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What’s Happening?! Quest is negotiating to buy MCI for about $6.2 billion. Bush push to overhaul social security. 76,152 students applied to the UC system this year. Tivo president resigned over vision conflict with founder and CEO.
What’s Happening! Midterm Exam I will provide the exam answer paper. Six essay questions: 1 is worth 25 points 1 of 2 is worth 20 points 1 is worth 15 points – must answer 4 are worth 10 points
Chapter 7 Summary Implementing a Vision: Strategy, Tactics and Business Plan
Important Chapter Topics How to transition a vision into reality through strategy, tactics, and business plans. Fundamentals and guidelines that relate to business strategies. How strategies dictate the role and significance of information systems.
Defining the Process Elements • Vision: Identifies what the organization wants to look like at some logical point in the future. • Strategy: How a company will achieve the long-term goal of the vision. • Tactics: More specific time-oriented, measurable ways to make a vision a reality. • Business Plan: Allocation of funds and other resources.
Business Strategy Focus • Competitive Environment: The primary market and major competitors and whether current strategies are producing the intended results. • Customer Targets: Are their primary needs being satisfied? • Product portfolio: Is it on target or does it need to be changed and/or broadened? • Financial Implications: Are current and projected results up to expectations? • Resource Allocation: Do changes need to be made?
Porter Strategy Guidelines • Primary Strategies: • Differentiation • Least Cost • Supporting Strategies: • Innovation • Growth • Alliances
Business Strategy Model Guidelines 1. What products and/or services do we intend to offer? 2. What price range of products do we intend to offer? 2. What customer targets do we intend to pursue? 3. What geographic markets do we intend to address? 4. How will we obtain products to sell to our customers? 5. How will we deal with sales to our customers? 6. What company structure do we intend to create? 7. What information systems approach will we take?
External Analysis Internal Analysis
Progressive Corporation Important learning points: • Market factors triggered the need for a new vision and supporting strategies. • The CEO had problems in getting his employees to accept the fact that a major change was needed. • Changes involved refocusing product and service strategies and related business processes and systems. • Information systems played a major role in support of the new strategies.
IT Based Strategies MARKET PLACE OPERATIONS Federal Express USA Today Charles Schwab Whirlpool Xerox SIGNIFICANT STRUCTURAL CHANGE BancOne Boeing Frito-Lay Wal-Mart USAA L.L. Bean McKesson TRADITIONAL PRODUCTS AND PROCESSES Figure 7-6
Possible Exam Questions • Explain the relationship between the vision of a company and the challenge of making things happen. • Explain the intent of Figure 7-3 and why it could be difficult to implement such an approach.
Chapter 8 Summary Evaluating Business Strategies and The Use of Information Systems: The Strategic Option Generator
Chapter Objectives • To identify strategic opportunities involving the use of information system. • To relate the use of information system to gain a competitive advantage.
A Systematic Approach Vision Strategy Tactics Business Plan • Competitive Options • Roles, Roles and Relationships • Redefine and/or Define • Telecommunications • as the Delivery Vehicle • Success Factor Profile Figure 1-4
STRATEGIC OPTION GENERATOR TARGET SUPPLIER CUSTOMER COMPETITOR THRUST DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE MODE OFFENSIVE DEFENSIVE DIRECTION USE PROVIDE EXECUTION STRATEGIC ADVANTAGE Figure 8-1
Federal Express Analysis Using the Strategic Option Generator TARGET SUPPLIER CUSTOMER COMPETITOR THRUST DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE MODE OFFENSIVE DEFENSIVE DIRECTION USE PROVIDE EXECUTION STRATEGIC ADVANTAGE Figure 8-2
UPS Analysis Using the Strategic Option Generator TARGET SUPPLIER CUSTOMER COMPETITOR THRUST DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE MODE OFFENSIVE DEFENSIVE DIRECTION USE PROVIDE EXECUTION STRATEGIC ADVANTAGE Figure 8-3
Conclusions It is necessary to understand and use the Strategic Option Generator properly. Some important guidelines: • Target: be sure to identify the correct primary target • Thrust: differentiation or cost must be selected, not both. • Supporting Strategies: any combination of the three can be selected. • Direction: it is confusing and the name of the element is not self-explanatory. The intent is to identify whether the users of the information systems are company employees or external to the company.
