The Hack of Sony

On November 24^th 2014 Sony Pictures was hacked by cyber terrorists who opposed the release of the movie “The Interview” (Seal, 2015). Sony’s computer network was hacked early in the morning as employees logged on to their computers to find a “blood-red skeleton baring its fangs, with the words ‘Hacked by the #GOP’” on their screens (Seal, 2015). Employees were instructed to shut down all of their computers and disconnect their personal devices from company WiFi as more and more employees saw the screen on their computers that is seen below (Seal, 2015). It was later found that the hackers used North Korean IP addresses, further bolstering the theory that the reason for the hacking was the impending release of the movie “The Interview” which was a comedy based on the oppressing role of North Korea’s dictator (DeLuca, Williams, & Winter, 2015). The damage to the information technology infrastructure was so deep that the company was not able to recover until February of 2015 (Pepitone, 2015). This hack has been called the “most serious cyberattack” in the history of the United States by the James Clapper, the United States Director of National Intelligence and the Federal Bureau of Investigation has confirmed that the government of North Korea was behind the hacks that hit Sony in November of 2014 (Deluca & Winter, 2015).

(Ragan, 2014)

In a sense, Sony succeeded by doing all they could in the wake of the unprecedented attack from the organized cyber crime group, #GOP. According to Time Magazine, the malware attack was not detected by Sony’s current industry standard antivirus software. During the investigation it was found that no organization would have been adequately prepared for this type of attack. (Frizell, 2014) Another item Sony was successful at was communication with their employees concerning the cyber-attack. December 2, 2014 a company-wide e-mail was sent out alerting employees of the depth of the cyber-attack. Sony leadership transparently communicated what they knew about the attack and emphasized that they appreciated each employees deep commitment and dedicated work to the company. (Robb, 2014)

Sony was unprepared for the cyber attack by not protecting their intellectual property and the sudden change in operational challenges of working without a network for a short period of time. Sony was not prepared for the sensitive intellectual property such as employees’ salaries, social security numbers, e-mail addresses, passwords, workplace complaints, and unreleased films to be released for the general public to access and view. (Frizell, 2014) Five Sony films (Fury, Annie, Mr. Turner, Still Alice, and To Write Love on Her Arms) were posted to the internet by the cyber criminals and resulted in millions of illegal downloads by users across the globe within a short period of time (Robb, 2014). A second area where Sony was unprepared, was that of the operational challenges it encountered (Schrage, 2014). Sony was very dependent on networks and devices to conduct their business. Once the cyber-attack was realized as being official, employees were asked to shut off their computers, and turn off WiFI for their mobile devices. Sony’s e-mail system went down and employees resorted quickly to using memos, personal cell phones, old Blackberry’s and temporary e-mail addresses to conduct any semblance of a normal workday (Seal, 2015).

One of the principles upheld by Sony during both during and after the cyber-attack was that of the employees enduring some stressful work conditions and continuing to relentlessly push forward with business in as normal a mode as possible under the circumstances (Frizell, 2014). On the negative side, a principle violated was that of integrity. The integrity of the stored data that Sony had in their 38 million released files was not well encrypted and once the hackers were able to access the network, they had full access to all of Sony’s data (Seal, 2015). This ties in closely with the availability of stored data, movies, personal information etc… Sony did not appear to have their internal data from personal information to movie files adequately secured to prevent a leak of such magnitude. Another principle violated was that of privacy on the part of all the employees. Social security numbers, email addresses, and other pertinent personal information was made public for billions of users over the web to access and review. Employees were coming to work terrified and unsure of what would happen next (Seal, 2015). As reports came in of employee’s credit card numbers being used to purchase online items and other employees applying for credit cards using personal information, panic began to take root (Seal, 2015). In reaction to these events, Sony setup a helpdesk of sorts where employees flooded to stand in line and sign up for credit protection and fraud alerts against their personal information (Seal, 2015). Even the FBI came in and assisted Sony with personnel counseling and identity theft classes (Seal, 2015).

The total impact of an information security incident is somewhat difficult to assess. On the most basic level there are financial impacts. In Sony’s case their preliminary fiscal third-quarter financial results revealed that the company planned to take a $15 million charge in the current quarter to cover “investigation and remediation costs” related to the breach (Musil, 2015). The major costs of the attack include the investigation into how the breach occurred, repair or replacement of computer systems, and steps to prevent a future attack. While these financial figures should have little effect on Sony Pictures Entertainment, which reported operating profit of $501 million for the fiscal year through March, there is a cost to their reputation that cannot be easily computed. Will high-profile stars continue to work with them if they are concerned with the safety of their personal information? There is also the risk that producers or financiers decide to take their projects to competitors.   Another difficult to compute effect is the cost of the loss of trade secrets. The hackers released documents that include contracts and marketing plans that could easily influence competitors’ strategies (Richwine, 2014). On another level, there the personal cost of these types of incidents. Sony Pictures Entertainment co-chairman Amy Pascal stepped down from her position. She was a central figure in some of the drama that ensued from the hack. It was Ms. Pascal’s leaked emails that were considered racially insensitive. While one would hope that Sony has learned something about protecting or preventing themselves from attacks like this in the future, it was only four years ago that Sony PlayStation online gaming networks were hacked which put sensitive details, such as personal information and perhaps credit card numbers, at risk for 77 million customers (Pepitone, 2011).

