MBA Essentials

Information Technology for Strategic, Competitive Advantage

Virginia Franke Kleist, Ph.D. Assistant Professor Division of MIS/Management

Welcome to the Technology Part of the Program

How are you using information technology (IT) today in your firms and businesses? How successful has this been for your firm? Do you have problems that are still unresolved with Information Technology? Can IT give competitive advantage, anyway? How can one identify which technologies will best give strategic advantage?
MBA Essentials Session X Information Resources Management 2

Contact Information
Virginia Franke Kleist, Ph.D. Virginia.kleist@mail.wvu.edu www.be.wvu.edu/divmim/mgmt/kleist 304-293-7939 I welcome your comments and contacts! Several drawings are adapted from Laudon and Laudon, (2005), Management Information Systems: Managing the Digital Firm, New Jersey: Prentice Hall (8th ed.). Some material adapted from Burgelman, Christensen and Wheelwright, (2004), Strategic Management of Technology and Innovation, Boston: McGraw-Hill Irwin (4th ed.).
MBA Essentials Session X Information Resources Management 3

MBA Essentials Session X

Information Resources Management

MBA Essentials Session X

Information Resources Management

What will we learn?

Strategic advantage from information technology Latest information technologies How do you successfully select, implement and manage a new IT? How can your firm benefit from IT?
MBA Essentials Session X Information Resources Management 6

MBA Essentials Session X

Information Resources Management

Strategic Information Systems

Strategic Information System

Technology used to gain an edge over an organizations competition Can be used at all levels of an organization or just a few Makes a difference Profoundly alters the way an organization does business Sustained strategic, competitive advantage
MBA Essentials Session X Information Resources Management 9

Examples of Strategic Information Systems

American Airlines Fed Ex Citibank Wal-Mart Abitibi Consolidated Simonton Windows (SBR) USA Today Benetton Sheetz PNC Corporation PriceWaterhouse Coopers Baxter Healthcare

MBA Essentials Session X

Information Resources Management

10

MBA Essentials Session X

Information Resources Management

11

Four types of Information Systems

Operational Decision Support Managerial Executive Decision-making becomes more complex the more executive the level Operational systems have been around a long time and tend to have good ROIs
MBA Essentials Session X Information Resources Management 12

MBA Essentials Session X

Information Resources Management

13

Current Technologies for Strategic Information Systems

What are the latest technologies of interest?

CPUs and software, open source code Client server computing Interactive multimedia Developments in Electronic Commerce TCP/IP and the Internet Databases and Datamining

Handhelds, M-commerce
Knowledge Management tools and Artificial Intelligence
MBA Essentials Session X Information Resources Management 15

MBA Essentials Session X

Information Resources Management

16

MBA Essentials Session X

Information Resources Management

17

Technologies: CPUs and Software

Hardware components of a computer system Buses, CPUs, MHz, RAM, Gigs and cache Bits and Bytes, storage Moores Law and price points per MIPs Mainframes, RISC computers, Parallel processing Open source movement in operating systems Enterprise Resource Planning software Object oriented programming
MBA Essentials Session X Information Resources Management 18

MBA Essentials Session X

Information Resources Management

19

Technologies: Client Server Computing

Distributed processing vs. centralized processing Network computing Servers Bridges and routers, gateways Network management Ethernet and Token Ring
MBA Essentials Session X Information Resources Management 20

Technologies: Interactive Multimedia

Groupware Voice over IP Streaming technology Flash MP3 Seeing corporate uses in training applications
Information Resources Management 21

MBA Essentials Session X

History of Technology
1960s: Mainframe computers, MIS not superb at meeting budgets or deadlines 1980s: First PCs emerge, beginning of schism between departments and centralized MIS 1990s: MIS and departments work together well, networks key techno 2000: Enterprise networks Next: Vice Presidents of Electricity?
MBA Essentials Session X Information Resources Management 22

Technologies: Electronic Commerce

The client/server/database three tier model HTML, JavaScript XML vs. EDI, ASP and ActiveX, PHP, CGI Web Services Interdev and development tools Security and encryption issues Intranets and Extranets
MBA Essentials Session X Information Resources Management 23

Technologies: TCP/IP and the Internet

Codes, bits and bytes Analog vs. Digital transmission Packet switching and circuit switching The IP address, TCP/IP layers The world is becoming digital VoIP
Information Resources Management 24

MBA Essentials Session X

MBA Essentials Session X

Information Resources Management

25

MBA Essentials Session X

Information Resources Management

26

MBA Essentials Session X

Information Resources Management

27

MBA Essentials Session X

Information Resources Management

28

Technologies: Databases, Datamining

Data is the companys strategic asset Data warehouses, multidimensional databases and data marts Informix, Oracle and Red Brick The database management system Data mining is a type of software application that finds patterns in data that can guide decision-making Data mining allows focused differentiation and the ability to narrow target markets
MBA Essentials Session X Information Resources Management 29

