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AN INTRODUCTION TO DIFFERENTIATED LEARNING TOOLS
Participants in flexible learning programs have limitations on the nature of the
time they can spend on learning. Typically they are employed fully or partially,
pursuing higher studies or have other social and familial responsibilities.
Availability of time is a great constraint to these students.
To aidthe participants,we have developedfour unique learningtools as below:
Bullet Notes : Helps in introducing the important concepts in each unit
of curriculum, equip the
student during preparation of
examinations and
Case Studies : Illustrate the concepts through real life experiences

Workbook : Helps absorption of learning through questions based on reallife nuggets
PEP Notes :Sharing notes of practices and experiences in the Industry will help the student to
rightly perceive and get inspired to learn concepts at the cutting edge
application level.placementinterviews
Why are these needed?
 Adults learn differently from B. School or college going
students who spend long hours at campus.
 Enhancing analytical skills through application related learning
kits trigger experiential learning
 Availability of time is a challenge.
 Career success increasingly depends on continuous learning
and success
What makes it relevant?

How is it useful?


Where does this lead to?
As and when you get 5 to 10 minutes you can read one of these and absorb and comprehend.
Spending more time is your choice.
You can use the time in travel, waiting for meetings, lunch time, small breaks or at home
usefully.
Through these tools, the learning bytes are right sized for ease of learning for time challenged
participants.
The content starts from practice and connect to precept making it easy to connect to industry
and retain.
They can be connectedto continuous assessment process of the academic program.
Practitioners can use their real life knowledge and skill to enhance learning skills.
Immediate visualization of the practical dimension of the concept will offer a rich learning
experience.

Easier to move ahead in the learning process.

Will facilitate the student to complete the program earlier than
otherwise.Helpsstay motivated and connected.
When is it useful?


© The ICFAI Foundationfor Higher Education (IFHE),
Hyderabad,April, 2015. All rights reserved
No part of this publication may be reproduced, stored in a retrieval system, used in a
spreadsheet, or transmitted in any form or by any means – el ectronic, mechanical,
photocopying or otherwise – without prior permission in wr iting from The ICFAI
Foundation for Higher Education (IFHE), Hyderabad.
Ref. No. ITS-PN-IFHE – 042015
For any clarification regarding this book, the students may please write to The ICFAI
Foundation for Higher Education (IFHE), Hyderabad giving the above reference number
of this book specifying chapter and page number.
While every possible care has been taken in type-setting and printing this book, The ICFAI
Foundation for Higher Education (IFHE), Hyderabad welcomes suggestions fromstudents
for improvement in future editions.
Our E-mail ID: cwfeedback@icfaiuniversity.in
ii

INTRODUCTION
Participants in ICFAI University Programs are eager to apply theory to practice. They realize that
application orientation can enhance their learning and subsequent usage of management precepts and
practices. Picking out the principle behind real world events is critical to this learning. Towards this end the
institution has introduced the PEP Notes.
The PEP Notes (Practice, Experience and Perspective Notes) is a collection of annotative notes on practices,
experiences and perspectives from industry as appearing in articles from reputed sources such as Harvard
Business Review, Economist, Mckinsey Quarterly, Accenture, Bain Consulting etc.
Practice : Organizations follow practices based on their past learning
Experience: Based on changing context, they face fresh experiences
Perspective: Organization learns from the experience and the practice to gain fresh perspective
These notes connect the three dimensions of the real world to key concepts in the subject. Each note is brief
– about one to two pages and is adapted fromthe article r eferred to in the note. The concept underlying the
note is highlighted in a box. The concept is also connected to the article through an introductory abstract in a
box at the beginning.
The learning outcomes expected are:
Real world Application based approach significantly enhances absorption and retention.
Exposure to the current trends,practices with illustrations connect back to theory.
Thoughts from leading sources.
The PEP Notes may be used for Assessment.
iii

CONTENTS
Block- Introduction to Information Technology and Systems 1
1. SAMSUNGEyeing Software Side 2
2. IT is changing the Face of Auto Industry 4
3. Smart Data for Better Decisions 6
4. The Advantages of Big Data 7
5. How to build Analytics Capabilities? 8
6. Little Data is also useful 10
7. Business Technology Trends in 2014 12
Block-2: Applications of Information Technology in Business 14
8. Digital Influence on Product Purchase Decisions in India 15
9. Cloud Computing Insights for CEOs 17
10. The Growing Creation Nets Increases Open Innovation 19
11. Improving the IT Yield 21
12. Digital Transformation Elements in an Organization 23
13. Software Complexity 25
14. Business and IT are not Independent 27
15. The Role of Analytics & Big Data in Business Growth 29
Block-3: Software and Database Concepts and Networks 31
16. Open Data as a Type of Database 32
17. Analytics driving Business Strategy 34
18. Cost of inaction on Big Data 36
19. Different Perspectives on Big Data & Data Analysis 38
20. The Role of Intuition in Big Data and Analytics 40
21. Growing Pervasive Computing 41
22. Advantages of Latest Mobile Technologies 43
23. The Digital Divide across the World 45
24. Growing Indian Internet & Smartphone Markets 47
25. Telecommunications Technology Trends 49
26. Wi-Fi for Customer Satisfaction 51
iv

Block-4: Management of MIS 53
27. The Role of Requirements Management in Software Product Development 54
28. Roadmap for a New CIO (Chief Information Officer) 55
29. Return on Investment (RoI) of Clinical IT Systems 57
30. Dealing with IT Risk 59
31. IT Spending for Organizational Effectiveness 61
32. On Mission to Develop IT Product Engineers in India 63
33. The Success Factors of CIOs 64
34. The Turnaround Journey at Yahoo (2012-13) 66
35. The ignored Soft factor in Nokia Downturn: Collective Emotions 68
36. The Growth of Open Innovation (OI) 70
37. How Analytics Changed the Business Model of a Media Organization? 72
38. The Pros and Cons in Analytics Outsourcing 74
39. Growing Software Entrepreneurial Zeal in India 76
40. Business Models which can be Adopted from Software Industry 78
41. Innovation Prowess for Growth Leadership 80
42. Wipro, World No. 3 in Energy & Utilities Vertical 82
43. Innovative Project Management at IBM 84
44. The Role of IT in Healthcare 86
45. Measuring Clinical IT Systems Performance 88
46. Predictive Analytics to increase Project Success Rate 90
47. Leading Healthcare IT (HIT) Projects 92
48. Corporate Website for Organizational Effectiveness 94
Block-5: Enterprise Functions and E-Business 96
49. Major Acquisition of an E-Commerce Company by an Overseas Investor 97
50. China’s Alibaba Surpassing Amazon and Ebay 99
51. The Real Value of Data:Enhancing the Organizational Business 101
52. Challenges in Internet of Things Business 103
53. The Role of IT in Mergers and Acquisitions 105
54. IT and Lean Management at Amazon 107
55. ERP in the Cloud 109
56. Technology Driving the Indian Taxi Services 111
57. The Role of IT in Coca-Cola 114
58. The Growing Need for Unstructured Analytics 116
v

Block-6: Advanced Topics in IT 118
59. Cloud Computing Updates 119
60. Big Data Operational Models 121
61. Platform is the Core to IT Systems 123
62. Internet of Things: The Future of Mobile Technologies 125
63. Changing Dynamics of Contact Center Outsourcing (CCO) Market 127
vi

Block-1
Introduction to Information Technology and Systems
SAMSUNG eyeing Software Side
IT is changing the Face of Auto Industry
Smart Data for Better Decisions
The Advantages of Big Data
How to build Analytics Capabilities?
Little Data is also Useful
Business Technology Trends in 2014
1

SAMSUNG Eyeing Software Side
Samsung is headed for vertical integration with an overview of hardware and software.
About SAMSUNG:-
SAMSUNG manufactures PCs, TVs, Air Conditioners, Refrigerators, Cameras, Phones, Tablets,
Smartphones and many of the spare parts required in their making. According to Knowledge@Wharton,
Samsung is looking for Vertical Integration of both hardware and software. It has launched Galaxy S4
Smartphone recently. Its Galaxy S3 has crossed the 40 million units sale in January 2013. Samsung’s
Power comes from manufacturing of screens, mobile devices and processors.
Its main competitor is Apple, which has capabilities both in hardware and software. Apple also procures
many parts from its vendor Samsung. Apple is the main customer of Samsung. Nokia and Blackberry are
still struggling to find their footing in the Smartphone market.
Now Samsung hopes to make an entry into the Software market, and is developing its own open source
operating systemknown as Tizen for mobile phones competing with Google Android.
World Smartphone Market
SAMSUNG Galaxy S4 Features:
5” Screen; both front and rare Cameras; health monitori ng software, video controls that respond to eye
movement, tilt to scroll, video pausing with respect to facial recognition, and hand signalling recognition
device. Google Android operating system consists of: S Translate, a language translation application and
S Navigation, a map application similar to Google Maps.
Samsung and Apple thrive chiefly on the success of their Television. Samsung recently demonstrated
using Galaxy S4 as its television remote.
2

