Success or Failure Factors of IS Business Succeed Survive or Service speed quality innovation...

Success or Failure Factors of IS

Business

Succeed

Surviveor

Service speed quality innovation

Improve

Continuous

RadicalChange Management

Technology Organization Management

i Ethically Acceptablei Socially Responsiblei Politically control

(Behavior) (Human)i Structurei attributei decision-makingi operation

culture(Strategic Advantage)

Risks Benefit

uncertainty

strategyovercome enhance

I SA Digital Society

1) choosing strategy

2) organizing the business

3) organizing the systems management area

Ability & flexibility to compress time and space and to expand organizational knowledge and then increase flexibility

culture

HUMAN ADAPTABILITY The Driver & Servant

[ organizational change] ------Radical Change

Success or Failure Factors of IS (Cont’d)

[ organizational change] ------Radical Change

A FIRM/ORGANIZATION: Evolution of change

Efficiency(Automate)

Effectiveness

(Informate)

Innovation

(Innovate)

[Doing the things right]

-Proper utilization of resource

{Save Money}

[Doing the right things]

-Attainment of goals

{Make Money}

Restructuring Competitive Advantage

Re-engineering Cooperative Advantage

Electronic Market: flatten the organizational hierarchical structure

“ Revolutionary significance lies in generality” e.g., steam engineers--triggered the first Industrial Revolution Computers--Seem to be triggering a second one.

- property of culture

- creativity

IT Yesterday, Today and Tomorrow

YesterdayComputer age

Computer proc.

Computing

Accuracy

Automation

Efficiency

“doing things

right”

TodayInformation age

People proc.

Communication

Perspective

Information

Effectiveness

“doing the right

things”

TomorrowKnowledge age

Knowledge proc.

Connectivity

Reality

Innovation

Performance/

Innovation

“creativity”

Three Necessary Perspectives

Business

Success

• Business Environment

• Enterprises Environment

• IT Environment

Simultaneous Revolutions

The Business

New Competitors

New Political Agendas

New Technology

New Employees and New Value

New Rules of Competition

Industry structure Changes

New regulatory Environment

Increasing Customer Expectation

Business Drivers

Organization

Market Technology

Regulation Employees/Work

Business Processes

Solution to Business Requirements

A Systematic Approach

VisionStrategyTactics

Business Plan

VisionStrategyTactics

Business Plan

¨ Competitive Options¨ Roles, Roles and Relationships¨ Redefine/ Define¨ Telecommunications as the Delivery Vehicle¨ Success Factor Profile

¨ Competitive Options¨ Roles, Roles and Relationships¨ Redefine/ Define¨ Telecommunications as the Delivery Vehicle¨ Success Factor Profile

The Information Technology Environment

Administrative Framework

Regulated Monopoly

Free Market

Regulated Free Market

Primary Target

Organizational

Individual

Business Process

Justification/ Purpose

Productivity/Efficiency

Effectiveness

CompetitiveAdvantage

ERA I Data Processing

ERA II End-User Computing

ERA III Strategic Systems

Competitiveness: A Link to National Goals

Human Resources

Capital

Technology

TradePolicy

Decreased Budget Deficit

Stronger National Security

Improved Domestic

Performance

Increased Competitiveness in World Market

More andBetter Jobs

New Competition

Reduced Trade Deficit

Increased Standard of Living

The Diamond of National Advantage

Firm Strategic, Structure

and Rivalry

Related and Supporting Industries

FactorConditions

DemandConditions

Government

Chance

Figure 3-1: FIVE COMPETITIVE FORCES MODEL

THE FIRMTRADITIONAL COMPETITORS

NEW MARKET ENTRANTS

SUPPLIERS

SUBSTITUTE PRODUCTS & SERVICES

CUSTOMERS

Threats

Bargaining power

N

Port Competitive Model

BargainingPower

of Supplier

SubstituteProducts

and Services

BargainingPower

of Buyers

PotentialNew Entrants

Intraindustry Rivalry Strategic Business Unit

Figure 3-1

Wal-Mart and the Porter Competitive Model

BargainingPower

of Supplier

SubstituteProducts

and Services

BargainingPower

of Buyers


Intraindustry Rivalry Strategic Business Unit

Figure 3-2

SBU: Wal-Mart Rivals:Kmart, Target, Toys R Us, Specialty Stores

i Foreign General Merchandisers or Discounts

i Established Retailer Shifting Strategy to Discounting or Megastores

i U.S. Product Manufacturei Foreign Manufacturei Local Governmenti IT Product and Service Suppliers

