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Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices Chapter I & 1:

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Presentation on theme: "Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices Chapter I & 1:"— Presentation transcript:

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2 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices Chapter I & 1: The Information Systems Strategy Triangle Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA

3 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 2 MIS Management Information Systems Which component is mostly important?

4 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 3 INTRODUCTION Shouldn’t managers rely on experts when it comes to making the decisions on IS for their organizations? –Managers today need to know about their organization’s capabilities and uses of information as much as they need to understand how to obtain and budget financial resources. –A manager who does not understand the basics of managing and using information cannot expect to be successful in today’s business environment.

5 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 4 Figure I.1 - Reasons why business managers should participate in information systems decisions IS must be managed as a critical resource IS enables change in the way people work together IS integrates with almost every aspect of business IS enables business opportunities and new strategies IS can be used to combat business challenges from competitors Reasons:

6 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 5 A Business View of Why Managers Need to Participate: IT accounts for more than 50% of the capital-goods dollars spent in the US. US companies spend $7,500 per employee on IT and use is growing exponentially. As managers decide which activities receive funding, it is essential that they have a basic grounding in managing and using IS.

7 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 6 6 Information Ecology ______ = simple observations ___________ = data endowed with relevance and purpose. ___________ = information that has been situationalized and contextualized to provide value. Data Information Knowledge

8 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 7 7 Figure I.9 System Hierarchy Information Oversee Design and Structure Infrastructure System’s Architecture Develop People TechnologyProcess Information System Management Requirements Strategies

9 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 8 Essential Value Propositions for a Successful Company Business Model Core Competency –Outsourcing –Offshoring Execution –Set corporate goals and get executive sponsorship for the initiative

10 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 9 WHY STRATEGY? (DBQ) Why is it important for business strategy to drive organizational strategy and IT strategy? What might happen if business strategy were not the driver?

11 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 10 Planning is everything... What are Two Major Outputs for an organization? Products, Services Customers, market, competition Vision guide Strategy create develop Tactic N Mission

12 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 11 Real World Example During an ice storm in 2007 many airlines were cancelling flights. Jet Blue waited to cancel flights and paid a heavy price. Had to cancel 1,000 flights over 5 days. Up to 9 planes full of passengers were stranded for up to 6 hours on the tarmac. An inadequate reservation system and shoestring communication system was blamed for the problems by Neelman. Changes had to be made.

13 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 12 Why is it important for business strategy to drive organizational strategy and IT strategy? What might happen if business strategy were not the driver? Typically, managers seem to think that changing or upgrading an information system (or even a component of an information system) will only positively impact a business. Quite the opposite, in fact, is true. By making changes in organizational strategy or IT strategy first, the triangle is "out of balance" and there will be consequences in the affected areas. For example, building a virtual organization, but not changing the business strategy to something like … "insuring our people are productive and have the widest possible work place opportunities" can lead to significant disconnects between workers, their managers, and their customers. And, worse, without supplying the virtual worker with the appropriate information system (a computer at home, a laptop, etc) will lead to a decrease in productivity by the virtual worker, and a major disruption of business operations.

14 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 13 Information System Strategy Triangle Business (Firm) Strategy Organizational Strategy IS/IT Strategy Where is the business going and why? What is required?How it can be delivered? N Direction for business Needs and priorities Infrastructure and services Supports business IT impact and potential Strategy Triangle 1. Architecture/Infrastructure 2. MIS organization 3. Funding 4. Project Management

15 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 14 Information System Strategy Triangle A business strategy is a well-articulated vision of where the business seeks to go and how it expects to get there. An organizational strategy is the organization’s design, as well as the choices it makes to define, set up, coordinate, and control its work processes. IS strategy is the plan the organization uses in providing information systems and services.

16 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 15 The Information Systems Strategy Triangle Successful firms’ business strategy drives both their organizational and IS strategies: They must, therefore, seek to balance business, organizational, and IS strategies IS Strategy is affected by the other strategies a firm uses. Changes in IS strategy must be accompanied by constant adjustments in the other two IS strategy can have (sometimes unintentional) consequences on business and organizational strategies

17 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 16 Example Give an example in which a company fails to perform well because it does not align its three strategies. Any? –too much focus on IT –used to be considered as a “hardware” company (PC, DOS etc.) –new division established in early 1990: GLOBAL SERVICIE DIVISION –it now becomes a “Service” corp. – “TOTAL solution”

18 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 17 Louis V. Gerstner, Jr. IBM former CEO and president ( ) Prior to joining IBM, Mr. Gerstner served for four years as chairman and chief executive officer of RJR Nabisco, Inc. This was preceded by an 11- year career at American Express Company, where he was president of the parent company and chairman and CEO of its largest subsidiary, American Express Travel Related Services Company. Prior to that, Mr. Gerstner was a director of the management consulting firm of McKinsey & Co., Inc., which he joined in In January 2003 he assumed the position of chairman of The Carlyle Group, a global private equity firm located in Washington, DC.

