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  1. Quiz1 • Last hour of the class : • Bring your own stuff • Bring extra pen,pencil,rubber,sharpener • OK to use pencil in exams csc491 week4

  2. Quiz1 • Lecture in the first half • Last hour of the class • Might be graded by other faculty • Prepare yourself for expected,and unexpected questions • Pattern of quiz1 • T/F , MCQs, Definitions , comparison csc491 week4

  3. Competitive Advantage • Is a significant and (ideally) long-term benefit to a company over its competition • Establishing and maintaining is complex • A company’s survival and prosperity depend on its success in doing so • A company can dictate its terms and conditions csc491 week4

  4. Industry Level Strategy (1)Competitive Five-force Model It identifies five key factors that can lead to a competitive advantage • Rivalry among existing competitors • Threat of new ENTRANTS(persons who enters a competition. • Threat of substitute products and services • Bargaining power of buyers • Bargaining power of suppliers csc491 week4

  5. Strategic Planning for competitive advantage • Altering the industry structure • Creating new products and services • Improving existing product lines and services • Using information systems for strategic purposes csc491 week4

  6. Altering the Industry Structure • Changing the industry to become more favorable to the company or organization • Gaining more power over suppliers and customers • Automobile manufacturers insist that their supplier be located close to major plants • All business transaction be accomplished using electronic data interchange • This helps the automobile company control the cost,quality, and supply of parts and materials csc491 week4

  7. Creating new products and services • Creating new products and services is always an approach that can help a firm gain a competitive advantage • Specially true of the computer industry and high-tech business • Company needs to introduce new products and services every few months • Full size foldable keyboard for use with handheld computers csc491 week4

  8. Using Information Systems for Strategic Purposes • First IS applications were aimed at reducing costs ,providing efficient processing for accounting and financial applications • Example: payroll,general ledger • As organization matured in their use of IS.managers began to utilize it to improve organizational effectiveness and support for fundamental business strategy csc491 week4

  9. Example: SABRE a sophisticated computerized reservation system installed by American Airlines • One of the first CBISs recognized for providing competitive advantage • Travel agent used it for rapid access to flight information,seat assignments,and ticketing • Because SABRE displayed AA. Flights whenever possible,it also gave the airline along-term,significant competitive advantage csc491 week4

  10. Industry Level Strategy (2)Network Economics • A second strategic concept useful at the industry level is network economics • Model based on the concept of a network where adding another participant involves zero marginal costs but can create much larger marginal gain • Example: The larger the number of subscribers in a telephone systems,or the Internet,the greater the value to all participants • No more expensive to operate a television station with 1000 subscribers than with 10 million subscriber csc491 week4

  11. From this network economics perspective, information technology can be strategically useful • Microsoft uses information technology to build communities of software developers around the world. • These small software developer firms work with Microsoft to debug its operating system software, provide new ideas,and extensions,provide customers with tips and new software application csc491 week4

  12. What Managers can do • Information systems are too important to be left entirely to a small technical group in the corporation • Some of the important questions managers should ask themselves are • What strategies are being used by industry leaders? • Which organizations are the industry leaders in the application of information systems technology? csc491 week4

  13. What Managers can do • Once the nature of information systems technology is understood,they should turn to their organization and ASK? • Is the org. behind or ahead of the industry in its application of information systems? • What is the current business strategic plan and how does that plan engage with the current strategy for I.S. csc491 week4

  14. Organizational Change • Deals with how for-profit and nonprofit organizations plan for,implement,and handle change • Internal or external factors can cause change • Internal:activity initiated by employees at all levels • External:activity wrought by competitors ,stock holders,federal and state laws,natural occurrence (hurricane) csc491 week4

  15. Change Model • A representation of change theories that identifies the phases of change and the best way to implement them. • Three stage approach: csc491 week4

  16. Three stage approach for change • Unfreezing is the process of ceasing(stop) old habits and creating a climate receptive to change csc491 week4

  17. Three stage approach for change 2 : Moving: is the process of learning new work methods ,behaviors,and systems 3 : Refreezing:: involves reinforcing changes to make the new process second nature,accepted ,and part of the job csc491 week4

  18. Organizational Learning • It is related to organizational change • How to adapt new conditions or alter their practices over time • Two types of adjustment Reengineering , Continuous improvement csc491 week4

  19. Reengineering • To stay competitive organization must occasionally make fundamental changes in the way they do business • Also known as Process Redesign • Involves radical design of Business process,organizational structures,information systems, csc491 week4

  20. Advantages Of Reengineering • Reduce delivery time,increase product and service quality,enhance customer service and satisfaction,and increase revenues and profitability • Example:Avon Products csc491 week4

  21. Avon Products • Reduce hundreds of incompatible computer system to one Platform Before: had 700 computer systems inS.America ,Asia,United Kingdom,Puerto Rico that didn’t work together efficiently • Avon decided to standardize its hardware platform worldwide • Reengineering project also standardize the company’s Internet usage to allow customers,suppliers,managers,and employees to share information csc491 week4

