Success or Failure Factors of IS

Succeed Service Continuous

or speed
Business quality Improve Change Management
Survive innovation Radical

Technology Organization Management

(Behavior) culture (Human)
Ethically Acceptable Structure (Strategic Advantage)
Socially Responsible attribute uncertainty
Politically control decision-making Risks Benefit
operation overcome enhance
strategy

A Digital Society
1) choosing strategy
2) organizing the business
3) organizing the systems
management area
HUMAN ADAPTABILITY
I S
Ability & flexibility to compress
time and space and to expand
organizational knowledge and
then increase flexibility
culture
The Driver & Servant

[ organizational change] ------Radical Change

 Success or Failure Factors of IS (Cont’d)
[ organizational change] ------Radical Change

A FIRM/ORGANIZATION: Evolution of change

Efficiency Effectiveness Innovation

(Automate) (Informate) (Innovate)

[Doing the things right] [Doing the right things] - creativity

-Proper utilization of -Attainment of goals - property of culture
resource
{Save Money} {Make Money}

Restructuring Re-engineering
Competitive Advantage Cooperative Advantage
Electronic Market: flatten the organizational hierarchical structure

“ Revolutionary significance lies in generality” e.g., steam engineers--triggered the first Industrial
Revolution Computers--Seem to be triggering a second one.
 IT Yesterday, Today and
Tomorrow
Yesterday Today Tomorrow
Computer age Information age Knowledge age
Computer proc. People proc. Knowledge proc.
Computing Communication Connectivity
Accuracy Perspective Reality
Automation Information Innovation
Efficiency Effectiveness Performance/
Innovation
“doing things “doing the right “creativity”
right” things”
Three Necessary Perspectives

•Business Environment
•Enterprises Environment Business
•IT Environment Success
 Simultaneous Revolutions
New Competitors

New Rules of New Political

Competition Agendas

Industry structure The

New
Changes Business Technology

New regulatory New Employees

Environment and New Value

Increasing Customer
Expectation
 Business Drivers

Market Technology

Regulation Employees/
Work
Organization

Business Processes
Solution to Business Requirements
A Systematic Approach
Vision
Strategy
Tactics
Business Plan

Competitive Options
Roles,Roles and Relationships
Redefine/ Define
Telecommunications as the Delivery Vehicle
Success Factor Profile
 The Information Technology
Environment
Administrative Justification/
Primary Purpose
Framework
Target
ERA I
Data Regulated Productivity/
Processing Organizational
Monopoly Efficiency

ERA II
End-User Free Market Individual Effectiveness
Computing

ERA III
Strategic Regulated Business Competitive
Free Market Process Advantage
Systems
 Competitiveness: A Link to
National Goals
Decreased Stronger
Human Trade
Budget National
Resources Policy Deficit Security

Improved Increased
More and
Capital Domestic Competitiveness
Better Jobs
Performance in World Market

Increased
New Reduced
Technology Competition Trade Deficit
Standard
of Living
The Diamond of National Advantage

Chance Firm Strategic,

Structure
and Rivalry

Factor Demand
Conditions Conditions

Related and
Supporting
Industries
Government
 Figure 3-1: FIVE COMPETITIVE
FORCES MODEL
NEW Threats SUBSTITUTE
MARKET PRODUCTS
ENTRANTS & SERVICES

TRADITIONAL
THE FIRM
COMPETITORS

SUPPLIERS CUSTOMERS
Bargaining power
N
 Port Competitive Model
Figure 3-1
Potential
New Entrants

Intraindustry Rivalry
Bargaining Bargaining
Power Strategic Business Unit Power
of Supplier of Buyers

Substitute
Products
and Services
 Wal-Mart and the Porter
Competitive Model
Figure 3-2 Potential
ForeignGeneral
Merchandisers or Discounts
New Entrants
Established Retailer Shifting
Strategy to Discounting or
Megastores
Intraindustry Rivalry
Strategic Business Unit
Bargaining SBU: Wal-Mart Bargaining
Rivals:Kmart, Target, Toys
Power R Us, Specialty Stores
Power
of Supplier of Buyers
U.S. Product Manufacture Consumers in Small Town, U.S.A
Foreign Manufacture Consumers in Metropolitan Areas in
Local Government Substitute the U.S.
IT Product and Service Suppliers Products Canadian and Mexican consumers

and Services Other Foreign Consumers

Mail Order Telemarketing

Home Shopping Buying Clubs

Network
Door-to-door Sales
Electronic
 FIVE COMPETITIVE FORCES MODEL

NEW Threats SUBSTITUTE

MARKET PRODUCTS
ENTRANTS & SERVICES

TRADITIONAL
THE FIRM
COMPETITORS

SUPPLIERS CUSTOMERS
Bargaining power
N
 Activities of Value Chain
Support Activities

