The Business of IT - Notes
Please note that information contained on this page was sourced from slides produced by Paul Mathiesen for INB301, I take no credit for the production of this information and have produced this page solely for the purpose of education.
Contributions towards creating an example exam would be greatly appreciated, if you have any suggestions, please send them to [email protected], or contact me on Facebook.
Definitions:
What is business??
“the activity of making, buying, or selling goods or providing services in exchange for money” (Merriam-Webster).
Some insights from Peter Drucker:
- “The purpose of business is to create and keep a customer.”
- “Business has only two functions — marketing and innovation.”
What is a Product??
‘A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumer’s needs and is received in exchange for money or something else of value’ (Kerin et al., 2011).
‘A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need’ (Kotler, 2006). - This includes physical objects, services, persons, places, organizations and ideas.
What is the Products Offer or Consumer Value?
‘The unique combination of benefits received by targeted buyers at a specific price’ (Kerin et al., 2011). - This includes quality, convenience, on-time delivery, and both before-sale and after-sale service.
Ultimately consumer value is created with and determined by the user during the consumption process (Dixon, 1990).
What is a service?
‘A service is any act of performance that one party can offer another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product’ (Kotler, 2006)
‘Delivering a service involves a contact, an interaction between the service provider and the customer. Customers are an integral part of the service delivery as they are “transformed” or simply interact during the transaction’ (Teboul, 2006).
What are expenses?
• An expense is, generally, an outflow of cash to another company or entity
• Can also relate to the depreciation of a major asset such as a car
• You also have fixed and variable expenses
Type of Profit:
Gross Profit = Revenue - Cost of Goods Sold (COGS)
Net Profit (NP) = Revenue - Cost of Goods Sold (COGS) - Expenses
Net Profit after Tax (NPAT) = Revenue - Cost of Goods Sold (COGS) - Expenses - Tax
Cyber Crime:
Control:
Control is defined as policies, procedures or practices and organizational structures designed to provide reasonable assurance that business objectives will be achieved and that undesired events will be prevented, detected or corrected.
-Preventative: deter problems before the arise.
-Detective: Detect and report the occurrence of an error, omission or malicious act.
-Corrective: Minimize the impact of a threat, remedy problems discovered by corrective controls and identify the cause of the problem.
Process:
A process is the self-contained, temporal and logical order (parallel and/or serial) of those activities, that are executed for the transformation of a business object with the goal of accomplishing a given task.
Business Process Management:
Business Process Management is the discipline that improves measurable business performance for stakeholders through ongoing optimisation and synchronisation of enterprise-wide process capabilities.
Business Process Improvement:
Focuses on increasing customer value through improving quality, enhancing service, reducing costs, and/or increasing productivity of an activity or business process. BPI initiatives often leverage well-known techniques such as Lean, Six Sigma, Global 8-D, Theory of Constraints, and/or Rummler Bache. These efforts can seek “incremental” improvement over time or “breakthrough” improvement all at once (i.e. a new way to manage the business).
(http://centricconsulting.com/what-is-business-process-improvement-bpi-and-business-process-management-bpm/)
Descriptions:
IT and Business Scenarios:
1. IT within a business - Enterprise systems, e-commerce, digital marketing, social media, crowdsourcing, etc.
2. Strategic impact of IT - Business value of IT, competitive advantage of IT, new competitors, strategic partnerships with IT companies, etc.
3. A business perspective on IT - IT strategy, IT governance, IT management, IT investment, IT evaluation, IT project management, etc.
4. IT as a business - IT products, IT services, IT consultancy, IT companies, IT industry, etc.
Product Innovations in IT:
Contributions towards creating an example exam would be greatly appreciated, if you have any suggestions, please send them to [email protected], or contact me on Facebook.
Definitions:
What is business??
“the activity of making, buying, or selling goods or providing services in exchange for money” (Merriam-Webster).
Some insights from Peter Drucker:
- “The purpose of business is to create and keep a customer.”
- “Business has only two functions — marketing and innovation.”
What is a Product??
‘A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumer’s needs and is received in exchange for money or something else of value’ (Kerin et al., 2011).
‘A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need’ (Kotler, 2006). - This includes physical objects, services, persons, places, organizations and ideas.
What is the Products Offer or Consumer Value?
‘The unique combination of benefits received by targeted buyers at a specific price’ (Kerin et al., 2011). - This includes quality, convenience, on-time delivery, and both before-sale and after-sale service.
Ultimately consumer value is created with and determined by the user during the consumption process (Dixon, 1990).
What is a service?
‘A service is any act of performance that one party can offer another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product’ (Kotler, 2006)
‘Delivering a service involves a contact, an interaction between the service provider and the customer. Customers are an integral part of the service delivery as they are “transformed” or simply interact during the transaction’ (Teboul, 2006).
What are expenses?