19 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 18 BRIEF OVERVIEW OF BUSINESS STRATEGY FRAMEWORKS

20 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 19 Striving for Competitive Advantage Firm level: Industry & Competitive Analysis Business level Competitive Forces Model (discussed in chap.2) Competitive Strategy D’Aveni’s Hypercompetition Model (7s) Value-Chain Analysis

21 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 20 PORTER ’ S FIVE COMPETITIVE FORCES MODEL THE FIRM INDUSTRY COMPETITORS NEW MARKET ENTRANTS SUPPLIERS SUBSTITUTE PRODUCTS & SERVICES CUSTOMERS Threats Bargaining power N Dr. Chen, The Trends of the Information Systems Technology TM -20 Switching cost Access to distribution channels Economies of scale Redefine products and services Improve price/performance Selection of suppler Threat of backward integration Buyer selection Switching costs Differentiation Cost-effectiveness Market access Differentiation of product or service

22 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 21 Business Strategy Frameworks Porter’s Generic Strategies Framework (and its variants) Hypercompetition and the New 7-Ss framework (D’Aveni) N

23 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 22 Figure 1.2: Porter’s Generic Strategy Framework – 3 Strategies for achieving Competitive Advantage Dr. Chen, The Trends of the Information Systems Technology TM -22 Competitive Mechanism Overall Cost Leadership Focus Differentiation Industrywide (Broad Target) Particular Segment only (Narrow Target) Competitive Scope Lower Cost Position Uniqueness Perceived by Customer Competitive Advantage N

24 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 23 Porter’s Competitive Advantage Strategies Cost leadership: be the cheapest Differentiation: focus on making your product and/or service stand out for non-cost reasons Focus: occupy narrow market niche where the products/services can stand out by virtue of their cost leadership or differentiation.

25 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 24 Variants on Differentiation Strategy Shareholder value model: create advantage through the use of knowledge and timing Unlimited resources model: companies with a large resource can sustain losses more easily than ones with fewer resources (deep pocket advantage) N

26 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices Time of market introduction relative to competition (months) Profits relative to competitions (%) Relationship between profits and time of market introduction

27 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 26 Cost Leadership Business Strategies and its Competitive Advantage Dr. Chen, The Trends of the Information Systems Technology TM -26 Cost Focus Differentiation Differentiation Focus Industry wide (Broad Target) Particular Segment only (Narrow Target) Competitive Scope Competitive Mechanism Lower Cost Position Uniqueness Perceived by Customer N Industrial economy Knowledge-based economy Innovation Alliance Growth

28 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 27 Competitive Advantage (Value) N Figure I.6 (2.4) Business Level: The Value Chain

29 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 28 Manufacturing Industry Value Chain Product and Service Flow Research and Development Engineering Production and Manufacturing Marketing Sales and Distribution Service Primary Activities Dr. Chen, The Trends of the Information Systems Technology Administrative and Other Indirect Value Added Administrative and Other Indirect Value Added Support Activities N

30 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 29 The Value System: Interconnecting relationships between organizations Upstream value Firm value Downstream value N

31 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 30 Hypercompetition and the New 7-S’s framework (D’Aveni) _______________________ Sustaining an advantage uses too much time and resources that can be a deadly distraction. The goal should be___________, not _______________ of advantage. Initiatives are achieved with a series of small steps. Hypercompetiton occurs when technologies or offerings are so new that standards and rules are influx, resulting in competitive advantages that cannot be sustained. It is characterized by intense and rapid competitive moves, in which competitors must move quickly to build new advantages and erode the advantages of their rivals. Every advantage is eroded. disruption sustainability

32 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 31 D’Aveni’s Disruption and 7-S’s Vision for Disruption Identifying and creating opportunities for temporary advantage through understanding Stakeholder satisfaction Strategic Soothsaying directed at identifying new ways to serve existing customers better or new customers that are not currently served by others Market Disruption Capability for Disruption Sustaining momentum by developing flexible capacities for Speed Surprise That can be applied across actions to Build temporary advantage Tactics for Disruption Seizing the initiative to gain advantage by Shifting the rules Signaling Simultaneous and sequential strategic thrusts With actions that shape, mold, or influence the direction or nature of the competitor’s response N Old 7Ss: structure, strategy, system, style, skills, staff, and super- ordinate goals. By Richard D’Aveni, professor of business strategy at Dartmouth College

