TMI3411
MULTIMEDIA INFORMATION STRATEGIC PLANNING
JANUARY 2008
MULTIMEDIA UNIVERSITY
SECOND TRIMESTER SUPPLEMENTARY EXAMINATION, 2007/08 SESSION
QUESTIONS WITH ANSWERS
TMI3411 – MULTIMEDIA INFORMATION STRATEGIC
PLANNING
(All Sections/Groups)
XX JANUARY 2008
XX:XX am – XX:XX am
(2 Hours)
INSTRUCTIONS TO STUDENTS
1. This examination paper consists of 2 sections (Section A and Section B). The total
number of pages for this document is 4 pages including the cover page.
2. Section A consists of 2 questions while Section B consists of 3 questions. Each
question carries an equal score of 15 points.
3. You are required to answer a total of 4 questions. You must answer 2 questions in
Section A. You are to choose 2 out of 3 questions in Section B.
4. The total score for this examination paper is 60 points.
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________________________________________________________________________
SECTION A – ANSWER ALL QUESTIONS
A1
DIKAR model in ICT Strategic Planning
(a)
Describe the entire process steps in the DIKAR model implemented in an
organization.
[7 points]
ANSWER
The term DIKAR is the abbreviation for Data, Information, Knowledge, Actions
and Results. The DIKAR model is a process model that links data, information,
knowledge and strategic actions into business results. The entire process
steps in the DIKAR model are as follows:
(1) Data – The first step is obtaining raw data. This activity forms the initial
source of information in the model. It is collected, for example, through
the manual method from frontline sales personnel or in real-time and
online through electronic point of sales (EPOS) machines. This raw data is
gathered and normally stored in a centralized database or in a collection
of report files. Raw data is truly raw, like the volume of sales of a
particular brand of product of a certain specification.
(2) Information – The raw information from the previous step is analyzed,
processed, grouped and transformed into information. For example, the
customer purchasing patterns for a particular product is the “information”
obtained in this analysis. We get information like northern customers
prefer a particular brand, while southern customers prefer a competing
brand. Raw data is not very useful, that is, until it is processed into this
type of information.
(3) Knowledge – Based on the information in the previous step, we analyze
and process again to obtain “knowledge” about our business. We know we
are in a certain market environment, and we begin to obtain knowledge
about our product acceptance in the market, its competitors, customer
preferences and wishes, etc.
(4) Actions – Out of the knowledge accumulated in the previous step, we
begin to formulate strategies and strategic “actions” to undertake in order
to succeed in the competitive market. We seek advice from experienced
staff; we conduct customer surveys, we get advice from consultants, or
conduct internal brainstorming sessions in groups, making sure that we
include our smartest and most dedicated employees in the discussions.
(5) Results – After implementation of the strategic actions, we monitor
whether we get the expected performance or reached our targets based
on our actions, i.e. the results. It tells us over a period of time whether
we are in the right direction, i.e. successful in our action plans or we are
not successful. We then have to review, analyze and find reasons for the
results. The successful actions are normally enhanced, the unsuccessful
actions stopped completely or amended appropriately.
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In ICT strategic planning, it was said that “The forward direction of DIKAR is
actually the BSC process viewed from technology or data processing’s
perspective”. What is meant by the statement?
[4 points]
ANSWER
(b)
The Balanced Score Card (BSC) process is a strategy evaluation and control
technique. The name BSC is derived from the perception of an organization’s
need to “balance” financial measures, usually used exclusively in strategy
evaluation, and control with non-financial measures such as product quality,
customer service, volume of sales, business process and operations, internal
learning and growth, etc.
The above statement means: In the context of the five (5) steps of DIKAR
moving in the forward direction and viewing it from technology or data
processing aspects, we will reach the final three (3) steps of DIKAR (i.e.
Knowledge, Actions and Results). These three steps can be considered the
“BSC portion” of DIKAR. Essentially, as an example, it means we have to
balance our choice between “what strategic actions to implement” against the
“financial burdens to get those actions implemented” and finally to the
extents of results achieved. In another example, we also must balance “our
financial and resource costs” against the “expected levels of improvement in
business results”. The BSC process is therefore a useful tool to help make
these decisions. No organization in the world have unlimited money and
resources, so some important decisions must be made.