Administrative and Other

Indirect Value Added

Outbound Marketing
Inbound Operations Services
and
Logistics Logistics
Sales

Primary Activities
The Value Chain

(Value)
 Manufacturing Industry Value
Chain Product and Service Flow
Figure 3-5

Production Sales and

Research and
Engineering and Marketing Service
Development Distributiion
Manufacturing

Administrative and Other

Indirect Value Added
 Examples of the Value Chain

N
Dr. Chen, The Trends of the Information Systems Technology TM -18
 Generic Value Chain
Figure 3-7
Firm Financial Regulatory Compliance Legal Accounting
Infrastructure Policy
Human
Resource Actuary Training Actuary Training Claims
Training
Management Product
Technology Actuarial Methods Development Claims
Development Investment Practice  Market Research Training

IT
Procurement
Communication

Policy Underwriting Policy Sales Claims

Independent
Rating Settlement
Investment
Agent Network Policy
Renewal Loss Control
Billing and
Collections Agent
Management
Advertising

Inbound Operations Outbound Marketing Service

and Sales
Logistics Logistics
 Generic Value Chain
Figure 3-8
Firm Information Systems Technology Planning and Budgeting Technology Office Technology
Infrastructure
Human
Resource Training Technology Motivation Technology Information Technology
Management
Technology Product Technology Computer-Aided Software Development Tools Information
Development Technology Pilot Plant Technology Systems Technology

Procurement Information System Technology Communication Technology Transportation System Technology

Transportation Basic Transportation Multimedia

Technology Technology Technology Technology Diagnostic and
Testing
Material Materials Material Communication
Handling Handling Handling System Communication
Machine Tool
Technology Technology System
Storage and
Technology Technology
Preservation Packaging Information
Technology Material
Technology Technology Information
Handling Technology
Communication
Communication Technology
System System
Technology Packaging Technology
Technology Information
Information Technology
Technology Information
Technology

Inbound Operations Outbound Marketing Service

and Sales
Logistics Logistics
 Porter’s Competitive Model
Figure 4-2
Aircraft Manufactures Aircraft Foreign Carriers
Leasing Companies Potential Regional Carrier Start-ups
 Labor Unions New Entrants Cargo Carrier Business
Strategy Change
Food Service Companies
Airport
Local Transportation Service
FAA (Air Traffic Controllers0
Hotels
Intraindustry Rivalry
SBU: American Airlines
Bargaining Rivals: United, Delta, Bargaining
Power USAir Northwest, Power
Southwest
of Supplier of Buyers

Travel Agents
 Alternate Travel Services Business Travelers
Fast Trains
Substitute
Pleasure Travels
Boats Products Charter Service
Private Transportation and Services U.S.Military
Videoconferencing Cargo and Mail
 Generic Value Chain
Figure 4-3
Firm Financial Accounting Regulatory Legal Community
Infrastructure Policy Compliance Affairs
Human Flight, Route and Pilot Training Baggage Handling
Yield Analyst Agent Training Inflight
Resource Safety Training Training
Training Training
Management Computer Reservation System, Inflight System
Technology Product Development Baggage
Flight Scheduling System, Yield Management
Development System Market Research Tracking System

Procurement Information Technology

Communication
Route Selection
TicketCounter Baggage System Promotion Lost Baggage
Passenger
Service System Operation Service
Flight Connection Advertising
Yield Gate Operation Complaint Follow-
Management RentalCar an d Advantage
System(Pricing) up
Aircraft Operations Hotel Reservation Program
Fuel System
Onbord Service Travel Agent
Flight Scheduling
Baggage Handling Programs
Crew Scheduling
Facilities Group Sales
Ticket Offices
Planning
Aircraft
Acquisition