i Consumers in Small Town, U.S.A i Consumers in Metropolitan Areas in

the U.S.i Canadian and Mexican consumersi Other Foreign Consumers

i Mail Order i Home

Shopping Network

i Electronic

i Telemarketingi Buying Clubsi Door-to-door Sales

FIVE COMPETITIVE FORCES MODEL

THE FIRMTRADITIONAL COMPETITORS

NEW MARKET ENTRANTS

SUPPLIERS

SUBSTITUTE PRODUCTS & SERVICES

CUSTOMERS

Threats

Bargaining power

N

Activities of Value Chain

Inbound Logistics

OperationsOutbound

Logistics

Marketingand Sales

Services

Administrative and Other Indirect Value Added


Primary Activities

Support Activities

The Value Chain

Com

petitive

Adv

anta

ge

(Value)

Manufacturing Industry Value Chain Product and Service Flow

Research and Development

EngineeringProduction

and Manufacturing

Marketing Sales and

DistributiionService



Figure 3-5

Examples of the Value Chain

NDr. Chen, The Trends of the Information Systems Technology TM -18

Generic Value ChainFigure 3-7

Financial Policy

Regulatory Compliance Legal Accounting

Actuary Training Actuary Training Claims Training

Claims Training

IT Communication

i Product Development

i Market Research

i Actuarial Methods

i Investment Practice

i Policy Rating

i Underwriting

i Investment

i Independent Agent Network

i Billing and Collections

i Policy Sales

i Policy Renewal

i Agent Management

i Advertising

i Claims Settlement

i Loss Control

Inbound

Logistics

Operations Outbound

Logistics

Marketing and Sales

Service

Firm InfrastructureHuman Resource ManagementTechnology Development

Procurement


Inbound

Logistics

Operations Outbound

Logistics

Marketing and Sales

Service


Procurement

Information Systems Technology Planning and Budgeting Technology Office Technology

Training Technology Motivation Technology Information Technology

Product Technology Computer-Aided Technology Pilot Plant Technology

Software Development Tools Information Systems Technology

Information System Technology Communication Technology Transportation System Technology

i Transportation Technology

i Material Handling

i Storage and Preservation Technology

i Communication System Technology

i Information Technology

i Basic Technology

i Materials Handling

i Machine Tool Technology

i Material Handling Technology

i Packaging Technology


i Transportation Technology

i Material Handling Technology

i Packaging Technology



i Multimedia Technology



i Diagnostic and Testing



Porter’s Competitive Model

BargainingPower

of Supplier

SubstituteProducts

and Services

BargainingPower

of Buyers


Intraindustry Rivalry

Figure 4-2

SBU: American Airlines Rivals: United, Delta, USAir Northwest, Southwest

i Aircraft Manufactures Aircraft i Leasing Companiesi Labor Unions i Food Service Companiesi Airporti Local Transportation Servicei FAA (Air Traffic Controllers0i Hotels

i Foreign Carriers i Regional Carrier Start-

upsi Cargo Carrier Business

Strategy Change

i Travel Agentsi Business Travelersi Pleasure Travelsi Charter Servicei U.S. Militaryi Cargo and Mail

i Alternate Travel Servicesi Fast Trainsi Boats

i Private Transportationi Videoconferencing


Financial Policy

Regulatory Compliance

LegalAccounting

Inbound

Logistics

Operations Outbound

Logistics

Marketing and Sales

Service


Procurement

Community Affairs

Flight, Route and Yield Analyst Training

Pilot Training

Safety Training

Baggage Handling Training Agent Training Inflight

Training

Information Technology Communication

Computer Reservation System, Inflight System Flight Scheduling System, Yield Management System

Product Development Market Research

Baggage Tracking System

¨ Route Selection¨ Passenger

Service System¨ Yield

Management System(Pricing)