PEP Notes: IT & Systems
World Tablet Market
Future:
Samsung is one among 12 organizations developing the Tizen operating system. This is because,
according to Knowledge@Wharton, Google may start charging for Android in future, or make it less
open.
Samsung hopes to emulate Apple having both hardware and Software capabilities. It also entered
the ‘Phablet’ market combining both phone and Tablet. Samsung and Apple are most likely to
remain as key players in Smartphone market for long term.
Traditionally overview of hardware and software in an organization includes servers, workstations,
desktop PCs, printers, monitors, scanners, photocopy machines, and peripheral devices such as keyboard
and mouse. The current day organizations are using mobile hardware and software technologies for
business purposes by giving smartphones and tablets to its employees. These mobile devices include the
latest hardware, integrated circuits, mobile chips, mobile operating systems such as Android, iOS,
Windows mobile and other open source mobile operating systems. The software applications in mobile
phones support audio, video, chatting, SMS, e-mail and browsing of the Internet.
DiscussionQuestions:
What were some of the features of Samsung Galaxy S4?
(Hints: health monitoring software-video controls-facial recognition)
What would Samsung have liked to do with respect to software?
(Hints: combine phone and tablet-operating systemdevelopment-vertical integration of hardware
and software)
Reference:Knowledge@Wharton, “Samsung: A Hardware Manufacturer seeking its software
side”,Knowledge@WhartonManaging Technology Series,March 27, 2013.
Applicable To:
Topic Course
Unit-1: Computer Systems – An Overview; IT & Systems
Section-1.8: Overview of Hardware and Software;
3

Block-1: Introduction to Information Technology and Systems
IT is changing the Face of Auto Industry
Automobiles integration with disruptive IT technologies is
changing the face of automobile industry.
Integration of high technology components into automobiles is changing the face of automobile industry. By
2050, there will not be any accidents involving Japanese cars. Japanese auto manufacturers such as Nissan,
Toyota and Honda are working in that direction with many technological innovations and integrations. This
article consists of the insights from the Mach Institute Fall Conference 2013 on disruptive technologies
getting integrated into automobiles.
Japanese car manufacturers togetherwith Asian, European and North American counterparts are
working towards ensuring that vehicles do not harm the environment through electrification or through
the use of different fuels and technological innovations as these cars are integrated with disruptive high
technology components and devices.
The automobile industry has incorporated major design changes since the 1920s.
Very structured high technology components are entering the tightly integrated automobile industry.
Automobile manufacturers, suppliers, dealers and industry are tightly integrated.
The disruptive digital technological innovations are bringing the commonality between auto industry
and ICT (Information and Communication Technology)industry. Batteries and electric motors are to be
integrated into vehicle braking, suspension,steering,safety,heating and AC systems.
The vehicle fueling infrastructure is changing with different fuels such as gasoline, diesel, compressed
natural gas (CNG), lithium ion batteries, ethanol and biodiesel.
Innovations Coming Up:
Innovations Related to Passenger Safety: At Nissan, safety related innovations include a sensorat the
rear end, active engine break, zero gravity seats,direct adaptive steering and lane departure prevention.
These kinds of innovations are present in car models such as Altima and Infiniti Q50.
Toyoto’s innovations include rear-end collision, night view detection system, pedestrian accident
avoidance systemand lane departure prevention.
Volkswagen’s safety innovations include park assistant,trailer assist,blind spot monitor, pre-crash
occupant protection system, remote control parking and construction site assistant.
The above innovations are being made by keeping the distinct aspects of intelligence in vehicles such as
recognition of othervehicles and devices, systems to process the gathered data and for ensuring rapid
fire response actions.The ultimate goal is to have driverless vehicles and accident free roads.
Many innovations which eliminate vehicle emissions are also coming up.
Technological Achievements: The cameras embedded in the cars can capture images 100 times faster
than the human driver. Microchips are embedded in each chassis and these interact with cloud based
platforms having customer data, manufacturing data and design data.
Example: Nissan has achieved autonomous car parking, autonomous lane change, autonomous remote
parking, autonomous highway exit and autonomous stop at signal light.
Future Challenges:
Disruptive technologies face challenges from tightly integrated automobile sectoras it involves many
integrated stakeholders from the auto industry such as design partners, suppliers, OEMs (original
equipment manufacturers), dealers and customers who participate in product development. The product
has to cross all these stakeholders asintegration requires change management.
4

Legal issues:If an unmanned vehicle meets with an accident or is damaged because of any technical
snag,it is still debated as to who is liable- the human or the manufacturer. Manufacturers are trying to
build systems that make humans liable.
New vehicles with disruptive technologies have to be brought into the market at the earliest.
With disruptive high technologies, Nissan has reduced fatalities and serious injuries involving their cars to
50% since 1995. By 2020, they want to reduce further 50% of the fatalities involving their cars. Sometime in
this century, they want to make zero fatalities involving their cars.
With the increasing number of computing devices, the interaction between hardware and software is
growing in the world. For example, devices such as mouse, DVD player, monitor and key board are the
hardware devices. These devices interact with the software stored in the computer. The software which
interacts with the hardware devices in the computer is the operating system. Operating system acts as
interface between computer and the external devices or actors. The software programs which deal with
hardware devices are known as system programs or system software, which is part of the operating
system. Operating system is also system software stored in the computer. It liaisons between hardware
and software.
How is IT useful for automobile industry?
(Hints: Passengersafety-intelligent vehicles-autonomous driving and parking)
What did Toyota achieve with IT?
(Hints: night view detection system-accident avoidance system-lane departure prevention)
Reference:Knowledge@Wharton, “The Promise – and the Challenge – of Integrating IT into the Auto
Industry”, Knowledge @ Wharton, 2014.
Applicable To:
Topic Course
Unit-1: Computer Systems – An Overview; IT & Systems
Section-1.8: Overview of Hardware and Software;
Sub-Section-1.8.1: Interaction between Hardware and Software;
5

SmartData for BetterDecisions
Smart data with quality of information can be used to make better decisions in an organization.
Organizations require smart data in order to take better decisions. In current days, organizations are pumped
with excessive data. Many times decisions are made with huge or sub-standard data. This article highlights
the need for smart data for making decisions by drawing insights from the article published by Ferguson,
R.B. (2014)in MIT Sloan Management Review. This was based on a research survey of 2,500 professionals
done by MIT Sloan Management Review and SAS Institute.
Organizations have to make strategic and operational decisions based on data, facts and figures. There is
huge data in the market and non-market environments. The data could be termed in exa bytes or zetta bytes.
Organizations are not having the required good quality data to make decisions.
In the MIT and SAS Institute survey, 60% of the respondents expressed that senior managers are pressuring
them to use data and analytics for making decisions in the organization. 42% of the responden ts agree that
they have the required data always or frequently to make decisions. Making right decisions in the
organization requires data to be smart. Smart data has got certain characteristics.
Smart data is the data from which patterns and signals can be extracted using efficient and intelligent
The characteristics of smart data are as follows:
Accurate: The smart data should be accurate and unambiguous.It should be quality data and
should have precision.

Actionable: The smart data should be immediately actionable. That action should be scalable as
well. The actions should meet the business objectives.
Agile: Smart data should be agile and it should change according to the changing environment.
What matters most is the flexibility in data. The data should be real--time and flexible.
Smart data should be useful for business intelligence, business analytics and business modelling.

Big data field requires strong theoretical background for decision makers. It is not only the
technologically viable but also requires strong theoretical background.
Smart data can give implications to organizational structure, organizational design and organizational strategy.
Smart data is useful for better organizational decisions.
Algorithms.
Decision makers can make informed decisions at right time and at right place by using smart data. Smart
data is useful in different strategies,processes and structures ofan organization.
The quality of decisions in an organization depends on the quality of information they gather. The
quality of information is dependent on sources of data, reliability of data, accuracy of data, consistency of
data, availability of data, trust worthiness of data, MIS system capabilities, processing capabilities and
skills of the individuals in the MIS team. The quality of information can be improved by extracting data
from reliable sources and with reliable and consistent MIS systems. This will have huge impact on the
organization such as profitability, reputation, market positioning, building trust, goodwill, employee
commitment, job satisfaction, customer commitment and market share.
What are the characteristics of smart data?
(Hints: accurate-actionable-agile)
How is smart data different from big data?
(Hints: gives implications to organizational structure-organizational strategy-organizational design)
Reference: Ferguson, R.B., “Better Decisions with Smart Data”, MIT Sloan Management Review,
February 20, 2014.
Applicable To:
Topic Course
Unit-3: Fundamentals of Information Systems; IT & Systems
Section-3.7: Quality of Information;
6

The Advantages of Big Data
Big data can be used to answer many types of questions.
Advantages of Big Data
Pharmaceutical companies can identify the attributes of their best sales executives.
Big Data can identify which songs are going to be hit.
Big data can identify whether Chubby baseball pitches have the right stuff.
Big data identifies the data patterns which are not identifiable through analog approaches.
Bid data identifies significant relationships.
Big data gives the answer to whatever problem one has.
Big data should not be confused with big ideas.
Some Insights about Big data
Big Data does not necessarily eliminate creativity.
Creative people can further find the data relationships using big data.
Advertisers candesign theirAds ifthey understandconsumerbuyingbehaviour.
Apple iPod was successfulbecause ofits elegant design with MP3quality sound.
Data can be in two forms. They are structured data and unstructured data.Structured data can be managed
using Relational Database Management Systems (RDBMS) such as ORACLE, SYBASE, MS SQL, and
my SQL. Unstructured data has to be analyzed using text processing techniques and mathematical
techniques. An example tool which can process unstructured data is no SQL, which stands for “not only
SQL”. Big data consists of both structur ed data and unstructured data. The data coming to organizations
from both internal and external sources is growing at astronomical way to peta bytes. The processed big
data can give useful insights to the organization for its decision making and strategies purposes.
Define big data.
(Hints: huge and continuous-structured vs.unstructured-internalvs.external to organization)
What are the advantages of big data for organizations?
(Hints: identify data patterns-identify significant relationships-do not eliminate creativity)
Reference: Finkelstein, S., “What would big data think of Einstein?”,BBC Capital,June 13, 2013.
Applicable To:
Topic Course
Section-3.8: Basics of Information Systems;
Sub-Section-3.8.2: Components of Information Systems;
Sub-Sub-Section-3.8.2.3: Data
7

