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INFORMATION - Coggle Diagram
INFORMATION
Three Lenses for IT Strategy
Five Forces Model
The 5 factors are threat of new entrants, fierceness of competition, customer's bargaining power and threat of subsitutes
Competitive Litmus Test
Analyze the firm's IT assets to identify whether the IT assets have sustainable competitive advantages
Value Chain
A series of linked activities that the firm performs, each of which preferably adds value that your customers are prepared to pay
IT can transform the value chaininto steps and linkages
Human Obsession with Prediction
Assumption
Means past behavior reasonably predicts the future
Rely on historical data
Good predictions need
Sound data
Data is raw facts
For example : 24, 32, and 28 are data
Information is sorted, condensed, and contextualized data.
For example : temps in your ZIP code
Insight is actionable information
For example : need a coat tomorrow
Unreliable data means untrustworthy insight
Collecting and managing data is the IT unit’s job.
But not all data is worth managing.
Not all information it produces is competitively valuable.
What’s competitively valuable requires non-IT managers’ judgments
Without it, IT excels at collecting more without a clear business purpose
Troves of irrelevant data bog down business decisions
Sound models
Business apps transform data 🡪information 🡪knowledge
Apps are “models” translated into software code.
-Predictions only as good as managerial insight in underlying models
-Function-specific . For example, marketing, operations, accounting, or finance
Non-IT managers are the only sources of :
--Things competitively worth predicting (the DV in stats-speak)
-Models in their functional domain
Arrival of "Big" Data with Two Opportunities
Generating foresight🡨cheap computing horsepower speeding transformation
Challenge: How to use such foresight to deliver more business value
Micro-segmentation, dynamic pricing, and instantaneous price discrimination.
Discovering what causes what
Correlation in statistics ~ Walmart’s beer and diapers sales on Friday night
Causation is the Holy Grail of prediction
Can tweak things that cause sales, returns, or customer loyalty