Building Networked Businesses How does IT effect: where you want to be and how you get there

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Building Networked Businesses How does IT
effectwhere you want to be and how you get
there

• Chapter 3 Module II

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A New World

• IT shapes what the future can be
• Allows for a future with different possibilities
• Products services
• Ways of adding value to stakeholders
• Ways of relating to the firm, and firm relating
  to others
• IT shapes how you get to that future
• Has a role in taking you that future, with
  different
• Organizational structure
• Management possibilities
• Computing and communications possibilities

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A New World

• The Need for new capabilities -- what companies
  and their stakeholders are getting is not
  measuring up to what is needed, and what is
  possible
• Is History repeating itself? matrix
  organization, etc.
• Blueprint for a Networked Organization see fig.
  3.3
• Building Value Networks deciding how you are
  going to organize your companys value network

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Why Do We Need Big Little Companies?Because
big companies cant deliver what customers want,
and neither can small companies

• Big Companies
• Size
• Reach
• Resources

• Small Companies
• Flexibility
• Responsiveness
• Closeness to customers

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Big Companies

• What characterizes them?
• Organized by function how does info flow?
• Committed to efficiency
• Operates with controls
• Pyramidal structure
• Who is in the middle of that pyramid, and what do
  they do?
• Risk reduction appropriate for a stable
  environment

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The Need for New Capabilities Organization vs.
Environment

• Which strategy to pursue? (figure 3.1)
• What is ITs impact on strategy? -- enables new
  targets (i.e., visions of the future), and new
  ways of operating to get to that future
• What is the IT-business linking strategy?
• How to combat competitive forces?/ How to
  transform the value chain?

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What does an organization look like that can
operate in this quadrant?
Introduction and Chapter 1 Powerpoints
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Is History Repeating Itself?

• Information Requirements vs. Business Decision
  Making Requirements ( fig 3.2)
• Porters three generic strategies (80)
• cost leadership, differentiation (broad target)
• focus (cost / differentiation / or both)
• Treacy and Wiersema (93)
• Value (product leadership, operational excellence
  and customer intimacy)

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Blue Print for a Networked Organization

• Operating and Innovative
• Managing and Learning (Traditional,
  Entrepreneurial and Networked)
• Leading and Engaging(Traditional, Entrepreneurial
  and Networked)

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Blueprint for a Networked Organization (Cont)

• Framework of Strategic Relevance Categories
  (Strategic Grid)
• Support (current low/ future low)
• Factory (high/low)
• Turnaround (low/high)
• Strategic (high/high)
• What are general implications of location on
  Strategic Grid? (5)

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IT-Business Linking Strategies

• Strategies for linking IT resources to the
  organization based on strategic relevance
  analysis (6, 7)
• centrally planned
• leading edge
• free market
• monopoly
• scarce resource
• necessary evil

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Analyzing Competitive Forces

• Forces driving industry competition (Porter, 80)
  (8)
• Threat of new entrants
• Bargaining power of Buyers
• Bargaining power of Suppliers
• Threat of Substitute Products or Services
• Rivalry Among Existing Firms

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Search For Opportunity

• Can IT Build barriers to entry?
• Can IT Build in Switching Costs?
• Can IT Change the Basis of Competition?
• Can IT Change the Balance of Power in Supplier
  Relationships?
• Can IT Technology generate New Products?

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Building Value Networks

• Inbound Logistics
• receiving/storing the materials automated
  warehouse
• Operation and product Definition
• transforming inputs into outputs through flexible
  manufacturing
• Outbound Logistics
• warehousing and distributing the product
• Marketing and Sales
• telemarketing laptops for sales force

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Analyzing the Value Chain

• After Sales Service
• remote servicing of equipment computer
  scheduling and routing of repair trucks
• Corporate Infrastructure
• planning, finance, legal, quality management
• Human resource management, Technology
  Development, Procurement
• training, improving manufacturing process, etc

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Risks of Info Systems Success

• Systems that change the basis of competition to a
  companys disadvantage?
• Continued enhancement of product/service to
  maintain competitive position
• Systems That Lower entry barriers
• Systems that Bring on Litigation or Regulation
• United and American reservation systems -- 80 of
  travel agents
• Systems That Increase Customer/Supplier Power

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Risks - Continued

• Bad Timing
• customers not ready to accept change
• Investments that turn out to be Indefensible and
  fail to produce lasting advantages
• replication by competitors
• Systems that Pose Immediate threats to Large,
  Established Competitors
• Inadequate Understanding of Buying Dynamics
  across Markets, Culture Lag
• failure of electronic home banking?

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The Challenge A New Point of View Is Required

• Planning Issues
• IT planning must be in line with competitive
  impact of the expenditures
• Confidentiality and Competition
• should IT plans be shared?
• Evaluating Expenditures
• IT-Management Partnership

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Effects of IT on CompetitionKey questions

• What is our business?
• How can IT add value to our business?
• Competitive Analysis
• Who are our most important competitors now and in
  the future?
• Who could provide same products/services?

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Effects of IT on CompetitionKey questions

• How can IT be used to integrate our value chain?
• Can we use IT to create/raise the entry barriers?
• Can IT help us to compete in a new (or changing)
  environment?
• What are the risks of IT-enabled strategies?
• Are we willing to undertake these risks?