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Chapter 2 Information Systems for Competitive Advantage

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Best-Cost Provider (middle-of-the-road) Reasonable quality, competitive prices ... Cost-benefit analysis for a web-based system ... in Being at the Cutting Edge ... – PowerPoint PPT presentation

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Title: Chapter 2 Information Systems for Competitive Advantage


1
Chapter 2 Information Systems for Competitive
Advantage
  • Information Systems Today
  • Leonard Jessup and Joseph Valacich

2
Chapter 2 Objectives
  • Understand the IS in automation, organizational
    learning, and strategic support
  • Understand IS for strategic organizational
    success
  • Understand the need for making an IS business
    case
  • Understand technological innovations to improve
    competitive advantage

3
Why Use Information Systems?
  • Automating doing things faster
  • Organizational learning doing things better
  • Supporting Strategy doing things smarter

4
Automating Doing Things Faster
  • Technology is used to automate a manual process
  • Doing things faster, better, cheaper
  • Greater accuracy and consistency
  • Loan application example
  • Manual processing
  • Technology-supported process
  • Completely automated

5
Organizational Learning Doing Things Better
  • Going beyond automation
  • Involves learning to improve the day-to-day
    activities within the process
  • Looking at patterns and trends
  • Organizational Learning
  • Using acquired knowledge and insights to improve
    organizational behavior
  • Total Quality Management (TQM)
  • Monitoring an organization to improve quality of
    operations, products, and services

6
Supporting Strategy Doing Things Smarter
  • Strategic Planning
  • Create a vision setting the direction
  • Create a standard performance targets
  • Create a strategy reaching the goal

7
Types of Competitive Advantage
  • Low-Cost Leadership
  • Best prices on goods/services
  • Examples Dell, Target
  • Differentiation
  • Best products or services
  • Examples Porsche, Nordstrom, IBM
  • Best-Cost Provider (middle-of-the-road)
  • Reasonable quality, competitive prices
  • Example Wal-Mart

8
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9
Information Systems for Competitive Advantage
  • A clear strategy is essential
  • Sources of competitive advantage
  • Best-made product
  • Superior customer service
  • Lower costs
  • Superior manufacturing technology
  • Shorter lead times
  • Well-known brand name
  • High value per cost

10
Information Systems for Competitive Advantage
  • IS and Value Chain Analysis
  • VC Analysis adding value within an organization
  • Organizations as big input/output processes
  • IS can automate many value chain activities
  • Purchased supplies inbound logistics
  • Operations
  • Outbound logistics
  • Sales and marketing
  • Service

11
Organizational Value Chain
12
Information Systems for Competitive Advantage
  • The Role of IS in Value Chain Analysis
  • IS competitive advantage in VCA
  • Internet link with suppliers, dealers
  • Extranets using the Internet for B2B
    interactions
  • Computer-aided manufacturing systems
  • Web site with online product ordering
  • Customer service response system
  • Computer-aided design

13
Information Systems for Competitive Advantage
  • The Technology/Strategy Fit
  • An IS implementation should create a significant
    organizational change consistent with the
    business strategy
  • Business Process Reengineering (BPR)

14
Making the Business Case for a System
  • The Productivity Paradox (how to quantify gains?)
  • Measurement problems
  • End-user development
  • Decision support systems (DSS)
  • Strategic systems
  • Time lags
  • Redistribution
  • Mismanagement

15
Making the Business Case for a System
  • Making a Successful Business Case
  • Arguments Based on Faith
  • Arguments Based on Fear
  • Industry factors
  • Stage of maturity
  • Regulation
  • Nature of competition or rivalry
  • Arguments Based on Facts
  • Cost-benefit analysis for a web-based system
  • Recurring/nonrecurring costs
  • Tangible/intangible costs
  • Tangible/intangible benefits

16
Presenting the Business Case
  • Know the Audience
  • The IS Manager
  • Company Executives (VPs and higher)
  • Steering Committee
  • Convert Benefits to Monetary Terms

17
Presenting the Business Case
  • Devise Proxy Variables
  • Measure changes in terms of perceived value
  • Develop a Work Profile Matrix
  • Time spent on each job, each type of work
  • Measure What Is Important to Management
  • Conoco Making a Business Case
  • Changing Mindsets About Information Systems

18
Competitive Advantage in Being at the Cutting
Edge
  • Deploying new technologies faster, better, and
    cheaper than competitors
  • Using new technology in innovative ways

19
Competitive Advantage in Being at the Cutting
Edge
  • The Need for Constant IS Innovation
  • On the lookout for new technologies that impact
    business

20
Competitive Advantage in Being at the Cutting
Edge
  • E-Business Innovation Cycle
  • Choosing enabling/emerging technologies
  • Matching with economic opportunities
  • Executing business innovation for growth
  • Assessing client value

21
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22
Competitive Advantage in Being at the Cutting
Edge
  • Implications of E-Business Innovation Cycle
  • Begin with technology when considering successful
    business strategies
  • Marketing is secondary to IT
  • Emerging technology cycle is ongoing

23
Competitive Advantage in Being at the Cutting
Edge
  • Terms and Concepts
  • E-commerce (Internet-related)
  • E-business (any IT that supports business)
  • Enabling technologies
  • Economic opportunities

24
Competitive Advantage in Being at the Cutting
Edge
  • The Cutting Edge vs. The Bleeding Edge
  • Information systems are often bought from, or
    built by, someone else
  • An organization typically cannot patent an IS
  • Rivals can copy emerging information systems
  • Therefore, ones IS competitive advantage can be
    short-lived

25
Competitive Advantage in Being at the Cutting
Edge
  • Requirements for Being at the Cutting Edge
  • Consider Porters competitive forces
  • To deploy emerging systems well
  • Organization must adapt well to change
  • Human capital available for deployment
    (knowledge, time, skills)
  • Tolerance of risk and uncertainty
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