Digital Business. It tells about digital business and how it can be examined.

1. EXAMINING DIGITAL BUSINESS
ORGANIZATIONS
2023
BIRATNAGAR INTERNATIONAL COLLEGE
TUTORIAL – WEEK 2
LECTURER: DIBYESH CHAND

2. AGENDAS
• Value Chain and Supply Chain
• The New Digital Business
• Data, Information and Knowledge
• Information Systems
• Organizational Change
L01: Demonstrate an ability to explain on the importance of innovation, digital
transformation, and digital capability within the digital business.

3. LEARNING OUTCOMES
The learning outcomes of Tutorial 2 are as follows:
• Organization Defined
• Value Chain and Supply Chain
• Understanding Digital Business Types
• Understand how data, information and knowledge underpins the Digital Business
• Understand how information systems support the Digital Business
• Understand organizational change and appropriate change models.

4. ‘ORGANISATION’ DEFINED
• Organisation: a group of people that is structured and managed to meet
its mission or set of group goals
• Relationships between members of the organisation and their various
activities
• Processes are defined that assign roles, responsibilities, and authority to
complete the various activities
Q: Define an organization in your own words?

5. WHAT IS OPEN SYSTEM?
An open system is a system that regularly exchanges feedback
with its external environment. Open systems are systems, of
course, so inputs, processes, outputs, goals, assessment and
evaluation, and learning are all important. Aspects that are
critically important to open systems include the boundaries,
external environment and equifinality.

6. ORGANISATIONS AS OPEN SYSTEMS

7. OPEN SYSTEM: EXAMPLE 1
if a salesperson is required to give a 30-minute presentation to every
prospect, this is a closed system. An open system allows the
salesperson to evaluate the needs of the customer and adapt the
presentation to five, 10, 30 or even 60 minutes, to accommodate the
needs of each client. This flexibility is in response to the external
environment, with decisions made in real time by the employee.

8. OPEN SYSTEM: EXAMPLE 2
Closed systems may keep accounting isolated from other
departments. In an open system, allowing the accounting department
to consult the customer service representative and the customer may
help resolve a conflict faster, than if the accounting department could
only get information from one source.

9. FEEDBACK IN OPEN SYSTEMS MODEL

10. WHY DIGITAL BUSINESSES ARE THE BEST
EXAMPLES TO ADAPT OPEN ORGANIZATION
SYSTEM?

11. DIGITAL BUSINESS AND ITS RELATION WITH VALUE
CHAIN AND SUPPLY CHAIN
Digitalization of Business happens at these levels also in a Digital
Business

12. VALUE CHAIN DEFINED
• Value chain: a series (chain) of activities that an organisation performs to transform inputs
into outputs.
• In a manufacturing context, it includes inbound logistics, warehouse and storage,
production, finished product storage, outbound logistics, marketing and sales, and customer
service.
• Supply chain: key value chain in a manufacturing organisation

13. VALUE CHAINS
• What is Value Chain? Value Chain Definition, its Management and
Analysis |

14. VALUE CHAIN:
PRIMARY/SECONDARY ACTIVITIES

15. SUPPLY CHAIN
• Supply chain: this is the key value chain in a
manufacturing organization
• A supply chain is a network between a company and its
suppliers to produce and distribute a specific product to
the final buyer. This network includes different activities,
people, entities, information, and resources

16. SUPPLY CHAIN MANAGEMENT (SCM):
• encompasses all the activities required to get the right product into the right
consumer’s hands in the right quantity at the right time and at the right cost

18. LINKING SUPPLY CHAIN ORGANISATIONS
Supply chain organisations are “linked” together through physical flows and
information flows:
• Physical: supplies and raw materials
• Information: participants communicating their plans, coordinating their work,
and managing the efficient flow of goods and services

19. THE NEW DIGITAL BUSINESS
• The digital businesses use technology to create new value in business model,
customer experiences and the internal capabilities that support core operations.
• It is the transformation of key business process through the use of internet
technologies
• The key digital business processes are R&D, marketing, manufacturing, logistics /
inventory management and so forth.