Possible Exam Questions • Explain the elements of the Strategic Option Generator. • Explain how the Strategic Option Generator should be used in Section III of the analysis term paper.
Chapter 9 Summary The Roles, Roles and Relationships Concept
Important Topics • Roles, roles and relationships concept. • Managing IS as a business. • Technology transfer through organizational learning. • Outsourcing.
IS as a Competitive Resource? • Business competitiveness is a top priority. • What about Information Systems?
Roles, Roles and Relationship Concept *********** 1. The role of information systems is focused on competitive priorities. 2. Senior management plays a major role in positioning and prioritizing the competitive role of information systems. 3. There is an on-going working relationship between senior management and the information systems organization to sustain the successful use of information systems to compete.
The Role of the Senior Executive The Person that Runs the Business on a Day-To-Day Basis • Provide a long term vision for the future of the business. • Recognize the value of information to the organization. • Sponsor and participate in determining the role of information systems.
Communicate the importance of the information systems role. • Provide funding, including R&D, to address the major requirements. • Focus on results and benefits. • Motivate to make things happen!
Role of Other Senior Management • Understand the role of information systems within the organization. • Identify and specify requirement for new information systems. • Justify and fund existing and new systems. • Sponsor their information systems on an on-going basis.
Role of IS Executive • Function as a member of the senior management team. • Provide an understanding of the realm of the possible, feasible, affordable and achievable with information systems. • Posture information systems as a service and support organization in both fact and perception.
Roles, Roles and Relationships Leadership in two forms: - Business Leadership - IT Leadership
Managing IS as a Business Important to recognize that the IS organization is really in three different businesses: • Designing information systems. • Building information systems. • Running and maintaining information systems.
Concurrent Learning Curves Information Technology Computer-based Applications Organization
Hiring someone whose expertise can perform a business function or activity better, more cost effectively and/or in a more timely manner than can be achieved in-house. Outsourcing Also enables the company to focus on its core competencies and those factors that mean the difference between success and failure.
Possible Exam Questions 1. Explain the importance of the roles, roles and relationships concept if a company has decided that it definitely wants to use information systems to gain a competitive advantage. 2. Can a company successfully use information systems as a competitive resource by outsourcing the management of this resource to an outside company?
Chapter10Introduction The Redefine and/or Define Concept and Change Management
Agenda • Learning Objectives • Redefine and/or Define Concept • The Product and Service Delivery Process • The Challenge of Change Management • Conclusions
Learning Objectives • To understand the second of the two core concepts of the structured analysis approach. • To appreciate the importance and significance of change management within an organization. • To remember that information systems is viewed as a major cause of change within a company.
Redefine and/or Define Concept Redefine = Change Define = Clarify How an organization can change and clarify the role of IS to achieve and sustain competitive advantage?
Redefine and/or DefineWhat? Options: • The business • Products and/or services • Business processes Why bother? • Value to customer
Product/Service Value-Add Process What the Customer Buys Product and Service Delivery Process Is the delivery process of the product more important than the product itself? Delivery Process Product/Service Value to Customer Figure 10-1
Change Management Four Challenging Factors: • The pace and time pressures of change. • Financial controls may not allow increase in the number of employees despite growth. • Shifting of productivity and other operational objectives to IT. • Dramatic improvements in IT price, performance, and function.
Conclusions • Change is the norm in most businesses. • Information technology can be a catalyst or vehicle for change. • Organizational change must be carefully managed. • Employees and management must understand and accept the need for change.
Chapter 10 The Redefine and/or Define Concept and Change Management
We live in a word of change, yet we act on the basis of continuity.
The Challenge of Change Millions of ordinary, psychologically normal people will face an abrupt collision with the future. Many of them will find it increasingly painful to keep up with the incessant demand for change that characterizes our time. Alvin Tofler Futurist
Definition of Change Making an essential difference often amounting to a loss of original identity or a substitution of one thing for another.
Equipping a company with the latest technology doesn't mean a thing if you don't alter how your employees think and how management leads them. Chad Frost President Frost Inc.
As we change what computers can do, we must change what we can do with computers. Max Hopper Former CIO Information Systems AMR and American Airlines
Redefine Change Define Clarify
Companies that achieve a sustainable strategic advantage with information technology generally redefine the factors of competition rather than using technology in a traditional way.