Inbound Operations Outbound Marketing Service

and Sales
Logistics Logistics
 Interorganizational Systems
Figure 5-1
Customers

Vendors

Your Company Support Services

Business Partners

Industry Forces
Government
Association Info Competitors
Sources
 Payment Process Industry
Figure 5-2

Merchants

Member Visa International

Banks or Mastercard

Card Holders
Individuals
Businesses
Figure 5-3 EDI Applications
Purchase
Orders Advance
Shipping
Notices

Electronic
Invoices Data
Interchange

Freight Inventory/
Bills Sales Data
 EDI System Obstacles
Figure 5-4
Company data versus standards
Data Cross-industry standards
Standards administration

Time zones and windows

Communication protocols
Communication Telecommunications equipment
Service cost and balance

Application Integration
Features and function supported
Interface
 Electronic Data Interchange (EDI)
Figure 5-5 Through the Use of a Van
Electronic
Vendor Systems:
Mailbox

Mainframes
Customer order

Time Schedule
Time Zone Minicomputers
Data Format
Communication
Protocols Microprocessors
Data Transmission
Speed

No Computer

Conversion/
Translation
Figure 5 -- extra Values
Beliefs
Principles

Mission
Vision
Culture
Goals
Strategies

Tactics
Objectives and Authority and
Measurements Responsibility
Business Plan
The Vision -to-Action Process
Implementation
(Action)

Agreement and
Commitment

Tactics and
Business Plan

Strategy
Feedback
Vision

Sensing
Opportunity
 Pyramid of Excellence
Stakeholder Value
Figure 6-4 Reprint
with permission of Where Vision
Whirlpool Corporate
Way
Value -Creating
What Objectives

How Worldwide
Excellence
System
 Vision and Information Systems
Figure 6-6 Invest
Vision

Save
Asset Money
Application
Networks

Expense
Strategic

Tools
Tactical
 The Three Components of a New Strategy

Vision

External Internal
Assessment Assessment

A New Strategy
Figure 7-1
 Strategic Management Process
Environmental Analysis
General Environment
Operating Environment
Competitive Positioning
Directions for Development

Stakeholder
Company Analysis
Company Current Chosen Realized
Strategic
Vision Strategy Vision & Strategy Strategy
History
Strategy

Company Analysis
Structure
Value/ Culture
Competitive Positioning
Figure 7-2 Resources
 Strategy Implementation
Senior Management
Business Uncertainties
Vision
and Macro-
Strategies

Empowered Implementors
Company Culture

Risks to be Avoided
Micro-
Strategies
Critical Performance Factors and
Tactics
Key Enterprise
Business Processes

Figure 7-3
 Managing for Results

Objectives
Authority
Responsibility
Training Control
Motivation
Performance
Results
Reward

Figure 7-4
 Management Information Needs
Senior Management

Emerging Opportunities and Threats

External Impact of Strategies and Tactics

Internal Impact of Strategies and Tactics

Performance Measurements

Enpowered Implementors
Figure 7-5
 IT-Based Strategies
Marketplace Operation

Significant Federal Express

Whirlpool
Structure USA Today
Xerox
Change Charts Schwab
Traditional USAA Banc One
Boeing
Products L.L.Bean Frito-Lay
and Processes McKesson Wal-Mart

Figure 7-6
 Company Infrastructure

Data Management
User Applications
Voice Management
Network Management
Planning Process
Financial Strategy
Organization

Figure 7-7
 Strategy Option Generator
Target
Supplier Customer Competitor
Thrust
Differentiation Cost Innovation Growth Alliance
Mode
Offensive Defensive
Direction
Use Provide
Execution

Figure 8-1 Strategic Advantage

 Strategy Option Generator
Target
Supplier Customer Competitor
Thrust
Differentiation Cost Innovation Growth Alliance
Mode
Offensive Defensive
Direction
Use Provide
Execution

Strategic Advantage
Figure 8-2
 Roles, Roles and Relationships
Senior Management

Users

Functional Informational Systems

Management Organization
Figure 9-1
 Using IS to Compete

Senior
Management
IT
Users
Leadership

Information
Systems
Organization

Figure 9-2
 Technology Transfer Through
Organizational Learning
Information
Technology

Applications

Organization

Figure 9-3
 Using IS to Compete: Primary
Responsibilities
Conceptual Specific
Direction
Approach Approach
Senior
Management 7 2 1
Functional
Management 2 5 4
IS
Management 1 3 5

10 10 10

Figure 9-4
 Making It Happen!