MBA Essentials Session X

Information Resources Management

30

MBA Essentials Session X

Information Resources Management

31

Technologies: Handhelds and M- Commerce

Cellular technology WAP technology Handheld market and applications The Win CE platform Linux in the small devices What is M-commerce and what does it mean to me?
Information Resources Management 32

MBA Essentials Session X

MBA Essentials Session X

Information Resources Management

33

Technologies: Knowledge Management Tools and Artificial Intelligence

Examples of Knowledge Management systems Expert systems: the earthenware dam Neural Networks Fuzzy logic Intelligent agents
MBA Essentials Session X Information Resources Management 34

Technologies: Wireless
802.11b, a and g Weaknesses in security in wireless Access points Use firewalls behind access point Netstumbler and war driving

MBA Essentials Session X

Information Resources Management

35

Managing for Information Systems Strategic Advantage

Management: Information Systems Planning

IS plan maps to the corporate strategic plan Variety of IS planning styles: CSF, Enterprise Planning Components of Information Systems Strategic Plan Organizational change from systems: TQM, BPR, paradigm shifts or simple automation
MBA Essentials Session X Information Resources Management 37

Management: the Systems Development Life Cycle

Systems analysis Systems design Programming Testing Conversion Production mode and ongoing maintenance
Information Resources Management 38

MBA Essentials Session X

MBA Essentials Session X

Information Resources Management

39

Management: IS Strategic Plan

Purpose linked to strategy Current situation Systems: What do you have, what will you need to meet future New developments in corporation Management strategies with techno: Bleeding edge, leading edge, lagging edge, single vendor strategy, outsource
MBA Essentials Session X Information Resources Management 40

MBA Essentials Session X

Information Resources Management

41

Management: Implementation
The RFP document Financial issues for IS planning The payback concerns Programming: the mythical man/month Construction issues Testing and maintenance End users Prototypes and pilots Outsourcing
Information Resources Management 42

MBA Essentials Session X

Management: Security Issues

System quality, reliability, accuracy Threats: hackers, viruses, Trojan horses, denial of service attacks, identity theft Controls The firewall and internet issues Encryption, DES, SSL, SET Biometrics
MBA Essentials Session X Information Resources Management 43

MBA Essentials Session X

Information Resources Management

44

Management: Legal Issues with Information

HIPAA. Health Insurance Portability and Accountability Act, 1996 Gramm-Leach-Bliley Act, 1999 Sarbanes-Oxley Act of 2002

MBA Essentials Session X

Information Resources Management

45

Strategic Advantage: IT at work

IT and changes in the organization of business: flatter, leaner, teams, JIT, global Datamining and Walmart E-commerce and the supply chain at Dell M-commerce and Progressive Auto Internet and Egghead American Airlines, Baxter, Citibank
MBA Essentials Session X Information Resources Management 46

Strategic Advantage: How does one come up with this idea, anyway?
(Laudon and Laudon, 2000)

Porters Value Chain: primary and support activities The competitive forces model: Threats from new market entrants, suppliers, substitute products and customers Core competencies Network economics
MBA Essentials Session X Information Resources Management 47

MBA Essentials Session X

Information Resources Management

48

MBA Essentials Session X

Information Resources Management

49

Some Problems from IT for Competitive Advantage

The productivity paradox Tangible vs. intangible benefits from IT Future cash flows analysis Unique vs. staying even with competition Value from simple automation projects Value from highly risky, but strategic IT projects Risk vs. return issues
MBA Essentials Session X Information Resources Management 50

Technology Life Cycle

(Little, 1981)

Emerging techno- Not demonstrated potential Packing techno- Has demonstrated potential Key techno- Embedded, major impact, proprietary Base techno- Minor impact Can a technology cause innovation? Leadership?
MBA Essentials Session X Information Resources Management 51

MBA Essentials Session X

Information Resources Management

52

MBA Essentials Session X

Information Resources Management

53

MBA Essentials Session X

Information Resources Management

54

How can your firm benefit from IT?

In supply chain management through inventory management In the customer interface via ecommerce In logistics through GPS/GIS In client management through groupware In marketing through datamining In internal management through Intranets
MBA Essentials Session X Information Resources Management 55

MBA Essentials Session X

Information Resources Management

56

MBA Essentials Session X

Information Resources Management

57

Class Discussion: The Dell Case

How did Dell achieve success? What IT technologies did Dell use? How does Dell use ecommerce successfully? What are the ways that Dell uses IT for strategic, competitive advantage? What is Dells business model? Will Dell be able to keep this success going, given the recent troubles?
MBA Essentials Session X Information Resources Management 58

What have we learned?

Strategic advantage from information technology Latest information technologies How do you successfully select, implement and manage a new IT? How can your firm benefit from IT?
MBA Essentials Session X Information Resources Management 59