• An expense is, generally, an outflow of cash to another company or entity
• Can also relate to the depreciation of a major asset such as a car
• You also have fixed and variable expenses
Type of Profit:
Gross Profit = Revenue - Cost of Goods Sold (COGS)
Net Profit (NP) = Revenue - Cost of Goods Sold (COGS) - Expenses
Net Profit after Tax (NPAT) = Revenue - Cost of Goods Sold (COGS) - Expenses - Tax
Cyber Crime:
- Crime committed using a computer and the internet, e.g. to steal a persons identity, illegal downloads, malicious programs etc.
- It's an unlawful act where a computer is either the target the tool or both.
Control:
Control is defined as policies, procedures or practices and organizational structures designed to provide reasonable assurance that business objectives will be achieved and that undesired events will be prevented, detected or corrected.
-Preventative: deter problems before the arise.
-Detective: Detect and report the occurrence of an error, omission or malicious act.
-Corrective: Minimize the impact of a threat, remedy problems discovered by corrective controls and identify the cause of the problem.
Process:
A process is the self-contained, temporal and logical order (parallel and/or serial) of those activities, that are executed for the transformation of a business object with the goal of accomplishing a given task.
Business Process Management:
Business Process Management is the discipline that improves measurable business performance for stakeholders through ongoing optimisation and synchronisation of enterprise-wide process capabilities.
Business Process Improvement:
Focuses on increasing customer value through improving quality, enhancing service, reducing costs, and/or increasing productivity of an activity or business process. BPI initiatives often leverage well-known techniques such as Lean, Six Sigma, Global 8-D, Theory of Constraints, and/or Rummler Bache. These efforts can seek “incremental” improvement over time or “breakthrough” improvement all at once (i.e. a new way to manage the business).
(http://centricconsulting.com/what-is-business-process-improvement-bpi-and-business-process-management-bpm/)
Descriptions:
IT and Business Scenarios:
1. IT within a business - Enterprise systems, e-commerce, digital marketing, social media, crowdsourcing, etc.
2. Strategic impact of IT - Business value of IT, competitive advantage of IT, new competitors, strategic partnerships with IT companies, etc.
3. A business perspective on IT - IT strategy, IT governance, IT management, IT investment, IT evaluation, IT project management, etc.
4. IT as a business - IT products, IT services, IT consultancy, IT companies, IT industry, etc.
Product Innovations in IT:
Change traditional offerings:
• Self-service, e-commerce • Downloading, streaming • Smart products, interactive • Servitization (e.g., cloud) |
Create new offerings:
• Location-based services • Social media |
Consider Transaction Orientation vs. Customer / Relationship Orientation
Transaction : the focus is on the sale of the product or service and there is little interaction with the customer
Customer: the focus is on the customer as a source of future transactions
Customer Segmentation:
The aim of segmentation is to break up customers into groups with similar needs, goals and potentially demographic markers (e.g. age, location, engagement preferences) to which a firm can provide tailored products and services.
Customer Value Proposition:
The customer value proposition is how your concept / solution solves the concerns or creates an opportunity (or both) for the customer.
Financial Statements:
Balance sheet :
• offers a snapshot of a company's health by telling how much a company owns (assets), and how much it owes (liabilities) and the difference between the two (equity) at a single moment in time.
Income statement (profit and loss statement) :
• shows how much money the company generated (revenue), how much it spent (expenses) and the difference between the two (profit) over a certain time period.
Cash flow statement:
• shows how much cash comes in and goes out of the company over a certain time period (per quarter or year).
• looks at three components by which cash enters and leaves a company: core operations, investing and financing.
Working Capital (WC):
• Sometimes called ‘seed money’
• Borrowed so that the business can run smoothly
Borrowed from yourself, family, friends, business associates, venture capitalists, banks
• Like a credit card, smooth’s out spikes in expenditure
• Should take into account the most negative cash position
Breakeven Point (BP):
• The point in time when the total revenues (TR) equal the total costs (TC)
TR = TC (or TR-TC = 0)
TR = P X Q (Price x Quantity)
TC = TVC + TFC (Total Variable and Fixed Costs)
TVC = AVC x Q (Average Variable Costs x Quantity)
Q = TFC / (P-AVC) (Breakeven Quantity)
Return on Investment (ROI):
ROI% = (gain from investment – cost of investment) x 100 = Net Profit x 100
cost of investment Investment
• The calculation for return on investment and, therefore the definition, can be modified to suit the situation
– it all depends on what you include as returns and costs.
–Total costs as investment
–Working capital (seed money) as investment
Some New Business Models:
1. Direct product or service sales
- 1A. Direct digital product or service sale
2. Commission based sale
- 2A. Digital product commission sale
3. Subscription or rental of services
4. Advertising
5. Infomediary
6. Other Business Models
-Freemium/Crippleware
1. Direct product or service sales:
Plenty of examples including ‘click and brick’ retailers such as David Jones, Woolworths etc.
• Can disrupt the normal distribution network:
▫ Delivered direct from wholesaler to customer (www.BookDepository.com) cutting out retailers
▫ Woolworths ‘click and pick up from petrol stations’
• Lower business overhead costs (rent):
▫ Physical Service delivered to home (e.g. car servicing, cleaning, gardening, Banking!!!)
