CCT 355: E-Business Technologies

Class 3: Information and Competitive Advantage

Before we begin…

• CI proposal – due next week – put email on it so I can get feedback back to you quickly

Cui bono?

• Literal translation: who benefits?• Figurative: to what good purpose?• Both excellent questions in any technology

implementation• Technology has potential to shape/be shaped

by existing social structures in an organization

Stakeholder Analysis

• Who stands to win/lose? Whose interests are compromised by corporate action/inaction?

• Suppliers, customers, government, shareholders, managers, information workers - all have varying interests - failure to consider usually leads to unbalanced system

• Not a technology question – but important in any technology implementation and change management situation

Open Systems

• Inputs - various sources of data/information, human resources, money, tech, raw materials

• Outputs - Services/products – but also waste and its costs

• Process – must deal with available inputs and create desirable outputs as efficiently as possible

• Feedback loops – outputs are usually inputs for other processes – coordination of processes is key

• Balance – hard to predict – complex systems issues

Org Types: Functional Hierarchy

• Leverage economies of scale

• Centralizes technical expertise

• Clean chain of command

• Coordination on task problematic

• Can be inflexible to change

• Turf wars, “not my department” attitude emerges

Org Types: Decentralized

• Flexible fast response to challenges

• Greater task-oriented communication and collaboration

• Downturns in some units don’t spread to others

• Duplication of resources• Less coordination of

functional expertise when expertise is spread widely

• Limited upper management control

Org Types: Matrix

• Less hierarchy and adherence to bureaucratic role

• Collaboration on shared tasks by design

• Most flexible

• Role conflict (is my functional role or my project team more important?)

• Required coordination can take time - and failure to coordinate can be disastrous

Org Types, Stakeholders and IT

• Differing relations among stakeholders in various org. types might enable or frustrate technology projects

• Different technologies fit better with different org. types – examples?

Value chains

• Inbound - coordination of inputs• Operations - coordination of process• Outbound - coordination of outputs• Support - e.g., marketing, sales, HR,

management- required to create and maintain organization but often not part of the value proposition

IT-enabled value chain

• Different systems at different parts of value chain – inbound (SCM), operations (TPS, control systems), outbound (SCM), support (ERP, CRM, communication networks)

• Historically separate, increasingly modular and interdependent

• Communication among systems essential

Automation

• IT to automate scheduled, simple repetitive tasks

• Increases efficiency, reduces human error • Implemented for years in manufacturing and

logistics management - increasingly common in knowledge work (e.g., tax preparation)

• Examples?

Leveraging data created through “informating”

• “informating” (ugh) creates data footprints that feed SCM, ERP and CRM tools

• Digitally based transaction data can inform business and customer trends, feed into supply chain, etc.

• Privacy of course a concern - examples?• TMI? Integrating new feedback loops requires

intelligent understanding of whole system – too much information might lead to confusion

Competitive Advantage

• Transaction vs. resource models of advantage - making transactions as cheap as possible vs. building core competencies (e.g., Wal-mart vs. Google)

• IT increasingly not a specialized resource (Carr) - resource distinction limited and fleeting, lack of automation as negative discriminant

• Intelligent or unique use of IT, however, can be a resource competency

Competitive Advantage of IT?

• IT can increase speed and lower cost of distribution and production of information

• IT and the productivity paradox - for years, the above was true, but return on investment (ROI) was stagnant or even negative - why?

• Paradox solved - IT now trends positive ROI - why?

A Balance…

• IT alone doesn’t do much - it must be used intelligently by intelligent people

• People, business process, technology, end objectives, market dynamics, partners and competitors, ethical concerns, legal concerns - all interact to determine success or failure of implementation

• IS types/functions blend – create information ecology usually as robust as weakest link

• Right balance? Well, that’s where knowledge and wisdom come in.

Example: FSAE

Questions to consider…

• IT and organizational structure issues• What are inbound, operations, outbound and support

value chains in this case?• What should be automated? What shouldn’t?• How can UT FSAE maximize its use of its data? What

operational and ethical considerations exist in doing so?• Is IT a transaction or resource-based competency in this

case?• What is the source of competitive advantage?