How to build Analytics Capabilities?
Big data with superior analyticscan improve the organizational performance.
An organizational survey by Bain & Company shows how big data is becoming critical to business
performance. The top performing organizations are good at capturing data, collecting, parsing, storing,
analytics and drawing implications, insights and conclusions from it. Top management and the CEO have to
explain the importance of analytics in business performance to the employees. The article explains how to
build capability.
The Survey
Bain & Company surveyed 400 organizations whose revenues were more than $1billion each, to find
out the relationship between their data and analytics capabilities and decision making speed and
effectiveness.
It was found that only 4% of the organizations are good at analytics. These organizations combine the
data, people, tools and organizational intent for achieving excellent analytics to meet superior business
performance.
Other companies are using analytics, but not up to this extent. They are using analytics for improving
their products and services.
The elite organizations using the analytics to the maximum extent are
Three times more likely to execute decisions as they thought

Five times more likely to make quick decisions

Twice likely to be in the top 25% of the financial performers in their industries.
Best Practice in Building Analytics Capability
The top performing organizations build the analytics capabilities by combing quality data, data savvy
people, state of the art tools and organizational intent.
Data: Data collection and organization should be in line with the organizational strategy.The
organizations have to identify the relevant sources of data. For example, gathered data from the queries
put on company website, customer calls, emails and chatting lines can give right insights and provide
direction to deal with the customer.
66% of the organizations do not have the right technologies to store and access the data. 56% of the
organizations do not have the systems to capture the data.
People: A successfulanalytics team should consists of data scientists who look after the raw dat a,
correlations, statistics and quality; business analysts who look after identifying and prioritizing solvable
problems and understand patterns and anomalies provided by the data scientists; and technical
specialists who look after the required hardware and software solutions and support.
56% of the companies expressed that they do not have the right capabilities to bring out rich insights
from the data.
Tools: Successfulcompanies are using analytics tools such as Hadoop, NoSQL and HPCC (High
Performance Computing Cluster). 38% of the companies are using any one of the above mentioned
tools.
Organizational Intent: This consists ofthe processes and incentives that support the management
decision making. CEO and top management have to communicate the importance of analytics in
reaching business performance to their employees. For example analytics are used in optimizing internal
processes,improving products and services and transforming business models.
8

Example: Nest is into home thermostats business. It uses big data and analytics to the maximumextent.
Other thermostat manufacturers provide remote control facility to their customers using web interface to
adjust the needed temperatures in homes. Whereas, Nest went a step ahead and using crowd sourcing
intelligence, collects data such as weather, location, time, type of home and adjusts the home
temperatures.
Application Areas
Analytics are used very much in financial services,healthcare and technology
industries. Analytics can be used in Call Centers.
Example: An Airlines company can attach a suitable call center executive immediately after
receiving call from a frequent flier based on his ID. They can even go a step further and collect
what category of flights he is booking, timing, days and then correlate it with why he is calling. The
main purpose here is to increase the revenues by targeting premium customers and to detect the
customer’s mood while the phone is ringing.
Organizations that have invested in big data and superior analytics have proved to have outperformed their
peers financially.
Data is vital in any information system. Information systems in an organization make use of data and
generate needed reports, graphs and tables useful for managerial decision making. Information systems
apply complex algorithms on data and generate useful information. Big data is the huge data collected
through both data warehouse and Internet. The sources of big data can be internal enterprise systems or
the external social networking sites.
What are some of the best practices in building analytics capabilities for organizations?
(Hints: clear organizational intent-proper data collection-use data analytics tools)
What are the different application areas of analytics?
(Hints: financial services-call centers-healthcare industry)
Reference: Wegener, R. and Sinha,V., “The value of Big Data: How analytics differentiates winners”,
Bain & Co, September 17, 2013.
Applicable To:
Topics Course
Section-3.8: Basics of Information Systems;
Sub-Section-3.8.2: Components of Information Systems;
Sub-Sub-Section-3.8.2.3: Data;
9

Little Data is also useful
Evidence based decision-making is a tool of information systems in a business that
help to improve organizational performance.
Big data gives enormous amount of information and more human resources are required to analyze it. The
best practice is to inculcate the culture of evidence based decision making where in all the employees make
use of the available little performance data in their day to day decision making. It is an efficient and cheap
way of dealing with data in the organization. Currently, not every organization has benefited with the big
data investments. They have invested lot of time and money in data warehouses, data marts, data scientists
and analytical tools. Very few organizations have got returns on their big data investments. This article
brings insights fromthe three years of research put in byRoss, Beath and Quaadgras (2013) on understanding
the business value of data in the organizations by interviewing executives from 51 organizations and 7 case
studies.
Organizations Benefited with Big Data: There are 3 types of organizations actually benefited with big
data. They are:
Organizations with Fact-Based Decision Making: For example, Procter & Gamble (P&G) used real data
analysis techniques way back in 1920s with the help of door-to-door interviews. Today P&G uses data
models, analytical tools, social media data, RFID data, computer models and simulation. They benefited
from big data.
UPS started tracking vehicles and goods from 1980s. They have driver strength of more than 100,000.
Today, using big data they have reduced the left-turns of the vehicles in goods delivery. With this they saved
$30 million and avoided the Carbon Dioxide emissions by 11,000 metric tons.
Engineering Organizations: ExxonMobil, in oil and gas industry, has used 3-D analysis for where to drill
for oil in the 1960s. Using big data, they are using 4-D analysis, geological analysis and can figure out
changes in the field over time.
Web Based or Internet Based Organizations: Organizations such as Google, Amazon, Netflix and eBay
use big data analysis extensively. Google has come up with a model in which they keep a trail web page to
certain users and analyze the feedback, compare it with users using the previous web pages and draw some
insights from it whether to go ahead with the product or not. This kind of tools Google is providing to other
organizations as well.
Evidence Based Decision-Making Practices: Evidence based decision making provides performance data
at finger tips every day before decision makers in the organization. The evidence based decision -making
practices are as follows:
Have a single source of authentic data.
Aetna in 2001 was at a loss of $300 million. The CEO insisted on using single source of information for
report generation. As time moved on initial inconsistencies were overcome and quality of reporting
improved. In 2005, Aetna reported $1.6 billion profit. FoxTel, an Australian Pay-TV company’s CFO
insisted to have a single source of data for decision making. The number of reports generated reduced
from 600 to 180, thereby saving lot of time and money.
Give decision makers regular feedback using scorecards
Pepsi America, a $5 billion bottling company, introduced score cards for warehouse workers creating a
healthy competition and thereby increasing performance. This has eliminated the need for checkers in
the warehouse.
Protection One, 6th largest security provider in the US, reported losses for 5 consecutive years in 2010.
CIO started providing score cards to branch and regional managers every morning facilitating them to
decide on who to meet that day, what to ask, what help to offer, etc. With this they could increase
revenues by more than 10% whereas, the industry average revenue growth rate was just 3% to 4%.
10

Define and manage business rules for the organization
Citrix Systems, a $2.1 billion technology company, that has 250,000 customers in 100 countries defined
the business rules of giving rebate to its 10,000 partners eliminating the earlier inconsistencies between
different rebate policies. This resulted in improved trust and performance.
An Insurance company in US, has locking period of 30 days for claims processing of a stolen car. An
analyst in the organization found that in a certain region, a car that could not be recovered in 24 hours
was never found. It was driven aboard and sold in a foreign country. With this the company changed the
business rule of locking period to 24 hours in certain regions of the country. The customer does not have
to wait 30 days for claims processing.
Train and coach the employees to improve performance
At Seven-Eleven Japan, Counsellors coach the sales clerks on the 16,000 retail stores twice a week.
This increased organizational performance helped Seven-Eleven to be profitable for more than 30 years.
Uses of information systems in business include decision making, communication, information
distribution, collaboration, workflow, business intelligence and implementation of business processes.
Information systems organize the data in an organization and provide useful information for efficient
evidence based decision making. Decisions based on data reduce the destructive conflicts in an
organization. Information systems reduce the customer response time, product development time, time to
market and support time. Information systems are used in manufacturing, retail, construction, utilities,
energy, engineering and consulting areas.
What is little data? Explain its characteristics.
(Hints: single source of data-eliminates duplication-eliminates inconsistencies)
Explain some of the evidence based decision making practices for organizations.
(Hints: availability of performance data-quality of reporting-overcome inconsistencies)
Reference: Ross, J.W., Beath,C.M. and Quaadgras,A., “You may not need Big Dat a after all”, Harvard
Business Review, December 2013.
Applicable To:
Topic Course
Section-3.9: Use of Information Systems in Business;
11