33 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 32 D’Aveni’s Hypercompetition Model (cont.) Hypercompetiton Strategies for Disruption –1. Stakeholder satisfaction is key to winning each dynamic interaction with competitors –2. Strategic soothsaying is the process for seeking out new knowledge for predicting what customers will want in the future –3. Speed is crucial to take advantage of opportunities and respond to counterattacks by competitors –4. Surprise enhances a company’s ability to stun a competitor, to build up superior position before a competitor can counterattack. Hypercompetition Tactics for Disruption –1. Shifting rules of the market to create tremendous disruption for competitors. –2. Signals out to (a) make announcements of strategic intent to dominate a marketplace, or (b) manipulate the future moves of rivals. –3. Simultaneous or sequential strategic thrusts using several moves to mislead or confuse a competitor. Speed of the disruptive turbulence created by hypercometition is driven by globalization, more appealing substitute products, more fragmented customer tastes, deregulation, and the invention of new business models – all contributing to structural disequilibrium, falling barriers to market entry, and the dethronement of industry leaders

34 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 33 Example: At General Electric, Jack Welch, implemented a DYB (“Destroy Your Business”) approach by placing employees in the shoes of competitors to highlight weaknesses and find fresh ways of meeting customer needs. Similarly GE’s Medical Systems Division used DYB to respond to the challenges posed by the Internet. N

35 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 34 “ Be fearful when others are greedy, and be greedy when others are fearful.” -- Warren E. Buffett, CEO, Berkshire Hathawy, Inc.

36 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 35 BRIEF OVERVIEW OF ORGANIZATIONAL STRATEGIES

37 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 36 Figure 1.6 Summary of Key Strategy Frameworks Generic Strategies: Competitive Advantage (CA) through low cost, differentiation or focus Hypercompetition: CA is temporary, created through speed and aggression in the market

38 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 37 IndustriesCompetitive Advantage (Characteristics) Competitive Advantage (How to) Porter’s Model Relatively stableEstablish a strong, long-term position and defend it. Attain a fit with the environment as in traditional markets Hyper- competition Model Dynamic 1) Ever-increasing competition 2) Changing power between players Short-lived, take advantage of any small window of opportunity that arises (thru speed and aggression) 1) change rules of competition 2) create disruptions (during which temporary advantages can be exploited) Porter’s Model vs. Hypercompetition Model

39 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 38 Figure 1.6 The Business Diamond Business Process Tasks and Structure Values and Beliefs Management and Measurement Systems (control) (Source: Hammer et al, 1994) N

40 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 39 Figure 1.7 Managerial Levers Source: Cash, et al., 1994 People, Information, and Technology Values Performance measurement and evaluation Incentives and rewards Data Planning Culture ControlOrganization Execution Informal networks Formal reporting relationships Business processes Decision rights Organizational effectiveness Strategy N

41 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 40 Figure 1.8 Summary of Org. Strategy Frameworks FrameworkKey IdeaUsefulness in IS Discussions Business Diamond Management levers There are 4 components of an organization: business processes, values and beliefs, management control systems, and tasks and structures. Organizational variables, control variables, and cultural variables are the levers manager can use to affect change in their organizations Using IS in an organization will affect each of these components. Use this framework to identify where these impacts are likely to occur This is a more detailed model than the Business diamond and gives specific areas where IS can be used to manage the organization and to change it

42 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 41 Summary of Key Strategy Frameworks Framework Key Idea Usefulness in Information Systems Discussions Porter’s generic strategies framework Firms achieve competitive advantage through cost leadership, differentiation, or focus. Understanding which strategy is chosen by a firm is critical to choosing IS to complement that strategy. D’Aveni’s hypercompetition model Speed and aggressive moves and counter- moves by a firm create competitive advantage. The 7-S’s give the manager suggestions on what moves and counter moves to make and IS are critical to achieve the speed needed for these moves. Brandenberg and Nalebuff’s co-opetition model Companies cooperate and compete at the same time. Being cooperative and competitive at the same time requires IS that can manage these two roles.

43 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 42 Figure. Enhanced Model of “Built To Last”: Continuity and Change in Visionary Companies  Strategic Competitive Advantages and creating values Preserve Core Values Core Purpose Change Culture & Operating Practices Specific Goals and Strategies Processes IT Efficiency Effectiveness Innovation Safety Quality Care Management (tangible, strategic mechanism)

44 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 43 What is Web 2.0? "Web 2.0" refers to the second generation of web development and web design. –It is characterized as facilitating communication, information sharing, interoperability, user-centered design and collaboration on the World Wide Web. It has led to the development and evolution of web-based communities, hosted services, and web applications. –Examples include social-networking sites, video-sharing sites, wikis, blogs, mashups and folksonomies. –Web 2.0 is the business revolution in the computer industry caused by the move to the Internet as a platform, and an attempt to understand the rules for success on that new platform. Source:

45 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 44 Major Issues for the Next Society 1. Internationalization 2. Technology 3. Population 4I + 1K Internationalization Integration Innovation Information and Knowledge

