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Transcript of Organizational Strategy, Competitive Advantage, and Information Systems · 2016-08-24 · Discuss...
![Page 1: Organizational Strategy, Competitive Advantage, and Information Systems · 2016-08-24 · Discuss ways in which information systems enable ... Describe the strategies that organizations](https://reader030.fdocuments.us/reader030/viewer/2022021704/5b4607347f8b9af5078b4b8c/html5/thumbnails/1.jpg)
Organizational Strategy, Competitive Advantage, and Information Systems
2
70 slides
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1. Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.
2. Differentiate between business process reengineering, business process improvement, and business process management.
3. Identify effective IT responses to different kinds of business pressures.
4. Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.
[ LEARNING OBJECTIVES]
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Business Processes 2.1
• Cross-Functional Processes
• Information Systems and Business
Processes
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Business Processes
• A business process is:
– an ongoing collection of related activities that
create a product or service of value to the
organization, its business partners, and/or its
customers.
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Business Processes
• A business process is:
– an ongoing collection of related activities that create
a product or service of value to the organization, its
business partners, and/or its customers.
• Comprised of three elements:
– Inputs
– Resources
– Outputs
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Business Processes
• A business process is:
– an ongoing collection of related activities that create a product or service of value to the organization, its business partners, and/or its customers.
• Comprised of three elements:
– Inputs
– Resources
– Outputs
• Efficiency vs. Effectiveness
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Examples of Business Processes
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Examples of Business Processes (Continued)
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Cross-Functional Processes
• No single functional area is responsible
• steps executed in a coordinated,
collaborative way
• Procurement & Fulfillment Cross-
functional processes
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Notify Traveler
Receive Ticket Order
Reserve Seats
Charge Credit Card
Confirm Flight(s)
Issue e-Ticket
Plan Trip
Check Flights
Submit Ticket Order
Receive e-Ticket
Seats Available
Use Credit Card?
Charge OK?
Seats Available?
Notify Traveler
Frequent Flyer Mileage
Sufficient?
Subtract Mileage
NO
YES
NO
YES
NO
YES
NO
YES
Traveler Airline Web Site
YES
NO
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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
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Executing the Process
• IS’s help Execute the Process by:
– Informing employees when it is time to complete
a task
– Providing required data
– Providing a means to complete the task
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Capturing & Storing Process Data
• Processes generate data
– Dates, times, product numbers, quantities, prices,
addresses, names, employee actions
• IS’s capture & store process data (aka,
transaction data)
• Capturing & storing data provides
immediate, ‘real time’ feedback
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Monitoring Process Performance
• IS evaluates information to determine
how well a process is being executed
• Evaluations occur at two levels
– Process level
– Instance level
• Monitoring identifies problems for
process improvement
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Business Process Reengineering, Business Process Improvement, and Business Process Management
2.2
• Reengineering
• Improvement
• Management
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Measures of Excellence in
Executing Business Processes
• Customer Satisfaction
• Cost Reduction
• Cycle and fulfillment time reduction
• Quality
• Differentiation
• Productivity
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Business Process Reengineering (BPR)
– A radical redesign of an organization’s business
processes to increase productivity and profitability
– Examines business processes with a “clean slate”
approach
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Business Process Improvement (BPI)
– An incremental approach to move an organization
toward business process centered operations
– Focuses on reducing variation in process outputs
by identifying the underlying cause of the
variation
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Business Process Improvement (BPI)
• Five basic phases of successful BPI
– Define – As is
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Business Process Improvement (BPI)
• Five basic phases of successful BPI
– Define – As is
– Measure – Numbers, Metrics
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Business Process Improvement (BPI)
• Five basic phases of successful BPI
– Define – As is
– Measure – Numbers, Metrics
– Analyze – causes, trends
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Business Process Improvement (BPI)
• Five basic phases of successful BPI
– Define – As is
– Measure – Numbers, Metrics
– Analyze – causes, trends
– Improve – alternatives, solutions
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Business Process Improvement (BPI)
• Five basic phases of successful BPI
– Define – As is
– Measure – Numbers, Metrics
– Analyze – causes, trends
– Improve – alternatives, solutions
– Control - stabilize
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Business Process Management (BPM)
• A management system used to support
continuous initiatives for core business
processes over time
• Important components of BPM:
– Process modeling
– Web-enabled technologies
– Business Activity Monitoring (BAM)
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Business Process Management (BPM)
• Business Process Management Suite
(BPMS)
– An integrated set of applications used for BPM
• Emerging Trend of Social BPM
– Technologies enabling employees to collaborate
across functions internally and externally using
social media tools
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Business Pressures, Organizational Responses, and Information Technology Support
2.3
• Business Pressures
• Organizational Responses
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Business Pressures
• Market Pressures
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Business Pressures
• Market Pressures
• Technology Pressures
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Business Pressures
• Market Pressures
• Technology Pressures
• Societal/Political/Legal Pressures
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Market Pressures
• Globalization
• Changing Nature of the Workforce
• Powerful Customers
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Globalization
• The integration and interdependence of
economic, social, cultural, and
ecological facets of life, made possible
by rapid advances in IT.