So how do companies like Sony, Target, Home Depot, and countless others, better prepare themselves for cyber criminals and attacks? The answer isn’t what we might think it should be. Current law does not offer much in the way of support for organizations looking to defend themselves from attack. Sony, like many companies, called the FBI and requested assistance in finding the culprit behind the cyber-attack. What is very interesting, is that technically, the FBI, CIA, and NSA are under no obligation to provide any support if they chose not do to so. (Schrage, 2014)

 

Resources

DeLuca, M., Williams, P., & Winter, T. (2015, January 7). Sony Hackers ‘Got Sloppy,’ Used North Korean IPs: FBI Director. Retrieved April 24, 2015, from http://www.nbcnews.com/storyline/sony-hack/sony-hackers-got-sloppy-used-north-korean-ips-fbi-director-n281556

DeLuca, M., & Winter, T. (2015, January 7). Sony Hack Most Serious Cyberattack Yet on U.S. Interests: Clapper. Retrieved April 24, 2015, from http://www.nbcnews.com/storyline/sony-hack/sony-hack-most-serious-cyberattack-yet-u-s-interests-clapper-n281456

Frizell, S. (2014, December 8). Internal Memo: Sony Could Not Have Prepared For ‘Unprecedented’ Hack. Time Magazine. Retrieved from http://time.com/3623456/sony-hack-unprecedented/

Musil, S. (2015, February 4). Sony Pictures hack has cost the company $15 million so far. Retrieved from cnet.com: http://www.cnet.com/news/sony-pictures-hack-to-cost-the-company-only-15-million/

Pepitone, J. (2011, May 10). Massive hack blows crater in Sony brand. Retrieved from CNNMoney.com: http://money.cnn.com/2011/05/10/technology/sony_hack_fallout/

Pepitone, J. (2015, January 23). Sony Hack: ‘Critical’ Systems Won’t Be Back Online Until February. Retrieved April 24, 2015, from http://www.nbcnews.com/storyline/sony-hack/sony-hack-critical-systems-wont-be-back-online-until-february-n292126

Ragan, S. (2014, November 25). Hackers suggest they had physical access during attack on Sony Pictures. Retrieved April 24, 2015, from http://www.csoonline.com/article/2851649/physical-security/hackers-suggest-they-had-physical-access-during-attack-on-sony-pictures.html

Richwine, L. (2014, December 9). Sony’s Hacking Scandal Could Cost The Company $100 Million. Retrieved from BusinessInsider.com: http://www.businessinsider.com/sonys-hacking-scandal-could-cost-the-company-100-million-2014-12

Robb, D. (2014, December 22). Sony Hack: A Timeline. Retrieved from http://deadline.com/2014/12/sony-hack-timeline-any-pascal-the-interview-north-korea-1201325501/

Schrage, M. (2014, December 17). The Sony Hack Shows How Lawless the Internet Really Is. Harvard Business Review. Retrieved from https://hbr.org/

Seal, M. (2015, March). Sony’s Hacking Saga over The Interview; Seth Rogen and Evan Goldberg Speak Out. Retrieved April 24, 2015, from http://www.vanityfair.com/hollywood/2015/02/sony-hacking-seth-rogen-evan-goldberg

IT Strategies for Transnational Organizations

(World Connection Asia Oriented, 2003)

As the world continues to move forward in the digital environment, the internet of everything changes how we do things. How we do things over the internet such as connect, monitor, search, manage, control and even play with things is ever, rapidly changing (TEDx Talks, 2012).

Before we get much further into our discussion, it would be good to clearly define a transnational company. A transnational company is any business which conducts operations across national boundaries, joining various levels of coordination and integration of strategies and operations (Basu, n.d.). A couple of good examples of companies, which are transnational, are IKEA and Procter and Gamble. IKEA operates businesses in Europe, the Middle East, North America, Asia Pacific, and the Caribbean (2012). Procter and Gamble operates 61 sites worldwide as another example (2014).  More specifically, a transnational strategy for a business involves coordination of operations globally and utilizing market advantages to increase sales and drive profitable growth to a business (Basu, n.d.).

IT business strategy helps global operations in two ways. First, it provides a coordination mechanism for any dispersed activities. Second, it allows various organizations, distributed across the globe, to cooperate by enabling partnerships to blossom (King & Sethi, 1999). The business desires its company to be globally integrated and yet locally able to respond in a timely manner (Davoren, n.d.).