¨ Fuel¨ Flight

Scheduling¨ Crew

Scheduling¨ Facilities

Planning¨ Aircraft

Acquisition

M Ticket Counter Operation

M Gate Operation

M Aircraft Operations

M Onbord Service

M Baggage Handling

M Ticket Offices

M Baggage System

M Flight Connection

M Rental Car an d Hotel Reservation System

M Promotion

M Advertising

M Advantage Program

M Travel Agent Programs

M Group Sales

M Lost Baggage Service

M Complaint Follow-up

Interorganizational Systems

Your Company

Customers

Vendors

Support Services

Business Partners

Competitors

Industry Forces Government

Association Info Sources

Figure 5-1

Payment Process IndustryFigure 5-2

Visa International or Mastercard

Merchants

Card Holders• Individuals• Businesses

MemberBanks

EDI Applications

ElectronicData

Interchange

AdvanceShippingNotices

Inventory/Sales Data

PurchaseOrders

Invoices

FreightBills

Figure 5-3

EDI System Obstacles

DataCompany data versus standards

Cross-industry standardsStandards administration

Company data versus standardsCross-industry standardsStandards administration

CommunicationTime zones and windowsCommunication protocols

Telecommunications equipmentService cost and balance

Time zones and windowsCommunication protocols

Telecommunications equipmentService cost and balance

Application IntegrationFeatures and function supported

Interface

IntegrationFeatures and function supported

Interface

Figure 5-4

Electronic Data Interchange (EDI)Through the Use of a Van

Customer order

i Time Schedulei Time Zonei Data Formati Communication

Protocolsi Data Transmission

Speed

Customer order

i Time Schedulei Time Zonei Data Formati Communication

Protocolsi Data Transmission

Speed

Electronic Mailbox

Conversion/Translation

Vendor Systems:

Mainframes

Minicomputers

Microprocessors

No Computer

Figure 5-5

Figure 5 -- extra Values Beliefs

Principles

Mission

GoalsCulture

Vision

Strategies

Tactics

Business Plan

Objectives and Measurements

Authority and Responsibility

The Vision -to-Action ProcessImplementation

(Action)

Agreement and Commitment

Tactics and

Business Plan

Strategy

Vision

Sensing Opportunity

Feedback

Pyramid of Excellence Stakeholder Value

Where

Way

What

How

Value -Creating Objectives

Worldwide Excellence

System

Total QualityGrowth & InnovationLeadership

Vision

Value

People

commitment

Customer

Satisfaction

Fact-Based

Management

Strategic

Planning

Measurement

& Results

Customer

Satisfaction

Whirlpool PeopleQuality Process

& Products

Figure 6-4 Reprint with permission of Whirlpool Corporate

Vision and Information Systems

Vision

ApplicationNetworks

Tools

Asset

ExpenseStrategic

Tactical

Invest

Save Money

Figure 6-6

The Three Components of a New Strategy

Figure 7-1

Vision

External Assessment

Internal Assessment

A New Strategy

Strategic Management Process

Environmental AnalysisGeneral Environment

Operating EnvironmentCompetitive Positioning

Directions for Development

Opportunitie

s

Threa

ts

CompanyVision

Company StrategicHistory

CurrentStrategy

Chosen Strategy

Realized Strategy

StakeholderAnalysis

Vision &Strategy

Company AnalysisStructure

Value/ CultureCompetitive Positioning

Resources

Strengths

Weakness

es

Figure 7-2

Strategy ImplementationSenior Management

Visionand Macro-Strategies

Empowered Implementors

Micro-Strategies

andTactics

Company Culture

Risks to be Avoided

Critical Performance Factors

Key Enterprise Business Processes

Business Uncertainties

Figure 7-3

Managing for Results

i Objectivesi Authorityi Responsibilityi Trainingi Motivationi Performancei Resultsi Reward

i Objectivesi Authorityi Responsibilityi Trainingi Motivationi Performancei Resultsi Reward

Control

Figure 7-4

Management Information Needs

Figure 7-5

Senior Management

Emerging Opportunities and ThreatsExternal Impact of Strategies and Tactics

Internal Impact of Strategies and TacticsPerformance Measurements

Enpowered Implementors

IT-Based Strategies

Figure 7-6

Marketplace Operation

SignificantStructureChange

TraditionalProductsand Processes

Federal ExpressUSA Today

Charts Schwab

USAAL.L.Bean

McKesson

WhirlpoolXerox

Banc OneBoeing

Frito-LayWal-Mart

Company Infrastructure

Figure 7-7

i Data Managementi User Applicationsi Voice Managementi Network Managementi Planning Processi Financial Strategyi Organization

i Data Managementi User Applicationsi Voice Managementi Network Managementi Planning Processi Financial Strategyi Organization