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Globalization 1.0 (1st Era)
1492 - 1800
• Focus:
– Countries
• Drivers:
– Muscle
– Horse power
– Wind power
– Steam power
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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
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Globalization 3.0 (3rd Era)
2000 - Present
• Focus:
– Groups & Individuals
• Drivers:
– Convergence of 10 forces or “Flatteners”
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The Ten “Flatteners”
1. 11/9/1989: Berlin
Wall Falls
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The Ten “Flatteners”
1. 11/9/1989: Berlin
Wall Falls
2. 8/9/1995: Netscape
Goes Public
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The Ten “Flatteners”
1. 11/9/1989: Berlin
Wall Falls
2. 8/9/1995: Netscape
Goes Public
3. Development of
Workflow
Software
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The Ten “Flatteners”
1. 11/9/1989: Berlin
Wall Falls
2. 8/9/1995: Netscape
Goes Public
3. Development of
Workflow
Software
4. Uploading
![Page 40: Organizational Strategy, Competitive Advantage, and Information Systems · 2016-08-24 · Discuss ways in which information systems enable ... Describe the strategies that organizations](https://reader030.fdocuments.us/reader030/viewer/2022021704/5b4607347f8b9af5078b4b8c/html5/thumbnails/40.jpg)
The Ten “Flatteners”
5. Outsourcing
1. 11/9/1989: Berlin
Wall Falls
2. 8/9/1995: Netscape
Goes Public
3. Development of
Workflow
Software
4. Uploading
![Page 41: Organizational Strategy, Competitive Advantage, and Information Systems · 2016-08-24 · Discuss ways in which information systems enable ... Describe the strategies that organizations](https://reader030.fdocuments.us/reader030/viewer/2022021704/5b4607347f8b9af5078b4b8c/html5/thumbnails/41.jpg)
The Ten “Flatteners”
5. Outsourcing
6. Offshoring
1. 11/9/1989: Berlin
Wall Falls
2. 8/9/1995: Netscape
Goes Public
3. Development of
Workflow
Software
4. Uploading
![Page 42: Organizational Strategy, Competitive Advantage, and Information Systems · 2016-08-24 · Discuss ways in which information systems enable ... Describe the strategies that organizations](https://reader030.fdocuments.us/reader030/viewer/2022021704/5b4607347f8b9af5078b4b8c/html5/thumbnails/42.jpg)
The Ten “Flatteners”
5. Outsourcing
6. Offshoring
7. Supply Chaining
1. 11/9/1989: Berlin
Wall Falls
2. 8/9/1995: Netscape
Goes Public
3. Development of
Workflow
Software
4. Uploading
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The Ten “Flatteners”
5. Outsourcing
6. Offshoring
7. Supply Chaining
8. Insourcing
1. 11/9/1989: Berlin
Wall Falls
2. 8/9/1995: Netscape
Goes Public
3. Development of
Workflow
Software
4. Uploading
![Page 44: Organizational Strategy, Competitive Advantage, and Information Systems · 2016-08-24 · Discuss ways in which information systems enable ... Describe the strategies that organizations](https://reader030.fdocuments.us/reader030/viewer/2022021704/5b4607347f8b9af5078b4b8c/html5/thumbnails/44.jpg)
The Ten “Flatteners”
5. Outsourcing
6. Offshoring
7. Supply Chaining
8. Insourcing
9. Informing
1. 11/9/1989: Berlin
Wall Falls
2. 8/9/1995: Netscape
Goes Public
3. Development of
Workflow
Software
4. Uploading
![Page 45: Organizational Strategy, Competitive Advantage, and Information Systems · 2016-08-24 · Discuss ways in which information systems enable ... Describe the strategies that organizations](https://reader030.fdocuments.us/reader030/viewer/2022021704/5b4607347f8b9af5078b4b8c/html5/thumbnails/45.jpg)
The Ten “Flatteners”
5. Outsourcing
6. Offshoring
7. Supply Chaining
8. Insourcing
9. Informing
10.The Steriods
1. 11/9/1989: Berlin
Wall Falls
2. 8/9/1995: Netscape
Goes Public
3. Development of
Workflow
Software
4. Uploading
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Changing Nature of the Workforce
• Workforce is Becoming More Diversified
– Women
– Single Parents
– Minorities
– Persons with Disabilities
• IT is Enabling Telecommuting
Employees
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Powerful Customers
