Understanding Business

Requirements
Session 5
Recap
• IT strategy (needs) should be determined in conjunction with Business
strategy (needs)
• IT is a competitive necessity in many cases
• When does IT become a source of competitive advantage?
Challenge for Businesses
“The information revolution is sweeping through our
economy. No company can escape its effects. Dramatic
reductions in the cost of obtaining, processing, and
transmitting information are changing the way we do
business”
“How will advances in IT affect competition and the sources
of competitive advantage?”
“What strategies should a company pursue to exploit the
technology?”
Challenge for Businesses
“To answer these questions managers must first
understand that IT is more than just computers.
Today, IT must be conceived of broadly to
encompass the information that businesses
create and use as well as a wide spectrum of
increasingly convergent and linked technologies
that process the information.”
Challenge for Businesses
• Re-framing the challenge
• A business model is defined by two things
• How the organization creates value for its customers
(the customer value proposition)
• How it captures that value (how it makes money)
• Your task is to understand transformation in
technology may be affecting both
What does it mean for businesses?
• What is useful information?
• How do we manage it?
• How do we make better decisions?
• What technology is suitable?
 Understanding Business Requirements
Support Activities

Human Resource Management

General Administration (procurement, infrastructure, finance etc.)

Research and Development, IT and Systems Development

Primary Activities

Purchase raw Convert raw Manage

materials Provide After
materials into Distribution and Manage Sales
Sale Service and
Manage “in- goods and “out-bound” and Marketing
Support
bound” logistics services logistics

Input Processing Output Sale/Marketing Support

 Simple Manufacturing Example
Manage
Improve logistics Improve Improve logistics
conventional / Provide After
by focusing on production and by focusing on
IT

digital marketing Sale Service and

procurement, post-production shipping,
and sales Support
warehousing etc. processes warehousing etc.
processes
Manage
Manage
Manage warehouse Manage Sales Manage after-
HR

warehouse
workforce on personnel, and Marketing sale service and
personnel,
factory floor downstream Teams support teams
suppliers
process owners
Procurement

Manage Manage
Manage orders Manage Sales
equipment Manage orders inventory of
and shipping of and Marketing
maintenance / and shipping of required tools
parts and raw procurement
replacement finished goods for support and
materials (ads, airtime)
orders service

Purchase raw Convert raw Manage

materials Provide After
materials into Distribution and Manage Sales
Sale Service and
Manage “in- goods and “out-bound” and Marketing
Support
bound” logistics services logistics

Input Processing Output Sale/Marketing Support

Some more examples
• Netflix
• Healthcare Delivery Value Chain
• Agribusiness Value Chains
• Example: Zahid kinnow
Care Delivery Value Chain
Information Characteristics – Decision
Structure
Suggested Reading
• Healthcare
• Care delivery value chain (more reading)
• Article by Porter and Kaplan (September 2011 HBR) “The Big Idea: How to
solve the cost crisis in health care” search for it in the Library’s E Databases
just like I asked you to lookup Carr’s article