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Management of Information Systems: 45-870

Management of Information Systems: 45-870. Mini-3 Spring 2000. Agenda. Schedule Reminders Return of Mid-Term Exam Discussion of IT Exercise III Extending Intranets: Extranets Using IT to create Strategic Advantage. Schedule Reminders. Sonoco I/T Diagnosis

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Management of Information Systems: 45-870

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  1. Management of Information Systems: 45-870 Mini-3 Spring 2000

  2. Agenda • Schedule Reminders • Return of Mid-Term Exam • Discussion of IT Exercise III • Extending Intranets: Extranets • Using IT to create Strategic Advantage

  3. Schedule Reminders • Sonoco I/T Diagnosis • Due no later than Tuesday, 22-Feb, 2000, by start of class • Ford I/T Strategy Analysis • No assignment due • Article and discussion questions will be distributed on Tuesday, 22-Feb • We will discuss the article and discussion questions informally in class on 29-Feb

  4. Schedule Reminders • Guest Speakers • Feb 22, Mr. Alberto Espinosa, CEO of Mayor Maynot Deliver, Inc. to discuss: • ASP and web databases • Technical aspects of IT Exercise III • Feb 24, Mr. Rob Trollinger, Principal, AT Kearney, to discuss: • Developing an I/T Strategy

  5. Return of Mid-Term Exam • Grading/Curve • Answers to Questions • Re-grade request policy: ** Requests for re-grade of any item on the exam are to be made in writing only. Requestors should return the exam to Prof. Slaughter with a brief explanation of why they believe an item should be re-graded. **

  6. IT Exercise III: Web Business Opportunity • Scenario: • You (and your team) own a small, high quality restaurant in the East End (of Pittsburgh) • Current focus on individual on-site diners • Decline in on-site dining clientele • Offer limited delivery service

  7. IT Exercise III: Web Business Opportunity • The Opportunity: • Proposal from Mr. Espinosa, CEO of Mayor Maynot Deliver, Inc. • New Internet Start-up company • East End’s only Internet-enabled multi-restaurant ordering and delivery service • Delivers high quality food (generally not fast food) from best restaurants to homes, offices, and hotels • Customer Profile: higher incomes, professionals, business travelers, graduate students, etc. Also larger groups or corporate customers.

  8. IT Exercise III: Web Business Opportunity • Mayor Maynot Deliver, Inc.: • provides its own delivery service (customers charged a flat 15% delivery fee) • Menu items at same prices as in the restaurants • Restaurants listed in company’s web directory (where customers can order online on web pages created by each restaurant) • Restaurants included in company’s delivery service • Restaurants must pay a monthly fee of about (3-5%) of total sales volume ordered over the web each month

  9. Mayor Maynot Deliver, Inc. Website • Prototype web site for company at: http://softrade-11.gsia.cmu.edu/data/restaurants.html • Each restaurant responsible for creating and updating its menu order page and information in the company’s database • Company responsible for creating and maintaining other pages on the web site

  10. Your Assignment • Evaluate this business opportunity and decide whether to accept or reject it • Technical Portion: • Register your restaurant name and type on the company’s web site • Register up to 20 different menu items and prices for your restaurant on the company web site • Create a web order page for your restaurant using FrontPage (see and follow exactly the technical instructions!) • Your web page should be attractive to customers and should be functional in terms of taking orders

  11. Your Assignment • Technical Portion (cont’d): • Address the following questions • Strengths/weaknesses of the company’s design for the web site • What functionality to add and why • What technical concerns do you have and how should Mayor Maynot Deliver, Inc. address them

  12. Your Assignment • Strategic Portion • Address the following questions: • How could this opportunity improve competitive advantage for your restaurant • What strategic challenges/threats does this opportunity represent • How would your business change if you accepted this opportunity • Will you accept this opportunity • What would you want to modify or change in the proposal

  13. Web Fair • Assignment due at the beginning of class on Thursday, March 2, 2000 • Create a web page on your team web with your answers to the technical and strategic questions. This page should have a hyperlink pointing to your restaurant order page • Your team will demonstrate your restaurant order page at the “web fair” and will explain to Prof. Slaughter whether you’ve decided to accept Mayor Maynot Deliver’s proposal and why

