INFORMATION SYSTEMS FOR COMPETITIVE ADVANTAGE Chapter 2 SIX MAJOR ROLES AND GOALS OF IT  1. Increase employee productivity by reducing time, errors and costs using  2. Enhance decision making  3. Improve team collaboration  4. Create business partnerships and alliances  5. Enable global reach all over the world taking into consideration the culture of each nation or society.  6. Facilitate organizational transformation as the organization evolves and responds to the ever-changing marketplace. 2 NFL Coaches NFL Coaches • What sources of competitive advantage can you identify the New England Patriots have by using information technology? • Are these long term, sustainable competitive advantages? • From our list of Roles and goals of Technology, what does the IS of the NFL do? 4 THREE PRIMARY USES OF INFORMATION SYSTEMS ______________ Providing support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency ____________________________ Providing support to improve day-to-day operations by creating, acquiring, and transferring knowledge ____________________________ Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals 2-5 WHY USE INFORMATION SYSTEMS IS FOR AUTOMATING: DOING THINGS FASTER Automation Providing support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency Styles of Processing • Manual Processing • Technology Supported Processing • Fully Automated Processing BENEFITS OF AUTOMATION – LOAN EXAMPLE 2-8 Table 2.1 IS FOR ORGANIZATIONAL LEARNING DOING THINGS BETTER Organizational Learning (Informating) Providing support to improve day-to-day operations by creating, acquiring, and transferring knowledge ______________ ______________ ______________ ORGANIZATIONAL LEARNING EXAMPLE 2-10 IS FOR SUPPORTING STRATEGY DOING THINGS SMARTER ____________________________ Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals Sources • • • • • • • of Competitive Advantage best-made ___________ superior ______________ service lower cost than rivals proprietary ______________ technology shorter lead-times in ___________ & testing new products brand name and ______________ more ___________ for their money STRATEGY 2-12 IS FOR COMPETITIVE ADVANTAGE IS and Value Chain Analysis  The roles of IS in Value Chain Analysis  The technology strategy Fit  VALUE CHAIN ANALYSIS 2-14 Is a process of analyzing an organization’s activities to determine where value is added to products and/or services and what costs are incurred in doing so. INFORMATION SYSTEMS ROLES IN THE VALUE CHAIN 2-15 Net Flix Net Flix 1. 2. Describe Net Flix’s competitive advantage and what are the sources of that competitive advantage ? Discuss where you feel Net Flix uses of information systems helps them add value in the Value chain. 16 MAKING THE BUSINESS CASE FOR A SYSTEM Business Case Identifying the ___________ provided by an information system Business Case Development Issues Several common issues create difficulty in defining business cases for information systems including: • Measurement ___________ • Time Lags • ___________ • Mismanagement MAKING THE BUSINESS CASE FOR A SYSTEM ___________ Problems • benefits are difficult to pinpoint --may be ___________ the wrong things • Expected ___________ not always defined in advance, so they are never seen (they must be identified to measure). • The biggest increases in productivity come from system effectiveness but many metrics focus on system efficiency ___________ Lags • Describes the ___________ in time from when the IT expenditure was made and when the ___________ are realized • Why? 2-18 MAKING THE BUSINESS CASE FOR A SYSTEM ___________ IS may be beneficial to individual firms, but not for an entire industry or the economy as a whole • Strategic information systems may help one firm increase its market share at the expense of others (redistributing) • Expectations have increased as technology has become prevalent. We forget the gains that have been realized. ___________ IS has not been ___________ and ___________ well • Some believe that people simply build bad systems, implement them poorly, and rely on technology fixes for problems that require joint technology/process solutions • Inappropriate IS investments can mask or even increase organizational slack and inefficiency 2-19 MAKING A SUCCESSFUL BUSINESS CASE  Individuals in organizations generally use one, or in most cases, a combination of the following argument types to justify investments in information systems Based on ___________ Based on ___________ Based on ___________ BUSINESS CASE ARGUMENTS BASED ON ___________  Arguments based on beliefs about organizational strategy, competitive advantage, industry forces, customer perceptions, market share, and so on BUSINESS CASE ARGUMENTS BASED ON ___________ Arguments based on the notion that if the system is not implemented, the firm will lose out to the competition or, worse, go out of business BUSINESS CASE ARGUMENTS BASED ON FEAR Factors to consider Industry factors Regulation Nature of competition THE FIVE FORCES MODEL – ANALYZE COMPETITIVE FORCES IN AN INDUSTRY  How IS can have a factor in the industry 24 BUSINESS CASE ARGUMENTS BASED ON ___________ Arguments based on data, quantitative analysis and/or indisputable factors PRESENTING THE BUSINESS CASE Know the _________ • The IS manager • Company executives Convert to _________terms Devise _________ variables Measure what is _________to management Assessing value for IT _________ Changing mindsets about IS COMPETITIVE ADVANTAGE IN BEING AT THE CUTTING EDGE The need for constant IS _________ The cutting edge vs. the _________ edge Requirements for being on the _________ edge _________ the new, new thing UTZ CHIPS CASE ANSWER THE FOLLOWING  Analyze the industry that UTZ is in using the porter model, is it a good industry to be in?  What competitive advantage do you feel Utz has? How does information play into that competitive advantage  Where in the value chain should they next upgrade their use of technology for the biggest biggest gains – how would you present that to management? 28