Competitive

Crisis
Management
Process
Action Improvement
Initiators Executive
Power

Figure 9-5
 Board of Directors

A Business
Suppliers

Products/Services

Competitors

Figure 9-6
 Board of Directors

Information
Suppliers

Systems
Organization

Competitors

Figure 9-7
 Steering Committee

Opportunities Direction

IT Needs Wants & Needs

Information Justification
Suppliers

Real Dollars
Real Dollars?
Systems
Products Organization
People Products & Services
Constraints Costs

Competitors

Figure 9-8
 Value to Customer Chart
Product/Service

Value-Added What the

Process Customer Buys

Value to Customer
Figure 10-1
 Value to Customer Analysis
Charles Schwab & Co.
Product/Service

Stock,Bond and
Computer-based Trades Mutual Fund Trades
Client-broker Service Financial Product Options
Street Smart Competetive Fees
Telebroker Timely Execution of
Equalizer Trades and Money
OneSource Transfer
•Electronic Transfers Personal Service
•Trade Risk Analysis Confidence in Financial
Custodial Responsibilty

Value-Added Process What the Customer Buys

Value to Customer
Figure 10-2
 Value to Customer Analysis
Mervyn’s
Product/Service

Point-of-Sale(POS) System: Qualify Apparel/Home

Ticketed Merchandise Fashions
UPC Scanning Competitive Prices
Price Look-up High Merchandise
Credit Card Approval Availability
Wireless Portable POS Personal Service
Warehouse Management Fast, Accurate Check-out
EDI System with Vendors Fast Credit Approval
Infobot Voice Response Access to Credit
System Information

Value-Added Process What the Customer Buys

Value to Customer
Figure 10-3
 Value to Customer Analysis
Boeing Commercial Airplane Group
Product/Service

CAD Design System and Aircraft Designed for

Review Process Passenger,Comfort,
Customer Input Through Operational Efficiency
Network and Safety
Co-Design Process WITH Flexible Design
Customer Configuration
Quality Control System Competitive Price
Vendor EDI System Logical Support

Value-Added Process What the Customer Buys

Value to Customer
Figure 10-4
 Telecommunications Models
People

Communication Machines
People

Figure 11-1 Machines

 Linking Users to Information Within
Application
Enterprise
on Networks
Department
Organization Individual
Users
LAN

WAN

Public Business
Network Application
Private Enterprise
Functions
Wired Organizational
Wireless Processes
Personal
Information
Traditional Graphics
Data Voice
Figure 11-2 Text Video
Images Multimedia
 Information Systems Support of
Business Requirements
Business and Information
Technology Dynamics

Multi-Vendor/ Multi-Products

Information System Architecture

Open Systems
Standards

Vendor Hardware Software

Products and Services

User Organization
Application Function
Ease Of Use
Figure 11-3 Seamless and Transparent
 Open Systems Environment

3.Database Other 1.Operating

Service Systems

Software
Application

5. Software Development Tools

6. Systems 2. Communication
4. User Interface Management
Services Service

Figure 11-4
 A Telecommunications Perspective
Objective Voice Data

Voice Message Transmission

Efficiency Volumes Volumes

Competitive Voice Applications PCs and Application

Advantage Plus Linkage Packages

Integrated Voice /Data Application

Figure 11-5
 Success Factor Profile
Management Importance Responsibility Assessment
Business Vision
Culture
Risk Management
Plan Implement
IS Integral to the Business
IS Justification Mgmt. Process
Executive-IS Mgr. Partnership
Executive IS Experience
Operational Automation
Linkage to Suppliers
Linkage to Customers
Linkage to Customers Service
Pervasive Computing Literacy
IS Architecture
IS Marketing
IS User Relations

Figure 12-1
 Information Systems Organization
IS Vice-President

Finance & Database

Planning
Administration Administration

Development &
Maintenance Systems
Support Computer Network
Project
Operations Management
Management
Systems
System Programming
Analysis