1A. Direct digital product/services:
Commercial reports – Gartner Group
Video capture services (screen scrapers)
Security and other software
Web creation
Libraries used in development
Web hosting, telecoms (Skype to Mobile, Skype Premium)
SOFTWARE, APPS, WEB SERVICES!!!!
2. Commission-based sales:
• The Auction Broker:
E-Bay enables auctions and then takes a commission from sales of other people’s products via their aggregated marketplace services
• Transaction Broker:
PayPal, Credit Cards, B-Pay all take transaction fees, usually from the seller
• Marketplace:
Apple App Store and E-bay takes commissions from fixed price products
• The Virtual Mall
Amazon extends its original book marketplace to allow ‘shops’ (not individuals) to sell a variety of products, providing centralised (controlled) delivery and payment options for the sellers.
I-Select and ComparetheMarket provide a selection of insurance products, taking a commission from completed sales
*Recognised the power and influence that arises from ‘independence’ e.g. CanStar, Choice
* Both owned by Insurance companies
2A. Digital Product Commission Sales
Commissions from Digital Products:
Music – iTunes
Photographs / Images used in advertising – Shutterstock
Games
Community sites
Training Videos
3. Subscription or rental of services
•Software, Music, Video, News, Services!
• Magazines, Newspapers and other information services are common examples of this
• Generally time-sensitive products and so the rental is time based: Metered usage (like electricity and water)
• Massive online games
• Support services: for advisory products such as financial planning, stock market support, payroll services etc. etc.
• Microsoft Office 365
4. Advertising
Fixed price: a set amount of money for displaying advertising, usually restricted by time.
CPM: Cost per Mille (French for thousand). A count is taken for every time the advertisement is served to a website. This is similar to the traditional radio or television model.
CPC: Cost per Click - a cost associated with each click on the advertisement.
CPS: Cost per Sale - a cost associated with each sale resulting from a click on the advertisement
CPL: Cost per Lead - a cost associated with each lead (potential sale) created from a click on the advertisement. This is similar to the call-centre processes that set up appointments for financial planners, real estate agents and other complex services.
CPA: Cost per Action – where payment is based on a desired action that the advertiser requires.
Hybrid model: a combination of above mentioned methods.
5. Infomediary
• Independently collects information about consumers and products e.g. CanStar, Gaming comparison sites
Online market research or publication of direct market research
• May sell information to the marketplace of product/service sellers while providing it for free to potential buyers or vice-versa
• May use advertising as principal revenue source (in the same way that television travel shows do)
6. Other Business Models
• Street Performer
Pledge or donate to use open-source or freeware
• Tiered Services
Bronze, Silver and Gold support services
• Use of Social media
Tweeting for sponsors
Promoting products on Facebook to friends etc.
Freemium / Crippleware
A restricted version of the software or webservice is provided free-of-charge to entice customers to upgrade to a full version or pay for extra functionality.
•Feature limited
LinkedIn, newspaper subscriptions
• Capacity or user-licence limited
Gmail, not networked versions
• Customer type
e.g. educational user
• Time limited
30 day trial
• Effort limited
Purchase in-game to improve performance (Pay to Win)
• Support limited
The Foundations Of Marketing
1) Understand the market place and the customer needs and wants.
2) D esign a Customer-driven Marketing Strategy.
3) Create an integrated marketing program that delivers superior value.
Digital Strategy
A digital strategy:
Creates value and revenue from digital assets
Transform processes, business models and customer experiences by exploiting the pervasive digital connections between systems, people, places and things
Requires both technical and business acumen
Technical: knowing how to exploit digital assets
Business: knowing what business strategies will be augmented by digital strategies
The five stages of a digital strategy are:
1)Plan
2)Reach out
3)Encourage Action
4)Convert to sale
5)Engage customers
1) Plan how you will:
Analyse your situation
Understand your customers’ behaviors and your competitors
Measure success
Integrate your channels
Communicate the benefits
Provide relevant experiences in channels
Some examples of measuring success would be Tracking Metrics, Performance Drivers, Customer Centric KPI's and Business Value KPI's.
- Research customers and marketplace
- Manage marketing information and customer data
2) D esign a Customer-driven Marketing Strategy.
- Select customers to serve, market segmentation and targeting
- Decided on value proposition: differentiation and positioning
3) Create an integrated marketing program that delivers superior value.
