Professional Documents
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Sis
Sis
First Edition
Global competition
rapid product and process innovation
1. Operational support 2. Support of management and knowledge work 3. Support of business transformation and competition 4. Ubiquitous computing
Era Era II of of Organizational Organizational Computing: Computing: Operational Operational Support Support
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Primary Objective
Support of Operations
Primary Clients
Justification
Efficiency
Source
Irwin/McGraw-Hill
Era 1
operational support
1950s-1970s Single data processing department which developed all applications end users - no direct access to computer technology large backlog
Era Era II IIof of Organizational Organizational Computing: Computing: Support Support of of Management Management & & Knowledge Knowledge Work Work
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Primary Objective
Management Support
Primary Clients
Justification
Management Effectiveness
Source
Irwin/McGraw-Hill
Began late 1970s Apple II PC 1977 end-user software beginning of end user computing
Era Era III III of of Organizational Organizational Computing: Computing: Support Support of of Business Business Transformation Transformation & & Competition Competition
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Primary Objective
Primary Clients
Justification
Source
Irwin/McGraw-Hill
Mid 1980s - orgs. heavy reliance on computers strategic information systems became prominent systems support line-of-business units, e.g. development and marketing of a product line-of-business units control their own systems
3- 1
Primary Objective
Electronic Integration
Collaborating Teams
Primary Clients
Justification
Organizational Effectiveness
Source
Irwin/McGraw-Hill
Cannot pursue competitive advantage based on single system Competing with information systems must be based on a broad and continually enhanced technology platform linked to corporate strategy networks & client/server architecture electronic integration of entire organization
A strategic system alters the way an organization does business some systems - offer a company a clear competitive advantage - higher profits or increased market share most strategic systems - enable a company to be an effective competitor
rapid diffusion of technological change makes it difficult to maintain a competitive advantage so strategic development of IS
dynamic capability of an org. not a static attribute
An information system designed to give the owner organization a strategic competitive advantage. A strategic system supports or shapes a business unit's competitive strategy. outward looking: customers, competitors, environments inward looking: employees, systems, procedures
significantly change business performance contribute to attaining a strategic goal fundamentally change the way a company does business, or the way it competes, or the way it deals with its customers or suppliers.
Strategic systems
External focus
changes way firm competes
Competitive Strategies
used to describe the interaction of external influences -- threats and opportunities -- that affect an organizations strategy and ability to compete competitive advantage - can be achieved by enhancing the firms ability to deal with customers, suppliers, substitute products and services, and new entrants to its market
Objective - use this model to identify potential areas where IT can be used to gain a competitive advantage
businesses can use four basic competitive strategies to deal with these competitive forces: 1. Product Differentiation 2. Cost leadership 3. Focused differentiation 4. Cost Focus
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Cost Leadership
Differentiation
Cost Focus
Focused Differentiation
Irwin/McGraw-Hill
1. Differentiation
competitive strategy for creating brand loyalty Develop products & services which are different from what the competition offers . superior attributes . distinguishing features
2. Cost leadership
to prevent new competitors from entering their markets, businesses produce goods/services at lower price than competition based on efficient operations based on effective operations economies of scale
3. Focused differentiation
develop new market niche for specialized products or services so that business can compete in target market better than its competitors
4. Cost Focus
Company serves narrow market segment with product/service which it offers at a significantly lower cost than competitors
Competitive Forces
Use competitive strategy to combat 5 competitive forces in marketplace 1. threat of new competitors 2. bargaining power of suppliers 3. bargaining power of customers 4. substitute products 5. rivalry within the industry
Competitive Forces
Erect barriers to entry: use IT to slow down new firms entering market
SABRE ASAP
Deliver products with better value identify and track a market niche with IS that you can serve better than others try to prevent substitution
Firm can use any of several tactics to change its products or processes through use of SIS
Internal innovation - generate new knowledge internal growth - economies of scale Mergers & acquisitions Strategic alliances - partnerships with other companies
strategic alliances:
information partnership - cooperative alliance formed between two firms
Advantages
share information systems reciprocity of competencies economy of time and money
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TACTICS
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if f e
STRATEGIES
The McGraw-Hill Companies, Inc., 1998
Irwin/McGraw-Hill
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3. Value Chain
Value Chain
Tool to use to discover where a company can apply IS to gain a competitive advantage
value chain model highlights the primary or support activities that add a margin of value to a firms products or services where information systems can best be applied to achieve a competitive advantage
Value chain consists of the major activities that have been added to the product during its creation,development or sale.
Activities in the creation of product or service inbound logistics - obtain raw materials Operations - transformation of inputs to finished goods Outbound logistics - storing products and delivering them Marketing/sales - establishing a customer need Service activities - after-sale service and maintenance each of these activities adds value to final
Value Value Chain Chain with with Typical Typical Strategic Strategic IS IS Mapped Mapped onto onto it it
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Irwin/McGraw-Hill
Value Chain
besides determining discrete steps in chain - also need to analyze linkages between steps in value chain Use value-chain analysis to identify strategic information systems to use IS strategically, must identify potentially info.-related aspects of each activity in value chain and linkages between them.
Mirrors with information the physical value chain possible to integrate the systems mapped onto the physical value chain (fig. 3.14) to produce the virtual V.C. can also link V.C. to that of suppliers and customers to form an integrated supply chain
point of analysis
identify stages and links where highestimpact potential is available and creatively use IS to bring about that potential.
Active support of Senior management not just MIS management Integrated Planning - for strategic use of IS into overall company strategic planning process Readiness: successful use of MIS already, org. experience with tech. innovation
depends on: 1. lead time will allow the achievement of competitive advantage 2. Copy cats may fail because of Uniqueness 3. If copied: Your organization will still have preempted the marketplace
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Irwin/McGraw-Hill