Strategy Option Generator

Figure 8-1

Target

Supplier Customer Competitor

Thrust

Differentiation Cost Innovation Growth Alliance

Mode

Offensive Defensive

Direction

Use Provide

Execution

Strategic Advantage

Strategy Option Generator

Figure 8-2

Target

Supplier Customer Competitor

ThrustDifferentiation Cost Innovation Growth Alliance

Mode

Offensive Defensive

Direction

Use Provide

Execution

Strategic Advantage

Roles, Roles and Relationships

Figure 9-1

Senior Management

Users

Functional Management

Informational Systems Organization

Using IS to Compete

Figure 9-2

Users

SeniorManagement

InformationSystems

Organization

Bus

ines

s L

eade

rshi

p

IT

Leadership

Technology Transfer Through Organizational Learning

Figure 9-3

InformationTechnology

InformationTechnology

ApplicationsApplications

OrganizationOrganization

Using IS to Compete: Primary Responsibilities

Figure 9-4

7

Direction ConceptualApproach

SpecificApproach

2 1

2 5 4

1 3 5

10 10 10

Senior ManagementFunctional Management

IS Management

Making It Happen!

Figure 9-5

Vision

Tactics

Strategy

CrisisManagement

ExecutivePower

ProcessImprovement

CompetitiveBusiness L

eadership

Technology Leadership

Action Initiators

Figure 9-6

A Business

Products/Services

Board of Directors

Competitors

Cu

stomersS

up

pli

ers

Figure 9-7

InformationSystems

Organization

Board of Directors

Competitors

Cu

stomersS

up

pli

ers

Figure 9-8

InformationSystems

Organization

Steering Committee

Competitors

UsersS

up

pli

ers

Opportunities Direction

IT NeedsReal Dollars

ProductsPeople

Wants & NeedsJustification

Real Dollars?

Products & ServicesConstraints Costs

Needs and

Priorities

Real Dollars

Value to Customer Chart

Figure 10-1

Value-Added Process

Value-Added Process

What the Customer Buys

What the Customer Buys

Product/ServiceProduct/Service

Del

iver

y P

roce

ss

Pr o

du

c t/ S

erv i

c e

Value to Customer

Value to Customer AnalysisCharles Schwab & Co.

Figure 10-2

i Computer-based Tradesi Client-broker Service

Street SmartTelebrokerEqualizerOneSource• Electronic Transfers• Trade Risk Analysis

i Computer-based Tradesi Client-broker Service

Street SmartTelebrokerEqualizerOneSource• Electronic Transfers• Trade Risk Analysis

i Stock, Bond and Mutual Fund Tradesi Financial Product Optionsi Competetive Feesi Timely Execution of Trades and Money Transferi Personal Servicei Confidence in Financiali Custodial Responsibilty

i Stock, Bond and Mutual Fund Tradesi Financial Product Optionsi Competetive Feesi Timely Execution of Trades and Money Transferi Personal Servicei Confidence in Financiali Custodial Responsibilty


Del

iver

y P

roce

ss

Pr o

du

c t/ S

erv i

c e

Value to CustomerValue-Added Process What the Customer Buys

Value to Customer AnalysisMervyn’s

Figure 10-3

i Point-of-Sale(POS) System: Ticketed Merchandise UPC Scanning Price Look-up Credit Card Approval

i Wireless Portable POSi Warehouse Managementi EDI System with Vendorsi Infobot Voice Response System

i Point-of-Sale(POS) System: Ticketed Merchandise UPC Scanning Price Look-up Credit Card Approval

i Wireless Portable POSi Warehouse Managementi EDI System with Vendorsi Infobot Voice Response System

i Qualify Apparel/Home Fashions

i Competitive Pricesi High Merchandise

Availabilityi Personal Servicei Fast, Accurate Check-outi Fast Credit Approvali Access to Credit i Information

i Qualify Apparel/Home Fashions

i Competitive Pricesi High Merchandise

Availabilityi Personal Servicei Fast, Accurate Check-outi Fast Credit Approvali Access to Credit i Information