  14. Internet Web Sites Linking Intranets to Extranets, the Internet Internet Links Engineering Server Marketing Server CORPORATE INTRANET Extranet Links Extranet Links Suppliers Customers Legacy Data Server H.R. Server Intranet Links Other Company Locations

  15. Extranets • What is an Extranet? • Examples:

  16. Extranets • Types of Extranets: • VANs: • EDIs: • VPNs:

  17. Extranets • How does an Extranet work?

  18. Extranets • Tunneling: • Encryption: • Protocols used in Tunneling:

  19. Extranets • Firewalls: • How do Firewalls work:

  20. Extranets • Benefits of Extranets: • Key Issues of Extranets:

  21. IT for Strategic Advantage • How can IT be used to create competitive advantage • Competitive Forces • The Value Chain • Using the Internet Strategically

  22. What is a Strategy? Astrategy is a definition of a business. It specifies the product / service to be provided and the segments of the market to which that product / service is directed. It defines the channels of distribution to the market segments and the kind of production processes that are required. Finally, it defines how the necessary capital will be provided and the kinds of people and organizational structure needed.

  23. Threat of New Entrants Bargaining Power of Suppliers Rivalry Among Existing Competitors Bargaining Power of Customers Threat of Substitutes The Competitive Environment

  24. Competitive Forces New Entrant Supplier Customer Competitor Substitute Differentiation Cost Innovation Competitive Strategies Growth Alliance Other Strategies

  25. Geographic Barriers Time Barriers Breaking Business Barriers with IT Cost Barriers Structural Barriers How does IT impact Competitive Forces?

  26. How IT can be used to implement competitive strategies • Improve Business Processes • Promote Business Innovation • Lock in customers and suppliers • Create switching costs • Raise barriers to entry • Leverage a strategic IT platform • Develop a strategic information base

  27. Examples • IT for cost leadership: • IT to differentiate: • IT to innovate: • IT to expand: • IT to foster alliance:

  28. The Value Chain • Value Chain = system of interdependent, linked activities • Competitive Advantage = f(how well value chain activities are defined, integrated, executed) • Primary Activities: inbound logistics, operations, outbound logistics, marketing & sales, service • Support Activities: firm infrastructure, human resource management, technology development, procurement

  29. Generic Value Chain FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT SUPPORT ACTIVITIES TECHNOLOGY DEVELOPMENT PROCUREMENT INBOUND LOGISTICS OUTBOUND LOGISTICS MARKETING AND SALES OPERATIONS SERVICE PRIMARY ACTIVITIES

  30. IT in the Value Chain Information System Technology Planning and Budgeting Technology Office Technology FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT Training Technology Motivation Research Product Technology Computer-Aided Design Pilot Plant Technology Software Development Tools Information Systems Technology TECHNOLOGY DEVELOPMENT Information Systems Technology Communication Systems Technology Transportation Systems Technology PROCUREMENT • Basic Process • Technology • Materials • Technology • Machine Tools • Technology • Materials Handling • Technology • Packaging • Technology • Testing Technology • Transportation • Technology • Material Handling • Technology • Storage and • Preservation • Technology • Communication • System Technology • Testing Technology • Transportation • Technology • Material Handling • Technology • Packaging • Technology • Communications • Technology • Diagnostic and • Testing Technology • Communications • Technology • Multi-Media • Technology • Communication • Technology MARKETING AND SALES SERVICE INBOUND LOGISTICS OUTBOUND LOGISTICS OPERATIONS

  31. Levels of use of IT for Competitive Advantage Levels Toward Use of IT To Create Competitive Advantage Level 1: Strategic Level 2: Offensive Level 3: Defensive Level 4: Cost-Justified Level 5: Controlled

  32. Question • How would you classify these organizations in terms of their level of investment in IT? • FedEx • Ford • Amazon.com • Walmart • Federal Government • Pennsylvania State Government • PNC Bank • Wells Fargo Bank

  33. Sonoco Case • For the Sonoco Case, in answering the last set of questions: • How would you classify the role/level of IT in Sonoco, using these levels of competitive advantage? • In 1980’s/1990’s? • With new business strategies? • With an e-commerce strategy?

  34. Using the Internet Strategically HIGHER IMPACT Product/Service Transformation Global Market Penetration Performance Improvement In Business Effectiveness Cost and Efficiency Improvements LOWER IMPACT HIGHER IMPACT

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