46 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 45 Mini Case Study Case Study 1-1: Roche’s new scientific method (p.41-43) Form Groups Group discussion and work on the case and answers to questions Questions #1 thru #4

47 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 46 #1. IS/IT Strategy Triangle Each group: Complete the case using “Strategy Triangle” model

48 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 47 Information System Strategy Triangle Business (Firm) Strategy Organizational Strategy IS/IT Strategy N

49 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 48 Information System Strategy Triangle for Roche’s new scientific method Business (Firm) Strategy Organizational Strategy IS/IT Strategy N 1. Genomics Revolution/ Breakthroughs 2. First to the Market with a new drug to cure cancer or other diseases (First Mover) 1. Culture of failure is alright (Fail Fast Approach) 2. Hire people who can adapt to changing 3. Build Teams 4. Reward system IT revolution (Process voluminous data fast) 1. To screen compounds 2. To run simulations or GeneChip experiments 3. To identify and locate genes that are associated with stroke using Decode

50 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 49 Q#1: According to Case Study 1-1 (Pearlson’s text, pp ), how and what does the business strategy affect information systems and organizational decisions? In order to take advantage of advances in the genomics revolution, Roche is rethinking the way it builds teams (organizational strategy), rewards teams (organizational strategy), hires people (organizational strategy), creates a culture (organizational strategy) and processes data (IS strategy). In particular, it is shedding its ultracompetitive approach in favor of culture-changing collaborative approaches. It is now recruiting through advertisements run on the back pages of Science magazine. Its IS strategy incorporates the GeneChip and Fail Fast approach to speed the screening of compounds that are tested. IS must be designed to handle the large volume of data that must be analyzed.

51 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 50 Q#2: What “generic” strategy (by Porter) does Roche appear to be using based upon this case? Provide a rationale for your response. Roche’s business strategy appears to be first to market with a new drug to cure cancer or other diseases whose genes are identified in through the genomics project. Thus, they appear to be applying the differentiation strategy of having a drug that adds value in the cure of a disease. (It could be argued, though, that Roche is applying a focus/differentiation strategy by concentrating on cancer or strokes… it is not entirely clear what Roche’s overarching business strategy is from the case).

52 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 51 Q#3: Apply the Hypercompetition model to Roche. Which of the 7 Ss are demonstrated in this case? The hypercompetition model suggests that speed and aggressiveness of moves and countermoves in any given market can create strategic advantage. Clearly this case demonstrates Roche’s concern with a speedy discovery. An example is its ‘Fail Fast’ philosophy. To uncover successful drugs, it is conducting thousands of experiments… a series of small steps. To compete, Roche is taking advantage of its deep pockets and is relying on its timing and know-how. Below are some possible applications of D’Aveni’s 7-Ss:

53 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 52 7-SApplication Superior stakeholder satisfactionMaximizing customer satisfaction by adding value through the discovery of breakthrough drugs to cure cancer, stroke, or other disabling diseases Strategic soothsayingSeeking new knowledge in a variety of ways: applying new technologies such as GeneChip; advertising for new employees in a wide range of sources, including Science magazine; leveraging on the knowledge of it employees through more collaboration and teamwork Positioning for speedUsing IS to process large volumes of data more efficiently; applying ‘Fail Fast’ philosophy to identify winners more speedily Positioning for surpriseAltering its organizational and IS strategies to speed the discovery of new breakthrough drugs Shifting the rules of competitionUsing breakthrough discoveries of revolutionary drugs to treat major diseases can result in new ways to serve customers that transforms the industry; Trying to take advantage of discoveries in the genomics projects Signaling strategic intent? Simultaneous and sequential strategic thrusts ?

54 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 53 Q#4: How do information systems support Roche’s business strategy? The case discusses a number of ways in which IS supports Roche’s business strategy: –to screen compounds, –to run simulations or GeneChip experiments with potential new drugs, and –to identify and locate genes that are associated with stroke using Decode.

55 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 54 Q#5 (Extra) What is the risk(s) of using/adopting the information systems? Roche may awaken a sleeping giant with better resources for implementing a better system (and/or reverse engineering of their system) Concern of loss of data will cause disaster to the company (e.g., 10 people are using 90% of the company total computer capacity)

56 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 55 Potential Risks There are many potential risks that a firm faces when attempting to use IT to outpace their competition. Awakening a sleeping giant – a large competitor with deeper pockets may be nudged into implementing IS with even better features Demonstrating bad timing – sometimes customers are not ready to use the technology designed to gain strategic advantage Implementing IS poorly – information systems that fail because they are poorly implemented Failing to deliver what users want – systems that don’t meet the firm’s target market likely to fail Web-based alternative removes advantages – consider risk of losing any advantage obtained by an information resource that later becomes available as a service on the web Running afoul of the law – Using IS strategically may promote litigation N

57 Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 56 End of Chapter 1


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