Business TechnologyTrends in 2014
Social,mobile, community, sensor, robotics and analytics are the top
technology trendsfor 2014 in information system design.
PricewaterhouseCoopers has done its 6th Annual Digital IQ survey of 1400 companies to find out the
emerging technologies in which the organizations are going to invest in 2014. The percentages of
organizations investing in specific technology areas are shown in following Graph. This article highlights the
top 10 business technology trends for 2014.
Technology Trends for 2014
50 44%
45 41% 39% 39%
40
35
30 25%
25 20%
20 15% 15%
15 11%
10 6%
5
0
Business Analytics: With increased smart devices, sensors and display devices to monitor customers,
events, people, behaviors and entities, organizations are getting large quantities of data. To analyze this
data, organizations are using new analytical, statistical and mathematical techniques. Organizations are
using business analytics to improve productivity, innovation, customer satisfaction and customer
loyalty. They are also using business analytics to derive insights from data useful for organizational
decision making and organizational results.
Social Technologies: Social technologies are being integrated into the organizational business processes.
Social technologies are not only used in marketing, services and sales functions but also in HR and
sourcing functions. Organizations are integrating business processes with community features in order
to innovate, increase productivity, improve collaboration, achieve efficiency and interact with external
stakeholders. Organizations are integrating social and community features such as gaming, discussion
forums, collaboration and social analytics into the business processes.
Mobile Technologies: Organizations are coming up with new products and services to address customer
requirements in mobile sector. Organizations are investing in mobile technologies such as sensors,
biometrics, Bluetooth and mobile social media. Individuals are making mobile devices to act on their
behalf.
Internet Security: Cyber security is a major concern for organizations. Organizations are prioritizing
their cyber security investments. Organizations are assessing the threats to their organization.
Organizations are not only concentrating on threat prevention but also strategizing monitoring, reacting
and identifying the threats. Organizations are collecting intelligence fromdifferent stakeholders such as
employees, customers, suppliers, contractors, partners and distributors.
12

On-demand Technology Services: Business organizations are procuring technology services on
demand using cloud computing, big data, analytics and social technologies. CIO role is transforming
from procurer to strategic counsellor to the organization. Cloud based business services are going to
grow in areas such as banks, insurance, hospitals, retail stores and media organizations.
Sensors: Internet of Things industry is picking up. Context aware sensor devices communicate with
one other. Sensor devices are being used in traffic monitoring, parking spaces, governments and
manufacturing companies. By 2020, we will have everything communicating with networks.
Robotics: Many Internet based companies are acquiring robotics companies. Robotics based on open
source Robot OS and Android is allowing manufacturers to concentrate on applications rather than
platforms. Robotics can be used in eldercare, surveillance, remote medicine and cleaning.
Battery Technologies: Battery technologies became major factor in product design. Mobile screens
and power consumption chips need to be advanced in mobile devices. Battery industry is undergoing
new business models.
3D Printing: 3D printing has become interesting production technology. 3D printing has undergone
drastic changes and is capable of using different materials such as steel, plastic, titanium and aluminum.
WearableTechnologies: Consumer oriented devices are monitoring physical activity. Health insurance
companies are integrating wearables in their cost and pricing models.
Information systems design should be done before implementation. Design identifies the components
and their interaction. There can be 2 to 3 iterations for design with the help of design reviews.
Information systems design should be done using design methodologies such as Structured Systems
Analysis and Design (SSAD), Object Oriented Analysis and Design (OOAD), Component Based Design
(CBD), Aspect Oriented Design (AOD) and Service Oriented Architecture (SOA). Design can be done at
two levels such as high level design and low level design. Low level design should also think about the
technologies suitable to the design such as cloud, mobile, social, database, web technologies and
distributed technologies.
Mention top-10 business technology trends in 2014.
(Hints: business analytics-social-mobile-Internet-on demand-sensors-robotics-3D-battery and wearable)
Explain how these technology trends are useful in information systems design.
(Hints: anytime anywhere-evidence based decision making-on demand systems)
Reference: PWC, “Digital IQ 2014 10 Technology Trends for Business”, Price waterhouseCoopers,
January 2014.
Applicable To:
Topic Course
Section-3.11: Information System Design;
13

Block-2:
Applications of Information Technology in Business
Digital Influence on Product Purchase Decisions in India
Cloud Computing Insights for CEOs
The Growing Creation Nets increase Open Innovation
Improving the IT Yield
Digital Transformation Elements in an Organization
Software Complexity
Business and IT are not Independent
The Role of Analytics & Big Data in Business Growth
14

Digital Influence on Product Purchase Decisionsin India
The usage of the World Wide Web is effecting the product purchase decisions in India.
Boston Consulting Group’s (BCG) Recent Research (April 2013):
BCG has surveyed 25,000 Indian consumers aged between 18 to 55 living in 26 locations in India to find the
impact of digital (online) activities on a range of product categories. Online activities were found to
influence the pre-purchase, purchase and post-purchase of few categories of products. Digital influence is
higher on product categories such as air travel, computers, automobiles, consumer durables, and mobile
phones, while it is minimal in case of product categories such as cosmetics, and consumer goods.
Internet Users in India
(330 Million) - Estimated
Internet
Users (in
Millions)
(125 Million)
2011 2016
High income Internet users have more digital influence over different product categories and they spend
more than their less connected peers. Online product research, product features and price comparisons
influence purchase decisions.
Internet Usage Vs. Digital Influence
Digital
Influence
Internet Usage
60% of the online purchasers prefer cash on delivery rather than payment using credit cards in India. Cash
on delivery is going to stay in India.
Internet Economy‘s Contributio n to Indian GDP 5.6% Projected
Indian
GDP (%) 4.1
2010 2011 2012 2013 2014 2015 2016
Indian market is different from developing economies such as China and developed economies such as US
and Europein ways of Internet using devices, availability of online product portals and method of payment.
15

In India, 15% consumers use mobile Internet in Tier-4 areas and 20% use mobile Internet in metropolitans.
Laptop bases Internet usage is only 9% in Tier-4 areas and 25% in metropolitans in India. E-books and
Kindle are very popular in US and Europe and are yet to find a proper market in India.
Online Behavior Influences Offline Behavior
Online Behavior Influences Of f line Behav ior
Internet usage among Indian consumers is impacting pre-purchase decisions, online purchase and post-
purchase and support activities. Majority of the people use low cost devices such as mobile phones for
accessing Internet in Tier-4 areas.
Digital Impact on ProductPurchase
Pre-purchase Decisions
Internet Usage Online Purchase
Post-Purchase / Support
Eureka Forbes in India has a successfulonline customer support systemin place
ICICI Bank has successfuland widely used Mobile Banking Systemin India
The World Wide Web is the network of networks known as Internet. Using Internet, the information from
other parts of the world is available in seconds. The information distribution and communication speed
have increased drastically. The behavior of individuals over the Internet is impacting the product
purchase decisions in India. It is impacting the offline behavior in the society. Digital influence is
affecting the usage of the World Wide Web across the world.
Explain how digitization is impacting product purchase decisions in India.
(Hints: impact on product categories-online product research-product comparisions)
Do you think Internet has major impact on product design and development? Justify your answer.
(Hints: crowd sourcing-source of product ideas-innovation in design with userinvolvement)
References: Subramanian, A., Jain, N., Bajpai, S. and Patodia, S., “Digital India: From Buzz to Bucks:
Capitalizing on India’s “Digitally Influenced” Consumers”, Research Repor t, BCG Center for Consumer
and Customer Insight, Boston Consulting Group, April 2013.
Applicable To:
Topic Course
Unit-5: Enterprise Collaboration Systems; IT & Systems
Section-5.3: Internet;
Sub-Section-5.3.1: The World Wide Web;
16

Block-2: Applications of Information Technology in Business
Cloud Computing Insights for CEOs
Cloud computing bringsthe benefits of improved productivity,enables collaborative
work,appliesanalyticsand hosts applications.
Cloud computing brings lot of benefits to the organizations. Organizations have to judiciously make the
transition to cloud with skilled people. In 2010, IBM has conducted a survey of 1,500 CEOs to find out the
organizational computing systems complexity. 80%of the CEOs responded that their systems are becoming
more complex day by day. Less than 50% of the respondents expressed that they have the needed strategies
and capabilities to handle the growing complexity. Managing this gap is going to be the largest leadership
challenge ever faced. To solve this gap, cloud computing came into picture. This article brings the insights
for CEOs from a Harvard Business Review article on cloud computing written by Andrew McAfee.
Current day organizations access on-premise servers,data centers,applications and infrastructure
through cloud computing techniques.Employees of the organizations do not even know the
locations of their data centers and servers.Organizations are just renting or subscribing to these
facilities.
CEOs and senior executives have to take the responsibility of transition to cloud and they have to
provide the required leadership. This is because cloud computing reduces the time to market,
development time, development costs and operating expenses and improves the organizational
productivity, collaboration and performance.
Cloud service models are such as Infrastructure-as-a-Service, which provides storage and servers;
Platform-as-a-Service, which provides the needed operating systems and databases; and Software-
as-a-Service, which provides the customoff the shelf applications.
Cloud Advantages
Using cloud computing, large enterprises can provide access of their applications to the remote
devices such as tablets,laptops,smart phones and desktops using Internet.
Employees can access organizational applications from anywhere; even from home.
According to a survey carried out by Microsoft, only 11% of the IT spending is on new application
development. The rest of the spending is on infrastructure and maintenance. Using cloud computing
these costs can be reduced and spending can be diverted to new application development.
Cloud computing makes individuals productive. It improves productivity in the organization
drastically. For example, Balfour Beatty, a global contracting company, using cloud computing was
able to share documents,blue prints and architectures easily with their colleagues. Employees using
Internet accessed the documents even on the move, thereby improving the productivity and
reducing the time taken.
Cloud computing enables collaborative work.Forexample, CSC has used a cloud based
collaboration platform known as Jive. Thousands ofemployees registered for cloud based resource
known as C3 in a very short time and C3 became their de-facto standard for collaboration.
Analytics are widely used in cloud computing. Data coming from different sources on clouds is
being analyzed and insights are been drawn for the organization. For example, Radiant System has
developed employee theft prevention systemfor restaurants known as Aloha Restaurant Guard
(ARG), which applies the analytics on data collected from point-of-sale machines. Using this cloud
based system,A California based restaurant could save around $40,000 per year from employee
theft of food services.
Developing and hosting applications is easy in cloud. For example, 3M instead of purchasing the
infrastructure, have deployed applications onto a Microsoft cloud based Azure platform for quick
scalability and capacity building, avoiding the huge capital costs.
17

