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CHAPTER 2: INFORMATION - Coggle Diagram
CHAPTER 2: INFORMATION
Human obsession with prediction
-during 8BC, Ancient Greeks thronged to hear predictions from Oracle of Delphi
-there then exist commonsense, nonsense & wishful thinking
-around 1700AD, prediction turned scientific with statistics in England
Assumption
Past behavior reasonably predicts the future (rely on historical data)
Good predictions
Sound data
-raw facts (e.g.: 24,32)
-sorted, condensed & contextualized data
-actionable information
Sound models (Apps)
-business apps transform data ~> information ~> knowledge
-modes translated into software code
-non-IT managers are the source of things competitively worth predicting & models in their domain
Arrival of "Big" Data with 2 opportunities
-digitization-infusion-ubiquity trifecta perpetuates these data streams (coming from interconnected supply chains, mobile devices, social media)
-most firms fail to capitalize on data in hand
-strategy must now be crafted assuming information abundance not equals to scarcity
-raise the bar for valuable insight
-historically wasted by product
-data is the sawdust of our era
Opportunities
Generating foresight
-cheap computing horsepower speeding transformation
-challenges: how to use such foresight to deliver more business value? (e.g.: micro-segmentation and dynamic pricing)
Discovering what causes what
-correlation in statistics
-causation is the Holy Grail of prediction
-can tweak things that causes sales, return or customers' loyalty
Three lenses for IT strategy
Fire forces model (telescope) ~> Value Chain (magnifying glass) ~> Competitive litmus test (microscope)
-give sharp insight for formulating IT strategy
-must be used together because they zoom into different aspects of the firm's competitive landscape
-IT alters industry attractiveness but also provides antidotes (increase transparency, blurring industry boundaries, etc.)
-firms can use IT to erect unconventional competitive barriers using network effects & analytics-driven customization
IT strategy requires understanding on: -how it is affecting the industry
-how it can alter how the firm creates value chain for the archrivals
-whether a particular IT asset can create a sustainable competitive advantage