It was also said that “The reverse direction of DIKAR is actually the CSF process
viewed from the business or management’s perspective”. What is meant by the
statement?
[4 points]
ANSWER
(c)
The Critical Success Factors (CSF) technique is a process that determines a
limited number of areas (and therefore strategic actions for those areas) such
that when successfully executed, will result in the successful performance of
the organization. These few key areas “must go right” for the organization to
be successful in the competitive environment.
The above statement means: Moving in the reverse direction of DIKAR and
viewing it from the business and management’s perspective, we start from
the “results”, then to “strategic actions”, to “knowledge”, to “information” and
finally to “raw data”. In this context, the management will first look at the
results and then determines which of those strategic actions produce the good
(successful) results. The CSF process is therefore, the act of selecting the few
strategic actions that gave successful results, high value, high impacts and
are essentially “critical to the success” of the organization in the competition.
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A2
Strategic ICT Systems for Organizations – Profit & Non-Profit
(a)
Describe the four (4) important categories of strategic ICT systems in which high
value information have been used extensively for the benefit of the organization.
[8 points]
ANSWER
The four (4) categories of strategic ICT systems are categorized as follows:
(1) Sharing information – these are ICT systems that share information via
technology-based systems with customers and/or suppliers and changed
the nature of the relationship. An example: The “Sabre” software
application where American Airlines share flight scheduling, seating
reservations and confirmations, etc, with clients like travel agents and
ultimately the customers (flyers). Another example: The controversial
“CTOS” software application in Malaysia where participating financial
institutions (banks, credit companies, etc) share credit rating information
on companies and individuals.
(2) Integration of internal information – these are ICT systems that integrate
the diverse information from various branches and operating subsidiaries
around the world into a centralized system, or a distributed system with
data integration and connectivity. An example: One particular Oil and Gas
companies with offices around the world share information and operating
experience so that any one office can get information whenever they are
needed to solve some problems previously solved by others in the group.
(3) Develop new products - these are ICT systems that contain information
which allows the organization to develop, produce, market and deliver
new or enhanced products or services based on those information. An
example: A global food and beverage company with offices around the
world can capitalize on customer buying patterns and customer tastes to
develop new food products customized to local eating preferences.
(4) Executive Information – these are ICT systems that provide executive
management (Board of Directors, Senior Managers, etc) with information
to support the development and implementation of strategy, particularly
with both internal and external information integrated in the analysis.
There are currently many commercial software offerings for these
Executive Information Systems (EIS).
(b)
Provide two (2) reasons why some organizations share information with their
customers and/or suppliers.
[4 points]
ANSWER
(1) In the case of an airline company, Air Asia, customers can do flight
bookings and payments online. It is very convenient for the customer as
they can plan their travel arrangements confidently. This facility resulted
in a significant increase in flyers using Air Asia compared to those
competitors still using the traditional travel agents, ticket booking and
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purchasing counters. This was made possible because the flight schedule
and seat reservation information for Air Asia has been shared directly
with the clients (flyers). Therefore, this information sharing is one of the
critical success factors for Air Asia.
(2) Large hospitals require continuous supplies, in various quantities and
varieties, of materials like medicines, tissue paper, gloves, disposable
syringes, sample bottles, test tubes, etc. There are usually many
suppliers for these materials. Instead of worrying about availability of
these supplies the hospital administration decided to share this vital
information with suppliers online and in real time. That way suppliers can
access information directly, will look at remaining stock and provide
timely delivery of materials as needed. In essence the hospital does not
need to keep a lot of stock of materials that occupy a lot of precious
space. In addition supplies may exceed their expiry dates in storage.
Therefore, by sharing vital information, suppliers working together with
hospital administrators make each others’ job much easier to manage.
(c)
List three (3) differences of ICT Strategic Plans in profit and non-profit
organizations.
[3 points]
ANSWER
(1) Nature of competition - Profit making organizations must develop ICT
strategic plans, for example, to increase sales volume and customer/user
acceptance of products and services in the intensely competitive market.
