driven by the strategic leverage of key resources and capabilities.
• This process aims to radically improve an entity (organization, business network, industry, or society) and redefine its value proposition for its stakeholders.
• This process includes digital transformation, digitization and digitalization.
• Digitalization is the use of digital technologies and data to improve business, create new business models and create a digital environment for business operations.
• Digitization is the technical process of converting analog signals into a digital form.
• Digitization improves efficiency by making information easier to store, search, and find.
• Many forward-thinking managers and entrepreneurs are transforming their existing business models.
• Business leaders have prioritised digital transformation as a company priority.
• Companies like Uber, Airbnb, Shyp, and TaskRabbit are revolutionizing industries using IT to create new business models.

Business Perspective

• Key issues in this lecture involve the powerful impact digital technology has on businesses.
• Examined how leading companies deploy digital technology to change their business, processes, customer experiences, as well as manage information and knowledge.
• Also covered the architecture of information systems (IS).

Digital Transformation (1/4)

• Many forward-looking managers and entrepreneurs are using digital technology to transform business models and reinvent businesses.
• 87% of business leaders prioritize digital transformation, and 79% of corporate strategists are reinventing business models to create new revenue streams.
• Companies like Uber, Airbnb and others are using IT to revolutionize business-customer interactions.
• Digital transformation has gone from making tasks more efficient to being disruptive, dramatically changing businesses, consumer markets, and organizations.

Digital Transformation (2/4)

• Digitization, digitalization and digital transformation are distinct, but related concepts.
• Digitization changes analog signals into digital form.
• Digitalization uses digital technologies to create new revenue opportunities and improve business processes.
• Digitalization also involves automating tasks and processes for better outcomes and to enhance value.
• Digital transformation includes incremental improvements to existing processes.

Digital Transformation (3/4)

• Digital transformation is a fundamental change process enabled by digital technologies accompanied by the strategic leverage of key resources.
• Its aim is to radically improve an organization and to redefine its value proposition for its stakeholders.
• This involves the innovative use of advanced digital technologies to radically improve an organization.
• This is accomplished by creating value for stakeholders using radical improvements.

Digital Transformation (4/4)

• Relevant emerging technologies include social media, the Internet of Things, cloud technologies, big data analytics, artificial intelligence, and blockchains.
• Digital transformation changes how businesses operate and provides stakeholders with new experiences.
• Information technology enables businesses to create new business models, improve operational processes, and enhance customer experiences.

Key strategic and tactical questions

• Key strategic and tactical questions determine organizational profitability and management performance.
• Answers for these questions require understanding mundane to complex IT capabilities and effective management strategies.
• These questions should cover business direction, market targeting, customer needs and business processes, profit generation and efficiency improvements.

Disruptive Digital Business Models

• Business models define products, services, markets, business costs to achieve company goals, and core strategy to make profit.
• Digital business models explain how businesses make money using digital technologies.
• Disruptive digital business models use digital technologies to change traditional industries.
• Digital transformation drives radical changes in existing business models to focus on delivering services exactly as needed by customers.

Examples of Disruptive Digital Business Models

• Subscription models like Netflix and Apple Music offer products/ services for a specific period of time.
• Freemium models offer a trial or basic free version of a product, allowing customers to upgrade. LinkedIn and Dropbox are examples
• Free models offer products or services in exchange for user data or engagement. Google, and Facebook are examples
• On-demand models provide products or services immediately as requested by the customer. Examples include ridesharing services like Bolt, Uber, and Glovo.
• Sharing economy models enable privately owned goods or services to be shared or offered through an online platform. Examples include Airbnb, Bolt and Uber

What is a Business Process?

• Business processes coordinate organizational tasks across functions to achieve goals and tasks.
• Processes consist of inputs which are raw materials, data, knowledge and expertise, transforming activities that change inputs and deliver outputs like products, services, and actions.
• Formal processes have documented steps like bank loan approvals, and are also known as standard operating procedures.
• Informal processes are undocumented, with input that may not yet be identified. They are often knowledge-intensive.