A transnational IT business strategy allows a business to deliver consist support to all locations while also providing some flexibility for local market situations encountered. A huge positive of a transnational IT business solution is the business continuity across the entire global business. If a natural disaster, such as a hurricane, wipes out a site, recovery can be sustained from backup drives kept at another global location where a hurricane is not likely to occur. This methodology allows local IT to draw upon central applications to restore an IT capability (Linton, n.d.).

While there are many advantages to a transnational business, there are some disadvantages that need to be considered. While internet access is the backbone of an IT strategy, the speed of the internet varies widely throughout the world. Akami Technologies ranked the average internet connection speeds by country for 2014 and the results are truly astounding. The world average connection speed is 3.9 Mbit/s. The United States ranked 11 out of 54 with a speed of 11.5 Mbit/s, up from 6.0 Mbit/s in 2013 while many South American countries fall below 3.0 Mbit/s. This vast difference in internet speed will have an effect on the IT communications of these companies. While variable speeds can be difficult to deal with, the increased cost of internet is also something that needs to be considered. The price for fixed broadband across the world range from just over $5 per month to over $1,700 per month with most of countries falling in range between $5 and $60 per month.

Finally, security breaches are a tremendous risk for transnational businesses. These businesses depend on the integrity and availability of their websites and computer networks to operate. From the Symantec Internet Security Threat Report 2014, the number of data breaches grew 62 percent from 2012 to 2013 (Haley, 2014). While security breaches can happen to any business that uses a computer, the basis for transnational business is its reliance on its network connectivity.

Contingency planning is a weakness that transnational corporations experience as their supply chains rely on single point vulnerabilities such as a supplier that is confined to one geographical area (Basu, .n.d.). IT strategies can help to mitigate risks by making the identification of alternate sources more accessible through supply chain software programs. Traditional methods that relied on single sources increased the single point vulnerabilities for transnational businesses but IT systems have made it more economical for more contingencies to be stored and utilized by corporations.

In conclusion, we have defined a transnational organization, reviewed briefly how an IT strategy aids a transnational organization, and reviewed some advantages and disadvantages of IT strategies for transnational companies.

 

Resources:

(2012). Retrieved from http://www.ikea.com/

(2014). Worldwide Sites. Retrieved from http://www.pg.com/en_US/index.shtml

Basu, C. (n.d.). What Is a Transnational Business Strategy?. Retrieved from http://smallbusiness.chron.com/transnational-business-strategy-20950.html

Davoren, J. (n.d.). Transnational Organization Structure. Retrieved from http://smallbusiness.chron.com/transnational-organization-structure-60691.html

Haley, K. (2014, April 8). The 2013 Internet Security Threat Report: Year of the Mega Data Breach. Retrieved from http://www.symantec.com/connect/blogs/2013-internet-security-threat-report-year-mega-data-breach

Hanna, J. (2014, December 8). A Manager’s Guide To International Strategy. Retrieved from http://www.forbes.com/sites/hbsworkingknowledge/2014/12/08/a-managers-guide-to-international-strategy/

King, W. R., & Sethi, V. (1999). An Empirical Assessment of the Organization of Transnational Information Systems. Journal Of Management Information Systems, 15(4), 7-28.

Linton, I. (n.d.). Transnational IT Operations as a Strategy. Retrieved from http://yourbusiness.azcentral.com/transnational-operations-strategy-4238.html

McFarlin, K. (n.d.). How to Have a Successful Transnational Strategy. Retrieved from http://smallbusiness.chron.com/successful-transnational-strategy-10328.html

Skroupa, C. (2014, September 4). Cyber Crime Means Business- Potentially Yours. Retrieved from http://www.forbes.com/sites/christopherskroupa/2014/09/04/cyber-crime-means-business-potentially-yours/

“The Akamai State of the Internet Report”. Akamai Technologies. Retrieved 30 September 2014.

TEDx Talks. (2012, October 5). The Internet of Things: Dr. John Barrett at TEDxCIT [Video file]. Retrieved from https://youtu.be/QaTIt1C5R-M

World Connection Asia Oriented [Illustration]. (2003, May 2). Retrieved from http://blog.redbranchmedia.com/?attachment_id=1465

Mobile Apps as a Business Model

(Appiction, 2011)

Mobile apps have evolved over time and are changing the way we do business. Today, mobile applications are becoming the status quo for user engagement and driving increased business profits (Kerschberg, 2015). Since 2009, mobile applications have become a more common piece of people’s lives and how businesses reach and interact with potential customers. In 2015, global spending on mobile apps is projected to reach a staggering height of $35 billion of global sales (statista.com, 2015).

(statisa.com, 2015)

To support this continued increase, Quinn (2015) notes that over 80% of customers prefer a mobile app rather than launching a web browser to click to an old school website. In this post, we’re going to look at the pros and cons of a mobile app as a business model, discuss how a mobile app is utilized by consumers, and provide insights as to how mobile apps versus a websites are used in an ever changing environment.