Programmers
Development Information
Center Center
Figure 13-1
 Future IS Organization?
IS Executive CIO

General and
Client Interface
Administration
IS Utility Telecommunications

Competitive Data Data

Administration
Systems Center Network

Professional
Performance Voice
and Technical Finance
and Planning Systems
Support

Client Systems Development

Equipment
Groups Center

Figure 13-2
 Information Systems Value

Company/Enterprise Infrastructure

Function/Development Application

Personal Applications
Personal/Individual and Tools

Figure 14-1
 Evolution of Financial Strategy
Initiation Expansion Control Maturity
I II III IV
Organization
Application Single Area Proliferation Containment Strategy

People Cost DP Competitive

Motivation Displacement Avoidance Efficiency Advantage
Business Case
Financial Charge-Out Management
Budget Installation
Justification System Process
Audit

DP Planning Little Reactive Directed Proactive

Centralized
Finance Multiple
Organization Dept. Dept.
Centralized Decentralized
Distributed
Figure 14-2
 Management Process
Management Incentive
Eliminate
Simply
Automate

Business Case Process

IS Development Discipline
Interlock Management
Benefit Measurement

Figure 14-3
 Organization
Downsizing

Outsourcing

Business Partnering

Corp. Alliance
Process
New Markets,
Opportunities Reengineering
and Redefining
Competitors
Organizational TQM
Responses to
Employee Business Drives Time,
Empowerment Flexibility and
Quality Circles Responsiveness
Teams Product as Competitive
Customization Factors
Markets

Customers

Global Standards

Figure 15-1
 Traditional Roles in Planning

Vision

Strategic

Tactical

Traditional IS Role

Figure 15-2
 Strategic Planning Model
Mission
Vision
Environment
(External)
Strategy Plan Tactical Plan Business Plan
Opportunities Detailed
Treats Goals
Business Unit Projects

Objectives Functional Resources:

Enterprise Programs Headcount,
(internal) Strategies Capital and
Major Project Expense
Strengths Positioning Budgets
Weaknesses

Culture
(Explicit/Implicit)
Figure 15-3
 What to Plan
Strategic Enterprise
Enterprise Strategies
Planning

Strategic Information
Information Strategies
Planning

Architecture
Architecture
Planning

Tactical
Planning Time Oriented Objectives

Implementation
Project Plans
Planning

Figure 15-4
Barriers to Aligning IS with Business Objectives
Business Plan
IS Track Record Communication of
and Credibility? Business Plan?

Senior Management Executive Skills of

Perception of IS? IS Executive

Clear IS Role? Is keeping IS

aligned with the
business objectives
Effective IS someone’s high-
Management? priority objective?

IS Organization? IS Policies?

IS Skills and A problem with

Capabilities? IS Capacity?
Does IS Organization
Have a
User/Business Focus?

Managing IS to
Figure 15-5 Business Objectives?
 Business-IS Planning
Business Dictates
IS Strategy
Strategy

Determines
Benefits

Information
Technology

Figure 15-6
 Business-IS Planning
Corporate Opportunities Technology
Vision Environment

Business Dictates IS
Strategy Strategy

1. Strategic Capability
2. Technology-driven
Business Change

Information
Technology

Figure 15-7
Enterprise-wide Information Systems
Strategic Planning Process

Business Domain Information Technology

Domain
Impact
Strategic Plan Information Technology
Opportunities

Business Processes Information Systems

and Organization Alignment Architecture and
Organization

Figure 15-8
 Xerox History

Continuous
Improvement

1959 1972 1979 1980 1983 1989 1990s

Figure 16-1
 Important Supporting Elements
Recognition Tools and Transition
and Reward Processes Team

Xerox is a
Total Quality
Company

Senior
Training Communication Management
Behavior

Figure 16-3
 A Win-Win Proposition
Delighted Customers

Satisfied Proud
Stockholders Employees

Enhanced Successful
Community Partners

Figure 16-5
 Organizational Response to
Business Drivers
IS Significance
High Medium Low
New Markets, Opportunities and
Competitors
Time,Flexibility and Responsiveness as
Competitive Factors

Product Customization

Process Reengineering, Redefining and TQM

Employee Empowerment and

Cross-Functional Teams
Organization Downsizing,
Outsourcing, Business Partnering
and Alliances

