ITM 501 Mod 5
ITM 501 Mod 5
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Date Created: 11/15/15
Trident University International Bruce Herrington Jr. ITM 501 Management Information System and Business Strategy Module 5 Case Assignment Dr. Caroline Howard INTRODUCTION The purpose of this paper is to discuss what degree should organizations depend on the analysis of large databases and other IT resources to formulate basic strategy. After my stance is made, I will present as much evidence as I can against my position. Finally, my original stance will be reviewed and re affirmed. I will complete this assignment in a 5 to 7 page paper. BODY Organizations should depend heavily on the analysis of large databases and other IT resources to formulate basic strategy for numerous reasons. According to the Big Data, Analytics and the Path From Insight to Value article it has made a huge difference, it says top performers say analytics is a differentiator. When the top performers say things like this it shows how much weight is placed on this data. This is the best way to keep an eye on exactly what the public is interested in buying at any time. Because the consumer market varies so much, this information is vital to finding the current trends. Ii would venture to think keeping a close eye on this is a reason for their success. Basic strategy should be supported and not a figureheads "seatofthepants" decisions, which is a quick decisions based on a gut feeling or intuition. They are often forced to make decisions under conditions of uncertainty and without all of the necessary information. While some entrepreneurs are good decision makers, others need to be more cautious about this approach, called intutive decision making. One case against intuitive decision making comes from the credit industry. For example, some banks use scoring models for consumer and small business loans, but at times individual bankers override the automated system because they intuitively disagreed with the computer model's results. These loans, however, invariably have higher delinquency and charge off rates than loans approved by the computer model. If the credit card companies were to look at this data they would see a trend and be n more incinced to change this procedure. When companies gather the data and take a good look at it they can look for these types of things. Many times in business employees and decision makers do not get a chance to get the overall look of the company. Instead, what they get is snapshot and they are forced to make decisions off of sketcy information. The credit card business is one example of businesses that are struggling because they didn’t use the information available to them to make informed decisions. Because of these mistakes they are currently in a crisis. Top performers approach business operations differently than their peers do. Specifically, they put analytics to use in the widest possible range of decisions, large and small. They were twice as likely to use analytics to guide future strategies, and twice as likely to use insights to guide daytoday operations. These top performers are using their data collection for all decisions, which are smart, informed decisions are much easier to make because you have something to base your decision off of. Many businesses end up in terrible situations because they do not use the resources available to the when making these large decisions that affect so many people. In order to be a top performer, you have to make solid decisions and have a great decision making process this means to closely examine all of the information and if enough information isn’t present request it. When depending on data analysis the companies get a full understanding of the situation and they can make these decisions a lot easier. This makes formulating basic strategy easier and uses technology to their advantage. Everyone knows numbers don’t lie, so there is no sense in making a decision without examining the numbers. If the top performers are having so much success, I don’t know why the companies that are being out done don’t adopt this process too. Organizations should use all IT resources when trying to formulate basic strategy. I think of their basic strategy as a blueprint for the company. This is what is going to guide them to success and will be the reason for their failure. This decides the vision and lays the foundation for these organizations. In order to formulate this strategy all personnel involved must be thoroughly educated on the direction the organization is going in and the current state. When including numbers they get a clear view of the organization’s current health and what is working at that time. Data can give so much insight on a company and can be understood by anyone if presented correctly. This is a resource that has helped many companies stay afloat in these hard economic times. This collected data can give organizations the information the need to make changes. For example, if they notice a certain product only sells in the summer, they can make it a seasonal item and not make it throughout the year. This is the type of value information data collection can give you. With this information they can take it to the top figureheads and have solid proof as to why this will work. If they do not have solid proof for this change it can cause these decision makers to question them and their job performance. Any decision made with statistics to back it up has a better chance of being received. This makes the decisionmakers job extremely easier and the data collectors look like they know what they are doing. Analysis of data takes away a personal intuition, for some people if it feels good then it has to be good. In today’s economy a feel good decision can be the downfall of any