1. Pertemuan 25 Materi : Buku Wajib & Sumber Materi :
Understanding e-Business Strategic and Tactical
Buku Wajib & Sumber Materi :
Turban, Efraim, R. Kelly Rainer and Richard E. Potter (2003). Introduction to Information Technology. Second Edition. John Wiley & Sons, Inc. Bab 13

2. Strategic Information Systems
Strategic Information Systems : systems that support or shape an organization’s competitive strategy
May significantly change the way the business operates
Makes substantial contribution toward achieving strategic goals
May increase performance and productivity significantly

3. Strategic Information Systems
Outward focus: aimed at direct competition in an industry
Inward focus: enhance the competitive position of the firm through…
Increasing employee productivity
Improving teamwork
Enhancing communication
Strategic Alliances : two or more companies share an inter-organizational system for mutual benefit

4. Competitive Strategy & IT
Strategy is the creation of a unique and valuable position, involving a set of activities different than what rivals do
IT creates competitive advantage by giving companies new ways to outperform their rivals
Create new applications
Enable reengineering of business processes
Enable innovation
Provide competitive intelligence

5. Competitive Intelligence on the Internet
Intelligence Search Strategy
Description
Review competitor’s Web sites
Reveal information about marketing information
Analyse related newsgroups
Find out what people think about a company and its products
Examine publicly available financial documents
By entering a number of databases and analyse findings
Do market research at your own Web site
Pose questions to Web site visitors
Use an information delivery service to gather news on competitors
Find what is published on the Internet about competitors
Use corporate research companies
Provide information ranging from risk analysis to stock market analysts’ reports about competitors

6. Porter’s Competitive Forces Model and IT
Competition - at the core of a firm’s success or failure
Used to develop strategies for companies to increase their competitive edge
Demonstrates how IT can enhance the competitiveness of corporations
5 major forces:
Threat of entry of new competitors
Threat of substitute products or services
Bargaining power of suppliers
Bargaining power of customers (buyers)
Rivalry among existing firms in the industry

7. Porter’s Five Forces Model

8. Porter’s Competitive Forces Model and IT
Response Strategies (Per Porter and Others) – may be supported in part by IT
Cost leadership strategy - producing at lowest cost
Differentiation strategy - being unique
Focus strategy - selecting a narrow-scope segment
Growth strategy - increasing market share
Alliances strategy - working with business partners
Innovation strategy - developing new products
Internal efficiency strategy - improving the manner in which business processes are executed
Customer-oriented strategy - concentrating on making customers happy

9. Impact of IT on Competitive Forces
Key Forces Affecting the Industry
Business Implications
Potential IT Responses
Threat of new entrants
Additional capacity
Reduced prices
New basis for
competition
Exploit existing economies of scale
Differentiate products / services,
Control distribution channels
Segment markets
High power suppliers
Raise prices/costs
Reduce quality of
supply
Reduce availability
Implement sourcing systems
Extend quality control into suppliers’ operations
Use forward planning with suppliers
High power buyers
Forces prices down
Higher quality demanded
Service flexibility required
Encourage competition
Differentiate and improve products/ services
Increase switching costs of buyers
Facilitate buyers product selection

10. Impact of IT on Competitive Forces
Key Forces Affecting the Industry
Business Implications
Potential IT Responses
Substitute products threatened
Limits potential and profit
Imposes price ceilings
Use differentiation strategy
Incorporate IT into product, service, or method of provision
Intense competition from rivals
Price competition
Need to develop new products and services
Distribution and service become critical
Customer loyalty required
Improve price/performance
Redefine products and services to increase value
Redefine market segments
Differentiate products and services in distribution channels and to consumers
Get closer to the end consumer - understand the user requirements

11. The Need for Organizational Change
Organizational structures and processes established in the Industrial Revolution are no longer effective, due to…
Globalization
Pressure for rapid change
Increasingly demanding customers
Opportunities afforded by IT
Focus on vertical, functional organization is inappropriate
Need integration that spans departmental and organizational boundaries

12. Business Process Reengineering
Solution based on fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in measures of performance
Elements:
Job Enrichment
Employee Empowerment
Process Simplification
Mass Customization
Reduced Cycle Time

13. Changes in Work Rules Brought by IT
Old Rule
Intervening Technology
New Rule
Information appears in only one place at one time
Shared databases, client/server architecture, electronic mail
Information appears simultaneously wherever needed
Only an expert can perform complex work.
Expert systems, neural computing
Novices can perform complex work.
Managers make all decisions.
Decision support systems, enterprise support systems, expert systems
Decision making is part of everyone’s job
Field personnel need offices to receive, send, store, and process information.
Wireless communication and portable computers, information highways, electronic mail
Field personnel can manage information from any location.
You have to locate items manually.
Tracking technology, groupware, workflow software, client/server
Items are located automatically
Plans get revised periodically.
High-performance computing systems
Plans get revised instantaneously whenever needed.

14. Changes in Work Rules Brought by IT
Old Rule
Intervening Technology
New Rule
People must come to one place to work together.
Groupware and group support systems, telecommunication, electronic mail, client/server
People can work together from different locations.
Customized products and services are expensive and take a long time to develop.
CAD-CAM, CASE tools, online systems for JIT decision making, expert systems
Customized products can be made fast and inexpensively (mass customization).
A long period of time is spanned between the inception of an idea and its implementation (time to market)
CAD-CAM, electronic data interchange, groupware, imaging (document) processing
Time-to-market can be reduced by 90 percent
Work should be moved to countries where labor is inexpensive (off-shore production).
Robots, imaging technologies, object-oriented programming, expert systems
Work can be also done in countries with high wages and salaries.

15. Networked Organization
Resemble computer networks and are supported by computerized systems
Shift toward the networked organization due to the movement toward an information-based economy
Informal
Loosely structured
Delegate/lead
Ownership/participation
Empower
Employees an asset
Information
shared ownership
Flatter/ manageable organizations
Team contributions
Networked Organization
Highly structured
Control
Direct
Employees a cost
Information
management-owned
Hierarchical organizations
Risk avoidance
Individual contributions
Hierarchical Organization
Formal
Manage
Risk management

16. Virtual Corporations Characteristics of Virtual Corporations (VC)
Excellence - each partner brings its core competence so an all-star winning team is created. No single company can match what the virtual corporation can achieve.
Full utilization of resources - some resources of the business partners may be underutilized when not in a VC.
Opportunism - the partnership is opportunistic. A VC is organized to seize market opportunities.
Lack of borders - it redefines traditional boundaries.
Trust - business partners in a VC are far more reliant on each other and more trusting than ever before.
Adaptability to change - the VC can quickly adapt to environmental changes because its structure is relatively simple.
Technology - IT makes the VC effective and efficient.