A successful mobile app needs to solve a problem or fulfil a particular purpose. We will now discuss the pros and cons of a mobile app. Data from a recent Nielsen report shows that U.S. Android and iPhone users spend 65 percent more time each month using apps than they did just two years ago (http://www.nielsen.com/us/en/insights/news/2014/smartphones-so-many-apps-so-much-time.html, 2014). With this increased time utilizing apps, businesses that employ mobile apps are at a tremendous advantage in giving consumers a faster and easier way to access the products or services, thus leading to increased traffic and ultimately sales. Another advantage is it helps increase customer retention and loyalty, as they are always at hand. Many businesses, both large and small, can now offer easy to use, and more importantly, easy to access loyalty programs that will “reward” customers who frequent them more often. Professor Urminsky of the University of Chicago said a strategy built on mobile apps to reward loyalty — in essence, “a loyalty platform rather than an isolated loyalty program” — opens new possibilities for small businesses. “If it’s used wisely,” he said, “I think it will be a game changer” (Grossman, 2015). A third advantage of having an app is it allows a business to create a direct marketing channel to its customers. All of the information you’d like to provide to your customers is easily accessible. Also, with push notifications, a business can get even closer to a direct interaction that can remind a customer about your products and services (Haselmayr, 2014). A fourth advantage of a business app is it allows for improved customer engagement. Apps typically will have a messaging or help desk where customers can communicate with the business in a very easy manner. In today’s fast-paced world, many people would rather quickly text a question (or comment) versus calling on the phone and waiting on hold. A few clicks on an app will allow customers this access.

While the development of an app has many advantages for a business, there are some disadvantages that need to be considered. The biggest downside is the cost to develop an app. In a recent survey of some of the leading mobile app development companies, by Clutch Corporation, it was determined that the median cost range is between $37,913 and $171,450, but could climb up to $500,000 or higher.

(Cost to Build a Mobile App: A Survey, 2015)

This cost doesn’t take into consideration the continuing costs after the app is developed. Forrester analyst, Ted Schadler, determined that “the average amount spent on a typical customer mobile app — $50,000 to $150,000 — turns out to be just 35% of the true two-year cost (Cost to Build a Mobile App: A Survey, 2015). Another disadvantage of business apps, which goes hand and hand with cost, is they need constant updating or enhancing. With different platforms to consider (i.e., iOS vs. Android) and the constant upgrading of existing app platforms, constant maintenance is required. According to an AnyPresence survey, over 80% of respondents reported updating their apps at least twice a year and nearly a third were updating at least once a month (Figuring the costs of custom mobile business app development, 2015). The final disadvantage is the time necessary to develop an app. While a mobile strategy is very important to the success of a business, the time from idea to deployment must be considered. 56 percent of mobile leaders surveyed say it takes from 7 months to more than one year to build one app (Kinvey, 2014).

Customers use apps on their mobile devices to quickly and easily gain access to information or purchase products in a way that is presented on a touchscreen device differently than it would be on computer website. App developers are challenged because they must meet a happy medium between the amount of information available on the website and the amount that can be presented to a user in a mobile app that keeps the app useable and convenient for the customer. This often entails trimming many details and reorganizing content based on the structure of the application. Mobile apps are designed to provide quickly accessible, high level information on the front and often have access to further lower level details through links in the app while a website may present all of the information at once to a user. Mobile applications are also stored on a user’s mobile device as opposed to simply being accessed on the internet. While data is fed to the app through the internet, the idea is that the mobile apps can be stored and arranged by the user in a way that makes them easier to access and keeps them ready when for when the customer wishes to quickly access information through the app.

Today, more and more people are gaining access to the internet through the use of smartphones and consequently mobile applications. It is important for companies to utilize mobile apps as recently mobile internet users have surpassed desktop users and the trend will no doubt continue to grow (see graph below) (Bosomworth, 2015).

Mobile applications are also increasingly becoming the “starting point” for which customers look to have questions answered on any variety of topics one can think of. Research shows that while 48% of people still start their search on search engines and a further 33% begin their searches on branded websites, now around 26% of user being their searches on branded apps (Bosomworth, 2015):

This goes to show the importance of utilizing apps is growing for businesses around the world. Today’s consumer wants up to the minute data presented to them in an easy to digest form at their fingertips, which is what can be provided through mobile apps.

In conclusion, mobile applications are significantly changing the way we do business as consumers. While developing a mobile app may not be the easiest task to perform, it does provide a significant method for businesses to connect with customers that has never existed until now (Quinn, 2015).

