Review questions - Answers
Table of contents
2. Information technology in a business environment ............................................................................. 1
3. A framework for information management ......................................................................................... 5
13. IT management .................................................................................................................................. 8
14. Services delivery management ........................................................................................................ 17
6/15. Financial management.................................................................................................................. 20
16. Operations management .................................................................................................................. 24
17. Quality management........................................................................................................................ 32
18. Supplier management ...................................................................................................................... 38
19. Human resources management ........................................................................................................ 39
20. IT governance .................................................................................................................................. 41
21. Business-IT alignment ..................................................................................................................... 51
2. Information technology in a business environment
• For each of the descriptions below, identify the concept that is being defined:
A structured set of activities, executed in an organization; → Business Process
A simple action, normally part of a business process; → Activity
A collection of related business processes; → Function
A sequence of business functions via which business processes are sequenced to produce
products or services with added value; → Value chain
Those functions in the Porter Value chain model that directly producing added value; →
Primary activities
Those functions in the Porter Value chain model ensure that the primary activities can run
smoothly; → Supporting activities
The extension of the value chain over several organizations; → Value system
The system of organizations and activities from raw materials to finished goods; →
Supply chain
A single system for the creation, storage, management and processing of data; → A
computer system
A collection of equipment, services and human effort supporting the creation, storage,
management and processing of information. → An information system
Supporting individual business processes by the storage and processing of their data; →
Data processing
Using information systems to make the execution of groups of related business processes
more efficient; → Task automation
Automating complete business processes along the value chain of an organization; →
Integrated information systems
1
,• Explain what business processes, activities and business functions are. Give and discuss an
example of each.
➔ Business functions group business processes
A few business functions of many classic business are:
● Marketing and sales
● Research and development
● Production
● Financial management and administration
● Human resource management
➔ Business processes are what the organization does
In the function marketing and sales:
● Create customer offer
● Accept customer offer
● Enter order
● Make invoice
➔ Business activities are simple actions
Create customer offer
● Determine configuration
● Fix prices
● Determine discount
● Make financial report on offer
• Describe the value chain model of Michael Porter.
➔ The value chain model, developed by Michael Porter, is a framework that helps
analyze and understand the various activities a company undertakes to deliver a
product or service to its customers. It highlights the different stages through which
value is created within an organization and how each stage contributes to the overall
competitive advantage.
According to Porter, the value chain consists of 5 primary activities and 4 support
activities:
1. Primary Activities:
a) Inbound Logistics: It involves receiving, storing, and distributing inputs or
raw materials for the production process.
b) Operations: This stage encompasses the actual production or service delivery
process, where inputs are transformed into the final product or service.
2
, c) Outbound Logistics: It includes activities related to the distribution and
delivery of the finished product to customers.
d) Marketing and Sales: This stage involves activities to promote and sell the
product or service, including advertising, sales channels, and pricing.
e) Service: It focuses on providing after-sales support, such as installation, repair,
and customer service, to enhance customer satisfaction and maintain loyalty.
2. Support Activities:
f) Procurement: It involves sourcing and acquiring the necessary inputs,
including materials, equipment, and services, for the production process.
g) Technology Development: This activity includes research and development,
innovation, and technology management to enhance the production process and
create new products or services.
h) Human Resource Management: It involves recruiting, training, and
developing the workforce necessary to support the organization's activities.
i) Infrastructure: This refers to the support systems and processes that enable
the value chain to function effectively, such as information technology,
accounting, finance, and other administrative functions.
• Describe how value chains are integrated into value systems and into the supply chain.
Value systems integrate multiple value chains of different organizations, identifying the
interdependencies and linkages between them.
Very often, you can look at each company with a different value chain and you can connect
those value chains in a value system. One example in which you can do this is for example a
supply chain. So, when you have a manufacturing process, it’s often a supply chain between
multiple firms (ex: supply chain of a car: there are multiple firms that are involved, so 1 firm
that makes the tires, the other makes the rubber, …), you can connect all of those companies in
a supply chain and such a supply chain you can look at it from the lens of a value chain and
when you look at it from the lens of a value chain it’s actually a value system. So, you can
connect those value chains into a value system and those interconnections, this is where IT can
also play a very important role because it’s basically in one direction the goods are being
exchanged (like for example for the value system of a car: this supplier for example creates the
rubber and this supplier turns the rubber into tires and so on) → goods that go from one to
another but in the opposite direction, it’s all about information, information about your supply
chain: how many kg of rubber do I need so I can create the tires that I want to create in the next
month. So this information exchange can also be supported by IT and it’s a very important
domain of IT.