Del

iver

y P

roce

ss

Pr o

du

c t/ S

erv i

c e


Value to Customer AnalysisBoeing Commercial Airplane Group

Figure 10-4

i CAD Design System and Review Process

i Customer Input Through Network

i Co-Design Process WITH Customer

i Quality Control Systemi Vendor EDI System

i CAD Design System and Review Process

i Customer Input Through Network

i Co-Design Process WITH Customer

i Quality Control Systemi Vendor EDI System

i Aircraft Designed for Passenger,Comfort, Operational Efficiency and Safety

i Flexible Design Configuration

i Competitive Pricei Logical Support

i Aircraft Designed for Passenger,Comfort, Operational Efficiency and Safety

i Flexible Design Configuration

i Competitive Pricei Logical Support


Del

iver

y P

roce

ss

Pr o

du

c t/ S

erv i

c e


Telecommunications Models

Communication

People

Machines

MachinesPeople

Figure 11-1

Linking Users to Information Within Application on Networks

Business Enterprise

Network Application

Users

Information

i LAN

i WAN

i Public

i Private

i Wired

i Wireless

i Functionsi Organizational Processesi Personal

i Enterprisei Organizatio

n

i Departmenti Individual

i Traditional Datai Texti Images

i Graphicsi Voicei Videoi Multimedia

Figure 11-2

Information Systems Support of Business Requirements

Business and InformationTechnology Dynamics

Multi-Vendor/ Multi-Products

Information System ArchitectureOpen Systems

Standards

Vendor Hardware Software Products and Services

User OrganizationG Application FunctionG Ease Of UseG Seamless and TransparentFigure 11-3

Open Systems Environment

3.Database

4. User Interface

1.Operating Systems

2. Communication Service

Other Service

6. Systems Management

Services

SoftwareApplication

SoftwareApplication

5. Software Development Tools

Figure 11-4

A Telecommunications Perspective

Objective Voice Data

EfficiencyVoice Message

VolumesTransmission

Volumes


Voice ApplicationsPlus Linkage

PCs and Application Packages

Integrated Voice /Data Application

Figure 11-5

Success Factor Profile

Figure 12-1

Management Importance Responsibility AssessmentBusiness VisionCultureRisk ManagementPlan ImplementIS Integral to the BusinessIS Justification Mgmt. Process

Executive-IS Mgr. Partnership

Executive IS Experience

Operational Automation

Linkage to Suppliers

Linkage to Customers

Linkage to Customers Service

Pervasive Computing LiteracyIS ArchitectureIS MarketingIS User Relations

Information Systems Organization

Figure 13-1

IS Vice-President

Development &Maintenance

ProjectManagement

SystemAnalysis

Programmers

Planning

SystemsSupport

SystemsProgramming

Finance &Administration

DatabaseAdministration

ComputerOperations

NetworkManagement

DevelopmentCenter

Information Center

Future IS Organization? IS Executive CIO

Figure 13-2

Client InterfaceGeneral and

Administration IS Utility Telecommunications

CompetitiveSystems

Professionaland Technical

Support

Client SystemsGroups

Administration

Finance

Equipment

DataCenter

Performanceand Planning

DevelopmentCenter

DataNetwork

Voice Systems

Information Systems Value

Figure 14-1

G Company/Enterprise

G Function/Development

G Personal/Individual

Infrastructure

Application

Personal Applications and Tools

Evolution of Financial Strategy

Figure 14-2

Initiation

IExpansion

IIControl

IIIMaturity

IV

Application

Motivation

DP Planning

Organization

Single Area Proliferation ContainmentOrganization

Strategy

People Displacement

CostAvoidance

DP Efficiency


FinancialJustification

BudgetBusiness Case

InstallationAudit

Charge-OutSystem

ManagementProcess

Little Reactive Directed Proactive

Finance Dept.

MultipleDept.