Concerns Over Cloud Computing
There are contradictory research studies from McKinsey and Microsoft regarding cost of transition
to cloud, one claiming higher costs and one supporting lower costs for setting up of data centers in
cloud. On the otherside, Amazon Web Services has reduced its prices a dozen times in 3 years
duration highlighting the lower costs in clouds.
Systems reliability and application reliability is a concern for organizations. For example, when
parts of Amazon Web Services infrastructure went down for 3 days,Netflix was able to operate as
usualbecause it handled the risk using duplication technique.However, in 2010, Google Gmail
services were available for 99.984% times.
Data security is anotherconcern for organizations using cloud.
Compliance to legal and regulatory requirements is also a concern for organizations.
Thus,by keeping the benefits in mind, organizations can transition to cloud using the following steps:
Identify the constraints and grey areas

Run pilot test using Software-as-a-Service first

Execute next development project on cloud

Enquire the organization’s enterprise software vendors’pla ns in cloud computing.
Collaborative work management tools provide an environment where in the developers can collaborate
with their work tasks using networking technologies. These tools enable developers to share the
development platforms, development tools, compliers, development frameworks, documents, libraries
and components. Cloud computing enables users towards collaborative work by providing shared servers,
platforms, software applications, operating systems and frameworks. An organization can have its own
private cloud for its collaborative work.
1. What are the advantages ofcloud computing?
(Hints: work anywhere anytime-improved productivity-reduced costs)
2. Explain the challenges arising from adopting cloud computing in organizations.
(Hints: systemreliability-application reliability-data security)
Reference: McAfee, A., “What Every CEO Needs to Know About the Cloud”, Harvard B usiness Review,
November 1, 2011.
Applicable To:
Topic Course
Section-5.7: Types of Groupware;
Sub-Section-5.7.3: Collaborative Work Management Tools;
18

The Growing CreationNets Increases OpenInnovation
Creation Nets such as process networks and practice networks are increasing the
knowledge management systems of the organizations.
Open Innovation
Open Innovation has become a buzzword in the industry. Different people have different meanings for it.
The main objective of open innovation is to bring the value to marketplace by connecting with different
organizations. It can be connecting to inside parties or outside parties. Open innovation emphasizes that the
organizations should use external ideas, internal paths and external paths in developing their technology
products. Example: Procter & Gamble, Eli Lilly and Cisco are best successful organizations in open
innovation. These organizations have launched innovative products using open innovation successfully.
Two Obstacles to Open Innovation
Many people lack understanding on what open Innovation means.
Many executives jump to conclusions that open innovation is just like open source software
projects. Some narrow down their thinking. They assume that a product launched out of a joint
venture constitutes open innovation. Such efforts do not have major impact on business
performance.
There is lot more confusion in deciding on management techniques that can be used to apply to
open innovation when there are hundreds and thousands of business partners involved.
Some Open Innovation Initiatives
Finding an external specialist as contractor to solve an important and complex research
problem Looking towards external environment for ideas
Establishing a joint venture with a business
partner Licensing a technology from a University
Participatingin huge networks andcoordinatingthe innovationactivitiesFollowingaresomeoftheopeninnovationinitiatives:
Hundreds and thousands of participants are coming together in forming distributed creation nets organized
by network organizers. Creation networks represent a strong form of open innovation involving hundreds
and thousands of participants to lead distributed innovation activities. They are designed to bring out o pen
innovation. These network organizers use different management techniques to create value and keep the
focus on. The creation nets fill the gap of the executives in finding the open innovation real potential and the
actual value generated.
Some of the Characteristics of Creation Nets
The creation nets are usually supervised by an individual or a small core team or a small company.
Example: Open Source Software Projects
The supervisors of a network decide the rules, regulations and norms of the network on ways to
measure performance and how to resolve the conflicts between the participants. These rules are
quite informal in the early stages ofthe network. No formal contracts are made for participation in
the network.
The supervisors in Creation Nets specify the performance requirements and not the individual
activities in the modules. This allows the participants to innovate and reach the required
performance levels. This is rather a pull approach than the traditional push approach. In a push
approach, the organizers push the activities to the participants. Where as in pull approach, the
participants derive or pull the activities from the required performance specifications.
The participants look for long term benefits from creation nets rather than short term profits. The
creation nets sometime give cash or contracts to their participants. The participants also join
because they are able to complete the activities quickly in the network than when they do them
individually.
19

Different Types of Creation Nets
There are mostly common characteristics across multiple creation nets. However there are differences in
creation networks in terms of degree of diversity. The different types of creation nets are i) Practice
Networks and ii) Process Networks.
Practice Networks Process Networks
These are the networks formed based on the These networks join the participants with
common practices of participants. They have diversified experiences and practices.
common sensibility and set of practices.
Organizers of these networks are known as Organizers of these networks are known as Process
Practice Orchestrators. Orchestrators.
Practice orchestrators play less active role in Process Orchestrators play active role and assign
recruitment and creation activities. However, they tasks to participants, measure performance and
involve in bringing together the participants in provide feedback to participants.
integration of creation activities. They also define
the protocols.
Examples of these networks include open source Examples of these networks include Design
software networks and extreme sports networks. Networksorganizedby OriginalDesign
Manufactures (ODMs) in Taiwan and Production
Networks organized by Li & Fung in China
Thus creation nets such as practice networks and process networks help organizations in making open
innovation ssuccessful in product development.
Knowledge Management Systems (KMS) in an organization maintain the understood information, which
is known as knowledge in the organization. They provide search, inference and storage facilities for the
knowledge. Organizations such as TCS, Infosys, and Wipro maintain knowledge bases of the projects
they have executed for further learning purposes. KMS gives useful inferences.
What is open innovation? Give some examples.
(Hints: welcome external ideas-external path for product development-proctor & gamble products)
What are the obstacles to open innovation? Explain.
(Hints: lack of understanding-confusion overmanagement techniques-unclearimpact on business)
Reference: Hagel, J. and Brown, J.S., “Creation Nets: Harnessing the Potenti al of Open Innovation”,
Journal of Service Science, 2008.
Applicable To:
Topics Course
Section-5.7: Types of Groupware;
Sub-Section-5.7.3: Collaborative Work Management Tools;
Sub-Sub-Section-5.7.3.5: Knowledge Management Systems;
20

Improving the IT Yield
Investments in information systems for business operations can make an
impact on organizational business performance.
Organizations have to take different approach in IT investments to have an impact on business
performance.
IT Investment Challenges Investment Recommendations
2/3rd of the investment goes in non- Use IT Financial Transparency
differentiating capabilities. Measure business impact with KPIs (Key
Not all IT investments provide equal Performance Indicators)
value to the organization Use Investment categories such as benefit-driven
Business Cases fail to mention the impact and compliance-related infrastructure/asset
a business is going to have after IT replacement
investment Maintain Portfolio of projects
Track each portfolios income and spending
2012 IT Spending Ratios
15%
Run
20% Grow
65% Transform
According to Gartner’s Survey (2013), the CEOs felt the following technology enabled capabilities
are very important for their business (in the decreasing order of priority).
E-Commerce
Enhanced Business Reporting
Supply chain traceability and optimization
Cloud Business
Sustainability
Enterprise Mobility
21

Stakeholders think that the IT initiatives with respect to business should be handled by:
CEO – Innovation and Revenue Growth
CFO – Increased Productivity and profitability, cost-effi ciency
CIO - Keep IT environment current and updatable
Business Unit Head – Look After the Profit and Loss of the business Unit
Obstacles to Wise IT Investment
Sl.
Obstacle How to Overcome this Obstacle?No.
1. Politics (Silos) CIO should play partnership role with business stakeholders.
2. Poor IT Financial CIO should make better choices about where to invest
Transparency
3. Lack of Accountability for “Orphaned” IT systems consume more. This is to be spe nt
Investment Results elsewhere.
4. Inability of Divest IT Assets Pulling back on IT systems such as cancelling project and sun
setting a project
5. Low Tolerance for Risk Invest in “sure” things that giv e quick payback.
6. Lack of IT Involvement in CIO should involve in business strategy and execution. CIO should
Business Strategy be involved in business strategy planning process.
Information systems for business operations support the organization’s day to day internal and external
business operations. Example information systems for business operations include point of sale machines,
teller machines, customer support machines, and transaction processing systems, etc. These systems are
supposed to increase the productivity and performance of the organization and teams. These are
developed using different databases, technologies, and frameworks. Information systems impact is traced
through response time, customer satisfaction and profitability of the organization.
What are some of the IT investment challenges and obstacles for organizations?
(Hints: business cases failure-unclear value to business-investing in non-differentiating capabilities)
How should organizations overcome the IT investment obstacles? Explain.
(Hints: financial transparency-key performance indicators-maintain portfolio of projects)
Reference: Barbara Gomolski, “Improve IT Yield by investing in the Right thi ngs while developing
the ‘Investment Gene’”, Gartner Research Report, March 29, 2013.
Applicable To:
Topic Course
Unit-6: Management Information Systems; IT & Systems
Section-6.3: Information Systems for Business Operations
22

