أ/ غدير عاشور 1 competitive advantages october 2010

 An IS is a collection of components that works together to provide help in the operation and management of an organisation.  “ any organized com bination of people, hardware, software, communications, networks, data resources, and policies and procedures that stores, retrieves, transforms, and disseminates information in an organization” (O’brien & Marakas, 15 th ed., 2010) 2 competitive advantages october 2010

 An IS does not need to be computer-based  Organisations and companies are good examples of the system in society 3 competitive advantages october 2010

 More competition: new competition in public as well as private sector  Faster pace: shorter product life cycles and faster product development  Increased globalisation: lower trade barriers, faster transport and communications and the easer flow of capital 4 competitive advantages october 2010

 Support of business processes and operations.  Support of decision making by employees and managers.  Support of strategies for competitive advantage. 5 competitive advantages october 2010

Figure 1.3: The Fundamental Roles of the Business Applications of Information Systems Support Strategies for Competitive Advantages Support Business Decision Making Support Business Processes and Operations 6 competitive advantages october 2010

 The figure illustrates how the fundamental roles interact in a typical organization.  At any moment, information systems designed to support business processes and operations may also be providing data to, or receiving data from, systems focused on business decision making or achieving competitive advantage. The same Is true for the other two. 7 competitive advantages october 2010

 Support of Business Processes and Operations. They have computer-based information system to help their employees record customer purchases, keep track of inventory, pay employees, buy new merchandise, and evaluate sales trends. Store operations would grind to halt without the support of such information systems. 8 competitive advantages october 2010

 Support of Business Decision Making. › Information systems help store managers and other business professionals make better decisions. › For example, decision about what lines of merchandise need to be added or discontinued and what kind of investments they require are typically made after an analysis provided by computer-based information systems. This function not only supports the decision making of store managers, buyers, and others, but also helps them look for ways to gain an advantage over other retailers in the competition for customers 9 competitive advantages october 2010

 Support of Strategies for Competitive Advantages. › Gaining a strategic advantage over competitors requires the innovative applications on information technologies. › Store management might take a decision to install touch-screen kiosks in all stores, with links to the e-commerce Web site for online shopping. › This offering might attract new customers and build customer loyalty because of the ease of shopping and buying merchandise provided by such information systems. Thus, strategic information systems can help provide products and services that give a business a comparative advantage over its competitors. 10 competitive advantages october 2010

 Today’s organizations are constantly striving to achieve integration to of their systems to allow information to flow freely through them, which adds even greater flexibility and business support than any of the individual system roles could provide. 11 competitive advantages october 2010

 Information Technology plays a major in reengineering business process  IT can increase the efficiency of business process as well as communication and collaboration among the people responsible for their operation and management. 12 competitive advantages october 2010

 The strategic roles of IT involves using information technology to develop products, services and capabilities that gives a company major advantages over the competitive forces it faces in marketing place.  Competition is a positive characteristic in business. 13 competitive advantages october 2010

 An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition. There can be many types of competitive advantages including the firm's cost structure, product offerings, distribution network and customer support. 14 competitive advantages october 2010

 Rivalry of competition  Threat of new entrants  Threat of substitutes  Bargaining power of customers  Bargaining power of suppliers 15 competitive advantages october 2010

 Cost leadership: ◦ Produce lower price products and services to help customers and suppliers to reduce their costs  Differentiation: ◦ Developing ways to differentiate products from those of its competitors  Innovation ◦ Produce new unique products and services or add some changes on the recent products 16 competitive advantages october 2010

 Growth ◦ Expanding a company's capacity to produce products and services, expanding into global markers  Alliances ◦ Establish new business linkage with customer, suppliers, competitors, and other companies. These linkages could include mergers, virtual companies or other marketing 17 competitive advantages october 2010

 For many companies, the business (IS) value of becoming a Customer-Focused business lies in its ability to help them: ◦ Keep customer loyal ◦ Anticipate customer future needs ◦ Respond to customer concerns ◦ Provide top quality customer service 18 competitive advantages october 2010

 Customer value strategy: ◦ Recognize that quality, rather than price, has become the primary determinant in a customer’s perceptions of value  From customer points of view, companies that offer the best value are able to: ◦ Keep track of their customers ◦ Keep up with market trend ◦ Supply products, services and information anytime and anywhere ◦ Provide customer services depending on individual needs 19 competitive advantages october 2010

 Some business activities are viewed as primary activities and others are support activities  Managers and business professionals must try to develop strategic use of internet and other technologies to add the most value to company's products or services 20 competitive advantages october 2010

 Value chain is an important concept that can help a manager identify opportunities for strategic IS  Views a firm as series or “chain” of basic activities that add value to the firm  Describes the activities within and around the organisation 21 competitive advantages october 2010

competitive advantages 22 competitive advantages october 2010

 Primary Activities. ◦ Inbound Logistics. Here goods are received from a company's suppliers. They are stored until they are needed on the production/assembly line. Goods are moved around the organisation. ◦ Operations. This is where goods are manufactured or assembled. Individual operations could include room service in an hotel, packing of books/videos/games by an online retailer, or the final tune for a new car's engine. 23 competitive advantages october 2010

◦ Outbound Logistics. The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer. ◦ Marketing and Sales. In true customer orientated fashion, at this stage the organisation prepares the offering to meet the needs of targeted customers. This area focuses strongly upon marketing communications and the promotions mix. ◦ Service. This includes all areas of service such as installation, after-sales service, complaints handling, training and so on. 24 competitive advantages october 2010

 Support Activities. ◦ Procurement. This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. They will be responsible for outsourcing (components or operations that would normally be done in-house are done by other organisations), and ePurchasing (using IT and web- based technologies to achieve procurement aims). 25 competitive advantages october 2010

◦ Technology Development. Technology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage. This could include production technology, Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and many other technological developments. 26 competitive advantages october 2010

◦ Human Resource Management (HRM). Employees are an expensive and vital resource. An organisation would manage recruitment and s election, training and development, and rewards and remuneration. The mission and objectives of the organisation would be driving force behind the HRM strategy. ◦ Firm Infrastructure. This activity includes and is driven by corporate or strategic planning. It includes the Management Information System (MIS), and other mechanisms for planning and control such as the accounting department. 27 competitive advantages october 2010

 Examples of support process: ◦ Computer-aided engineering and design enable a company to design products and process ◦ Extranets can improve resources by providing online e-commerce websites for a firm supplier 28 competitive advantages october 2010

 Examples of primary process: ◦ Support of marketing and sales processes by developing an interactive target marketing capability on the internet and its World Wide Web ◦ Customer services can be improved by co- ordinated and integrated customer relationship management system 29 competitive advantages october 2010

 Support of Business Processes and Operations  Support of Business Decision Making  Support of Strategies for Competitive Advantage 30 competitive advantages october 2010

 etitive_advantage.asp etitive_advantage.asp  INTRODUCTION TO INFORMATION SYSTEMS", by James A. O'Brien / Marakas, (15th), McGraw-Hill chapter 2 (section 1) 31 competitive advantages october 2010

 Specification, Design and Re-engineering of Information Systems.  Reading: chapter 10, section 1 32 competitive advantages october 2010