Normally, non-profit making organizations do not have much competition
because their receivable funds are mostly voluntary contributions. There
may be some competition for donations and funds with other non-profit
organizations, but the nature of that competition in the usual sense is not
for “customers/users”. It is more of the competition for “donors”. We
develop different strategies for different target groups.
(2) Customer targets – The targets in ICT strategic plans for profit making
organizations are the consumers and users of products and services. It is
common that most banking facilities nowadays include online and real
time transactions (e.g. make payments, transfer funds, etc) on a “24 by 7
by 365 basis”, anywhere and anytime. On the other hand, non-profit
making organizations do not need to provide those ICT services as their
target customers do not do transactions on their own money. They just
donate (give away money) to the non-profit organization, and that’s it.
After the donation, all the money collected will be in the control of the
organization and not the donors.
(3) Environmental changes – Strategic plans for profit making organizations
must be revised regularly to adapt to the fast changing business and
customer environment. Even though they may have a long duration
master plan (e.g. 10 years), they also have short term strategic plans for
say 2 years, organized in line with the master plan. For non-profit making
organizations, the social and demographic environments do not change
abruptly and significantly, so their strategic plans are usually set for a
much longer duration when compared to profit making organizations.
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SECTION B – ANSWER ANY 2 OUT OF 3 QUESTIONS
B1 Strategic Planning & Analysis Tools – Value Chain Analysis (VCA)
(a)
Explain how the Value Chain Analysis (VCA) process is being used in strategic
planning of ICT systems. You may illustrate using a suitable example.
[6 points]
ANSWER
The Value Chain Analysis (VCA) process is a strategic planning tool that looks
into the series of activities in the business process of an organization for
activities that have “value” in the chain. The chain is the connectivity network
among the various activities in the business process. Normally, activities are
categorized into primary and support activities.
By analyzing the entire business processes, the VCA methodology looks for
activities along the chain or chains that truly provide “value” to the final
product or output. These activities, usually primary, are either retained, or
sometimes modified and enhanced. Those activities that do not provide
“value”, usually support activities, may be removed completely, or
incorporated and blended into existing ones that give total added “value”.
Sometimes a new, more effective and efficient activity is introduced in the
chain to replace several non-value added activities.
For example, in the production of a car accessory, the company currently
executes the manufacturing through a chain of activities starting from the
procurement of raw materials, processing through the molding machine, then
through some other activities, all the way to the spray painting, labeling and
final packaging. Assume the case that the last three activities, currently done
manually using human labour, when analysed through the VCA method could
now be replaced with just one activity through the introduction of a new
computer controlled “automatic product packager”. This change gives more
value to the end product like reducing the overall cost to manufacture, able to
incorporate flexible design, can change paint colors fast, can print labels fast,
can run 24-hours, does not request for work leave like humans, etc.
So for this example (e.g. car accessory manufacturing above) we know that
the change in activities will result in a change in the ICT facilities and
applications to support this new business process. If the business strategic
plan demanded the use of the new computer controlled “automatic product
packager”, then the ICT strategic plan must take this into consideration to be
aligned to the needs of the business.
(b)
Provide three (3) reasons why it is important that the various business units or
departments in an organization agree on the outcome of the VCA process.
[6 points]
ANSWER
The decision to come out with the final outcome of the VCA process normally
needs agreements of the various business units or departments in the
organization because:
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(1) most activities in the entire business processes involve many parties (e.g.
business units) who are responsible to carry them out. You must get their
agreement to say that some activities in the process chain need to be
removed or replaced. Many people will feel uncomfortable especially
Heads of Business units, when decisions are made that some of the
things they currently undertake “do not add value” to the process chain
and had to be dropped. It is painful but that is a necessary part of life
when the way we conduct business today must change to meet with the
stiff competition out there.
(2) when the business units are involved with activities that must be
removed, for example, they have to be responsible for their people doing
their current jobs – like move them to the other departments, retrain or
do other jobs, or close down the current business unit completely.
(3) when the activities in the chain will be replaced by new machines, for
example, they will have to agree to have their current business unit
expanded, provide training for the new activity in the process chain, or
create a new business unit to handle the new activities, etc.