Digital TransformationElements in an Organization
Information systems for business operations effect customer experience,
operational processesand e-business models in an organization.
Organizations are using technology to improve their performance across the globe. Organizations are using
advancements in digital technologysuch as analytics, social media, smart devices and mobile in addition to
traditional ERP to change the customer experience, internal processes and business models. The best
example is the media industry which changed drastically because of technological advancements in the past
decade. Westerman, G., Bonnet, D. and McAfee, A. (2014) have done research study by interviewing 157
executives from 50 companies having more than $1 billion sales each. 50% of the respondents interviewed
were IT executives and technical leads and the rest were CEOs, COOs, marketing heads and business
managers.
The respondents of the survey expressed that their organizations are at different levels in digital maturity
having different levels of successes. Some of the organizations are at the beginning in digital transformation.
Digital transformation requires strong leadership and change management. Managers need to have the vision
for transforming to digital. They should know what to transform. In the survey it was found that
organizations are digitally transforming mainly in 3 broad areas. They are customer experience, operational
processes and business models. In turn each of these areas consists of 3 elements, summing it to a total of 9
elements of digital transformation in organizations. None of the organizations surveyed have achieved
digital transformation in all these 9 areas. Each organizations is digitally transforming in few areas. The 9
elements of digital transformation are discussed below:
Customer Experience: The major elements getting digitized in customer experience are as follows:
Understanding Customer: Organizations are making use of existing digital systems in market
segmentation. They are using social media to know how to make customer happy. Organizations
are creating online forums and discussion boards to improve customer relationship and loyalty.
Organizations are using analytics to understand the customer better. For example, an insurance
company is using analytics for deciding pricing and portfolio structures.
Customer Touch Points: Organizations are making use of different customer touch points to
improve customer service. Organizations are using multiple channels to provide integrated services
to the customers. Some companies are also providing self-service facilities using digital tools. For
example, one hospitality company has connected Smartphone apps to customer profiles so that
customer SMSs, apps and social media have an integrated look.
Top-Line Growth: Organizations are using technology for in-person sales conversations. For
example, a medical devices company’s sales executives turn on an iPad with video and audio and
keeps before doctor before leaving the room to make their product presentation. This gives the
doctor an opportunity to concentrate on the presentation and have a 10 minutes discussion with
sales representative presentation after he views it. This process does not disturb the doctor.
Operational Processes (Internal Processes): The major elements getting digitized in operational
processes are as follows:
Digitizing Internal Processes: Organizations are automating internal processes so that their
employees concentrate on strategic tasks. For example, organizations are automating employee self-
help and HR activities so that the HR executives can concentrate on HR strategies.
Virtualized Work: Organizations allow employees to work virtually by providing needed digital
technologies. For example, in a financial services organization, employees including CEO do not
have permanent seats to sit in the office. They work one or two days fromhome and whenever they
have meeting come to office and sit with those they have work with. This is improving employee
relationships resulting in better customer satisfaction.
23

Managing Performance: Transactional based systems are allowing employees to compare
organizational details at different times. They can compare the statuses and adjust the production
capacities. For example, a medical devices company using collaboration tools involving 300 of
their business managers instead of 12 in thestrategic planning process, thereby allowing wide vision
to come in.
Business Models: The major elements getting digitized in transforming business models are as follows:
Modifying Businesses Digitally: Organizations are augmenting physical with digital offerings.
They are using digital content to share in the organization. For example, a grocery store after going
digital has got 20% new customers and existing customer are spending 13% more on an average.
New Digitized Products and Businesses: Organizations are creating digital products to
complement physical products. For example, a sports apparel manufacturer is selling GPS and other
digital devices in order to show the customer workout in addition to their traditional products.
Digitally Going Global: Organizations are going global by providing digital shared services such
as finance, HR, design and manufacturing. For example, a manufacturing company can transform
its production to another plant globally within a few days in case of any disturbances.
Information systems for business operations include business process management systems, customer
support systems, performance management systems and quality management systems. These systems are
increasing the customer experience and supporting both internal and external business processes.
Digitization and automation are changing the business models of an organization. They increase
operational excellence, customer support and competitive advantage.
What are the elements of organizational processes getting digitized?
(Hints: understanding customer-customertouch points-top-line growth)
Which elements of business models are getting digitized in organizations?
(Hints: modifying businessesdigitally-new digital products-digitally going global)
Reference:Westerman, G., Bonnet, D. and McAfee, A., “The Nine Elements of Digital Transformation”,
MIT Sloan Management Review, January 07, 2014.
Applicable To:
Topic Course
Section-6.3: Information Systems for Business Operations;
24

Software Complexity
Characteristicsof MIS such as software complexity can be used to
estimate development and maintenance costs.
Organizations measure software complexity to reduce their software development and maintenance
costs
In Recent years, Organizations are trying to reduce the software development costs
Software Complexity impacts organizational costs,manpower allocation, project and program
evaluation.
Using Software Complexity one can estimate software development and maintenance costs.
Software Complexity is measured in terms of execution time and disk space or storage required.
Software Complexity depends on the program size, different modules interaction and control structures
used.
Experiential factors such as knowledge of programming languages,algorithms, programming skills,
domain knowledge and application knowledge impact the difficulty of task in picture. These parameters
influence the programmer behavior in projects.
Software Program complexity is dependent on non-programming factors such as programming
environment, the programmer, and the task.
The best practice is to specify and follow some acceptable level of program complexity for any software
organization. It keeps the organizational costs at optimum level.
Programming Languages
Programming
OrganizationalEnvironment
Resource
Allocation
Algorithms
Software
Programming Skills Program
Development
Costs
Complexity
Domain Knowledge
Software
Maintenance
Application Knowledge
Task Complexity Costs
Characteristics of MIS include complexity, flexibility to modify, and difficult to program. MIS has to be
developed by a team because of its inherent complexity. Communication, coordination and cooperation
are very much required in MIS development teams. MIS systems should be useful in organizational and
managerial decision making. They should be give accurate and reliable output. They should be available,
usable, consistent and applicable to current business scenario in the organization.
25

Define software complexity in your own words.
(Hints: program size and algorithms-required storage space-execution time)
What factors impact program complexity in software projects?
(Hints: taskcomplexity-programming environment-domain knowledge)
Reference: Kearney, J.K., Sedlmeyer, R.L., Thompson, W.B., Gray, M.A. and Adler, M.A., “Software
Complexity Measurement”, Communications of the ACM, Vol. 29, No.11, November 1986.
Applicable To:
Topic Course
Unit-6: Management Information Systems; Section-6.6: Management IT & Systems
Information Systems;
Sub-Section-6.6.2: Characteristics of MIS;
26

Business and IT are not Independent
Making IT and businessimprove relationships,build trust and make them business
partners can result into information systems for strategic advantage.
The job of IT in an organization is very difficult. It operates under many constraints. Business divisions
complain that IT does not understand the business well. They overpromise and under deliver. IT does not
allow innovation in business. These are the common complaints every growing organization receives from
both IT and business teams. This article brings the insights fromRedman, T.C and Sweeney, B. (2013)
Some CEOs think that IT does not matter and they spend less time in hearing to IT problems and issues.
They think that IT is little strategic opportunity and devote less time to it. Half-hearted efforts do not
result into better outcomes for the organization. CEOs have to look at IT as a strategic function.
Organizations fail to derive betterservices from IT and make disservice to businesses.
The technological advancements and the growing data in the organizations have made IT to play a key
role in the organization.
Executives expect IT team to modify the data formats easily. This is a tedious task for IT team. Smart CEOs and leaders try to
fill this gap and use IT for its competitive advantage.
discussedonHarvardBusinessReviewBlogNetwork.
Following are the steps for using IT for competitive advantage and to fill the gap between IT and business.
Do not repeat the same mistakes:
In some organizations, IT is asked to improve data quality. It is simply not possible. IT teams are not
provided the chance to explain. They are given applications to work on without being trained. They are
asked to understand the business processes without it being explained to them. Business teams say that
IT has dumped some application on them to use, and they do not like to use it or do not accept the
change. For example, in case of business mergers, the integration of different IT systems is looked at
last, which should be considered at a very early stage of the merger. This puts CIOs and IT teams in
trouble during mergers leading to over spending time and money on integrated systems. To handle t his
situation, both sides should acknowledge their mistakes and ensure that it does not repeat in future.
Find out the common ground to work on:
Organizations should build trust in dealing with different stakeholders. They should find out some
common middle ground to work on for both IT and business teams. In an organization, there are
competing priorities such as CEO’s interest on going for cloud and legal department’s concern over data
security; CFO’s requirement of reducing costs and CMO’s require ment of coming up with innovative
products; COO’s requirement of reliable system versus product manager’s vision of providing online
(web) interface to the users. The idea is to accept on the commonality and find out all areas of
agreement and work on them initially.
How IT can help organization to compete?:
IT is treated as a cost center and organizations should understand that one size does not fit all.
Organizations should invest in IT for strategic and long term benefits. If the organizational investments
are less in IT, their systems will phase out in 3 to 5 years. Thus, organizations have to invest in IT for
long term and for strategic advantages.
The explained step (i) improves the relationship between IT and business; step (ii) builds the trust between
them; and step (iii) makes both of them as business partners. Technology is changing rapidly and it is
touching every part of life.
Information systems for strategic advantage should be developed by taking feedback from customers,
suppliers, employees, marketing and business intelligence teams. These systems should give strategic
advantage and competitiveness to the organization. They add value to the organizational enterprise
systems and fulfil stakeholder expectations. They include strategic portfolios consisting of products,
programs and projects which give an edge over competitors. CIO, CMO, COO and CEO should strategize
these systems based on market conditions, economy, technological scenario, competition and
sustainability.
27