Resources:

Appiction. (2011, March 11). Mobile Application Revolution. [Video file]. Retrieved from https://youtu.be/_yqHj1WXIHk

Bloomberg, J. (2015, January 9). Mobile App Disruptions At CES. Retrieved from http://www.forbes.com/sites/jasonbloomberg/2015/01/09/mobile-app-disruptions-at-ces/

Bosomworth, D. (2015, January 15). Mobile marketing statistics 2015. Retrieved March 20, 2015, from http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing-statistics/

Cost to Build a Mobile App: A Survey. (2015, January 30). Retrieved from https://clutch.co/app-development/cost-build-mobile-app-survey

Figuring the costs of custom mobile business app development. (2015, February 21). Retrieved from http://www.formotus.com/14018/blog-mobility/figuring-the-costs-of-custom-mobile-business-app-development

Grossman, J. (2015, January 28). Using Smartphones and Apps to Enhance Loyalty Programs. Retrieved from http://www.nytimes.com/2015/01/29/business/smallbusiness/using-smartphones-and-apps-to-enhance-small-business-loyalty-programs.html?_r=0

Haselmayr, M. (2014, November 17). Here’s Why Your Business Needs Its Own Mobile App. Retrieved from http://www.forbes.com/sites/allbusiness/2014/11/17/heres-why-your-business-needs-its-own-mobile-app/

Hof, R. (2015, February 19). Yahoo Woos Mobile App Developers In Hopes Of Boosting Ad Business. Retrieved from http://www.forbes.com/sites/roberthof/2015/02/19/yahoo-woos-mobile-app-developers-in-hopes-of-boosting-ad-business/

http://www.nielsen.com/us/en/insights/news/2014/smartphones-so-many-apps–so-much-time.html. (2014, July 1)

Kerschberg, B. (2015, February 6). 3 Ways To Drive Business With Mobile Apps. Retrieved from http://www.forbes.com/sites/benkerschberg/2015/02/06/3-ways-to-drive-business-with-mobile-apps/

Kerschberg, B. (2015, February 10). 5 Elements of A Killer Mobile App. Retrieved from http://www.forbes.com/sites/benkerschberg/2015/02/10/5-elements-of-a-killer-mobile-app/

Kinvey, I. (2014, November). CIO & Mobile Leader Survey. Retrieved from http://resources.kinvey.com/docs/State+of+Enterprise+Mobility+Survey+2014+-+Kinvey.pdf

Quinn, M. (2015, March 10). Before You Build A Mobile App, Do Your Homework. Retrieved from http://www.forbes.com/sites/theyec/2015/03/10/before-you-build-a-mobile-app-do-your-homework/

Statista. (2015). Global spending on mobile apps. Retrieved from http://www.statista.com/statistics/236519/global-spending-on-mobile-apps-since-2009/

E-Business and Competitive Advantage

E-business is all around us and increasing at a worthy rate. Since the year 2000, customers have been satisfied with e-business as a whole, and despite a few slight downturns the trend has increased. According to Statista, the US Customer Satisfaction with e-business reached 73.4 out of a 100 point total in 2014 (2015).

A popular e-business firm that comes to mind is eHarmony. eHarmony is a non-traditional online dating firm that doesn’t just match people together like any ordinary online dating firm. eHarmony helps match individuals based on something more scientific; compatibility. Compatibility is a differentiator for them in their line of business. With their unique offering of pairing compatible individuals, they have had over 51 million registrants, 10 billion matches, and a tout able divorce rate of only 3.86% in their 15 years of service. Not only do they provide compatibility matches for individuals to investigate on their own, they also provide a higher level service, for those who can afford it, called EH+. With EH+, they will send a personal matchmaker to work with an individual for 6 or 12 months and offer a human touch to finding that true compatible individual. These normal and specialized services serve to challenge existing rivals and help e-Harmony capture a better competitive advantage in the market. A new value to customers e-Harmony is developing is ‘Elevated Careers’. Their desire is to branch out, based on their research of linking compatible people, and link compatible people with enjoyable careers where they desire to stay for the long term. This strategic capability will improve the efficiency of their existing business processes and set them apart from their competitors (2015).

eHarmony faces three main competitive forces. First and foremost is the rivalry of competitors. The online dating community is enormous, with research showing that more than 41 million people have tried online dating and the annual revenue generated from the online dating industry is greater than 1.2 billion dollars (http://www.statisticbrain.com/online-dating-statistics/, 2014). Due to the sheer volume of people using these services, companies must always be trying to gain a competitive advantage in the marketplace. A second competitive force they face is the threat of new entrants. Online Dating Magazine estimates that there are more than 2,500 online dating services online in the U.S. alone, with 1,000 new online dating services opening every year. Some estimates say there are 8.000 competitors worldwide (Zwilling, 2013). The final competitive force they face is the threat of substitutes. While online dating continues to be an option, people can easily substitute “real-life” dating or not dating at all.