20. THE NEW DIGITAL BUSINESS
Business Function Traditional Business Digital Business
Point of Scale Sales Direct cash payment and
providing hand written bill
Online billing and printed
Bills
Marketing Television, Newspaper, Hoarding
Board Ads
Digital Marketing using
social media, website and
emails
Human Resource
Management
Check in Check out via
attendance book registration
Managing human resources
through HRM Software
Finance Keeping record in record books Using Finance management
software

21. DATA, INFORMATION AND KNOWLEDGE
When studying Information Systems we use the terms Data, Information and
Knowledge regularly.
It is important to understand the differences between these terms and the process
that businesses go through in order to produce Knowledge from raw Data.

22. DATA, INFORMATION AND KNOWLEDGE
• Data, Information and Knowledge can be demonstrated as a hierarchy.
• Data alone tells us very little, however by converting it to information (What), and
then to knowledge (How), organizations can then add experience to gain Wisdom
(Why)
• In many cases organizations are also considering Wisdom as a fourth layer in
that hierarchy.

23. DATA, INFORMATION AND KNOWLEDGE
Data
Data can be defined as a representation of facts, concepts, or instructions in a
formalized manner, which should be suitable for communication, interpretation, or
processing by human or electronic machine.
Data is represented with the help of characters as alphabets (A-Z, a-z), digits (0-9),
or special characters (+,-, / , *, <,>, =, etc)

24. DATA, INFORMATION AND KNOWLEDGE
Categories of Data
Data Represented by:
Alphanumeric data Numbers, letters and other
characters
Audio data Sounds, noises or tones
Image data Graphic images and
pictures
Video data Moving images or pictures

25. DATA, INFORMATION AND KNOWLEDGE
Information
Information is the processed data on which decisions and actions are based.
• One of an organization's most valuable resources
• Often confused with the term data

26. DATA, INFORMATION AND KNOWLEDGE
The Value of Information
• Valuable information helps people perform tasks more efficiently and effectively
• Inaccurate data can result in loss of potential new customers and reduced
customer satisfaction

27. DATA, INFORMATION AND KNOWLEDGE
Characteristics of quality information
Information has to be fit for the purpose for which you need it. It should be:
• relevant
• current
• adequate
• timely
• reliable
• cost-effective

28. DATA, INFORMATION AND KNOWLEDGE
Data and Information relationship

29. DATA, INFORMATION AND KNOWLEDGE
Knowledge
• Knowledge: awareness and understanding of a set of information and the ways it
can be made useful to support a task
• The process of defining relationships among data to create useful information
requires knowledge

30. INFORMATION SYSTEMS
Today's Digital Businesses work with large amounts of data and this data needs to
be converted to Information.
To convert Data to Information we must organise it and process it.
This Information can then be used to help workers within the organisation to answer
questions, solve problems and make decisions.
The purpose of an Information System is to organise and process Data into
useful Information. An information system consists of the hardware, software,
databases, networks, and procedures.

31. INFORMATION SYSTEMS
Pyramid Diagram of Organization
levels and information requirements
Understanding the various levels of an
organization is essential to understand the
information required by the users who operate
at their respective levels.
The following diagram illustrates the various
levels of a typical organization.

32. INFORMATION SYSTEMS
Operational Management Level
• The operational level is concerned with performing day to day business transactions
of the organization.
• Examples of users at this level of management include cashiers at a point of sale,
bank tellers, nurses in a hospital, customer care staff, etc.
• Users at this level use make structured decisions. This means that they have defined
rules that guides them while making decisions.
• For example, if a store sells items on credit and they have a credit policy that has
some set limit on the borrowing. All the sales person needs to decide whether to give
credit to a customer or not is based on the current credit information from the system.

