Summary

2.1 Practices and Frameworks for Data Management

• Data governance involves establishing policies, processes, standards, roles, and responsibilities to manage data as a valuable asset. One important part of data governance is information quality, which covers how accurate, complete, consistent, and readily accessible it is.
• Data management is about figuring out the specific ways that data will be stored, analyzed, protected, and measured.
• Data quality involves ensuring that data are accurate, complete, and consistent.
• The four key dimensions of big data—known as the four Vs—include volume, variety, velocity, and veracity.
• Different types of data are required for generating suitable information, and different types of data require different management approaches. There are two main categories of data: structured data and unstructured data.
• Good data management strategies require updating outdated data, rectifying known inaccuracies, addressing varied definitions, resolving discrepancies in redundant data sources, and managing variations in opinions, forecasting techniques, or simulation models.
• Information systems planning and management involve selecting and implementing the right technology infrastructure for data storage, processing, analysis, and governance.
• There is a distinction between information used for strategic planning and information used for management control. Strategic planning focuses on the long-term goals and direction of the company, while management control ensures efficient day-to-day operations and adherence to those strategic plans.
• Foundational frameworks include the Robert Anthony framework, Herbert A. Simon’s decision-making framework, and Gorry and Scott Morton’s framework, which combines elements of both the Robert Anthony framework and Simon’s decision-making frameworks.

2.2 Strategies to Improve the Value of Information Technology Within Organizations

• Information technology systems are used in handling tasks that involve high degrees of uncertainty and take place in dynamic and unstructured situations.
• The most common means of understanding the value of IS in a business is to measure the relationship between IT investments and output measures of revenue and human productivity. However, the business value of IT goes beyond direct output or revenue measures because IT often supports organizational redesign efforts.
• Data managers decide whether they need IT systems for operational purposes or for strategic planning.
• Managers see that IT can bring value through three primary methods, including automation of operation, information generation for managing people and resources, and transformation of existing processes or combined tasks.
• Functional area information systems (FAIS) are designed to enhance the internal efficiency and effectiveness of each department in an organization by providing valuable support tailored to each respective department’s functions.
• Business-IT alignment, or strategic alignment, refers to the strong integration of the IT function with an organization’s strategy, mission, and objectives.
• Gaps between business and IT departments can usually be attributed to different objectives, lack of expertise awareness, and lack of communication.
• To improve business-IT alignment, organizations should prioritize organizational communication, focus on strengthening their governance, align scope and IT architecture, and emphasize the development of human skills.
• The five key strategies usually pursued by organizations when seeking to generate value include IT cost leadership strategy, differentiation strategy, focus/innovation strategy, operational effectiveness strategy, and customer-oriented strategy.

2.3 Digital Business Models

• Organizations need to develop digital business models that deliver value to customers or users by working as the vital connector between technology and the strategic goals of an organization.
• A successful business model provides a logical framework that unlocks the hidden value of technologies, allowing businesses to benefit economically, as well as serving as a blueprint for how a company generates and captures value from new products, services, or innovations.
• Common digital business models include e-commerce, subscription, freemium, affiliate, marketplace, advertising, crowdfunding, sharing economy, and digital product.
• Digital business models face criticisms and challenges including unequal distribution of opportunities, level of control in algorithmic systems, and lack of transparency.

2.4 Business Process Management

• The business process relies on three essential components: inputs, resources, and outputs.
• Efficient and well-designed business processes are crucial for gaining a competitive advantage and ensuring organizational success. Functional areas in the business process include accounting, finance, marketing, production/operations, human resources, and management.
• Measures of excellence when evaluating the execution of a business process include user satisfaction, innovation, flexibility and adaptability, cost reduction, quality, differentiation, customer satisfaction, environmental impact, and compliance and governance.
• Key parameters in BPM that contribute to the successful digitalization of business process initiatives within an organization include strategic alignment, methods, and culture.
• By capturing and managing data, monitoring performance, and facilitating communication, information systems contribute to improved efficiency, better decision-making, and overall business growth for any business process.

2.5 Digital Innovation Creation, Distribution, and Commercialization

• In management information systems, IT innovation focuses on the integration of new IT-enabled business processes, products, and services within an organization, while digital innovation centers on the creation of new offerings through the combination of physical and digital products and examines IT's role in facilitating or constraining innovation.
• The steps involved in digital innovation are initiation, development, implementation, and exploitation, which are informed by the external competitive environment and the internal organizational environment. Not all of these components are mandatory in every digital innovation effort, and they need not follow a prescribed order.
• Digital platform strategies include opening the door to third parties, which creates an ecosystem for external developers to integrate their products/services, enhancing platform functionality; connecting customers, which facilitates interactions and transactions between customers, forming a marketplace; and connecting products to connect customers, which links various products/services to provide a comprehensive, seamless customer experience.