CentralizedCentralized

DecentralizedDistributed

Management Process

Figure 14-3

Management Incentive

EliminateSimply

Automate

Business Case Process

IS Development Discipline

Interlock Management

Benefit Measurement

Figure 15-1

OrganizationalResponses to

Business Drives

Organizationg Downsizingg Outsourcingg Business Partneringg Corp. Alliance

New Markets, Opportunities

and Competitors

Process

Reengineering

Redefining

TQM

Employeeg Empowermentg Quality Circles g Teams Product

Customizationg Marketsg Customersg Global Standards

Time, Flexibility and Responsiveness as Competitive

Factors

Traditional Roles in Planning

Vision

Strategic

Tactical

Traditional IS Role

Figure 15-2

Strategic Planning Model

OpportunitiesTreats

OpportunitiesTreats

StrengthsWeaknesses

StrengthsWeaknesses

MissionVision

MissionVision

Culture(Explicit/Implicit)

Culture(Explicit/Implicit)

Goals

Objectives

StrategiesPositioning

Goals

Objectives

StrategiesPositioning

Business Unit

Functional Programs

Major Project

Business Unit

Functional Programs

Major Project

Detailed Projects

Resources:Headcount, Capital and ExpenseBudgets

Detailed Projects

Resources:Headcount, Capital and ExpenseBudgets

Environment (External)

Enterprise(internal)

Strategy Plan Tactical Plan Business Plan

Figure 15-3

What to PlanStrategic Enterprise

Planning

Strategic InformationPlanning

ArchitecturePlanning

TacticalPlanning

ImplementationPlanning

Enterprise Strategies

Information Strategies

Architecture

Time Oriented Objectives

Project Plans

Figure 15-4

Barriers to Aligning IS with Business Objectives

Figure 15-5

IS Track Record and Credibility?

Senior ManagementPerception of IS?

Communication ofBusiness Plan?

Executive Skills of IS Executive

Clear IS Role?

Effective IS Management?

IS Organization?

IS Skills and Capabilities?

IS Policies?

A problem with IS Capacity?

Does IS Organization Have a

User/Business Focus?

Managing IS to Business Objectives?

Business Plan

Is keeping IS aligned with the business objectives someone’s high-priority objective?

Business-IS Planning

Figure 15-6

Business Strategy

Information Technology

IS StrategyDictates

BenefitsDetermines

Business-IS Planning

Figure 15-7

Corporate Vision

Opportunities Technology Environment

Business Strategy

IS Strategy

Information Technology

1. Strategic Capability 2. Technology-driven Business Change

Dictates

Enterprise-wide Information Systems Strategic Planning Process

Business Domain Information Technology Domain

Information Technology Opportunities

Strategic PlanImpact

AlignmentBusiness Processes and Organization

Information Systems Architecture and

Organization

Org

aniz

atio

n

Op

port

unit

y

Figure 15-8

Xerox History

Figure 16-1

1959 1972 1979 1980 1983 1989 1990s

914

Cop

ier

Intr

oduc

edC

ompe

titio

n In

crea

ses

Ben

chm

arki

ng S

tart

edQ

ualit

y C

ircl

e St

arte

d Fu

ji

Xer

ox W

on D

emin

g A

war

d

Lea

ders

hip

Thr

ough

Qua

lity

Initi

ated

U.S

. Xer

ox W

on B

aldr

idge

Aw

ard

Continuous Improvement

Important Supporting Elements

Figure 16-3

Recognition and Reward

Tools and Processes

TransitionTeam

Training CommunicationSenior

ManagementBehavior

Xerox is a Total Quality

Company

A Win-Win Proposition

Delighted Customers

Satisfied Stockholders

Proud Employees

Enhanced Community

Successful Partners

Figure 16-5

Organizational Response to Business Drivers

High Medium Low

IS Significance

¨ New Markets, Opportunities and Competitors

¨ Time, Flexibility and Responsiveness as Competitive Factors

¨ Product Customization

¨ Process Reengineering, Redefining and TQM

¨ Employee Empowerment and Cross-Functional Teams

¨ Organization Downsizing, Outsourcing, Business Partnering and Alliances

Figure 17-1

Organizational Response

Mandatory Necessary Marginal

IS Role

Figure 17-2

Business Success Factors

¨ Business Leadership

¨ Fitting Pieces into the Big Picture

¨ Organizational Responsiveness and Resilience

¨ Realizing that Solving Customer Problems Requires a Team Approach

¨ A Strong Company¨ Ability and Willingness to

Innovate, Change and Take Risks¨ Accomplishing All of These Factors While Maintaining Necessary Balance

