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Organizational Strategy, Competitive Advantage, and Information Systems
Organizational Strategy, Competitive Advantage, and Information Systems
Organizational Strategy, Competitive Advantage, and Information Systems
Organizational Strategy,
Competitive Advantage,
and Information Systems
Organizational Strategy
1. Discuss ways in which information systems enable cross-
functional business processes and business processes for a single
functional area.
2. Become familiar with business process defi nition, measurement,
and analysis.
3. Compare and contrast business process improvement, business
process reengineering, and business process management to
identify the advantages and disadvantages of each one.
4. Identify effective IT responses to different kinds of business
pressures.
5. Describe the strategies that organizations typically adopt to counter
Porter’s five competitive forces.
6. Describe the characteristics of effective business–information
technology alignment.
Competitive Advantage
1. Business Processes
2. Business Process Reengineering, Business
Process Improvement, and Business Process
Management
3. Business Pressures, Organizational Responses,
and Information Technology Support
4. Competitive Advantage and Strategic
Information Systems
5. Business–Information Technology Alignment
[ Opening Case A Tool to Combat
Terrorism and Fight Crime ]
• The Problem
• A Potential IT Solution
• The Results
• What We Learned from This Case
About [small] business
2.1 Sharing Bicycles
2.1 Business Processes
• Cross-Functional Processes
• Information Systems and Business
Processes
Business Processes
Use NO Frequent
NO Credit Flyer Mileage
Seats Card? Sufficient?
Available?
YES
YES
YES Charge Credit Card
Subtract Mileage
Submit Ticket Order
Charge NO
Notify Traveler
OK?
Receive e-Ticket YES
Confirm Flight(s)
Issue e-Ticket
Information Systems & Business
Processes
• IS’s vital role in three areas of business
processes
– Executing the process
– Capturing and storing process data
– Monitoring process performance
Executing the Process
• Market Pressures
• Technology Pressures
• Societal/Political/Legal Pressures
Market Pressures
• Globalization
• Changing Nature of the Workforce
• Powerful Customers
Globalization
1492 - 1800
• Focus:
– Countries
• Drivers:
– Muscle
– Horse power
– Wind power
– Steam power
Globalization 2.0 (2nd Era) 1800
- 2000
• Focus:
– Companies
• Main Driver:
– Multinational Companies
• First Half of 2.0
– Driver: Falling transport costs
• Second Half of 2.0
– Driver: Falling telecom costs
Globalization 3.0 (3 Era) rd
2000 - Present
• Focus:
– Groups & Individuals
• Drivers:
– Convergence of 10 forces or “Flatteners”
The Ten “Flatteners”
1. 11/9/1989: Berlin 5. Outsourcing
Wall Falls 6. Offshoring
2. 8/9/1995: Netscape 7. Supply Chaining
Goes Public
8. Insourcing
3. Development of
9. Informing
Workflow
Software 10.The Steriods
4. Uploading
Changing Nature of the
Workforce
• Workforce is Becoming More Diversified
– Women
– Single Parents
– Minorities
– Persons with Disabilities
• IT is Enabling Telecommuting Employees
Powerful Customers
• Green IT
– Facilities design and management
– Carbon management
– International and U.S. state environmental laws
– Energy management
• Digital Divide
– One Laptop per Child (OLPC)
http://one.laptop.org
Social Responsibility &
Philanthropy in Business
• www.patientslikeme.com
• www.giftflow.org
• www.ourgoods.org
• www.sparked.com
• www.thredup.com
• www.collaborativeconsumption.com
• www.kiva.org
• www.donorschooce.org
Compliance with Government
Regulations
• Sarbanes-Oxley Act
• USA PATRIOT act
• Gramm-Leach-Bliley Act
• Health Insurance Portability & Accountability
Act (HIPAA)
Protection against Terrorist
Attacks
• Employees in military reserves called to
active duty
• Information Technology used to identify and
protect against terrorists and cyberattacks
• Department of Homeland Security’s (DHS)
US-VISIT program
– Network of biometric-screening systems
Ethical Issues
• Strategic Systems
• Customer Focus
• Make-to-Order and Mass Customization
– Bodymetrics (www.bodymetrics.com)
• E-Business & E-Commerce
[about business]
2.5 Massechusetts
Mutual Transforms
Its Information
Systems
2.4 Competitive Advantage and
Strategic Information
Systems
• Porter’s Competitive Forces Model
• Porter’s Value Chain Model
• Strategies for Competitive Advantage
2.4 Competitive Advantage and
Strategic Information
Systems
• Competitive Strategy
– A statement identifying a business’s
approach to compete, it’s goals, and the
plans and policies required to attain those
goals.
2.4 Competitive Advantage and
Strategic Information
Systems
• Strategic Information Systems (SIS)
– An information system that helps an
organization achieve and maintain a
competitive advantages
Porter’s Competitive Forces
Model
Porter’s Competitive Forces
Model
1. Threat of Entry of New Competitors
2. Bargaining Power of Suppliers
3. Bargaining Power of Customers/Buyers
4. Threat of Substitute Products or Services
5. Rivalry Among Existing Firms within the
Industry
Porter’s Value Chain Model
https://www.youtube.com/watch?v=EXJqkY619nc
https://www.youtube.com/watch?v=W-tQ_jgWStE
Porter’s Value Chain Model
• Value Chain
– A sequence of activities through which the
organization’s inputs are transformed into valuable
outputs.
• Primary Activities
– Relate to Production & Distribution of Products &
Services
• Support Activities
– Support Primary Activities Contributing to
Competitive Advantage
Primary Activities
• The Problem
• An Interesting IT Solution
• The Results: Initial Uses of Watson
• What We Learned from This Case