(c)
Business objectives and strategies of an organization are the products of a number
of considerations. List three (3) of those considerations based on the “What
Choice” principle.
[3 points]
ANSWER
(1) what the organization “might do” – based on the environment it currently
operates or by moving into new environments
(2) what the organization “wants to do” – based on the values and views of
the senior executives or stakeholders of the company
(3) what the organization “must do” – if it is to survive in the environment
with so much competition (i.e. Critical Success Factors, or CSF)
(4) what the organization “can do” – based on the organization’s resources
and capabilities.
B2 Strategic Planning & Analysis Tools – Critical Success Factors (CSF)
(a)
Describe how the Critical Success Factors (CSF) process is being used in strategic
planning of ICT systems. You may illustrate using a suitable example.
[6 points]
ANSWER
The critical success factors are the limited number of areas that when
successfully executed, will result in the successful performance of the
organization. These are the few key areas where “things must go right” for
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the organization to be successful in the competitive environment. These areas
cannot be omitted in the strategic plan.
For example, in the freight delivery business like DHL, the execution speed
and availability of storage warehouses for goods in transit are two critical
success factors. You must perform freight delivery fast and you must have
sufficient warehouse space to temporarily store goods you are delivering.
These two areas are really critical for you in running your freight delivery
business. Having a very good Human Resource (HR) manager is important
but not critical to this business, i.e. as long as you have one HR manager.
Your business process activity is directly dependent on your execution speed
and ample storage space for your goods.
So your ICT strategic plan must include considerations of applications that
help you manage your freight delivery fast and administer goods in transit
accurately in your warehouse. The strategic actions on these two areas
ensuing from your ICT strategic plan are therefore critical to the success of
your freight business.
(b)
Describe three (3) methods or considerations that you can use to identify the CSF
for your business organization.
[6 points]
ANSWER
(1) consider your core business – if you are involved in creating ideas,
concepts and printing of product advertisements, make sure that you are
very good at the things you really do. There is no point in concentrating
on the display of advertisements on the billboards. Let the experts do
them. Hire them to do the jobs. They have labor and equipment, and have
been doing displays for a long time. You core business is “creating” and
“printing” advertisements and not the “displaying” them, which is best left
to others good at it. Concentrate on your critical success factors i.e.
creating and printing only.
(2) consider what makes your main clients happy – if your clients are getting
freebies (gifts) from your competitors, then consider strategies to counter
the impacts of the competitors on your present clients. This counter
strategy is critical to your business success (survival) because you may
lose your main clients forever and they are the bulk of your current source
of income and business. You may end up bankrupt if you lose your main
clients. This is a critical success factor – maintain existing main clients.
(3) consider what the customer environment is looking for – If you anticipate
new changes in technology coming and you customers want them, then
you must prepare early to survive. For example, customers currently pay
by checque which is a manual process; you may consider direct bank
account credits or debits using the internet – no more paperwork moving
around between you and your clients. This is a critical success factor. If
you are not up to it and not acting fast on it, your clients may go to your
competitors who provide those facilities.
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(c.)
Explain why the CSF are limited to only a few areas of consideration. You may
illustrate using a suitable example.
[3 points]
ANSWER
If there are many critical success factors identified for the business, (like
about ten (10) areas or more), then certainly these many areas should not be
considered critical success factors any more. Normally the number of critical
success factors should be less than five (5), which we call “a few”. The
example below illustrates this point.
For example, if you have a patient in the hospital in the intensive care unit
(ICU), you expect the doctor to tell you something like - the patient will need
to overcome say two (2) issues like the low breathing rate and high blood
pressure to ensure that the patient has a chance of survival. These two areas
are the critical success factors for the patient. On the other hand, if the doctor
tells you that the patient needs to overcome ten (10) or more critical issues
for his survival, then it is best said that the patient is close to “good as dead”
or “near death”. The doctor should have said that the patient had so many
problems critical to survival, that we only pray to God do a miracle. That is, it
makes sense only to have a few critical success factors and not many. In this
case you can assume that the patient is your business organization.