In order for eHarmony to counter these threats of competitive forces, they can utilize some competitive strategies, mainly differentiation, innovation, and growth. For eHarmony, differentiation and innovation go hand in hand. Unlike many other Web dating services, eHarmony doesn’t let customers search for partners on their own. They are offered matches based on their answers to a long questionnaire, which currently has about 200 items (Tierney, 2013). This is unique to eHarmony as other sites allow people to search other people enrolled in the dating site. When talking about growth as a competitive strategy, it is important to remember that more than 41 million people have tried online dating. Furthermore while eHarmony is already active in the USA, UK, Canada, Brazil and Australia, they have plans to expand even further afield. This will allow more people to utilize their services. For online dating services, the number of users is very important as no one wants to use a dating site with only a few users.

eHarmony is clearly an example of a success story in e-business. Almost anyone can go online and create a website using some basic coding skills and an idea in their minds, but it takes management with a creative and competitive mindset to create a business that exists almost 100% online and become a major player in their industry. eHarmony has been able to do this by capitalizing on opportunities to be the first to market with their ideas and providing a product that works. They have greatly benefitted from word-of-mouth referrals due to their success and have a reputation in their industry that makes them the kingpin of online dating. With online dating companies popping up every day, eHarmony appears to be here to stay thanks to a focus on creating a superior product through innovation and differentiation.

References
(2015, January 5). Why eHarmony Survives Amid Wave of Dating Sites [Video File]. Retrieved from http://www.bloomberg.com/news/videos/2015-01-06/why-eharmony-survives-amid-wave-of-dating-sites

Coltman, T., Devinney, T. M., Latukefu, A., & Midgley, D. F. (2001). E-Business: REVOLUTION, EVOLUTION, OR HYPE?. California Management Review, 44(1), 57-86.

Ramachanran, V. (2013, May 14). http://mashable.com/2013/05/14/eharmony-redesign/.

Statista. (2015). U.S. customer satisfaction with e-business from 2000 to 2014 (index score) [Data set]. Retrieved from http://www.statista.com/statistics/185727/us-customer-satisfaction-with-e-commerce-since-2000/

Tierney, J. (2013, February 2011). http://www.nytimes.com/2013/02/12/science/skepticism-as-eharmony-defends-its-matchmaking-algorithm.html?pagewanted=2.

http://www.eharmony.com/about/eharmony/

http://www.statisticbrain.com/online-dating-statistics/. (2014, July 7).

Zwilling, M. (2013, March 1). http://www.forbes.com/sites/martinzwilling/2013/03/01/how-many-more-online-dating-sites-do-we-need/.

Business Intelligence in HealthCare

Business Intelligence technology provides businesses the ability to track, interpret, and manage information. Organizations are continually looking for ways to utilize the information they have stored in their operational systems.

(avistasllc, 2010)

The healthcare industry uses their data for business decision making as well as medical practice decision making. The medical industry has some of the most complex data, and without an established method to collect and analyze the data, intelligent business decisions may be overlooked (n.d., Horstmeier). Some of the functions that business intelligence can assist with are cost reduction, fraud prevention, revenue generation, and helping to suggest which diagnostic tests are needed along with the most accurate diagnoses. With all the benefits business intelligence has to offer, it is somewhat surprising that only 33 % of healthcare organizations are utilizing business intelligence (Rodney, 2012). This low percentage may have a direct effect on every person reading this when one considers that at least 44,000 people, and perhaps as many as 98,000 people, die in hospitals each year as a result of medical errors that could have been prevented (To Err Is Human: Building A Safer Health System, 1999).

One example of using business intelligence in a hospital setting involves the data that supports a reduction in congestive heart failure (CHF) readmissions. The clinical staff would be able to assess the number of patients with CHF readmitted to the hospital, identify patients on multiple medications, present the data in timely views that allow the discharge nurse to view the list of current CHF patients, and finally, allow the discharge nurse to provide targeted patient education and follow-up care. The impact of the information ascertained from a business intelligence product has shown an increase in the ability to identify at-risk patients, a decrease in readmissions and an improvement in patient satisfaction (Muirhead, 2013).

While the previous example supports the use of business intelligence in a clinical setting, its implementation by ThedaCare health networks reveals the financial benefits that can be obtained. From 2008 to 2012, they reduced their year over year BI software maintenance by $130,000 while doubling overall user volume. They also saved over $800,000 in overtime in 2011 and reduced it an additional 3.5% in 2012. Finally, they were able to convert to a rolling budget forecast which resulted in reducing labor by about 20,000 hours/year which translated to an estimated $1,000,000 savings (Gocsik, 2013).