- Product and service design: build strong brands
- Pricing: create real value
- Distribution: manage demand and supply chains
- Promotion: communicate the value proposition
- Customer relationship management: build strong relations with chosen customers
- Partner relationship management: build strong relations with marketing partners
- Create satisfied loyal customers
- Create customer lifetime value
- Increase share of market and share of customer
Digital Strategy
A digital strategy:
Creates value and revenue from digital assets
Transform processes, business models and customer experiences by exploiting the pervasive digital connections between systems, people, places and things
Requires both technical and business acumen
Technical: knowing how to exploit digital assets
Business: knowing what business strategies will be augmented by digital strategies
The five stages of a digital strategy are:
1)Plan
2)Reach out
3)Encourage Action
4)Convert to sale
5)Engage customers
1) Plan how you will:
Analyse your situation
Understand your customers’ behaviors and your competitors
Measure success
Integrate your channels
Communicate the benefits
Provide relevant experiences in channels
Some examples of measuring success would be Tracking Metrics, Performance Drivers, Customer Centric KPI's and Business Value KPI's.
2) Reach Out- but how??
In order to ensure your companies advertising campaign is reaching as many people within your target audience as possible, it is important to utilise a combination of Online and Offline methods for communicating with your consumers. |
3)Encourage Action
Encouraging interaction is about persuading your target customers to take their next step towards purchasing your product of service. This may mean encouraging them to find out more about your company or products, visiting you on social media or reading a blog post. These actions should be included in the high level goals of your marketing analytics. |
4) Convert to a Sale
This is the stage where you convert your customers interest into a "sale". This may mean buying a product, subscribing or other actions dependent on your business model. If you are aiming to sell a product, it is important to understand different people react to different advertisement methods, the Eisenberg Customer Modality breaks buyers into four main types, Methodical, Humanstic, Spontaneious and Competitive. Having a good understanding of the customer types you are trying to appeal to can alter how you present your product/information in order increase the conversion rate from customer to paying customer.
This is the stage where you convert your customers interest into a "sale". This may mean buying a product, subscribing or other actions dependent on your business model. If you are aiming to sell a product, it is important to understand different people react to different advertisement methods, the Eisenberg Customer Modality breaks buyers into four main types, Methodical, Humanstic, Spontaneious and Competitive. Having a good understanding of the customer types you are trying to appeal to can alter how you present your product/information in order increase the conversion rate from customer to paying customer.
5) Engage the Customer
Engaging the customer is about forming a long-term relation ship with buyers to build their "customer loyalty" which manifests in repeat purchases or usage. This can be achieved through social presence, email and direct interactions to boost the customers life time value. Indicators of customer engagement come through measuring repeat sales and interaction on social media.
Engaging the customer is about forming a long-term relation ship with buyers to build their "customer loyalty" which manifests in repeat purchases or usage. This can be achieved through social presence, email and direct interactions to boost the customers life time value. Indicators of customer engagement come through measuring repeat sales and interaction on social media.
Traditional Drivers of Outsourcing
1) Financial:
•Reduce Costs
Vendors enjoy economies of scale allowing them to provide IS services at a lower cost
• Improve Cost Control
Implement cost controls that more directly tie usage to costs
• Restructure IS budgets
By converting capital outflows (purchase of software and infrastructure) into operating outflows (rent)
• The need to acquire new resources
Such as upgrades additional personnel or cash.
2) Strategic and Business:
•Focus on core competencies
By outsourcing non core competencies
• Provide IS for start-ups
Implement cost controls that more directly tie usage to costs
• Reduction and Devolution
Reducing head count or downsizing through outsourcing
• Reduce uncertainty and increase flexibility
Reduce uncertainty by having third parties manage fluctuations in user demands
Increase general flexibility in the IS functions
3) Technical:
• Access to Technical Talent
Where companies cannot afford, attract or retain technical expertise.
• Access to new technologies
Including new infrastructure or technologies requiring greater expertise than those locally available.
• Improve Technical Service
From support services with greater expertise or who can provide more timely services
• Focus internal staff on core technical activities
By outsourcing non-core activities
Reduce management time spent on IT
4) Political:
• Reaction to the efficiency imperative
Where local IS services are not perceived to be as efficient as those provided by the market
• Eliminate a troublesome function
Poor implementations for example.
• Enhance credibility
By outsourcing their kingdom, IS managers show they are corporate players
• Focus internal staff on core technical activities
By outsourcing non-core activities
Reduce management time spent on IT
Contemporary Drivers of Outsourcing
•Business process improvement
In accordance with standardized industry practice through the outsourcing vendor
• Improving analytics
Through access to new expertise and technology
• Driving Innovation
Through partnering with IT companies
• Improving Quality
of services to customer
• Consolidating IS Services
Creating effectiveness at a global level
• Forcing Change
On the organisations
• Enabling Compliance
of regulatory or statutory requirement
• External Bench-marking
Through the outsourcing arrangement
5 Phase Outsourcing Process
The five phases of the outsourcing process are:
1) Strategy
2) Formulation
3) Transition
4) Transfer
5) Monitoring and Transformation
1) Strategy
1. Analyse functions and processes to identify potential outsourcing opportunities
2. Determine sourcing approaches
3. Create Preliminary Transformation Plan
4. Evaluation and Decision
5. Prepare Governance Plan
2) Formulation
1. Identify criteria for selection of vendors
2. Identify vendors through the procurement process
3. Due Diligence: understand and confirm Vendors’ capabilities
4. Prepare for negotiations by establishing cost and service quality dimensions
5. Establish preliminary agreements
6. Preliminary transition plan
3) Transition
1. Prepare Transformation Plan
2. Prepare Insourcing Plan
3. Integration Preparation
a) Finalise Solution Architecture
b) Finalise Service Architecture
c) Finalise Personnel strategy
4. Contracts Finalisation and Review
4) Transfer
1. Transfer
a) Services
b) Resources
c) Personnel
d) Knowledge
2. Due Diligence review
5) Monitoring and Transformation
1. Service performance
2. Financial performance
3. Transformation Plan execution
4. Benefits Assessment
5. Governance and Forward Planning
1) Financial:
•Reduce Costs
Vendors enjoy economies of scale allowing them to provide IS services at a lower cost
• Improve Cost Control
Implement cost controls that more directly tie usage to costs
• Restructure IS budgets
By converting capital outflows (purchase of software and infrastructure) into operating outflows (rent)
• The need to acquire new resources
Such as upgrades additional personnel or cash.
