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Porter’s Generic Value Chain

Porter’s Generic Value Chain

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Porter’s Generic Value Chain

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  1. Infrastructure Human Resource Management Profit Margin Technology Development Procurement Inbound Logistics Outbound Logistics Marketing & Sales Service Operations Profit Margin Elapsed Time - Value added time cost Porter’s Generic Value Chain Support Activities Primary Activities

  2. Infrastructure -Planning Models Human Resource -Skills & Experience Databases Profit Margin Technology -Computer-Aided Design Procurement -On-line parts ordering Automated Warehouse Inbound Logistics Point of Sale Scanners Outbound Logistics E-Commerce Marketing & Sales Remote Equipment Servicing Service Automated Check Clearing Operations Profit Margin Elapsed Time - Value added time cost Potential IS Contributions Support Activities Primary Activities

  3. Support From Top Management Degree of Perceived Need Within the Firm Timing of Project Commitment Development Project Selection Decision Available Organizational Resources Established Evaluation Criteria - Accept - - Reject - - Redefine - - Postpone - - Proof of Concept - Project Selection Factors

  4. Create a set of “blueprints” that represent the desired state of affairs Assess the current state of affairs with regard to IT assets Create a prioritized schedule of projects IS Planning Process

  5. Current System New System 1 5 2 “How” Physical Physical “What” Logical Logical 4 3 Project Process Flow Model

  6. Evaluation Criteria Description of Criteria Potential Organizational Benefits  The degree to which the proposed project will improve profits, customer service, organizational performance, etc. and the expected duration of these benefits. Strategic Fit  The degree to which the proposed project will assist the organization in achieving its strategic objectives and other long-term goals. Level of Resource Allocation  The various types of resources and their expected levels associated with the proposed project, including time, labor, capital, and identifiable opportunity costs. Value Chain Analysis  The degree to which the proposed project contributes value to the manufacture or delivery of goods and services to the marketplace. Project Evaluation Criteria

  7. Measurable Benefits Unmeasurable Benefits Market share will improve to a sustainable minimum of 35%. We will be one of the leading suppliers in the market. Line throughput will increase by 7% within the first quarter and by at least 3% each quarter thereafter. Line throughput will be dramatically increased and will continue this trend over time. Product quality will increase such that rework will be reduced more than 12% annually. Product quality will increase and rework will decrease. Production costs for the auxiliary power unit will be reduced by at least $3.00 per unit. Production costs for the auxiliary power unit will go down significantly. Measurable vs. Unmeasurable

  8. A corporate IS strategy is necessary to define: ·what IS services will be provided and to whom; ·who is responsible for providing specific IS services; ·how these services will be provided; ·priorities for provision of new facilities and improvement of existing facilities; ·who has access to what information; ·how access to IS services will be distributed and supported; ·what common standards should be applied; ·what resources are required and how resources available should be utilized; ·mechanisms for understanding and mapping current and future business processes; ·a mechanism for maintaining and renewing the strategy. Corporate IS Strategy Objectives

  9. Typical Corporate IS Plan

  10. Typical IS Plan (continued)

  11. Project Feasibility Assessment

  12. Project Feasibility Assessment (continued)