A risk facing management in healthcare, when it comes to business intelligence systems, is the security of the data that is entered. Patients come to hospitals and other health care operations with the understanding that the information they provide and the information that the healthcare professionals gather will be kept confidential. However, in today’s world no information is safe once entered into a computer. In an article from Hospitals and Health Networks Magazine, author Mark Taylor states “Health & Human Services’ Office of Civil Rights, the federal agency charged with enforcing the privacy rule of the 1996 Health Information Portability and Accountability Act, estimates that personal health data of 30 million Americans has been compromised since 2009” (Taylor, 2015). Healthcare professionals involved in managing a new BI system must be cognizant of the risks that a security breach poses to their patients. One example of a recent security breach in healthcare is Community Health Systems who experienced a breach in 2014 that compromised the data of 4.5 million patients across 28 states (Brown, Lowe, & CNN Wire, 2014). When implementing a new business intelligence system in the healthcare industry a great deal of care must be placed into developing strong security measures against hackers for the data that the system is designed to contain. Not only is financial information at risk, but also drug information, patient information, and health credentials.

There are a number of barriers that healthcare organizations need to consider when implementing a business intelligence system. Considerations need to be taken into account for standards pertaining to data collection and analysis, disseminating to physicians and staff why data is being collected and how it is to be used for improvement, excess metrics measurement, and whether no communication exists which will make it difficult to engage all in the business intelligence effort. To mitigate these barriers, simple steps can be taken with some imaginative forethought (Business intelligence in an era of reform: strategies for improvement, 2012).

In an effort to build a proper health care Business Intelligence system, one should consider developing a single data access point and train all physician and staff members to enter and retrieve data properly. This will assist with data integrity. Next, one should highly consider automated extraction of the data to drive process improvement. For example, this enabled the Reading Hospital and Medical Center in Pennsylvania to pull quality data for heart failure and acute myocardial infarction 300 percent more rapidly. Another consideration to help overcome implementation barriers is to standardize data definitions, such as what is a visit? What is a surgery? All departments should clearly understand the metrics and their definitions the same way to ensure data integrity. A final barrier consideration in implementing a business intelligence solution in health care is to measure only the items you intend to change. Too many metrics can lead to physicians and staff losing trust and developing a ‘checking a box’ mentality (Business intelligence in an era of reform: strategies for improvement, 2012).

In conclusion, business intelligence in healthcare organizations is designed to collect and structure data that will efficiently deliver meaningful information to the correct people, facilitating faster and more accurate business decisions. With only 33% of healthcare organizations adopting business intelligence solutions, this technology is placed in the early majority phase of the technology adoption curve. Going forward, there remains a huge risk in the security of the business intelligence data and how it can be securely protected. Various implementation barriers can quickly hamper a business intelligence solution. Therefore a strong, well designed, business intelligence strategy, developed before implementation, can profit both the healthcare organization and its customers.

References

Avilistic, (2010, August 23). What is Business Intelligence? [YouTube Video]. Retrieved from https://www.youtube.com/watch?v=0aHtHl-jcAs

Brown, G., Lowe, Z., & CNN Wire. (2014, August 18). Tennessee-based hospital network hacked, 4.5 million records stolen. Retrieved February 12, 2015, from http://wreg.com/2014/08/18/tennessee-based-hospital-network-hacked-4-5-million-records-stolen/

Business intelligence in an era of reform: strategies for improvement. (2012). hfm (Healthcare Financial Management), 66(6), 79-84.
Dmyterko, K. (2010, June 9). HIMSS: Business intelligence may be key to success in the ED. Retrieved from http://www.clinical-innovation.com/topics/analytics-quality/himss-business-intelligence-may-be-key-success-ed?page=0%2C0

Gocsik, T. (2013, February). ThedaCare’s Clinical & Business Intelligence Journey. Retrieved from http://www.himss.org/files/HIMSSorg/Content/files/HIMSS%20CBI_2013-02-I5_ThedaCare%20Case%20Study-FINAL.pdf

Henchey, P. (2013, April 1). What Is Clinical Business Intelligence? (Module 1). Retrieved from http://www.himss.org/library/clinical-business-intelligence/clinical-business-intelligence-primer/what-is-clinical-business-intelligence

Hortsmeier, P. (n.d.). Why Your Healthcare Business Intelligence Strategy Can’t Win without a Data Warehouse. Retrieved from https://www.healthcatalyst.com/healthcare-business-intelligence-data-warehouse

Muirhead, C. (2013, February). Clinical & Business Intelligence: An Analytics Executive Review Industry Capabilities – Available Tools, How & Where Applied. Retrieved from http://himss.files.cms-plus.com/HIMSSorg/Content/files/HIMSS%20CBI%20Analytics%20Exec%20Review_Industry%20Capabilities%20module_2013-02-19_FINAL.pdf.

Roney, K. (2012, October 12). http://www.beckershospitalreview.com/news-analysis/33-of-healthcare-organizations-dont-use-business-intelligence-tools.html.

Taylor, M. (2015, February 10). Hospitals Battle Data Breaches With a Cybersecurity SOS. Retrieved February 12, 2015, from http://www.hhnmag.com/display/HHN-news-article.dhtml?dcrPath=/templatedata/HF_Common/NewsArticle/data/HHN/Magazine/2015/Feb/fea-hospital-cybersecurity

To Err Is Human: Building A Safer Health System. (1999). Institute of Medicine.