2) Strategic and Business:
•Focus on core competencies
By outsourcing non core competencies
• Provide IS for start-ups
Implement cost controls that more directly tie usage to costs
• Reduction and Devolution
Reducing head count or downsizing through outsourcing
• Reduce uncertainty and increase flexibility
Reduce uncertainty by having third parties manage fluctuations in user demands
Increase general flexibility in the IS functions
3) Technical:
• Access to Technical Talent
Where companies cannot afford, attract or retain technical expertise.
• Access to new technologies
Including new infrastructure or technologies requiring greater expertise than those locally available.
• Improve Technical Service
From support services with greater expertise or who can provide more timely services
• Focus internal staff on core technical activities
By outsourcing non-core activities
Reduce management time spent on IT
4) Political:
• Reaction to the efficiency imperative
Where local IS services are not perceived to be as efficient as those provided by the market
• Eliminate a troublesome function
Poor implementations for example.
• Enhance credibility
By outsourcing their kingdom, IS managers show they are corporate players
• Focus internal staff on core technical activities
By outsourcing non-core activities
Reduce management time spent on IT
Contemporary Drivers of Outsourcing
•Business process improvement
In accordance with standardized industry practice through the outsourcing vendor
• Improving analytics
Through access to new expertise and technology
• Driving Innovation
Through partnering with IT companies
• Improving Quality
of services to customer
• Consolidating IS Services
Creating effectiveness at a global level
• Forcing Change
On the organisations
• Enabling Compliance
of regulatory or statutory requirement
• External Bench-marking
Through the outsourcing arrangement
5 Phase Outsourcing Process
The five phases of the outsourcing process are:
1) Strategy
2) Formulation
3) Transition
4) Transfer
5) Monitoring and Transformation
1) Strategy
1. Analyse functions and processes to identify potential outsourcing opportunities
2. Determine sourcing approaches
3. Create Preliminary Transformation Plan
4. Evaluation and Decision
5. Prepare Governance Plan
2) Formulation
1. Identify criteria for selection of vendors
2. Identify vendors through the procurement process
3. Due Diligence: understand and confirm Vendors’ capabilities
4. Prepare for negotiations by establishing cost and service quality dimensions
5. Establish preliminary agreements
6. Preliminary transition plan
3) Transition
1. Prepare Transformation Plan
2. Prepare Insourcing Plan
3. Integration Preparation
a) Finalise Solution Architecture
b) Finalise Service Architecture
c) Finalise Personnel strategy
4. Contracts Finalisation and Review
4) Transfer
1. Transfer
a) Services
b) Resources
c) Personnel
d) Knowledge
2. Due Diligence review
5) Monitoring and Transformation
1. Service performance
2. Financial performance
3. Transformation Plan execution
4. Benefits Assessment
5. Governance and Forward Planning
Common Cloud Computing Service Models (SPI):
SPI is an acronym for the most common cloud computing service models, Software as a Service, Platform as a Service and Infrastructure as a Service.
1. Software as a Service (SaaS) A software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network
• easier administration, automatic updates
• users have the same version of software leading to better collaboration and integration of services e.g. Microsoft 365, SAP
2. Platform as a Service (PaaS) Clients rent hardware, operating systems, storage and network capacity over the Internet.
• that is, rent virtualized servers and associated services for running existing applications or developing and testing new ones e.g. Oracle
3. Infrastructure as a Service (IaaS) A provision model in which an organization outsources the equipment used to support operations, including storage, hardware, servers and networking components.
• the service provider owns the equipment and is responsible for housing, running and maintaining it e.g. Fujitsu, CITEC
Typology of Leaders:
Autocrats:
Make decisions and issue orders and instructions
Advantages:
Quick decision making, less skilled workers can be hired, short-term success.
Disadvantages:
Inhibits the innovative power of the workers, usually has a negative impact on organizational productivity in the medium to long term.