  22. Reengineering Business process redesign Changes to Organizational structure Changes to Organizational Values Changes to Information Systems csc491 week4

  23. Continuous Improvement • Constantly seeking ways to improve the business processes to add value to products and services • To increase customer satisfaction • To respond to the environmental changes and demands • Manufacturing companies make product changes and improvements • Service organizations find ways to provide faster and more effective assistant to customers csc491 week4

  24. Bethlehem Steel C.I. plan • One of its initiative was to develop a closer relationship with its suppliers • Information from 70 suppliers was collected • List was narrowed down to just 16 and RFP was sent out • After Request for proposals(RFP) reduced to 3 firms • What continuous improvement is all about”To be flexible and to readjust when appropriate “ csc491 week4

  25. Strong action taken to solve serious problem Driven by senior executives Goal is to achieve a major breakthrough Information system integral to the solution Routine action taken to make minor improvements Worker driven Goal is continuous,gradual improvements I.S provide data to guide improvement team ComparisonReengineering continuous Imp csc491 week4

  26. Technology Diffusion • It is a measure of how widely technology is spread through out an organization • Example: An organization in which computers and information systems are located in most departments and areas • Has a high level of technology diffusion csc491 week4

  27. Technology Infusion • The extend to which technology is deeply integrated into an area or department • Example:an architecture firm uses computers in all aspects of designing a building or structure • It is possible for a firm to have high level of infusion in one aspect of its operations and a low level of diffusion overall csc491 week4

  28. Technology Acceptance ModelTAM • It specifies the factors that can lead to • higher acceptance and usage of technology • the ease of its use, • the quality of information system • the degree to which the organization supports the use of the information system csc491 week4

  29. Expert System Expert System Rule base User Interface user Interface Engine Knowledge base csc491 week4

  30. Expert Systems • An organized collection of people,procedures,databases,and devices used to generate expert advice or suggest a decision in an area • These computer systems are like a human specialist with many years of experience • They are developed through extensive interviewing and observations of expert people csc491 week4

  31. Expert Systems • A system that gives computer the ability to make suggestions and act like an expert in a particular field • To Monitor Nuclear reactors,perform medical diagnosis,design and configure information system components • Knowledge base:collection of data,rules,procedures and relationships csc491 week4

  32. Expert Systems • A knowledge base for a medical expert system would include information about a variety of diseases or disorders,along with their symptoms and causes • A rule base consists of a series of rules or relationship used to help make good decision csc491 week4

  33. Expert Systems • If certain symptoms exist, a specific diagnosis is made with a prescribed treatment • Interface Engine: interacts with knowledge base and rule base • User interface gives the user or decision maker access to the expert system csc491 week4

  34. Expert Systems • Weather prediction • Locating repair problems,automobile engine • Investment strategy • Designing circuit boards • Configuring the best information system for a company • Developing the best marketing plan for a new product csc491 week4

  35. The Relationship betweenOrganizations and Information systems • Can Information systems “flatten” organizations by reducing their number of levels? • Will information systems allow organizations to operate with fewer middle managers and clerical workers? • Can they be used to “reengineer” organizations so they become lean, efficient, and hard hitting? • Can organizations use systems to rebuild their business processes? • Can the Internet and World Wide Web substitute for organizations? csc491 week4

  36. Complex Relationship b/w Organizations and I.S. • Goal is to introduce you to the Salient features of organizations that you will need to know about as a Manager when you • Envision,design,build, and operate information systems • Features of ORG. that are related to I.S. • How I.S. affects Organizations ,vice versa csc491 week4

  37. Two-Way Relationship • Information systems and organizations have a mutual influence on each other • This complex two-way relationship is mediated by many factors • Not all the decision made by managers • Other factors mediating the relationship are the organizational culture,bureaucracy,politics,business fashion,and pure chance csc491 week4

  38. Mediating Factors Environment Culture Structure Standard procedures Business process Politics Management Decisions Chance organizations Information Technology Relationship between Organizations And Information Technology csc491 week4

  39. There are many types of organizations • Technology of information systems have different impact on different types of ORG. • There is no singular effect of computers,one can not,conclude that “computers flatten hierarchies” in all organizations • Different organizations in different circumstances experience different effects from the same technology csc491 week4

  40. What is an Organization? • Technical definition:A stable,formal social structure that takes resources from the environment and processes them to produce outputs. • Technical definition focuses on three elements of an organization. • Capital and labor are primary production factors provided by the environment • The organization transform these inputs into products and services • The products and services are consumed by environments in return for supply inputs csc491 week4

  41. Stable/Formal/social • An organization is more stable than an informal group in terms of longevity and routineness. • Organizations are formal because they are legal entities and must abide by law.they have internal rules and procedures. • Organizations are social structures because they are a collection of social elements,much as a machine has a structure—a particular arrangement of valves,cams,shafts,and other parts csc491 week4

  42. Hw2 • Do the following questions from chapter 2 • 2 ,5 ,7,8,9,10 NOTE: use your own wording for the answers • Due date next class csc491 week4