Course Name : Information System Concept

(ISYS6093003)
Effective Period : September 2022

ORGANIZATIONAL STRATEGY,
COMPETITIVE ADVANTAGE AND
INFORMATION SYSTEMS
Session 2
 LEARNING OUTCOMES

• LO 2 : Explain the concepts of information system

development

https://www.pinterest.co.uk/pin/114912227980727908/
 ACKNOWLEDGEMENT

These slides have been

adapted from
R. Kelly Rainer, JR, Brad
Prince, (2022).
Introduction to
Information Systems, 9th
Edition. John Willey &
Sons, Inc, Chapter 2
 LEARNING OBJECTIVES

1. Discuss ways in which information

systems enable business processes for
a single functional area and cross-
functional processes.
2. Differentiate among business process
reengineering, business process
improvement, and business process
management.
3. Identify effective IT responses to
different kinds of business pressures.
4. Describe the strategies that
http://www.juniortouchchamps.org/aimsobjectives
organizations typically adopt to counter
Porter’s five competitive forces.

Bina Nusantara
 SUB TOPICS

2. Business Process
Improvement, Business
1. Business Process Process Reengineering,
and Business Process
Management

3. Business Pressures,
4. Competitive
Organizational
Advantage and
Responses, and
Strategic Information
Information Technology
Systems
Support
1. BUSINESS PROCESS
 Business Processes
• A business process is an ongoing collection of related
activities that create a product or service of value to the
organization, its business partners, and/or its customers
• Comprised of three elements:
– Inputs
– Resources
– Outputs
• Efficiency vs. effectiveness
Business Processes
Business Processes
 Information Systems and
Business Processes
• IS’s vital role in three areas of business processes
o Executing the process
o Capturing and storing process data
o Monitoring process performance
• IS’s help execute the process by:
o Informing employees when it is time to complete a
task
o Providing required data
o Providing a means to complete the task
 Robotic Process Automation

• Robotic process automation (RPA) is a system that

enables enterprises to automate business processes
and tasks that historically were carried out by
employees.
• Companies that employ RPA develop software
“robots”—known as bots—that automate the steps
in a business process.

https://unida.ac.id/teknologi/artikel/robotic-process-automation-rpa-bukti-teknologi-masa-depan.html
 2. BUSINESS PROCESS
IMPROVEMENT,
BUSINESS PROCESS
REENGINEERING,
AND BUSINESS PROCESS
MANAGEMENT
 Business Process Improvement,
Business Process Reengineering,
and Business Process Management

• Excellence in executing business processes is widely

recognized as the underlying basis for all significant
measures of competitive performance in an
organization.
• Consider these measures, for example:
• Customer satisfaction: The result of optimizing
and aligning business processes to fulfill
customers’ needs, wants, and desires.
• Cost reduction : The result of optimizing
operations and supplier processes.
• Cycle and fulfillment time reduction: The result
of optimizing the manufacturing and logistics
processes.

– Continue….
 Business Process Improvement,
Business Process Reengineering,
and Business Process Management
– Continue….

• Quality: The result of optimizing the design,

development, and production processes.
• Differentiation: The result of optimizing the
marketing and innovation processes.
• Productivity: The result of optimizing each
individual’s work processes.

The question is :
How does an organization ensure business process
excellence?
 Business Process Improvement,
Business Process Reengineering,
and Business Process Management
 Michael Hammer & James Champy, 1993, Reengineering
the Corporation
 Business process reengineering (BPR)
 A radical redesign of an organization’s business
processes to increase productivity and profitability
 Examines business processes with a “clean slate”
approach
 Business Process Improvement,
Business Process Reengineering,
and Business Process Management
• Business Process Improvement
– An incremental approach to move an
organization toward business process centered
operations
– Focuses on reducing variation in process outputs
by identifying the underlying cause of the
variation
• Six Sigma is a popular methodology for BPI
 Business Process Improvement,
Business Process Reengineering,
and Business Process Management

Five basic phases of successful BPI

Measur
Define Analyze Improve Control
e
 Business Process Improvement,
Business Process Reengineering,
and Business Process Management

BPI
• Low risk / low cost
• Incremental change
• Bottom-up approach
• Takes less time
• Quantifiable results
• All employees trained in
BPI
BPR
• High risk / high cost
• Radical redesign
• Top-down approach
• Time consuming
• Impacts can be
overwhelming
• High failure rate
 Business Process Improvement,
Business Process Reengineering,
and Business Process Management