Suits:
Short term projects, wide span of control, low skilled workforce/monotonous work
Laissez-Faire:
Used to describe a leader that lets his or her colleagues get on with their work. This style is largely a "hands off" view that tends to minimize the amount of work or face time required.
Advantages:
Increases morale of employees and they strive for higher job satisfaction as they hold the responsibility for framing and achieving their group goals.
Disadvantages:
Can make employees feel insecure, can result in reduced feedback to employees.
Suits:
Employees who are highly skilled, experienced, and educated; Employees who have high pride in their work and the drive to do it successfully on their own.
Participative:
Though the ultimate responsibility continues to vest with the leaders they take all decisions in consultation with their followers.
Advantages:
Psychological involvement, motivation, reduction in turnover and absenteeism.
Disadvantages:
Lengthy and 'boring' decision making
Suits:
Professional organisations where the emphasis is clearly on training professional and leadership development
Creative industries enjoy a lot of benefits from from the free flow of ideas democratic/participative leadership brings.
Democratic:
Promotes the sharing of responsibility, the exercise of delegation and continuous consultation.
Advantages:
Positive work environment, Creative thinking, Overall development of the subordinates
Disadvantages:
Delay in decision making, Employees may not always be willing to participate.
Suits:
Professional organisations where the emphasis is clearly on training professional and leadership development
Creative industries enjoy a lot of benefits from from the free flow of ideas democratic/participative leadership brings.
Types of organisational structures:
Traditional Types - Simple, Functional, Divisional
Contemporary Types - Team, Matrix, Project
Simple:
Functional:
Divisional:
Team/Matrix/Project:
Types of Ownership
1.Sole Trader
2.Partnerships (and Joint Ventures)
3.Company
Sole Trader:
• You are the firm’s sole owner and have complete control
• You own all the assets and are responsible for all debts
• You reap all the profits
• Simple business structure
• Tax advantages when profits are lower
• Relatively easy to shut down
Partnership:
•General partnership – all parties are equally responsible for the management of the business and each has unlimited liability for debts and obligations
• Limited partnership – where one or more partners has limited ownership and obligations
• Partners share profits in accordance with their partnership agreement
• If one partner leaves, a new partnership needs to be constituted
Company:
• Can be owned by one or more people via shares
Privately held or publicly traded
• Has limited liability (unless guarantees are in place)
Shareholders are not responsible for company debt
• Must be registered
• Has considerable reporting responsibilities
• Directors are held to account for activities
Developing a Business Case
1. A description of the idea and its Value Proposition
2. Resources needed to create the App and how much it will cost
• Sourcing strategy if applicable.
3. Who will do it and when – an activity plan and a personnel plan including an organisational structure
4. Digital Marketing Strategy (DMS)
1. Web revenue models & Key performance measures for each DMS phase
2. Reach out strategies and actions (online only) to customer segments
3. Encourage action strategies and actions
4. Convert to sale
5. Post-sale community engagement activities
5. Sales and profit projections on a cash basis
6. SWOT analysis
7. Critical Success Factors and assumptions
8. Risks and mitigation strategies
Steps for leading Change:
Create a climate for change:
1) Create Urgency
2) Form a powerful coalition
3) Create a vision for change
Engaging and Enabling the organisation:
4) Communicate the vision
5) Empower Action
6) Create quick wins
Implementing and Sustaining for Change:
7) Build on Change
8) Make it Stick
Drivers of Resistance to Change:
• Self-interest
• Misunderstanding
• Low tolerance to change
• Different assessments of the situation
Overcoming Resistance:
SPI is an acronym for the most common cloud computing service models, Software as a Service, Platform as a Service and Infrastructure as a Service.
1. Software as a Service (SaaS) A software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network
• easier administration, automatic updates
• users have the same version of software leading to better collaboration and integration of services e.g. Microsoft 365, SAP
2. Platform as a Service (PaaS) Clients rent hardware, operating systems, storage and network capacity over the Internet.
• that is, rent virtualized servers and associated services for running existing applications or developing and testing new ones e.g. Oracle
3. Infrastructure as a Service (IaaS) A provision model in which an organization outsources the equipment used to support operations, including storage, hardware, servers and networking components.
• the service provider owns the equipment and is responsible for housing, running and maintaining it e.g. Fujitsu, CITEC
Typology of Leaders:
Autocrats:
Make decisions and issue orders and instructions
Advantages:
Quick decision making, less skilled workers can be hired, short-term success.
Disadvantages:
Inhibits the innovative power of the workers, usually has a negative impact on organizational productivity in the medium to long term.
Suits:
Short term projects, wide span of control, low skilled workforce/monotonous work
Laissez-Faire:
Used to describe a leader that lets his or her colleagues get on with their work. This style is largely a "hands off" view that tends to minimize the amount of work or face time required.
Advantages:
Increases morale of employees and they strive for higher job satisfaction as they hold the responsibility for framing and achieving their group goals.
Disadvantages:
Can make employees feel insecure, can result in reduced feedback to employees.