How do you fill the gap between business and IT?
(Hints: do not repeat the same mistakes-have common ground-use IT for competitive advantage)
How can relationship between business and IT departments be improved in an organization?
(Hints: build trust-make IT and business as business partners-transfer of domain knowledge)
Reference: Redman, T.C and Sweeney, B., “Bridging the Gap Between IT a nd Your Business”, HBR Blog
Network,October 01, 2013.
Applicable To:
Topic Course
Section-6.10: Information Systems for Strategic Advantage;
28

The Role of Analytics & Big Data in Business Growth
Big data and data analyticscan give strategic advantage to organizations.
Big Data can give organizations Competitive Advantage Provided they follow certain timelines.
Figure: Big Data – Input Sources and Output Reports
Analysis
Reports
Internet
Sort, Filter, Model
Social Media
Big Data can be a big game changerfor marketing people because of the analytical tools available
today.
Analysis of data should not stop at “What?” but it should a lso ask “Why?” and “What next?”.
For leveraging full potential of big data, organizations should go to the basics such as theory based
approaches,develop holistic view of customers and marketers and learn by doing
Starting point for analysis is developing hypothesis regarding the needs of customer
After gathering data, analysis should take place to test the hypothesis
Superior segmentation and clustering customers can help in analysis
Example: one Pharmaceutical company trying to increase the sales of a specific drug reduced the sales
force and thought of utilizing the remaining sales force strategically. In that direction they collected the
data from Physicians prescribing that specific drug with information such as how many times they
prescribe the drug per year, volume of prescriptions, and physician’s loyalty to this drug. After analysis
of this data, they could exceed the expectations of sales.
What is required today is to find the customer path to purchase.
It is recommended to organizations to start with pilot analytics projects instead of taking huge analytics
projects all at once.
29

Developmentsin Analytics
Online
Shopping
Behavior
Price Promotions
Bar Codes
Ask People What They Buy
2010 - Present1970 1980 1990
They should select a product,geography or problem for analytics project.
Example: A Global Energy Company would like to improve their return on marketing investment
through analytics. They have considered 2 business units in 3 countries as a pilot run. Sample includes
operating gas stations in Europe and selling motor oil in Asia. The diversity of data has given theman
opportunity to explore a wide set of approaches for analysis resulting into solutions to hand le in
different situations.
Organizations need Socialists to gather this data, find hidden patterns,interpret them and turn them into
insights for organizations.
Further, Analytics become a self-funding way for organizations to position them betterin the market.
Current day information systems for strategic advantage include the big data systems which process
huge amounts of both structured and unstructured data using analytics techniques. An example big data
platform is Hadoop which has distributed data processing and analytics facilities. Information systems for
strategic advantage are using technologies such as cloud computing, mobile and social technologies,
business intelligence and data analytics. These IT systems in organization are differen tiating the
organization from its competitors by providing market intelligence and usable insights.
How is big data analysis useful for current day organizations?
(Hints:market analysis-hypothesis proving-business insights)
What is the role of analytics in big data analysis?
(Hints: provide statisticaltechniques-apply correlation and regression-provides inferences)
Reference: Meer, D., “The ABC’s of Analytics”, Strategy + Business, Spring 2013.
Applicable To:
Topic Course
Section-6.10: Information Systems for Strategic Advantage;
30

Block-3:
Software and Database Concepts and Networks
Open Data as a Type of Database
Analytics driving Business Strategy
Cost of inaction on Big Data
Different Perspectives on Big Data & Data Analysis
The Role of Intuition in Big Data and Analytics
Growing Pervasive Computing
Advantages of Latest Mobile Technologies
The Digital Divide across the World
Growing Indian Internet & Smartphone Markets
Telecommunications Technology Trends
Wi-Fi for Customer Satisfaction
31

Open Data as a Type of Database
“Open data”as one among the types of databases,can provide insights to the
organization,which isnot possible only with internal and proprietary data.
Open data is the publicly available and usable data. Not every data in the organization is proprietary to the
organization. Not every data should be kept as private and internal to the organization. Countries such as US,
Singapore and Mexico are opening up the channels to open data. G8 countries have formed an open data
charter to publish government data. In this article, the sources of open data, advantages of open data,
application areas and the challenges with open data in current days are discussed.
Sources of Open Data:
Organizations started sharing information and data with customers and business partners.
Data aggregators are gathering data from different sources,aggregating it and selling to 3rd
parties. Open data is widely available from social networking sites such as Facebook and Twitter.
Advantages of Open Data:
Organizations can combine their proprietary big data and analytics with publicly available open data and
can get insights which they won’t be able to get using only internal data.
Different types of data such as demographic data, health-care data, real-time location data and financial
data from open data can be used in creating new products and services.
Sharing of product data related to manufacturing conditions and materials used can be useful in
premium pricing of the products for the organizations.
Open data can generate different new areas of consumer value.
Application Areas of Open Data: According to a research carried out by McKinsey Global Institute,
McKinsey Business Technology Office and McKinsey Center for Government, the annual worth of
open data is $3 trillion in seven domains such as education, consumer products, health-care, consumer
finance, transportation, electricity and oil and gas (Figure 1).
Oil and Gas Industry: The increasing complexity in reservoirs is increasing the costs and risks at the rate
of 50 to 1. Using open data, it is easy to find the dry holes. Sharing the seismic data among different
companies can help the oil and gas industry. Sharing data between companies in this industry can
reduce the project costs by 15% to 25%.
Consumer Products: Sharing data between manufacturers and retailers can avoid the exchange of
important information with competitors in consumer products area. With open data, new marketing
approaches can be devised which were not possible earlier with company’s proprietary data.
Example: Nectar, an UK based loyalty cards company, gathers information from Sainsbury’s grocery
stores, Hertz car rentals and BP gas stations using its cards. Sharing this information among these three
companies can protect the companies competitive positioning and can provide better understanding of
consumer behaviour.
32

Block-3: Software and Database Concepts and Networks
Figure 1: Open Data Economic Value ($3-$5 billion)
2500
2000
1500
1,470 920
1,180
1000
580
500 280 510 450 720 890
340
520
0
210 240 300
Agriculture: San Francisco based Climate Corporation combined 60 years on data on crop yield and 30
years of data on weather information to provide fee based solutions to formers and agricultural industry
using complex algorithms. This company has been acquired for $1 billion by Monsanto.
Challenges with Open Data:
Open data can give away competitive advantage and there is possibility for loss of intellectual property.
There are concerns about information security and privacy of data.
Overall open data can generate new opportunities and competitive complexities for the organizations in
different industries.
Data can be of two categories such as internal and external or open and closed. Internal data sources are
the organizational enterprise systems, legacy systems, data warehouses and data marts. External data
sources are Internet, discussion forums, journals, trade publications, industrial bodies, public data bases
and social media. Types of databases include relational databases, hierarchical databases and network
oriented databases. In relational databases, data is organized in the form of rows and columns. In
hierarchical database, data is organized in the form of tree like structure. In the case of network oriented
databases, data is organized in the form of connected/linked nodes arranged in the formof a network or a
graph.
What is open data? What are different sources of open data?
(Hints: available from social media-networking sites-customers and business partners)
What are different advantages ofopen data for organizations?
(Hints: competitive positioning-sharing data across companies-new opportunities and complexities)
Reference: Chui, M., Manyika, J. and Kuiken, S.V., “What e xecutives should know about open
data”, McKinsey Quarterly, January 2014.
Applicable To:
Topic Course
Unit-8: Database Management; IT & Systems
Section-8.5: Database Management Approach;
Sub-Section-8.5.2: Types of Databases;
33