¨ Good Communication Throughout the Entire Organization

Porter Competitive Model for the Commercial Aircraft Industry

BargainingPower

of Supplier

SubstituteProducts

and Services

BargainingPower

of Buyers


Intralndustry Rivalry SBU: Boeing Airbus McDonnell Douglas

i Tupolev, from Former Soviet Union i Mitsubishi Heavy Industries in Japani Taiwan Aerospace, Other Emerging

Industrial Poweri Other Small-Aircraft Manufactures or

Aerospace, Military Companies: Dassault, ATR, Lockheed

i Engine Manufacturesi Electronics, Semiconductors, etc.i Other Material Suppliers,

Specialty Metals, Composite Materials, etc.

i Government Institutions

i Airlinesi Leasing Companiesi Government Institutionsi FAA, IATA, EPAi Other Regulating Bodies

Figure 2

i Capital Sources, banks, investors

i FAA, IATA, EPAi Other Regulating Bodiesi IT Vendors

i Advances in Small, Short-Haul, Turboprop Technology

i Advances in Automotive Industry and Infrastructure

i Fast Train for Distances Less than 400 Miles

i Advances in Telecommunications, Videoconferencing, etc.

Porter Value Chain for Boeing

Figure 3

Inbound

Logistics

Operations Outbound

Logistics

Marketing and Sales

Service


Procurement

Information Systems Technology Planning and Budgeting Technology Office Technology

i Material qualification

i Engine selection

i Partners & joint programs

i Electronics, etc.

i Concurrent engineering

i Flexible & modular manufacture

i Wide choice in capacity with “family” concept

i Fly-by-wire technology

i Short development cycles

i Quick to market with short manufacturing cycles

i Worldwide presence

i Early involvement of customers in product definition

i Promotion, advertising

i Lobbying U.S. and foreign governments

i Seeking powerful partners

i Facilitation of financing

i Trade shows

i Repair, spare partsi Maintenance

servicei Inspection & testi Upgradesi Training facilities

for customers

Procurement training Managing relationship with suppliersQualification of suppliers New materials Partners

IS inventory management JIT, production forecast

CAD/CAM systems Assembly of planes & parts tracking

R&D, Partnerships Defense contracts

Hiring & training of engineers, test pilots, skilled workers

Training for competitiveness company-wide

People familiar with national & international economics and politics

Product development Market research Regulation & Policies

Customer relationships Tracking of issues

Relationships Between Senior Executives at Boeing

Figure 5

Frank ShrontzCEO

Create the Vision

Phil Condit PresidentRuns the Day-to-Day

Buisness

John Warner Information Service

Group Implements the Information Systems

Ron Woodard CommercialAirplane Group

Runs the Airplane Business

Jerry King Defense& Space Group

Runs the Defense Business

Dale Hougardy Head of the 777 ProgramDevelops the 777

Boeing Value to Customer Chart

Figure 6

Boeing Aircraft


¨ CAD/CAM system, review, process, concurrent engineering¨ Customer and partner/supplier through the network¨ Co-design with customer¨ Qualify control system¨ Vender EDI system

¨ CAD/CAM system, review, process, concurrent engineering¨ Customer and partner/supplier through the network¨ Co-design with customer¨ Qualify control system¨ Vender EDI system

¨ An aircraft designed for passenger comfort, operational efficiency and safe¨ Flexible design configuration¨ Competitive price¨ On-time delivery¨ Logistical support, training, maintenance ----Peace of mind

¨ An aircraft designed for passenger comfort, operational efficiency and safe¨ Flexible design configuration¨ Competitive price¨ On-time delivery¨ Logistical support, training, maintenance ----Peace of mind

Value to CustomerValue-Add Process What the Customer Buys

Organizational Response

Mandatory Necessary Marginal

IS Role

Figure 17-2

Business Success Factors

¨ Business Leadership

¨ Fitting Pieces into the Big Picture

¨ Organizational Responsiveness and Resilience

¨ Realizing that Solving Customer Problems Requires a Team Approach

¨ A Strong Company¨ Ability and Willingness to

Innovate, Change and Take Risks¨ Accomplishing All of These Factors While Maintaining Necessary Balance

¨ Good Communication Throughout the Entire Organization

Success or Failure Factors of IS Business Succeed Survive or Service speed quality innovation...

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