Figure 17-1
 Organizational Response
Business Success Factors IS Role
Mandatory Necessary Marginal
Business Leadership

Fitting Pieces into the Big Picture

Organizational Responsiveness and Resilience

Realizing that Solving Customer Problems

Requires a Team Approach
A Strong Company
Ability and Willingness to
Innovate, Change and Take Risks
Accomplishing All of These Factors While
Maintaining Necessary Balance
Good Communication Throughout the Entire
Organization
Figure 17-2
 Porter Competitive Model for the
Commercial Aircraft Industry Tupolev, from Former Soviet Union
Engine Manufactures Mitsubishi Heavy Industries in Japan
Potential
Electronics, Semiconductors, etc. Taiwan Aerospace, Other Emerging
New Entrants
Other Material Suppliers, Industrial Power
Specialty Metals, Composite
Materials, etc. Other Small-Aircraft Manufactures or
Government Institutions
Aerospace, Military Companies:
Dassault, ATR, Lockheed
Bargaining Intralndustry Rivalry
SBU: Boeing Airbus Bargaining
Power
Power
of Supplier McDonnell Douglas
of Buyers
Capital Sources, banks,
investors Airlines
FAA, IATA, EPA Leasing Companies
Other Regulating Bodies Substitute Government Institutions
IT Vendors Products
FAA, IATA, EPA
and Services
Other Regulating Bodies
Advances in Small, Short-Haul,
Turboprop Technology
Advances in Automotive Industry and
Infrastructure
Fast Train for Distances Less than
400 Miles
Figure 2 Advances in Telecommunications,
Videoconferencing, etc.
 Porter Value Chain for Boeing
Firm Information Systems Technology Planning and Budgeting Technology Office Technology
Infrastructure
Human Procurement training Hiring & training of Training for People familiar with national &
Resource Managing relationship engineers, test pilots, competitiveness international economics and politics
with suppliers skilled workers company-wide
Management Qualification of R&D, Partnerships
Technology Product development
suppliers New Defense contracts
Market research
Development materials Partners Regulation & Policies
IS inventory CAD/CAM systems
Procurement Customer relationships
management JIT, Assembly of planes &
Tracking of issues
production forecast parts tracking

Material Concurrent Worldwide Early involvement of Repair, spare parts

engineering presence customers in product
qualification definition Maintenance service
Flexible & modular
Engine selection manufacture Promotion, Inspection & test
Wide choice in advertising
Partners & joint capacity with “family” Upgrades
Lobbying U.S. and
programs concept foreign governments Training facilities for
Fly-by-wire customers
Electronics, etc. Seeking powerful
technology partners
Short development Facilitation of
cycles financing
Quick to market with Trade shows
short manufacturing
cycles

Inbound Operations Outbound Marketing Service

and Sales
Figure 3 Logistics Logistics
 Relationships Between Senior
Executives at Boeing
Frank Shrontz Phil Condit President
CEO Runs the Day-to-Day
Create the Vision Buisness

John Warner
Ron Woodard Commercial Jerry King Defense&
Information Service
Airplane Group Space Group
Group Implements the
Runs the Airplane Business Runs the Defense Business
Information Systems

Dale Hougardy Head of

the 777 Program
Develops the 777
Figure 5
 Boeing Value to Customer Chart
Boeing Aircraft
Product/Service

An aircraft designed for passenger

comfort, operational efficiency
CAD/CAM system, review,
and safe
process, concurrent engineering
Flexible design configuration
Customer and partner/supplier
Competitive price
through the network
On-time delivery
Co-design with customer
Logistical support, training,
Qualify control system
maintenance ----Peace of mind
Vender EDI system

Value-Add Process What the Customer Buys

Value to Customer
Figure 6
 Organizational Response
Business Success Factors IS Role
Mandatory Necessary Marginal
Business Leadership

Fitting Pieces into the Big Picture

Organizational Responsiveness and Resilience

Realizing that Solving Customer Problems

Requires a Team Approach
A Strong Company
Ability and Willingness to
Innovate, Change and Take Risks
Accomplishing All of These Factors While
Maintaining Necessary Balance
Good Communication Throughout the Entire
Organization
Figure 17-2