Suits:
Employees who are highly skilled, experienced, and educated; Employees who have high pride in their work and the drive to do it successfully on their own.
Participative:
Though the ultimate responsibility continues to vest with the leaders they take all decisions in consultation with their followers.
Advantages:
Psychological involvement, motivation, reduction in turnover and absenteeism.
Disadvantages:
Lengthy and 'boring' decision making
Suits:
Professional organisations where the emphasis is clearly on training professional and leadership development
Creative industries enjoy a lot of benefits from from the free flow of ideas democratic/participative leadership brings.
Democratic:
Promotes the sharing of responsibility, the exercise of delegation and continuous consultation.
Advantages:
Positive work environment, Creative thinking, Overall development of the subordinates
Disadvantages:
Delay in decision making, Employees may not always be willing to participate.
Suits:
Professional organisations where the emphasis is clearly on training professional and leadership development
Creative industries enjoy a lot of benefits from from the free flow of ideas democratic/participative leadership brings.
Types of organisational structures:
Traditional Types - Simple, Functional, Divisional
Contemporary Types - Team, Matrix, Project
Simple:
- Small Business Startup
- Usually one 'principle' and all employees report to them
- Employees share functions
- Little policy or procedures
Functional:
- Staff with similar functions or roles are grouped together e.g. Production, Marketing & Sales, Accounting, etc
Divisional:
- Each division is self contained, has its own set of responsibilities and operates independently of each other
- Divisions may employ shared services for common supporting activities
- Divisions are often formed around types of products. May be further broken down base on geography and customer segment.
Team/Matrix/Project:
- The organisation is made up of teams
- Structure is fluid and team compositions will change
Types of Ownership
1.Sole Trader
2.Partnerships (and Joint Ventures)
3.Company
Sole Trader:
• You are the firm’s sole owner and have complete control
• You own all the assets and are responsible for all debts
• You reap all the profits
• Simple business structure
• Tax advantages when profits are lower
• Relatively easy to shut down
Partnership:
•General partnership – all parties are equally responsible for the management of the business and each has unlimited liability for debts and obligations
• Limited partnership – where one or more partners has limited ownership and obligations
• Partners share profits in accordance with their partnership agreement
• If one partner leaves, a new partnership needs to be constituted
Company:
• Can be owned by one or more people via shares
Privately held or publicly traded
• Has limited liability (unless guarantees are in place)
Shareholders are not responsible for company debt
• Must be registered
• Has considerable reporting responsibilities
• Directors are held to account for activities
Developing a Business Case
1. A description of the idea and its Value Proposition
2. Resources needed to create the App and how much it will cost
• Sourcing strategy if applicable.
3. Who will do it and when – an activity plan and a personnel plan including an organisational structure
4. Digital Marketing Strategy (DMS)
1. Web revenue models & Key performance measures for each DMS phase
2. Reach out strategies and actions (online only) to customer segments
3. Encourage action strategies and actions
4. Convert to sale
5. Post-sale community engagement activities
5. Sales and profit projections on a cash basis
6. SWOT analysis
7. Critical Success Factors and assumptions
8. Risks and mitigation strategies
Steps for leading Change:
Create a climate for change:
1) Create Urgency
2) Form a powerful coalition
3) Create a vision for change
Engaging and Enabling the organisation:
4) Communicate the vision
5) Empower Action
6) Create quick wins
Implementing and Sustaining for Change:
7) Build on Change
8) Make it Stick
Drivers of Resistance to Change:
• Self-interest
• Misunderstanding
• Low tolerance to change
• Different assessments of the situation
Overcoming Resistance:
Common Change Problems:
• We do not communicate objectives accurately
• We go from situation to solution
• People do not feel empowered
• We do not involve people in change design
• Bottom up communication is not acknowledged
• There is no consequence (+/-) management
• Spheres of influence are not specifically pointed out
• Boundaries are not properly set
• By hiding information appropriate questions never get asked
• We jump into the how, before everyone understands the why
• People hear but don’t agree
• We don’t understand cultural differences
Cyber Crime and Employers Rights:
Why do Employers Check?
To detect activity that may negatively impact on the company!
Prevention: IS Audit:
IS audition is the process of collecting and evaluating evidence to determine whether information systems and related resources, adequately safeguard assets, maintain data and system integrity, provide relevant and reliable information, achieve organisational goals effectively, consume resources efficiently, and have in effect internal controls that provide reasonable assurance that operational control objectives will be met
Challenges of Motivating Employees:
Types of Power:
1) Coercive Power
- Forcing someone to do something that they don’t want to do.
– Compliance is the aim
– Demonstrations of harm are used to illustrate what will happen if you do not comply
2) Reward Power
– Having the ability to grant things that people desire
– Or remove things that are not desired
– once you use up your rewards you lose power
3) Legitimate Power
– Based on role such as ‘manager’
– Therefore based on the means to communicate your ‘legitimate’ authority
– That is, to create feelings of responsibility or obligation
4) Referent Power
– This is based on charm and personal approval
– Role models!