So, one of the main purposes is actually to optimize and to connect those supply chains, to
connect the different actors within a supply chain , so make a connection between the different
companies and actors.
• Discuss the groups of business processes along the value chain.
The activities in the value chain can be seen as business processes.
• Describe three ways to use information systems in businesses. What are the main differences
between these ways to use information systems?
The most basic way to use IT in a business is data processing
1) Use it to improve data processing
3
, Involves capturing, storing, organizing, and manipulating data to generate useful
information.
2) Use it to improve tasks (→ task automation)
Information systems can automate various tasks and processes within a business. This
involves using technology to replace manual, repetitive, and time-consuming tasks with
automated systems.
3) Use it to integrate all of those systems across business functions (→ Integrated
information systems)
Integrated information systems refer to the integration of various business functions and
processes into a cohesive and unified system.
We can look at those 3 ways as being kind of maturity levels:
- The most basic way to use IT in a business is data processing
- When you go one step further: automate tasks
- Additional step further: integrating all these data processing systems and task automation
systems across departments → to function as an integrated information system
• Describe the properties of integrated information systems. How are these properties different
from task automation?
- Integration: all parts work together
- Adjustment of business processes to information systems
- Complex infrastructure
➔ These properties distinguish them from task automation, which primarily focuses on
automating specific tasks without the same level of integration or the need for
significant process adjustments.
• Discuss the attention points and issues when implementing integrated information systems.
Which of these issues are also important for the implementation of task automation?
- Use a structured approach
- Consider the whole organization
- Have a clear vision
- The information system is designed as one unit → make an architecture (dream big and start
small but need great architecture)
- There will be change → manage it!
- That takes several phases to implement → Phased and planned approach
- It should not only be the task of IT specialists → involve users
• Explain why the introduction of integrated information systems requires a way of thinking that
differs from the thinking of the “traditional” technically oriented IT specialist.
Because most important problems are not technical:
- Ever-changing user equipment
- Budget limits
- Unmotivated staff
- Unacceptable project delays
• Discuss the benefits of the use of information systems.
- Operational benefits: daily business processes more efficiently
4
Table of contents
2. Information technology in a business environment ............................................................................. 1
3. A framework for information management ......................................................................................... 5
13. IT management .................................................................................................................................. 8
14. Services delivery management ........................................................................................................ 17
6/15. Financial management.................................................................................................................. 20
16. Operations management .................................................................................................................. 24
17. Quality management........................................................................................................................ 32
18. Supplier management ...................................................................................................................... 38
19. Human resources management ........................................................................................................ 39
20. IT governance .................................................................................................................................. 41
21. Business-IT alignment ..................................................................................................................... 51
2. Information technology in a business environment
• For each of the descriptions below, identify the concept that is being defined:
A structured set of activities, executed in an organization; → Business Process
A simple action, normally part of a business process; → Activity
A collection of related business processes; → Function
A sequence of business functions via which business processes are sequenced to produce
products or services with added value; → Value chain
Those functions in the Porter Value chain model that directly producing added value; →
Primary activities
Those functions in the Porter Value chain model ensure that the primary activities can run
smoothly; → Supporting activities
The extension of the value chain over several organizations; → Value system
The system of organizations and activities from raw materials to finished goods; →
Supply chain
A single system for the creation, storage, management and processing of data; → A
computer system
A collection of equipment, services and human effort supporting the creation, storage,
management and processing of information. → An information system
Supporting individual business processes by the storage and processing of their data; →
Data processing
Using information systems to make the execution of groups of related business processes
more efficient; → Task automation
Automating complete business processes along the value chain of an organization; →
Integrated information systems
1
,• Explain what business processes, activities and business functions are. Give and discuss an
example of each.
➔ Business functions group business processes
A few business functions of many classic business are:
● Marketing and sales
● Research and development
● Production
● Financial management and administration
● Human resource management
➔ Business processes are what the organization does
In the function marketing and sales:
● Create customer offer
● Accept customer offer
● Enter order
● Make invoice
➔ Business activities are simple actions
Create customer offer
● Determine configuration
● Fix prices
● Determine discount
● Make financial report on offer
• Describe the value chain model of Michael Porter.
➔ The value chain model, developed by Michael Porter, is a framework that helps
analyze and understand the various activities a company undertakes to deliver a
product or service to its customers. It highlights the different stages through which
value is created within an organization and how each stage contributes to the overall
competitive advantage.