Analytics driving Business Strategy
Data centric organizational culture combined with analytics can manage big data resulting in
innovation and businessstrategy improvement for an organization.
General Electric (GE) is a conglomerate, which is into power, water, energy, healthcare, aviation, oil & gas,
transportation, business and home appliances. Oil & Gas business of GE has revenues of $15 billion. It has a
division known as measurement and control working on business analytics extensively supporting the GE
head quarters. This article brings insights from an interview with Philip Kim, former marketing operations
leader of measurement and control division of Oil & Gas business at GE, and published in MIT Sloan
Management Review.
GE has announced its cloud platform which is going to gather, store and analyze the huge data coming from
the industrial Internet. GE’s application of analytics is leading to innovation, driving the business strategy
improvements. The model they are working on is shown in the following figure. At GE, analytics are helping
in achieving process innovation and in turn driving the commercial change.
Big Data
Organizational
Strategic
Strategy
Analytics
Innovation
Thinking Business
Strategy
Organizational
Culture
GE divides analytics work into two major categories.
Big data: It is the massive data coming from big machines and industrial Internet. Data is received from
specified data points of customer assets.
Analysis: How analytics can be used to derive commercial value? The analytics team uses the available
data and makes it useful for commercial purposes. This analysis may be related to cost reductions,
productivity improvements or growing sales.
They apply analytics tools to big data and derive some strategic outcomes useful for the organization. They
make use of data visualization techniques and Lean Six Sigma and drive change in behavior. Data analytics
helped them in innovating and driving business strategy.
The factors such as scale and complexity of the problem impact the data analysis.
Using data, they identify growth segments for GE with the help of data modelling and multivariate
analysis techniques.
They compute the return on investment (ROI) of big data projects. They use very result-oriented
analytics, which helps in sales growth. They prioritize the projects based on return on investment.
The feedback from different departments is to simplify the models instead of complicating them.
Analytics Project Life Cycle:They follow agile approach in analytics project. They have sprint cycles and
sprint meetings, which are used in SCRUM methodology. SCRUM is an agile project management
methodology. It was developed by K. Schwaber, Jeff Sutherland and their team. According to it, entire
product requirements are kept as product backlog. From product backlog, a Sprint backlog is derived. This
Sprint backlog is implemented in a Sprint release cycle. A Sprint is a short release cycle of 2 to 4 weeks.
34

Sprint meeting happens every day. They take anuser story and implement a Sprint cycle for that story. At the
end of 3 to 4 weeks, they have useful outcomes which can be used by different departments or for
commercial purposes. They do very fast prototyping and delivery. They answer specific questions to check
the feasibility of an analytics project at the very beginning of the project. They follow iterative approach in
analytics projects.
GE’s culture of data centric decision-making is helping the organization in dealing with big data. The GE’s
culture adopts the analytics in organizational strategy. The organization which makes early investments in
big data can have the competitive advantage over its rivals. The data centric organizational culture combined
with big data and analytics can drive strategic thinking and innovation in an organization in turn improving
business strategy of the organization.
Managing big data involves analysis of both structured and unstructured data. The structured data is to
be analyzed using relational database management systems. The unstructured data should be analyzed
using analytical tools and techniques. These analytical techniques include mathematical, statistical,
artificial intelligence, natural language processing and text processing techniques. Managing big data
involves a discipline and culture in extracting, cleansing, integrating, analyzing and transforming the data.
Analytical tools, RDBMS tools and business intelligence tools can be applied on big data in the
organization for analysis purpose.
How did GE use analytics for its strategic advantage?
(Hints: productivity improvements-commercialization-cost reductions and sales growth)
Explain the typical analytics project life cycle.
(Hints: agile project management-sprint cycle-sprint meetings)
Reference: Kim, P. (2014),“GE and the Culture of Analytics”,MIT Sloan Mana gement Review, January
27, 2014.
Applicable To:
Topic Course
Section-8.5: Database Management Approach;
Sub-Section-8.5.4: Managing Data;
35

Costof inaction on Big Data
Big data projects, which bring specific insights and outcomes for an organization,are distinct
from regular relational database projects or business intelligence projects.
Cost of inaction on big data would be expensive for organizations. They may lose competitive advantage to
its competitors. This article brings perspectives of Phil Simon (2014) on big data discussed on Harvard
Business Review Blog Network. According to him, there is no transformation application of big data which
was taken to masses in the last three years time. Majority of organizations remain at thinking about big data.
According to Gartner, 58% of the organizations were deploying or planning to deploy big data projects in
2012. In 2013, 64% of the organizations are planning on deploying big data projects.
Organizations Having Big Data Projects
65 64%
64
63
62
61
60
59
58%
58
57
56
55
2012 2013
Organizations which are widely using big data include Google, Facebook, Apple, Amazon, Netflix and
Twitter. Otherwise, large organizations are yet to make their mark in big data.
The barrier to implement big data projects in the organizations include noise coming from vendors,
consultants and media.
Some of the CIOs are still confused to go either small or large on big data projects.
Big data is not a just anotherIT initiative. It is different from regular relational database or business
intelligence projects.
Big data has to handle peta bytes of unstructured data.Organizations just should not think about the
routine return of investment of big data as they think in routine projects. This is because big data brings
entirely different insights and discoveries for the organization.
Example: Netflix, an online movie seller, made use of big data very extensively. It is successfulin big
data usage.They even get responses for their 80,000 moves based on certain color combinations from
consumers. One cannot overnight reach the level of Netflix in analyzing big data.
Several organizations are acquiring, storing, and analyzing data for more than a decade. They have the
perspectives and practices such as :
Big data requires a holistic way. It is not same as ERP and CRM projects where in return on
investment can be calculated immediately.

They have invested on database tools.

They deal with their internal structured data properly.
36

They agree that big data involves everybody in the organization and it requires commitment from
the top management of the organization.
The organizations which cannot analyze their regular structured data may not be able to analyze big data as
well. Hence, the organizations whose decisions are based on data and information and those who can manage
small data well can get into big data. The inaction on big data may lead to loos ing competitive advantage of
organization to competitors.
Relational database model is based on relationships between different attributes of an entity. Relational
databases store data in the form of rows in tables. Each table consists of different columns for attributes.
There is relationship between key attribute or primary key and other attributes in the table. The relational
databases are to be designed in such a way that data duplication and redundancy are avoided. The design
process of relational database tables is known as normalization. There are different normal forms
supported by the relational database management systems. Example RDBMS include Oracle, Sybase, MS
SQL Server and MySQL.
Which organizations are using big data extensively. Give some examples.
(Hints: Netflix-GE-Google and Facebook)
What is the cost of inaction on big data for organizations?
(Hints: business loss-losing competitive advantage-lack of right business insights)
Reference:Simon, P., “How to Get Over Your Inaction on Big Data”, HBR Blog Ne twork,February 24,
2014.
Applicable To:
Topic Course
Section-8.7: The Relational Database Model;
37

Different Perspectives onBig Data & Data Analysis
Analysis of big data complemented with data warehousing can impact the
organizational strategy.
This article highlights the importance of data, data analysis and big data. It presents the ins ights from
different perspectives of well-known researchers across the world on big data and data analysis. As the big
data is penetrating into several parts of the organization, there is aneed for understanding of the data and
understanding of the numbers. Researchers and practitioners are focusing on the landscape of data and
thinking on ways to transform knowledge to bottom line improvements. The different perspectives are as
follows:
According to Andrew O’Connell and Walter Frick, data is slippery, two-faced and cryptic. The data is
open to interpretation whether it belongs to customers, employees or products.
According to Tom Davenport of Babson College and MIT, organizations should rethink how the data
analysis is going to create value for themselves and their customers.
Scott A. Neslin of Dartmouth College expressed that numbers can tell us many stories; but which one
to pick is what matters most. That is, customers may find that one set of data may give them reasons to
pursue it, while the otherset may not. This is a real challenge that customers face with the data.
Susan Fournier of Boston University and Bob Rietveld of Oxyme were skeptical if big data would
serve the purpose of their organization or not. According to them the aggregate numbers are exhaustive.
However, they do not give any information about individual customers when talking about different
products.
Joël Le Bon of the University of Houston expressed that organizations overlook the small source of
information pertaining to competitors’ strategies,schemes and plans such as sales representatives.He
emphasizes that the organizations should cultivate the culture of intelligence which will have a major
impact on organizational strategy.
According to Jeanne W. Ross and Anne Quaadgras of MIT and Cynthia M. Beath of University of
Texas, if organizations are not changing according to the insights from big data, then paying money for
big data is questionable.According to them, instead of concentrating on quantity and type of data,
organizations should cultivate a culture of evidence based decision making. That is, providing all
decision makers with undisputed performance based database,giving real time feedback, updating
business rules and encouraging every decision maker in the organization to use the data.
McKinsey stressed the involvement of everyone in the organization in making use of big data. While the
business unit heads provide training to the managers and users,they should make use of analytics and
tracking tools which can transform the organization into a data-driven organization.
Going ahead
The organizations should have leadership roles with knowledge of Statistics to lead the consumer data
teams. Otherwise the routine managers will think of ways to get to the kernels of knowledge through
huge data.
Organizations should reflect if they are ready for the Chief Data Officer (CDO) position.
Organization should check whether they need data visualization.
Data can be raw data or structured data. Data is stored in data marts of the data warehouse. Data comes
from different enterprise systems such as ERP, CRM, SCM, legacy systems, other internal systems or
external sources such as Internet and social media. Organizations maintain data warehouses for business
intelligence purposes. Data warehouse extracts, cleanses, stores, transforms, integrates, and transmits the
data to different enterprise systems in the organization. It makes use of data marts. The data mining
techniques are applied on the data stored in data warehouse. The current day terminology for data
warehousing is ‘business intelligence system’.
38

Data analysis adds value to organizations. Justify.
(Hints: customer and product related insights-impact on organizational strategy-decision making)
What roles in organization structure help the organizations in handling data?
(Hints: chief data officer-data scientist-business analyst)
Reference: Andrew O’Connell and Walter Frick,“You’ve Got the Information But What D oes it Mean?
Welcome to “From Data to Action””, HBR Blog Network,November 19, 2013.
Applicable To:
Topics Course
Section-8.9: Data Warehousing;
39

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