company. Nowadays these decision makers have to put personal or gut feelings aside and look at the basic strategy objectively. This means letting the numbers speak for themselves and making the bestinformed decision for the company. For the top performing organizations they understand this and use the number for to largest to the smallest decisions. This involves them sitting down and being spoonfeed this information and making the best decision off the gathered data. With the numbers in their face they have real time information on the success and the failure of the company. Nobody has to assume or estimate what the company is doing and where the improvements can be made. Companies have to understand that they can let technology do the work for them and they build these strategies off of those numbers. In the article it discussed how this information is gathered in retail and it would seem to be a very easy process to understand. In that business something is either selling or its not. I would think this process would be very helpful in this business, because of its simplicity. When looking at retail many people are influenced by the hottest trends and what they see on television. If a company notices a product isn’t selling then they can decide not to carry it anymore. Like I stated before it could be a seasonal item and the company can decrease the amount of this product they request throughout the year. These decisions can make from one process and that is data collection. This is another example of how important this is to any company. When formulating basic strategy organizations could face problems when analyzing data. The problem here is that the data has to be accurately reported to the decision makers. While doing my own research for this assignment I came across an article that discusses just this issue. The Reference for Business article discusses how this information can be inaccurately reported and affects decisionmaking. These mistakes can put any company at risk and make them look like they don’t know what is going on in their company. If the person deciphering the data doesn’t know what they are looking for this process is useless. Just like in any company the people reviewing the collected data have to understand the company’s interest and what information needs to be reported. If this is a small company they could in fact be in some serious trouble because of this inaccurate info that they are making decisions off of. I am sure no one wants to answer why this information is incorrect and why these decisions were made. Data analysis can be a laborintensive project depending on how indepth the company needs to get to make some of the decisions. Deciding to discontinue an item is far easier them decided to close a business due to loss revenue. This shows how basic strategy can be affected when they information changes the dynamics of the company and their vision. In the article, it discussed how some companies have 30 to 40 people reviewing the collected data and ensuring the numbers are correctly reported. In cases like this it would make some people rethink the importance of analyzing data when developing a basic strategy for any company. If companies do not have the manpower to accurately report this information then it is senseless to even collect this data. Basic strategies have to be spot on and if they aren’t then the company ends up going in the wrong direction and that spell disaster for all personnel involved. Data collection is important, but this process being the cornerstone can be too risky. There is no difference them making a gut decision then to make a decision off faulty information. No matter the risk involved many companies have made great strides by analyzing data. If the companies at the top of their respective industries this process has to work. The background information discusses how the successful companies use this process for the smallest decisions. It should how important this process can be and the rewards it can give. No matter the companies decision risk are involved. If I were a business owner I would look to the companies having continued success and try to adopt some of the procedures, especially when it comes to making decisions. Companies like Apple have been known to use this process when making decisions and look at their success. This shows that even the larges organizations use data analysis to make decisions. I am sure small businesses do the same thing, maybe just not on such a large scale. Data analysis shows how many people are using technology to gather this valuable information. Because this information can provide the company with black and white information, it has to be the tool most commonly used for decisionmaking, no matter the size of any company or what their goals are. As technology continues to advance I am sure more and more improvements will be made to this process. New software will be developed for a smoother process to bring this information to the business owners. This will make the companies who are unsure about this process or do not have the money to dedicate to the manhours to complete this process. CONCLUSION In conclusion, data analysis is the key to success when it comes to any organization and I am sure it will become an even larger piece as we move into the future. The smart companies allow technology to work for them and make these things easier. Technology is the fastest evolving business in the world today. What was once the newest technology yesterday is now obsolete. BIBILOGRAPHY 1. Trident University Background information, Management Information System and Business Strategy , http://cdad.tuiu.edu/CourseHomeModule.aspx? course=67&term=96&module=5&page=case., retrieved on December 11, 2011 /
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