According to Porter, the value chain consists of 5 primary activities and 4 support
activities:
1. Primary Activities:
a) Inbound Logistics: It involves receiving, storing, and distributing inputs or
raw materials for the production process.
b) Operations: This stage encompasses the actual production or service delivery
process, where inputs are transformed into the final product or service.
2
, c) Outbound Logistics: It includes activities related to the distribution and
delivery of the finished product to customers.
d) Marketing and Sales: This stage involves activities to promote and sell the
product or service, including advertising, sales channels, and pricing.
e) Service: It focuses on providing after-sales support, such as installation, repair,
and customer service, to enhance customer satisfaction and maintain loyalty.
2. Support Activities:
f) Procurement: It involves sourcing and acquiring the necessary inputs,
including materials, equipment, and services, for the production process.
g) Technology Development: This activity includes research and development,
innovation, and technology management to enhance the production process and
create new products or services.
h) Human Resource Management: It involves recruiting, training, and
developing the workforce necessary to support the organization's activities.
i) Infrastructure: This refers to the support systems and processes that enable
the value chain to function effectively, such as information technology,
accounting, finance, and other administrative functions.
• Describe how value chains are integrated into value systems and into the supply chain.
Value systems integrate multiple value chains of different organizations, identifying the
interdependencies and linkages between them.
Very often, you can look at each company with a different value chain and you can connect
those value chains in a value system. One example in which you can do this is for example a
supply chain. So, when you have a manufacturing process, it’s often a supply chain between
multiple firms (ex: supply chain of a car: there are multiple firms that are involved, so 1 firm
that makes the tires, the other makes the rubber, …), you can connect all of those companies in
a supply chain and such a supply chain you can look at it from the lens of a value chain and
when you look at it from the lens of a value chain it’s actually a value system. So, you can
connect those value chains into a value system and those interconnections, this is where IT can
also play a very important role because it’s basically in one direction the goods are being
exchanged (like for example for the value system of a car: this supplier for example creates the
rubber and this supplier turns the rubber into tires and so on) → goods that go from one to
another but in the opposite direction, it’s all about information, information about your supply
chain: how many kg of rubber do I need so I can create the tires that I want to create in the next
month. So this information exchange can also be supported by IT and it’s a very important
domain of IT.
So, one of the main purposes is actually to optimize and to connect those supply chains, to
connect the different actors within a supply chain , so make a connection between the different
companies and actors.
• Discuss the groups of business processes along the value chain.
The activities in the value chain can be seen as business processes.
• Describe three ways to use information systems in businesses. What are the main differences
between these ways to use information systems?
The most basic way to use IT in a business is data processing
1) Use it to improve data processing
3
, Involves capturing, storing, organizing, and manipulating data to generate useful
information.
2) Use it to improve tasks (→ task automation)
Information systems can automate various tasks and processes within a business. This
involves using technology to replace manual, repetitive, and time-consuming tasks with
automated systems.
3) Use it to integrate all of those systems across business functions (→ Integrated
information systems)
Integrated information systems refer to the integration of various business functions and
processes into a cohesive and unified system.
We can look at those 3 ways as being kind of maturity levels:
- The most basic way to use IT in a business is data processing
- When you go one step further: automate tasks
- Additional step further: integrating all these data processing systems and task automation
systems across departments → to function as an integrated information system
• Describe the properties of integrated information systems. How are these properties different
from task automation?
- Integration: all parts work together
- Adjustment of business processes to information systems
- Complex infrastructure
➔ These properties distinguish them from task automation, which primarily focuses on
automating specific tasks without the same level of integration or the need for
significant process adjustments.
• Discuss the attention points and issues when implementing integrated information systems.
Which of these issues are also important for the implementation of task automation?
- Use a structured approach
- Consider the whole organization
- Have a clear vision
- The information system is designed as one unit → make an architecture (dream big and start
small but need great architecture)
- There will be change → manage it!
- That takes several phases to implement → Phased and planned approach
- It should not only be the task of IT specialists → involve users
• Explain why the introduction of integrated information systems requires a way of thinking that
differs from the thinking of the “traditional” technically oriented IT specialist.
Because most important problems are not technical:
- Ever-changing user equipment
- Budget limits
- Unmotivated staff
- Unacceptable project delays
• Discuss the benefits of the use of information systems.
- Operational benefits: daily business processes more efficiently
4