• Business Process Management is a management

technique that includes methods and tools to
support the documentation, design, analysis,
implementation, management, and optimization of
business processes.
• BPM coordinates individual BPI activities and creates
a central repository of a company’s processes,
generally by utilizing software such as BPMS
(Business Process Management Suite).
 Business Process Improvement,
Business Process Reengineering,
and Business Process Management
• Important components of BPM:
 Process modeling
 Web-enabled technologies
 Business Activity Monitoring (BAM)
• Business Process Management Suite (BPMS)
 An integrated set of applications used for BPM
• Emerging Trend of Social BPM
 Technologies enabling employees to
collaborate across functions internally and
externally using social media tools
3. BUSINESS PRESSURES,
ORGANIZATIONAL
RESPONSES,
AND IT SUPPORT
 Business Pressures,
Organizational Responses,
and IT Support
Business pressures:
• Market Pressures (Economic)
 Global economy and strong competition
(Globalization)
 Need for real-time operations
 The Changing Nature of the Workforce
 Powerful customers
• Technology Pressures
 Technological innovations and obsolescence
 Information overload
• Societal / Political / Legal Pressures
 Social responsibility
 Compliance with government regulations and
deregulations
 Protection against Terrorist Attacks
 Ethical Issues
 Business Pressures,
Organizational Responses,
and IT Support
 Business Pressures,
Organizational Responses,
and IT Support
The Stages of Globalization (From Thomas Friedman in The World is Flat)
• Globalization 1.0 (1492 to 1800)
• World went from large to medium-size
• All about countries and muscles
• Key agents of change: brawn and horsepower
• Globalization 2.0 (1800 to 2000)
• World has shrunk from medium to small-size
• Key agent of change: multinational companies
• First half: global integration powered by falling
transportation costs (steam engine and railroad)
• Second half: global integration powered by falling
telecommunications costs (telephone, PC, satellites,
fiber-optic cable)
• Globalization 3.0 (2000 – now)
• World is now tiny (everyone is everyone else’s close
neighbor)
• Competitive playing field is being leveled
• Key agent of change: software, in conjunction with
– the global fiber-optic network
• Enabling people to collaborate and compete globally
 Business Pressures,
Organizational Responses,
and IT Support
Consider the rapid technological innovation of the Apple iPad
(www.apple.com/ipad).

• Apple released its first iPad in April 2010.

• Apple released its iPad Mini in November 2012.

• In November 2013 Apple released its iPad Air.

• In November 2015 Apple released its iPad Pro.

• In 2019, Apple released the latest versions of its iPad (7th generation),
iPad Mini (5th generation), and iPad Air (3rd generation).

• In 2020, Apple released the latest version of its iPad Pro (4th generation).
 Business Pressures,
Organizational Responses,
and IT Support
Technological Innovation and Obsolescence

Obsolescence: Innovation:
Pony Express Telegraph

Obsolescence: Innovation:
Horse and Buggy Ford Model T
 Business Pressures,
Organizational Responses,
and IT Support
Organizational Responses
• A Strategic Systems provide advantages that enable
organizations to increase market share and/or
profits, to better negotiate with suppliers, or prevent
competitors from entering their markets.
• Customer Focus is the difference between attracting
and keeping customers by providing superb
customer service to losing them to competitors.
• Continue….
 Business Pressures,
Organizational Responses,
and IT Support
Organizational Responses (Continue…)
• Make-to-Order is a strategy of producing
customized products and services.
• Mass Customization is producing a large quantity of
items, but customizing them to fit the desire of each
customer.
• Reebok and Bodymetrics provide excellent
examples of mass customization.
• E-business and E-commerce: Buying and selling
products and services electronically. E-business is a
broader concept than e-commerce.
4. COMPETITIVE ADVANTAGE
AND STRATEGIC IS
 Competitive Advantage
and Strategic IS
• Competitive Advantage: An advantage over
competitors in some measure such as cost, quality,
or speed, leads to control of a market and to larger-
than average profits.
• Strategic Information Systems (SIS) provide a
competitive advantage by helping an organization to
implement its strategic goals and to increase its
performance and productivity.
 Competitive Advantage
and Strategic IS
Porter’s Competitive Forces Model

