978-0073402987 Review Question Chapter 1-3

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Solution Manual

Book Title

Business Driven Information Systems 5th Edition

ISBN 13

978-0073402987

978-0073402987 Review Question Chapter 1-3

April 4, 2019

B U SINES S DRIV E N I N F O R M AT I O N

SYS T E M S

REVIEW QUESTIONS

1. What is data and why is it important to a business?

Data are raw facts that describe the characteristics of an event or object. Before the

2. How can a manager turn data into information?

Information is data converted into a meaningful and useful context. Having the right

3. What is the relationship between data, information, business intelligence, and

knowledge?

Data is converted into information, business intelligence, and knowledge. Using data,

4. Why is it important for a company to operate cross-functionally?

Each department performs its own activities. Although each department has its own

focus and data, none can work independently if the company is to operate as a whole. It

is easy to see how a business decision made by one department can a0ect other

5. Why would a company want to have a CIO, CPO, and CSO?

A chief information o9cer is responsible for (1) overseeing all uses of MIS and (2)

CHAPTER

6. Explain MIS and the role it plays in a company and global business.

Management information systems (MIS) is a business function, like accounting and

human resources, which moves information about people, products, and processes

across the company to facilitate decision making and problem solving. MIS incorporates

7. Do you agree that MIS is essential for businesses operating in the information age? Why

or why not?

MIS can be an important enabler of business success and innovation. This is not to say

that MIS equals business success and innovation, or that MIS represents business

8. Why is it important for a business major to understand MIS?

MIS systems drive organizations and all business students will be using MIS systems to

9. What type of career are you planning to pursue? How will your specific career use data,

information, business intelligence, and knowledge?

10. Explain systems thinking and how it supports business operations.

Systems thinking is a way of monitoring the entire system by viewing multiple inputs

being processed or transformed to produce outputs while continuously gathering

11. What business strategies would you use if you were developing a competitive advantage

for a company?

12. Explain Porter’s Five Forces Model and the role it plays in decision making.

Formally de+ned, Porter’s Five Forces Model analyzes the competitive forces within the

environment in which a company operates to assess the potential for profitability in an

13. How could a company use loyalty programs to inCuence buyer power? How could a

company use switching costs to lock in customers and suppliers?

Companies can also reduce buyer power with loyalty programs, which reward customers

based on their spending. The airline industry is famous for its frequent-Cyer programs,

buyer power.

One way to reduce buyer power is by manipulating switching costs, costs that

make customers reluctant to switch to another product or service. Switching costs

14. What are Porter’s three generic strategies and why would a company want to follow only

one?

Porter has identi+ed three generic business strategies for entering a new market: (1)

broad cost leadership, (2) broad di0erentiation, and (3) focused strategy. Broad

15. How can a company use Porter’s value chain analysis to measure customer satisfaction?

To identify these competitive advantages, Michael Porter created value chain analysis ,

which views a firm as a series of business processes that each add value to the product

or service. Value chain analysis is a useful tool for determining how to create the

B U SI N ES S D R I V E N I N F O R M AT I O N

SYS T E M S

REVIEW QUESTIONS

1. Why must business professionals understand how MIS supports decision making and

problem solving?

Decision making is one of the most important and challenging aspects of management.

Decisions range from routine choices, such as how many items to order or how many

2. What is the relationship between critical success factors and key performance

indicators? How can a manager use them to understand business operations?

Critical success factors (CSFs) are the crucial steps companies perform to achieve their

goals and objectives and implement their strategies. Key performance indicators (KPIs)

3. What are the three di0erent levels found in a company? What types of decisions are

made at each level?

A few key concepts about organizational structure will help our discussion of MIS

decision-making tools. The structure of a typical organization is similar to a pyramid, and

4. De+ne transaction processing systems and describe the role they play in a business.

Transactional information encompasses all the information contained within a single

business process or unit of work, and its primary purpose is to support the performance

CHAPTER

5. De+ne decision support systems and describe the role they play in a business.

Decision support systems (DSSs) model information using OLAP, which provides

assistance in evaluating and choosing among di0erent courses of action. DSSs enable

6. De+ne expert systems and describe the role they play in a business.

Expert systems are computerized advisory programs that imitate the reasoning

processes of experts in solving difficult problems. Typically, they include a knowledge

7. What are the capabilities associated with digital dashboards?

Executive information systems use visualization to deliver specific key information to top

8. What are the common DSS analysis techniques?

Consolidation is the aggregation of data from simple roll-ups to complex groupings of

interrelated information. For example, data for different sales representatives can then

be rolled up to an o9ce level, then a state level, then a regional sales level. Drill-down

9. How does an electronic spreadsheet program, such as Excel, provide decision support

capabilities?