33. INFORMATION SYSTEMS
Tactical Management Level
• This organization level is dominated by middle-level managers, heads of
departments, supervisors, etc.
• The users at this level usually oversee the activities of the users at the
operational management level.
• Tactical users make semi-structured decisions. The decisions are partly based on
set guidelines and judgmental calls. As an example, a tactical manager can check
the credit limit and payments history of a customer and decide to make an
exception to raise the credit limit for a particular customer.

34. INFORMATION SYSTEMS
Strategic Management Level
• This is the most senior level in an organization.
• The users at this level make unstructured decisions.
• Senior level managers are concerned with the long-term planning of the
organization.
• They use information from tactical managers and external data to guide them
when making unstructured decisions.

35. INFORMATION SYSTEMS
Different types of Information System
A typical organization is divided into operational, middle, and upper level. The information
requirements for users at each level differ. Towards that end, there are number of information
systems that support each level in an organization. Some of them are:
• Transaction Processing System (TPS)
• Office Support Systems (OSS)
• Management Information Systems (MIS)
• Decision Support Systems (DSS)
• Executive Information Systems (EIS)

36. INFORMATION SYSTEMS
Transaction Process System (TPS)
Transaction processing systems are used to record day to day business
transactions of the organization. They are used by users at the operational
management level.
Examples of transaction processing systems include;
• Point of Sale Systems – records daily sales
• Payroll systems – processing employees salary, loans management, etc.
• Stock Control systems – keeping track of inventory levels
• Airline booking systems – flights booking management

37. INFORMATION SYSTEMS
Office Support System (OSS)
The overall aim of office support systems analysis and design was to develop,
implement and validate a problem oriented office system analysis and design
methodology using a formal office language to help users and manufacturers to specify
and implement a computer based office support system (OSS) and to meet the needs
of end users organizations.
Examples of Office support systems include;
• Project Management Systems
• Emails
• Microsoft Office / Adobe Suite

38. INFORMATION SYSTEMS
Management Information System (MIS)
Management Information Systems (MIS) are used by tactical managers to monitor the
organization’s current performance status. The output from a transaction processing system is
used as input to a management information system.
The MIS system analyzes the input with routine algorithms i.e. aggregate, compare and
summarizes the results to produced reports that tactical managers use to monitor, control and
predict future performance.
Examples of management information systems include;
• Sales management systems – they get input from the point of sale system
• Budgeting systems – gives an overview of how much money is spent within the organization
for the short and long terms.
• Human resource management system – overall welfare of the employees, staff turnover, etc.

39. INFORMATION SYSTEMS
Decision Support System
Decision support systems are used by senior management to make non-routine
decisions. Decision support systems use input from internal systems (transaction
processing systems and management information systems) and external systems.
The main objective of decision support systems is to provide solutions to problems
that are unique and change frequently.
Examples of decision support systems include;
• Financial Planning Systems
• Bank Loan Management Systems

40. INFORMATION SYSTEMS
Executive Information System (ESS)
An executive information system (EIS) is a decision support system (DSS) used
to assist senior executives in the decision-making process. It does this by
providing easy access to important data needed to achieve strategic goals in an
organization. An EIS normally features graphical displays on an easy-to-use
interface. This information is intelligence based:
Examples of decision support systems include;
• External Database
• Market and Financial Reports

41. ORGANIZATIONAL CHANGE
The Digital Business by its very nature is prone to both regular and dramatic
periods of change.
This change is often referred to as Digital Transformation and effects many areas of
the business including, business model, technology, business domain, data,
processes, and cultural/organisational structure.
Managing Organisational Change is key to the successful Digital Transformation of
the organisation.

