Week 2 Questions- Information Systems in Business

Explain information technology’s role in business?

Information Techonology is everywhere in the business world. Customer service, finance, sales and marketing, and human resources are areas in business that can all benefit from implementation of information technology. It's roles within a business is facilitating communication and increasing business intelligence. Information technology can aenable departments to perform more efficiently and effectively with their business operations.

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

Effiency IT metrics measure the performance of the IT system itself.

- This includes: speed and availability.

Effectiveness IT metrics measure the impact IT has on business processes and activities,

- This includes: customer satisfaction and conversion rates.

What does Porter’s Five Forces Model attempt to explain?

The Five Forces Model helps to determine the relative attractiveness of an industry, and includes the following forces:

1. buyer power (when  buyers have many sellers to choose from. and is low when their choices are limited. Buyer power is the ability of a buyer to impact the price they are willing to pay for a certain item)

2. supplier power (when one company has power over an industry. If the supplier power is high, they are able to impact and influence the industry by charging high prices and limiting services and quality)

3. threat of substitute products or services (high threat when there are other alternatives to a product or service, and low when there is limited alternatives to choose from)

4. threat of new entrants (threat is high when new competitors easily enter a market. Low threat when there are barriers to a market that make it hard for competitors to enter)

5. rivalry among existing customers (this is high when there is strong competition in a certain market and is low when competition isn't as high)

How does the internet affect the model?


The internet allows for more buyer power, which affect the markets and competitors. Buyers are able to get online and buy cheaper items to that of the original value being sold by retail stores, etc.

Describe the relationship between business processes and value chains?


A business process is standardised set of activities that accomplish a specific task (i.e. customer's orders)


The value chain is an approach that views a business as a series of processes, of which adds value to the service or product for each customer.