B3 Strategic Evaluation & Monitoring Tool - Balanced Score Card (BSC)
(a)
Explain how the Balanced Score Card (BSC) process is being used in strategic
planning of ICT systems. You may illustrate using a suitable example.
[7 points]
ANSWER
The Balanced Score Card (BSC) is a strategy evaluation and control
technique. It is not a strategy formulation technique. The name BSC is
derived from the perception of an organization’s need to “balance” financial
measures, usually used exclusively in strategy evaluation, and control with
non-financial measures such as product quality and customer service. The
overall aim of BSC is to essentially balance the shareholder objectives with
customer and operational objectives.
For example, to manufacture a product of high quality you need high quality
raw materials and high quality product designs. To achieve these two factors,
you need to spend more money as high quality raw materials cost more and
good product designers demand high salaries. You have therefore increased
your overall cost of the product (the financial measure) at the same time you
have increased your product quality. Now somebody must make the decision
on how to “balance” these two opposite and inter-dependent issues – one is
the increase in product quality (which is good) while the other is the increase
in product cost (which is not good). The management and shareholders must
therefore decide which way to go i.e. the business objectives. A strategy must
be put in place to evaluate and control the balance between these two issues.
Ensuing from these strategic business objectives, the ICT infrastructure and
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strategic plan to support the new business operations must also be
incorporated accordingly.
(b)
Describe the four (4) mandatory perspectives of the Balanced Score Card (BSC)
for an organization.
[4 points]
ANSWER
(1) Organization financial performance – e.g. data in numbers regarding
profits generated, manufacturing costs and other factors like borrowings,
loans, etc to run the business.
(2) Customer perception – e.g. customers believe that our products are of
high quality standards, meet their diverse needs, priced accordingly, etc.
(3) Internal business process – e.g. efficient manufacturing process like 200
units per day output, energy cost RM 0.35 per unit, and equipment
maintenance cost averaging RM 2.50 per unit, etc. These numbers reflect
efficiency when compared to other manufacturers in the same business.
(4) Internal learning and growth – e.g. the measure of human resource
capabilities in the organization. The increase in skills, knowledge and
competency for product engineering through research and development,
competence in sales and marketing, the continuous learning programs
implemented by the company for staff, etc.
(c)
Give four (4) examples, one each on how the four (4) perspectives of the BSC are
being measured, scored and evaluated.
[4 points]
ANSWER
In the BSC process, the management in the strategic action plan must first
set all the detailed criteria for performance measures of the 4 perspectives: what to measure, how to measure, what scale to use, what score to give for a
particular performance, etc.
(1) Financial measure – There can be many financial measures. Take the case
of the profit target. For example, based on a strategic financial profit
target of RM 10 million for the year ending 2008, if the organization only
achieved RM 4.5 million in profit then a score of 0.45 shall be given to this
attribute according to the agreed criteria.
(2) Customer perception measure – Take the case of one measure, the
customer product satisfaction survey. For example, if the strategic target
set by management is to reach the level of 8 out of a scale of 10 and the
survey results give an average of 6 out of 10, then the customer
perception score is the percentage of the actual average against the set
target, again according to the agreed criteria.
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(3) Internal business process measure – Take the case of one measure, cost
of energy index. If the cost of energy achieved by the manufacturing
process per unit is say RM 0.26, and checking this through the table of
scores set by the management gives a score of 0.75, then 0.75 is the
score for this energy index. If the cost of energy is lower say RM 0.20 per
unit, again checking this through the scoring table we may get a score of
0.82, which is much higher because of better energy efficiency.
(4) Internal learning and growth measure – Similarly, the management may
set a strategic learning and growth measure, like the number of days for
technical training for each staff in the organization. If the strategic target
set is 5 training days minimum per year for each employee, and by the
end of the year the achievement is only an average of 4 days per year for
all employees, we would score 80 percent or 0.8 for this attribute.
The overall BSC score for the organization is the sum of the weighted average
of the scores of the 4 perspectives above using a pre-agreed set of weights
set by the management of the organization. Nowadays most organizations
implement special application software to conduct this BSC “calculations”
online and in real time for all managers and employees to see. This is one
way ICT has been directly used in the real live performance management and
evaluation of an organization.
End of document.
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