Information Technology and Crowning a Tooth

Have you ever had a broken tooth that needed to be restored with a “cap” (aka, a crown)? Once the dentist takes an impression of the damaged tooth, it is sent to a dental laboratory for the fabrication of the crown. Like any business, the decision the dentist has to make is which dental laboratory to use for the fabrication. There were approximately 12,100 dental laboratories providing almost $3.1 billion worth of services at the end of the first decade of the 2000s (Highbeam Business, n.d.). That many choices can make for a very difficult decision. Most business decisions are made based on the barriers of who can perform 1) a high quality restoration, 2) in the shortest amount of time, and 3) for the least amount of money. In the past, large sized labs were able to accomplish this feat the best. For smaller labs, the triad of those three requirements was a huge barrier to compete. The difficult challenge for smaller labs with fewer workers meant a longer turnaround time.

The advent of CAD-CAM dentistry has allowed the smaller lab to now compete with the larger labs. How it works is a dental scan is taken by the dentist of the offending tooth. This file is then digitally sent to a laboratory which then reviews the file and designs the crown. Next, the crown is then milled from a choice of materials. Once it is completed, the final touches, to make the crown look life-like, are added by the dental lab technician. What once took weeks to fabricate can now be fabricated in hours. Not to mention, a single lab technician can review multiple files and start the fabrication for multiple units. Of course, the large laboratories can also utilize this technology. But the smaller labs are now able to compete. While this technology has dramatically decreased a barrier of competition between dental labs, it has created a new barrier of competition – with the dentist.

(CERECbySirona, 2013)

Products like CEREC and E4D now provide the dentist in-house capabilities to mill crowns in their own office. Not only is the procedure completed in one visit, but the cost of having the lab fabricate the crown is transferred to an internal cost (Child, n.d.). Although an individual dentist may have to spend approximately $100,000 of capital to begin using CEREC, it is well worth the long-term benefit (Butler, 2011). By utilizing the CEREC technology in-house, a dentist can save lab costs of approximately $7,000 per month or an equivalent of $84,000 per year (Willis, n.d.).

We can use this information to analyze the competition in this market using Porter’s Competitive Forces (Porter, 2008). The first force is buyers. The buyers in this market are those who are on the unfortunate end of a root canal. When in this situation a patient is faced with the decision of removing the tooth or opting for the more expensive root canal and crown. Using innovative products like CEREC and E4D can help to drive down cost (and notably lead time as mentioned earlier) to make the buyer more likely to opt for the root canal and crown rather than simply having the tooth removed. The next force is that of suppliers. The advent of this technology has allowed for firms of all sizes to compete, which is good news for the consumer. With lower barriers to entry (no skilled crown fabricators for example), more suppliers are in the market, all thanks to innovations in technology. The third force, substitutes, is virtually non-existent in this market. If a patient wishes to keep a full set of teeth, they are forced to opt for the root canal and crown route. The next to last force is that of new entrants. As mentioned earlier, the introduction of this technology has lowered barriers of entry and welcomed a rush of new entrants, which further enhances competition in this market. The final force is that of existing rivals. While there are more and more suppliers entering the market thanks to this new technology, the firms who have made the transition from traditional production to using this new technology and consider themselves market leaders still must be cognizant of their rivals both old and new.

In conclusion, the reduced time, effort, and cost to develop a crown within a dental office is worth the initial investment in technology, not to mention the estimated 15 month return on investment to purchase the equipment (Willis, n.d.). A result from this technology will drive smaller and larger labs to be more cost competitive. This will also result in less patient visits for crown applications and additional time for dentists to acquire more patients and perform additional dental services.

Works Cited:

Butler, S. (2011, June 10). Why Your Dentist Costs So Much. Retrieved from http://www.cbsnews.com/news/why-your-dentist-costs-so-much/

CERECbySirona. (2013, July 8). CAD/CAM for Everyone [Video file]. Retrieved from https://www.youtube.com/watch?v=_SBsoHw0cDg

Child, P. (n.d.). Digital dentistry: Is this the future of dentistry?. Retrieved from http://www.dentaleconomics.com/articles/print/volume-101/issue-10/features/digital-dentistry-is-this-the-future-of-dentistry.html

Highbeam Business. (n.d.). Dental Laboratories SIC 8072. Retrieved from http://business.highbeam.com/industry-reports/business/dental-laboratories

Porter, Michael E. (2008, January). The Five Competitive Forces That Shape Strategy. Retrieved from https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy

Willis, B. (n.d.). CEREC: Myth or Magic?. Retrieved from http://www.dentaleconomics.com/articles/print/volume-96/issue-1/departments/letters-from-readers/cerec-myth-or-magic.html

Group 5 Blog

Group 5 Blog for BMBA 5009 Management Information Systems, Spring 2015 Semester.

Contributors include:

• Andrew Sorkin
• Chris Pensinger
• Nathaniel Gibson