42. ORGANIZATIONAL CHANGE
Leavitt’s Diamond
It is a theory that proposes that every
organizational system is made up of
four main components, people, tasks,
structures and technology, with an
interaction among the four
components. Any change in one of
these components will necessitate a
change in the other three components.
• Play video and discuss with the class
• https://www.youtube.com/watch?v=DB0L5CAQgkE&t=
5s&ab_channel=Forklarmiglige

43. ORGANIZATIONAL CHANGE
Structure
Structure is a foundation of an organization. It covers many things. It includes staff,
layers of hierarchies, departments and how these all interact with each other. What
is communication style among different layers of hierarchies and department.
Hence, it is important for any change to happen that structure needs to be adjusted
and evolved as per the requirements of change. If there is change in structure,
there is change in other components of this model.

44. ORGANIZATIONAL CHANGE
Relation between structure and people
If there is change in structure it does affect change in employees. It may bring positive
or negative changes in their behavior and productivity. Similarly, if there are changes in
employees it can bring changes in organizational structure.
Relationship between structure and task
When there is a change in organizational structure it does bring changes in different
tasks which need to be performed by employees
Relationship between structure and technology
Technology brings revolutionary changes in organizational structure. In present times,
procedures and processes are being automated which cause changes in structure like
less number of employees, more strong technological infrastructure etc.

45. ORGANIZATIONAL CHANGE
Task
Tasks refer to activities which are being performed by employees. In addition to this,
tasks also encompass bigger actions such as organizational goals. Therefore, tasks
are about who is doing what and what purpose organization is pursuing.

46. ORGANIZATIONAL CHANGE
Relation between task and people
There is a change in employees then their tasks will also get changed. In the same way if new
actions and tasks are being introduced then it will surely affect employees. Employees get new
experience and enhance their expertise through dealing with new tasks.
Relationship between task and structure
If new department is set up or new layer of hierarchy is introduced in an organization, the tasks
and functions of employees will also get changed. The work flow and process will also get affected
and adjusted if structural changes are introduced in organizations.
Relationship between task and technology
Change in technology will lead to change in tasks and actions which are performed by employees.
Employees need to adopt to technology by changing the way of doing things. There may be
reduced manual tasks.

47. ORGANIZATIONAL CHANGE
People
This element is about employees of an organization. Employees are the backbone
of an organization and organizational functions and goals depends on its
employees and how they work, what expertise they posses, what knowledge and
skills they exhibit. And change in employees affects all other elements and there will
be changes in these.

48. ORGANIZATIONAL CHANGE
Relation between people and task
When tasks are changed then employees need to change its old methods of doing
tasks. With proper training and coaching employees become adjusted to new tasks.
Relationship between people and structure
If organizational structure is altered then employees are the first who need to adjusted
to new structure, set up or department. They might get new roles and responsibilities
under the new structure.
Relationship between people and technology
When a new technology is introduced in an organization, it also affects employees who
need training and extra skills to adopt to new technology. In some situation, application
of new technology demands new hiring who have skills and expertise to handle the
technology.

49. ORGANIZATIONAL CHANGE
Technology
Technology helps employees to better perform tasks. It ranges from computer,
machines to cellular phones, other software and latest machines which are used to
provide easier, faster and reliable services. Like other elements of Leavitt’s
Diamond model, if there are changes in other elements technology also need to be
replaced, changed or upgraded.

50. ORGANIZATIONAL CHANGE
Relation between technology and task
If there are changes in task then technological alterations happen. For instance, an
organization needs to change its registration process and aim to replace it with more
efficient and effective one then only solution is to replace it with online registration
process.
Relationship between technology and structure
Technology provides solution when an organization alters its structure. For instance, if
an organization need to dismantle its huge department to cut cost and have more
productivity then technological automation is the answer.
Relationship between technology and people
Technology must be at part with the needs of employees of an organization. Employees
skills and expertise also determine the level of technology being in use in an
organization.

51. TUTORIAL AND WORKSHOP ACTIVITIES
Activity: 1 Netflix Case Study
Activity: 2 Supply Chain Management
Activity 3: Assignment Guidance