Figure 2.3
Porter’s Competitive
Forces Model
 Competitive Advantage
and Strategic IS
Porter’s Competitive Forces Model:
• Threat of entry of new competitors is high when it is
easy to enter a market and low when significant
barriers to entry exist.
 A barrier to entry is a product or service feature
that customers expect from organizations in a
certain industry.
 For most organizations, the Internet increases the
threat that new competitors will enter a market.
• The bargaining power of suppliers is high when
buyers have few choices and low when buyers have
many choices.
 Internet impact is mixed. Buyers can find
alternative suppliers and compare prices more
easily, reducing power of suppliers.
 On the other hand, as companies use the Internet
to integrate their supply chains, suppliers can lock
in customers.
 Competitive Advantage
and Strategic IS
Porter’s Competitive Forces Model:
• The bargaining power of buyers is high when buyers
have many choices and low when buyers have few
choices.
 Internet increases buyers’ access to information,
increasing buyer power.
 Internet reduces switching costs, which are the
costs, in money and time, to buy elsewhere. This
also increases buyer power.
• The threat of substitute products or services is high
when there are many substitutes for an organization’s
products or services and low where there are few
substitutes.
 Information-based industries are in the
greatest danger from this threat (e.g., music,
books, software). The Internet can convey digital
information quickly and efficiently.
 Competitive Advantage
and Strategic IS
Porter’s Competitive Forces Model:
• The rivalry among firms in an industry is high when
there is fierce competition and low when there is not.
PORTER FIVE COMPETITIVE FORCES Airlines Industry, Indonesia, 2021
Although there are several vehicles can replace airplane, such as car, train, or boat, but if passenger already
choose airplane, it means their destination place is quite far away and it is more convenience if they use airplane
Threats of
Substitute
Products
LOW

• Airlines must
• Most of Airlines
have strong
Rivalry among offer similar
relationship with
Existing Firm services and
their supplier Suppliers Buyers limited
because of Power HIGH Power
differentiation
machine HIGH Similar Services but HIGH • Low switching
equipments Have their own
cost, customers
supply that has to segment
are easy to
be in high quality
change the
Airline that they
want to use

Threats of
New Entrants
LOW

It is difficult for new airlines to compete with existing airlines in the market, because in the
beginning, the airlines must build relationship with customers 35
 Competitive Advantage
and Strategic IS
Porter’s Value Chain Model
• Primary activities are those business activities that
relate to the production and distribution of the firm’s
products and services, thus creating value for which
customers are willing to pay.
• Support activities do not add value directly to a firm’s
products and services, but support the primary
activities.
 Competitive Advantage
and Strategic IS

Open your book, Page:62

Figure 2.4 Porter’s Value Chain Model.
 Competitive Advantage
and Strategic IS
Strategies for Competitive Advantage:
• Cost Leadership. Produce products and/or services at
the lowest cost in the industry.
• Differentiation. Offer different products, services or
product features.
• Innovation. Introduce new products and services, add
new features to existing products and services or
develop new ways to produce them.
• Operational Effectiveness. Improve the manner in
which internal business processes are executed so that
a firm performs similar activities better than its rivals.
• Customer-orientation. Concentrate on making
customers happy.
 Competitive Advantage
and Strategic IS
Strategies for Competitive Advantage

Figure 2.5
Strategies for
Competitive
Advantage
 Individual
Assignment – session 25&26

• The student write an article based on selective topic from IS

Concept course (min 450 words with Ms.doc format (.doc) )
• Every members in one group must choose different topics
to write the article
• Students submit softcopy upload in Binusmaya – Individual
Assignment Menu
o File name Format: StudentID_StudentName_Title of the
article
o Deadline : Session 26 IS Concept course
 Session 25 Preparation : Video
Presentation

• Student already have group (4-5 persons/ group)

• Choose 1 topic in IS Concept course
• Create Short Video about the selected Topic (3-4
minutes), which include :
 Definition
 Characteristics
 Flow/example
 Etc
• Submit your video in Binusmaya (Group
Assignment)
 Credit that must be displayed after video playing :

• CREATED BY :
• STUDENT ID – FULL NAME
• STUDENT ID – FULL NAME
• STUDENT ID – FULL NAME
• STUDENT ID – FULL NAME
• STUDENT ID – FULL NAME

IS CONCEPT COURSE LECTURER AND CLASS :

LECTURER NAME-CLASS
Credit that must be displayed after video playing :
 Session 3 & 4 Preparation

• Watch this video about Porter’s Five Forces

How to Create Porter Five Forces.mp4

• Watch this video about Porter’s Value Chain

How to Create Porter's Value Chain.mp4

• Take a note at home after watch the video, bring

it into session 3&4
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