Session 1

1. Session 1 Introduction & Strategy

2. Housekeeping Website Lecture preparation Syndicate assignment Individual assignment Exam Questions or concerns?

3. Course Outline

4. Preconceptions? What are your preconceptions of the course? What are you wanting to learn? Maybe we can incorporate some of it

5. Course Objectives • You won’t get all the answers here – we’re not even going to cover all the issues – I don’t know all the answers anyway! • We’ll discuss practical stuff - you won’t be inundated with theory or models • You won’t be taught how to program • We will grapple with some of the key issues • Hype and buzzwords are discouraged – let’s move away from acronyms - KMACYOYO • Critical thinking and straight talking is encouraged • Some preparation is a requirement if we are to achieve anything

6. Without knowing your exact ages, it is likely that • many of you …. • grew up in the era of email and the Internet • have had laptops and cell phones since you were young • speak a different language from your bosses • type faster than you can write • are social media savvy and are able to multi task (tech-wise at least) • This sets you apart from many who are older • than you in the work place

7. How old do you have to be to be “in touch”? How old before you’re out of touch?

8. Let’s talk Strategy

9. Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations. • Where is the business trying to get to in the long-term (direction) • Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope) • How can the business perform better than the competition in those markets? (advantage) • What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources) • What external, environmental factors affect the businesses' ability to compete? (environment) • What are the values and expectations of those who have power in and around the business? (stakeholders) • Johnson and Scholes

10. IT Strategy Operational view IT has to keep the organisation ticking over at an operational level This is easier said than done, as: • Business continually moves the goal posts • Technology changes on a day to day basis – think: • Speed, performance and throughput – PCs do today what mini and even mainframe computers did decades ago • Facebook • Social media • Utube • Smart phones & tablets - quad core !!! • Micro SD cards 1, 2, 4, 8, 16, 32, 64, 256 GB !!!

11. IT Strategy Traditional strategic view IT must deliver the goals and objectives of the corporate strategy The board determines the corporate strategy and the IT EXCO develops an IT strategy that will deliver the aspirations and objectives of the above determined corporate strategy IT is not really a consideration in determining the corporate strategy. The board has an expectation that the various business units will pull together to deliver the strategy.

12. IT Strategy Increasingly …. IT should be a key determinant and enablerof corporate strategy. This elevates IT’s role from merely implementing the corporate strategy to being a key contributor in the formulation of that strategy.

13. What does Michael Porter say? Operational effectiveness is not strategy “… they are both essential to superior performance, but they work in different ways. A company can outperform its rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers and or create comparable value at a lower cost …”

14. IT over the ages Data processing (accounting, inventory, etc) ATMs Electronic Data Interchange (EDI) Electronic banking - Nedtel Internet banking Commercialization of the Internet Commercialization of Email Depiction of eras – dates are not precise Online transacting Facebook Utube Twitter Punch cards Green screen PC Mobile 1960s 1970s 1980s 1990s 2000s

15. What does this mean? • When Neil Armstrong walked on the moon the prevailing commercial technology was punch cards • If you wrote a thesis in the 70’s, you would have done so on a typewriter • If you had written a thesis in the early 80’s you would have done so on a mainframe word processor • Visicalc (ever heard of it?) was developed in the eighties for PCs • Prior to the late nineties most people paid their rates and taxes at the city council’s offices and their phone bills at the Post Office

16. HP 9845C – HP 9836 OS HP Proprietary 75% code rewrite Continually rewriting even while developing 80s IBM PC - AT DOS 0% code rewrite M I C R O S O F T 1990s 2000s Windows 0% code rewrite 1990s 2000s .Net 0% code rewrite

17. Some of the game changers • Access to information (WWW) • Email • Banking • Travel • Online shopping • E-Books • Social networks • B2B • Social media

18. Internet Banking • Before • Cheques • Post office • OTC • ATMs • After • Who uses a cheque book? • When last did you visit a bank? • When last did you receive a cheque? • Prohibitive OTC transaction fees !!!

19. Internet Banking . Brick & mortar Electronic transactions OTC & direct dial-up Internet banking 1990s 2000s

20. Travel • Online bookings: • Transport • Accommodation • Discounted parking at the airport • Theatre • Museums • Access to: • Images • Google street maps – “walk” from the station to your hotel • Weather • Events • General information

21. Internet Shopping • How has Internet shopping changed our lives? • Instead of walking or driving from shop to shop to compare products and prices we now do this at home • In many cases, we conclude the purchase on the Internet – particularly for undifferentiated products such as books, CDs, groceries, etc • We may well still visit the stores, but we do our research at home – think cars, computers, photographic equipment, etc • Companies that are doing this well include Alibaba,Amazon,Ebay, Itunes, Woolworths Food, kalahari.net, Pricecheck, …

22. Some Problems • Some industry players are shooting themselves in the foot by making things too flexible and hence too complicated • Booking with some low cost airlines can be excruciating: • Fare • Taxes • Fees • Baggage checking fees • Credit card fees • Charging per Kg for passengers – Samoa – how are they going to manage this? In the end you want to run a mile!

23. The IT legacy in many companies? • During the data processing era, the object was to computerise the company’s accounts • Today, in many big companies, IT still falls under the CFO! • an accountant • heading the organisation’s potentially most influential department • What training does the average accountant have in IT or in IT strategic thinking?

24. What are the opportunities? • Where will the likes of Utube, Facebook and Twitter take us? • Health • Crime fighting • Online collaboration • Cloud • SAAS (software as a service) ? • ?? Inhibitors in SA – speed, bandwidth and cost

25. Challenge • How will companies differentiate themselves going forward? • Banks – can they do it by product alone? • Is there still an IT card that hasn’t been played? • This is the big challenge going forward …

26. Developing World Opportunities • Using cell phones to communicate market prices • which ports are paying what for which fish • which markets are paying what for maize • Relaying weather information to rural farmers • Pharmaceutical companies – managing patient drug dosage, usage and consumption

27. The challenge is to identify the one thing that your competitors are not doing, or are doing badly, and to capitalise on that