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Chapter 13. Information Technology For Management 5 th Edition Turban, McLean, Wetherbe Lecture Slides by A. Lekacos, Stony Brook University John Wiley & Sons, Inc. IT for Strategy and Planning. Learning Objectives.

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Chapter 13

Information Technology For Management 5th Edition

Turban, McLean, Wetherbe

Lecture Slides by A. Lekacos,

Stony Brook University

John Wiley & Sons, Inc.

IT for Strategy and Planning


Learning Objectives

  • information systems.

  • IT

  • information technology

  • 4 information systems information systems plans business plans

  • information requirement , project payoff portfolios, resource allocation, project planning.


  • IT alignment.

  • IT architectures information architecture.

  • major issues information systems planning.

  • Web-related IT planning application portfolio


Dells direct path to success

  • The Problem:

  • (make-to-forecast strategy) (value chain) inbound logistics outbound logistics

  • () (lost sales) (inadequate supply) (over supply) profit


  • The solution:

  • make-to-forecast strategy direct business model () Dell mass-customization build-to-order (BTO) strategy

  • Dell Dell

  • BTO Dell Dell 1 1-5


  • Dell e-commerce Web 1996 Dell Web 1 USD

  • build-to-order


  • Results:

  • Dell

  • BTO strategy

  • Dell 40 BUSD


12.1) IT Strategic Alignment

  • Strategic Information System EIS, OIS, TPS, KMS goals, processes, products, environmental relationships

  • (Competitive Advantage)

    • Value Chain Data

  • (Improving Core Competency)


maps crafts

  • SWOT Analysis

  • Product Life Cycle

  • Quality Preference


CIO ()


The relationship among business, IS and IT strategies


alignment IT 2

  • 1) IS functions strategy, structure, technology processes IS Business Goal IS Alignment

  • 2) IS Strategy Organizational Strategy IS IS strategic alignment


13.2) Competitive forces model

  • Michael Porter 5

Michael E. Porter

( Competitive Strategy Competitive Advantage Michael E. Porter)


  • (force)

  • (Perfect competitive)


  • ( )


Porters Competitive 5 Forces Model

  • Porter (Competitive forces) 5

  • 1) ()

  • 2) ()

  • 3)

  • 4)

  • 5)


Porter's Five Forces Model

Industry competitors

()

Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)


Porter's Five Forces Model

1

Industry competitors

Rivalry among

existing firms

Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)


Porter's Five Forces Model

2

1

Potential

entrants

Threat of

new entrants

Industry competitors

Rivalry among

existing firms

Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)


Porter's Five Forces Model

3

2

1

Potential

entrants

Threat of

new entrants

Industry competitors

Rivalry among

existing firms

Threat of

substitutes

Substitute

products

Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)


Porter's Five Forces Model

3

1

2

4

Potential

entrants

Threat of

new entrants

Industry competitors

Rivalry among

existing firms

Bargaining power

of suppliers

Suppliers

Threat of

substitutes

Substitute

products

Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)


Porter's Five Forces Model

1

3

4

2

5

Potential

entrants

Threat of

new entrants

Industry competitors

Rivalry among

existing firms

Bargaining power

of suppliers

Bargaining power

of buyers

Suppliers

Buyers

Threat of

substitutes

Substitute

products

Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)


..

5 ()

()

()


Porters five forces Model


1) (Threat of New Entrance)

  • ?


(1)

  • 1) Economies of scale

  • 2) Proprietary product differences

  • 3) Brand identity


(2)

  • 4) Switching cost

  • 5) Capital requirement

  • 6) Access to distribution


(3)

  • 7) Absolute cost advantage

  • (Vertical Integration) CP ()

  • 8) Proprietary learning curve

  • 9) Access to necessary inputs


(4)

  • 10) Proprietary low-cost product design

  • 11) Government policy

  • 12) Expected retaliation


Porters five forces Model


2) (1)

  • 2.1) Differentiation of inputs

  • Supplier

  • 2.2) Switching costs of suppliers and firms in the industry

  • supplier

  • 2.3) Presence of substitute inputs

  • Supplier

  • 2.4) Supplier concentration

  • Supplier Supplier


(2)

  • 2.5) Importance of volume to supplier

  • Supplier

  • 2.6) Cost relative to total purchases in the industry

  • ()

  • 2.7) Impact of inputs on cost or differentiation

  • 2.8) Threat of forward integration relative to threat of backward integration by firms in the industry.