Business Process Reengineering (BPR)

• BPR radically redesigns core business processes to drastically improve productivity, cycle times and quality.
• BPR is about improving cycle times – the time it takes to complete a task.
• BPR proposes that simply introducing technology to manual or outdated processes does not automatically improve them. It is necessary to examine and modify them.
• Eliminating unnecessary processes and improving, simplifying, and automating remaining processes reduces costs, cycle time, and labor.

BPR Goals

• BPR aims to streamline processes by eliminating unnecessary steps, and automating simple processes.
• This can enhance processes by automating existing manual processes, expanding data flows to multiple functions, and creating innovative business models.
• An example of improved processes is a customer scanning a product image and directly purchasing it from a site like Amazon.com, bypassing traditional sales channels.

Eight Phases of Business Process Reengineering

• Developing vision and objectives for a new process.
• Understanding existing processes, and identifying process areas for redesign.
• Identifying change levers to be used
• Implementing new processes.
• Evaluation and refinement of the new processes.
• Setting processes to the correct operational level,
• Performing continuous improvement on new processes.

Comparing IT infrastructure, IT architecture, and Enterprise Architecture

• IT infrastructure encompasses physical computing devices owned and used by an organization.
• IT architecture plans and outlines how IT resources within a specific department, will be planned, acquired and deployed.
• Enterprise architecture plans the structure and functionality of an organizational strategy, information, processes, and IT assets.
• Enterprise architecture strategically guides change in an organization, just as architectural plans guide construction projects.

IT Infrastructure

• Inventory of physical computing devices owned and used by an organization.
• Includes various hardware and software components, networks, and data centers, along with any associated facilities.
• Does not include people or process components associated with an IS.

IT Architecture

• Guides the planning, acquisition, building, modifying and interfacing of IT resources in a particular department.
• Offers ways of identifying how various technologies working together can satisfy user needs.
• A blueprint that sets guidelines for acquiring and deploying new technology.
• Developed based on department direction and business requirements.

Enterprise Architecture (EA)

• Conceptual plan, which defines the structure and operation, of an organization's strategy, information, processes, and IT assets.
• Guides organizational change and improvements.
• Solves issues where an organization is progressing, and how to get better at it.

Measuring EA Success: KPIs

• Success of Enterprise Architecture (EA) is measured using Key Performance Indicators (KPIs).
• KPIs are quantifiable measures used to evaluate important aspects of an organization.
• KPIs reduce the complexity of EA performance to manageable number for evaluation purposes.

Strategic Focus of EA

• EA strategically addresses IT system complexity.
• EA also addresses aligning IT systems with business needs.
• IT Systems' complexity involves difficulties in managing complex and expensive systems.
• Poor business alignment issues occur when IT systems are not aligned with business needs.
• Business and IT benefits of Enterprise Architecture (EA) include reducing IT costs, increased productivity, identifying competitive advantages to grow, and mitigating risks associated with new technology implementations.

EA Components

• Business Architecture describes the overall business structure and strategy.
• Application Architecture deals with the software and applications used.
• Information Architecture outlines how data is organized and used.
• Technology Architecture covers the technology infrastructure.

Enterprise Systems

• Enterprise systems aim to support business processes across departments.
• They use internet technology to integrate business and stakeholder information.
• Four main components are:
  • Enterprise Resource Planning (ERP) for internal processes.
  • Customer Relationship Management (CRM) for customer interactions.
  • Supply Chain Management (SCM) for the supply chain.
  • Supplier Relationship Management (SRM) for supplier relations.

IS and strategic advantage

• For different markets, how can Information Systems (IS) support or impact:
  • Cost leadership
  • Product differentiation
  • Innovation
  • Segmentation

Information Systems (IS) and Corporate Culture

• Information systems (IS) do not exist independently but are embedded within a specific organizational and social context.
• ISs aim to address business problems by providing solutions with a common purpose, values, and beliefs.
• Organizational culture and values influence IS investments.

IS Value

• IS value is defined by the people who use the systems, supported business processes, and the organizational culture.
• Relationships among IS, people and business processes drive value creation.
• Organizational trust and commitment are essential for effective and successful IS implementation and use.