10. What is the di0erence between the ability of a manager to retrieve information instantly

on demand using an MIS and the capabilities provided by a DSS?

11. What is arti+cial intelligence? What are the +ve types of AI systems? What applications

of AI o0er the greatest business value?

Arti+cial intelligence (AI) simulates human thinking and behavior, such as the ability to

reason and learn. Its ultimate goal is to build a system that can mimic human

12. What is a business process and what role does it play in an organization?

A business process is a standardized set of activities that accomplish a specific task, such

13. Why do managers need to understand business processes? Can you make a correlation

between systems thinking and business processes?

Some processes, such as a programming process, may be contained wholly within a

single department. However, most, such as ordering a product, are cross-functional or

cross-departmental processes and span the entire organization. The process of “order to

14. Why would a manager need to review an As-Is and To-Be process model?

As-Is process models represent the current state of the operation that has been

mapped, without any specific improvements or changes to existing processes. The next

15. How can a manager use automation, streamlining, and business process reengineering

to gain operational efficiency and e0ectiveness?

Automation is the process of computerizing manual tasks, making them more e9cient

and e0ective and dramatically lowering operational costs. Streamlining improves

business process e9ciencies by simplifying or eliminating unnecessary steps. As the rate

16. Explain the difference between customer-facing processes and business-facing

processes. Which one is more important to an organization?

Customer-facing processes, also called front-o9ce processes, result in a product or

service received by an organization’s external customer. They include ful+lling orders,

17. Explain how finding di0erent ways to travel the same road relates to automation,

streamlining, and business process reengineering.

Be#er, faster, cheaper is the path taken by automation, streamlining, and business

process reengineering. Automation and streamlining are typically be#er, faster, and

B U SI N ES S D R I V E N I N F O R M AT I O N

SYS T E M S

REVIEW QUESTIONS

1. What is the di0erent between sustaining and disruptive technology?

A disruptive technology is a new way of doing things that initially does not meet the

needs of existing customers. Disruptive technologies tend to open new markets and

2. Do you consider the Internet and WWW forms of sustaining or disruptive technology?

3. How has the Internet and WWW created a global plaOorm for business?

As people began learning about the WWW and the Internet, they understood that it

enabled a company to communicate with anyone, anywhere, at any time, creating a new

4. What is the di0erence between ebusiness and ecommerce?

Ecommerce is the buying and selling of goods and services over the Internet.

Ecommerce refers only to online transactions. Ebusiness includes ecommerce along with

5. What are the benefit and challenges associated with ebusiness?

Advantages of ebusiness include opening new markets, reducing costs, improving

CHAPTER

6. What are the benefit and challenges associated with Business 2.0?

The benefit of Business 2.0 include content sharing through open sourcing,

7. Explain business models and their role in a company. How did ebusiness change

traditional business models?

A business model is a plan that details how a company creates, delivers, and generates

8. How can a company use mass customization and personalization to decrease buyer

power?

9. How does ebusiness di0er from Business 2.0?

10. What are the di0erences among collective intelligence, knowledge management, and

crowdsourcing?

Collective intelligence is collaborating and tapping into the core knowledge of all

employees, partners, and customers. Knowledge can be a real competitive advantage for

an organization. The most common form of collective intelligence found inside the

11. Why is knowledge management critical to a business?

The primary objective of knowledge management is to be sure that a company’s

12. What are the bene+ts and challenges associated with wikis?

Wikis are great tools for collaborating but can be changed and updated by any person.

13. How do disintermediation, reintermediation, and cybermediation di0er?

Intermediaries are agents, so?ware, or businesses that provide a trading infrastructure

to bring buyers and sellers together. The introduction of ebusiness brought about

disintermediation, which occurs when a business sells directly to the customer online

14. What is the semantic web?

The semantic web as a component of Web 3.0 that describes things in a way that

15. How does mbusiness different from ebusiness?

Mobile business (or mbusiness, mcommerce) is the ability to purchase goods and

services through a wireless Internet-enabled device. Egovernment involves the use of

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Business Driven Information Systems 5th Edition