Porters five forces Model


3) (1)

  • 3.1)

  • 1) Buyer concentration versus firm concentration

  • 2) Buyer volume

  • 3) Buyer switch costs relative to firm switching costs

  • 4) Buyer information


(2)

  • 5) Ability to backward integrate

  • 6) Substitute product

  • 7) Pull-through

  • ()


(3)

  • 3.2) (Price Sensitive)

  • 1) Price total purchase

  • 2) Product differences

  • 3) Brand identity

  • 4) Impact on quality/performance

  • /


(4)

  • 5) Buyer profits

  • ()

  • 6) Decision makers incentives


Porters five forces Model


4) (1)

  • 4.1) Relative price/performance of substitutes

  • /

  • 4.2) Switching costs

  • 4.3) Buyer propensity to substitute

  • Happy


Porters five forces Model


5) (1)

  • 5.1) Exit barriers

  • 5.2) Industry concentration

  • 5.3) Fixed costs/Value added

  • / ( )

  • 5.4) Industry growth


(2)

  • 5.5) Intermittent overcapacity

  • ()

  • 5.6) Product difference

  • ( )

  • 5.7) Switching cost

  • 5.8) Brand identity

  • ()


(3)

  • 5.9) Diversity of rivals

  • ()

  • 5.10) Corporate stakes


Competitor Analysis ?

  • 5 Porters five forces Model 5


Competitor Analysis ?

First Competitive Force

1) ( )

2) () ( )

3) ( SWOT Analysis)

4) ( )


We Analyze the Entry Barriers

1) ?( )

2) ?( )

3) () ?( Promotion )

4) ?( )

Second Competitive Force


We Analyze the Substitute Products

Third Competitive Force

1) ?( )

2) ?( )

3) ?( )


We Analyze the Supply Chain

Fourth & Fifth Competitive Forces

1) ?

2) ?

3) (transaction) ?

4) (capture) ?


  • (Web-based)

  • 5 Porter


Internet and its effect on Industry Structure

  • (-) (+)

( Strategy and Internet Michael E. Porter)


Internetand its effect on industry structure


1)

  • 1) (-)

  • 2) ( ) (-)

  • 3) (-)


2)

  • 1) (-)

  • 2) (-)

  • 3) () (-)

  • 4) (-)

  • ( - )


3)

  • 1) (+)

  • 2) (-)

  • + -


4) /

  • 1) Supplier Supplier (+/-)

  • 2) Supplier (, Broker) (-)

  • 3) (-)

  • 4) (-)

  • (-) (+) Supplier


5)

  • 1) (+)

  • 2) (end consumers) (-)

  • 3) ( Supplier) (-)


.

  • (-)

  • IT IT

  • IT at Work 13.2 Britannica Seeks to Compete with Advancing Technology page 524


Strategies for Competitive Advantages (1)

  • ()

  • 1) (Cost leadership strategy)

  • 2) (Differentiation strategy)

  • product feature


Strategies for Competitive Advantages (2)

  • 3) (Niche strategy)

  • 4) (Growth strategy)

  • 5) (Alliance strategy)

  • partnership, alliance, joint venture virtual company

  • 6) (Innovative strategy)

  • feature ( Table13.2)


Full Package Services


Strategies for Competitive Advantages (3)

  • 7) (Operational effectiveness strategy)

  • 8) (Customer orientation strategy)

  • happy

  • 9) (Time strategy)

  • 10) (Entry-barrier strategy)

  • Web


Strategies for Competitive Advantages (4)

  • 11) Supplier Buyer

    (Lock-in customer or supplier strategy)

  • /

  • 12) (Increase switching cost strategy)


(1)

  • 12

  • ) Supplier Buyer

  • )

  • )

  • )

  • ) ()

  • )


(2)


13.3) Porters Value Chain Model

  • (value chain model (Porter, 1985)) 2 : (primary activities) (support activities)

    • Inbound logistics (inputs)

    • Operations (manufacturing and testing)

    • Outbound logistics (storage and distribution)

