Business Information Technology - Week Two Questions

Explain the role of information technology’s role in business

Information technology is everywhere and it enables some businesses to differentiate themselves from competitors to gain competitive advantage. It works to maximise the efficiency of IT operations so that the business can focus on their resources on providing value for the business. Further more, it allocates the business with information and communication thus creating positive effectiveness.

What are efficiency and effectiveness metrics? (Provide examples)

-          Efficiency IT metrics measures the performance of the IT system itself including throughput, speed, and availability. Getting the most from each source. Some include: Throughput, transaction speed, system availability, web traffic, response time, and information accuracy. The main focus of efficiency is based of technology and how it operates. Examples of Efficiency IT metrics are as follows: 40% of equipment (on average) is in Development/Test, vs. Production

-          Data Centre greenhouse emissions will surpass that or airlines by 2020

-          Server utilization is still low; up to 30% of servers are "dead"; average cooling utilization is only 50%

-          Effectiveness IT metrics measures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell through increases. Setting the right goals and seeing they are accomplished. The main focus of efficiency is based around an organisations goals, strategies and objectives. Some include: Usability, customer satisfaction, conversion rates and financial. Examples of effectiveness IT metrics are as follows:

-          Mean Time to Repair: How long it takes to resolve an outage.

-          Server to System Administration Ratio: Number of servers that can be handled by an administrator (high performers can handle about 125 servers.. while medium and low performers can handle about 25)

-          First Fix Rate: The percentage of incidents that are correctly repaired the first time.

-          Change Success Rate: Percent of changes that are successfully deployed without creating an incident.

What does Porters give forces Model attempt to explain? How does the internet affect the model?

1) Buyer Power

2) Supplier Power

3) Threat of substitute products or services

4) Threat of new entrants

5) Rivalry among existing competitors

These forces attempt to help companies identify potential opportunities while deterring potential rivals. It helps to determine the relative attractiveness of an industry. Information technology increases competition as availability of information increases, thus the more the internet displays information technology, the more competitive the market will become for the business.

Describe the relationship between processes and value chains

-  The Value chain enables a firm to evaluate activities that add value to a firm’s products and services used within the organisation. It views an organisation as a series of processes, each of which adds value to the product or service.  In comparison to Business Processes which is a standardised set of activities that accomplish a specific task. The relationship between the two are branched down and connected from the value creation which is the result of effective business processes and efficient value chains. Both enable support activities and can decrease the threat of new entrants; moreover improving primary activities can decrease the threat of substitutes.