– Media stars
– Power can be easily lost
5) Expert Power
– The ability to communicate knowledge and expertise
– It is the perception of expertise the wields the power
6) Informational Power
– Using or withholding information to control others
– Persuasion based on perceived information held
– Using and manipulating information to create influence
Strategic Planning:
A Strategic Plan outlines 5 elements:
The Four Ways To Process Improvement:
Derivation:
Looking at other organisations within your industry to or even outside of your industry to derive better practices
Innovation:
A new process.
Utilization:
Utililising the assets we have within our organisation better, this can include physical assets, technological assets, staff assets, assets that might be idle at different times.
Enhancement:
Enhancing an existing process.
The McKinsey 7S Framework for organizational effectiveness
The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change.
Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration (http://www.mindtools.com/pages/article/newSTR_91.htm)
Hard Elements:
Strategy
Software
Systems
Soft Elements:
Shared Values
Skills
Style
Staff
• We do not communicate objectives accurately
• We go from situation to solution
• People do not feel empowered
• We do not involve people in change design
• Bottom up communication is not acknowledged
• There is no consequence (+/-) management
• Spheres of influence are not specifically pointed out
• Boundaries are not properly set
• By hiding information appropriate questions never get asked
• We jump into the how, before everyone understands the why
• People hear but don’t agree
• We don’t understand cultural differences
Cyber Crime and Employers Rights:
- They can check you work emails and use of company technological assets (including web usage), as long as there is a policy or notice of surveillance.
- They can monitor your phone calls for quality purposes.
- An employer could not access your emails from say gmail, as this would be a violation of privacy (even if the work computer and internet services were used).
Why do Employers Check?
To detect activity that may negatively impact on the company!
- e.g. disparaging comments made about the company, it's products or its customers that are made on social media sites.
- illegal actions such as the circulation of pornographic materials in the workplace.
- To detect fraud! A common problem in the work place
Prevention: IS Audit:
IS audition is the process of collecting and evaluating evidence to determine whether information systems and related resources, adequately safeguard assets, maintain data and system integrity, provide relevant and reliable information, achieve organisational goals effectively, consume resources efficiently, and have in effect internal controls that provide reasonable assurance that operational control objectives will be met
Challenges of Motivating Employees:
- Focus: How do you get employees to focus on the things that are important to the organization.
- Personalities: No two people are motivated in exactly the same manner.
- How can we communicate what our companies rewards are, how they earn them and what they are supposed to do.
- Leadership: Motivation of employees is greatly impacted by their immediate supervisor.
- Expectations: Expectancy theory highlights that motivation is driven by expectations.
- Cost: There are costs associated with motivating employees, what is the ROI?
- Environment: This includes past history, the culture of the company, the economy, and the companies competition.
- Emotions: How are they feeling at the time.
Types of Power:
- Coercive Power
- Reward Power
- Legitimate Power
- Referent Power
- Expert Power
- Informational Power
1) Coercive Power
- Forcing someone to do something that they don’t want to do.
– Compliance is the aim
– Demonstrations of harm are used to illustrate what will happen if you do not comply
2) Reward Power
– Having the ability to grant things that people desire
– Or remove things that are not desired
– once you use up your rewards you lose power
3) Legitimate Power
– Based on role such as ‘manager’
– Therefore based on the means to communicate your ‘legitimate’ authority
– That is, to create feelings of responsibility or obligation
4) Referent Power
– This is based on charm and personal approval
– Role models!
– Media stars
– Power can be easily lost
5) Expert Power
– The ability to communicate knowledge and expertise
– It is the perception of expertise the wields the power
6) Informational Power
– Using or withholding information to control others
– Persuasion based on perceived information held
– Using and manipulating information to create influence
Strategic Planning:
A Strategic Plan outlines 5 elements:
- What will life be like in the future: …………………Vision
- What you are doing: ………………………………Mission
- What you want to achieve : ……….Goals and Objectives
- How you are going to do it: ………………………..Strategy
- What are you actually going to do:……………..Activities
The Four Ways To Process Improvement:
Derivation:
Looking at other organisations within your industry to or even outside of your industry to derive better practices
Innovation:
A new process.
Utilization:
Utililising the assets we have within our organisation better, this can include physical assets, technological assets, staff assets, assets that might be idle at different times.
Enhancement:
Enhancing an existing process.
The McKinsey 7S Framework for organizational effectiveness
The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change.
Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration (http://www.mindtools.com/pages/article/newSTR_91.htm)
Hard Elements:
Strategy
Software
Systems
Soft Elements:
Shared Values
Skills
Style
Staff
- Strategy: the plan devised to maintain and build competitive advantage over the competition.
- Structure: the way the organization is structured and who reports to whom.
- Systems: the daily activities and procedures that staff members engage in to get the job done.
- Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.
- Style: the style of leadership adopted.
- Staff: the employees and their general capabilities.
- Skills: the actual skills and competencies of the employees working for the company.