    • Marketing and sales

    • Service


The Value Chain (Continued)

  • ()

    • The firms infrastructure (accounting, finance, management)

    • Human resources management

    • Technology development (R&D)

    • Procurement


The Value Chain (Continued)

Secondary Activities

Value

Primary Activities


The Airline Industry Value Chain


The Value Chain (Continued)

Internal

E-Billing

E-Payments


The Value System

  • Porter (value system) interorganizational informationsystems (IOSs)

  • Internet-based EDI systems strategic benefits

    • (PO to Receiving)

    • (Automated Replenishment)


Sustaining a Strategic Information System (SIS)

  • Strategic information systems

  • (inward systems) value chain


13.4) Strategic resources and capabilities

  • IT

  • 1)

  • 2) self service

  • IT resource-based view (RBV) 13.3

  • 13.3 IS 13.4 Technology resources, IT skills Managerial IT resources


Strategic Resources And Capabilities


13.5) IT Planning

  • IT planning IT (IT infrastructure) (applications portfolios)

  • IT (IT planning) IT (corporate IT planning)

  • Corporate IT planning IT infrastructure end user goals IT (Goal alignment)


  • IT

    • (Business-led approach) IT

    • (Method-driven approach) IS

    • (Technological approach) IT

    • (Administrative approach) IT steering committee.

    • (Organizational approach) IT (all stakeholders)


IT Planning A Critical Issue for OrganizationsContinued

IT 4 4

  • IT (Strategic IT planning) IT

  • (Information requirements analysis) strategic information architecture specific application development

  • (Resource allocation) IT application development resources operational resources.

  • (Project planning) specific IS projects.


IT Planning A Critical Issue for OrganizationsContinued

Applications portfolio computer applications information system department

The applications portfolio categorizes existing, planned, and potential information systems based on their business contributions.


Tools and Methodologies of IT Planning

  • IT planning model applications portfoliostrategic information systems(SIS)

  • IT : IT planning information systems applications

  • (industry, supply chain, competition)(competencies, value chain, organizational structure)(alignment).

  • Alignment


  • Thebusiness systemsplanning (BSP) model IBM two main building blocks information architecture

    • (Business processes)

    • (Data classes)

  • Stages Of IT Growth Model, 6 IT

    • Initiation.

    • Expansion (Contagion). applications

    • Control.

    • Integration.

    • Data administration.

    • Maturity. IT


Business System Planning (BSP) Approach


The stages of IT growth model


  • Critical success factors (CSFs) CSF (manufacturing, service, government) CSF :

    • ?

    • ?

    • critical factors?

    • ?

    • ?


Critical success factors-basic processes


  • Scenario planning scenario.


  • Goal

  • (Information requirements analysis) 2 infrastructures ( data warehouse data center), intranet, extranet, corporate partners

  • (Identifies high payoffs) IT

  • architecture


  • (Resource allocation) hardware, software, data networks communications, facilities, personnel, financial plans master development plan (requirements analysis phase)

    • infrastructures

    • outsourcing strategy.


Various tools exist for planning and control:

  • PERT & CPM

  • Gantt Charts

(project planning) specific applications vendor management and control outsources

We have to understand what we are going to do

We need to know the start and end dates

We need to know the resources

We need to know the tasks


13.6) Interorganizational and International IT Planning

  • Information technologyarchitecture

  • applications

    operational control

    management planning and control

    strategic planning

  • Applications oriented to various functional-operational activities

    MarketingR&D

    ProductionDistribution

  • It also includes infrastructure

    Databases

    Supporting software

    Networks


  • IT infrastructure infrastructure levels information intensity(the extent to which products or processes incorporate information)strategic focus(the level of emphasis on strategy and planning) IT infrastructure services

    • IT infrastructure services

    • IT infrastructure services

    • ( cross-selling) IT infrastructure services


  • IT strategic goals IT infrastructure services

  • IT architecture

    • Centralized computing:

    • Distributed computing:

    • Blended computing:


    • End-user configurations (workstations):

      • PC dumb terminals not smart

      • single-user PC

      • single-user PC PC

      • Workgroup PC l P2P network

      • PC LAN Wi-FI.

