Week 2 Questions

Explain information technology’s role in business?


Information technology is everywhere in business. It is crucial in understanding IT and the great insight in which it provides for the business industry. 




What are Efficiency and Effectiveness Metrics? Provide some examples of each.


It is clear that businesses splurge large amounts of money on IT in order to keep up with the ever changing business environment, some businesses have even been reported to be spending half their total capital expenditure on IT. Efficiency and effectiveness metrics are two primary types of business IT metrics. 
Efficiency IT metrics: measures the performance of the IT system itself, such as throughput, speed and availability. 
Effectiveness IT Metrics: measures the impact IT has on business process and activities, including customer satisfaction, conversion rates and sell through increases. 




What does Porter’s Five Forces Model attempt to explain? How does the internet affect the model?


Porters Five Forces Model is an easy framework for understanding market forces. Businesses must be resilient to the ever changing business environment, and in order for this to happen they must constantly observe the market and adapt. They must also make crucial businesses decisions such as offering new products, entering the markets, competing in new industries or industry segments. Through new mediums such as the internet, which plays a vital role within the business world due to its easy access and wide variety of uses. The internet has also made it that much easier for businesses to become public and expand their reach globally. 


Describe the relationship between business processes and value chains?


When a business makes a business decision such as that in Porters model, entering a new market is a risky manoeuvre and businesses must understand, accept and successfully execute its business strategy. The business process of the organisation and the value chain they create an integral role in the strategy execution. The value chain views a business as a series of processes, each of which adds to the value of the product or service for each customer.