• Increasing consumer sophistication &
expectations
• Consumer more knowledgeable about
– Products and services
– Price comparisons
– Electronic auctions
• Customer Relationship Management
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Technology Pressures
• Technological Innovation &
Obsolescence
– Rapid development of both New and Substitute
Products & Services
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Technology Pressures
• Technological Innovation &
Obsolescence
– Rapid development of both New and Substitute
Products & Services
• Information Overload
– Vast stores of data, information, & knowledge
– Difficulties in managing data for decision making
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Societal / Political / Legal Pressures
• Social Responsibility
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Societal / Political / Legal Pressures
• Social Responsibility
• Compliance with Government
Regulations
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Societal / Political / Legal Pressures
• Social Responsibility
• Compliance with Government
Regulations
• Protection against Terrorist Attacks
• Ethical Issues
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Societal / Political / Legal Pressures
• Social Responsibility
• Compliance with Government
Regulations
• Protection against Terrorist Attacks
• Ethical Issues
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Social Responsibility
• Green IT
– Facilities design and
management
– Carbon management
– International and
U.S. state
environmental laws
– Energy management
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Social Responsibility
• Green IT
– Facilities design and management
– Carbon management
– International and U.S. state environmental laws
– Energy management
• Digital Divide
– One Laptop per Child (OLPC)
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Organizational Responses
• Strategic Systems
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Organizational Responses
• Strategic Systems
• Customer Focus
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Organizational Responses
• Strategic Systems
• Customer Focus
• Make-to-Order and Mass Customization
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Organizational Responses
• Strategic Systems
• Customer Focus
• Make-to-Order and Mass Customization
• E-Business & E-Commerce
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Competitive Advantage and Strategic Information Systems
2.4
• Competitive Strategy
– A statement identifying a business’s
approach to compete, it’s goals, and the
plans and policies required to attain those
goals.
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Competitive Advantage and Strategic Information Systems
2.4
• Strategic Information Systems
(SIS)
– An information system that helps an
organization achieve and maintain a
competitive advantages
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Porter’s Competitive Forces Model
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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
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Primary Activities
• Five Primary Activities for
Manufacturing
1. Inbound Logistics (inputs)
2. Operations (manufacturing & testing)
3. Outbound Logistics (storage & distribution)
4. Marketing & Sales
5. After Sales Services
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Support Activities
• Four Support Activities
1. Firm’s Infrastructure (accounting, finance,
management)
2. Human Resources Management
3. Product & Technology Development (R&D)
4. Procurement
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Strategies for Competitive Advantage
• Cost Leadership
• Differentiation
• Innovation
• Operational Effectiveness
• Customer-Orientation
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FIGURE 2.5 Strategies for competitive advantage.
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Organizational Strategy, Competitive Advantage, and Information Systems
2
The End