    • IT at Work 13.5 Institute of Technology Turns Its Focus on the Customer page539


    • IT

    • Planning for Interorganizational Systems (IOS)

    • IT Planning for Multinational Corporations legal, political, social environment, local systems.

    • Other Problems for IT Planning

      • Cost, ROI justification

      • Time-consuming process

      • Obsolete methodologies

      • Lack of qualified personnel

      • Poor communication flow

      • Minimal top management support


    Global Competition

    • global environment.

    • Global dimensions globalize

      • Product

      • Markets & Placement

      • Promotion

      • Where value is added to the product

      • Competitive strategy

      • Use of non-home-country personnel - labor

      • Multidomestic Strategy: Zero standardization along the global dimensions.

      • Global Strategy: Complete standardization along the seven global dimensions.


    E-Planning

    • Web-based systems IT strategic planning. IT planning E-planning EC infrastructure

    • E-planning

    • e-planning :

      • applications portfolio

      • risk analysis, the degree of risk in Web-based systems can be high

      • strategic planning issues such as the use of metrics (industry standards)

      • strategic planning must integrate, e-business and knowledge management

    • The Web environment is very turbulent

    • IT at Work 13.6 Market Research Company Benefits from Internet-Based Technology 541


    Application portfolio analysis for a toy distributor


    13.7 Managing the IS Department

    • CIO

    • CEO (Chief Executive Officer)

    • Web-based CIO 3

    • 1) Technology and its management are changing

    • 2) Executives attitudes are changing

    • 3) Interactions with vendors are increasing

    • CIO 8


    CIO Web-based

    • 1) CIO

    • 2) Web-based Business change technology change

    • 3) IT ( Web infrastructure) ( )

    • 4) Business Visionary business models Web Internet, Intranet extranet

    • 5)

    • 6)

    • 7) CIO

    • 8)


    The IS Department and End users

    IT at Work 13.7 Minesotas Department of Transportation Violates Procedures


    • IS Department End user:

    • 1) Let them sink or swim ()

    • 2) Use the stick ( end user computing )

    • 3) Use the carrot ( )

    • 4) Offer support ( end user computing )


    Fostering the IS Department/End-user Relationship

    • IS Department (Service Organization) IT Infrastructure enterprise end-user application IS Dept. end-user

    • IS Dept. IT

    • IS Dept. () () IT ( )

    • 1)Service-level Agreement

    • 2) The information center


    Service-level Agreement

    • Service-level Agreement (SLA) End-user IS Dept. IS Dept.

    • SLA

    • 1)

    • 2) ()

    • 3)

    • 4)

    • 5) SLA Owner


    • 6) SLA

    • 7)

    • 8) SLA

    • 9)


    The Information Center

    • information center (IC) ( users service center, technical support center IS help center) IBM Canada 1970

    • IC


    Managerial Issues

    • Sustaining competitive advantage.

    • Importance.

    • IT IS management IT 1) strategic planning 2) information requirements analysis 3) resource allocation 4) project planning


    Managerial Issues

    • Organizing for planning.

    • :

    • IS Department?

      • How should IT be organized? Staffed? Funded? How should human resources issues, such as training, benefits, and career paths for IS personnel, be handled?

    • ?

      • The competition? The economy? Governmental regulations? Emerging technologies?

    • strategic direction host organization?

      • What are its key objectives?

      • Are they agreed upon and clearly stated?


    Managerial Issues

    • Finally, with these strategies and objectives and the larger environment what strategies and objectives should IS pursue?

      • What policies should it establish?

      • What type of information architecture should the organization have: centralized or not centralized?

      • How should investments in IT be justified?

    • The answer to each of these questions must be tailored to the particular circumstances of the ISD and the larger organization of which it is a part.


    Managerial Issues

    • Fitting the IT architecture to the organization.

    • IT architecture IT

    • IT architecture planning.

    • IT IT IT () ( ) IT secondary infrastructure issues


    Managerial Issues

    • IT policy

    • IT architectures corporate guidelines IT cost-benefit IT architectural goals

    • IT


    Managerial Issues

    • Ethical and legal issues.

    • IT Supply chain


    Managerial Issues

    • IT strategy.

    • IT :

    • (1)

    • (2)

    • (3)


    13

    • .


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