I NFORMATION S YSTEMS FOR C OMPETITIVE A DVANTAGE Chapter 2

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.

1831 Competitive advantage Significant, long-term benefit to a company over its competition Ability to establish and maintain a competitive advantage is vital to a company’s success

4 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? NFL Coaches

2-5 T HREE P RIMARY U SES OF I NFORMATION S YSTEMS Automation Providing support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency Automation Providing support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency Organizational Learning (Informating) Providing support to improve day-to-day operations by creating, acquiring, and transferring knowledge Organizational Learning (Informating) Providing support to improve day-to-day operations by creating, acquiring, and transferring knowledge Achieving Strategy Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals Achieving Strategy Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals

W HY U SE INFORMATION S YSTEMS

IS FOR A UTOMATING : D OING THINGS FASTER Automation Providing support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency Automation Providing support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency

2-8 B ENEFITS OF A UTOMATION – L OAN E XAMPLE

IS FOR ORGANIZATIONAL LEARNING D OING THINGS BETTER Organizational Learning (Informating) Providing support to improve day-to-day operations by creating, acquiring, and transferring knowledge Organizational Learning (Informating) Providing support to improve day-to-day operations by creating, acquiring, and transferring knowledge

2-10 O RGANIZATIONAL L EARNING E XAMPLE

IS FOR SUPPORTING STRATEGY D OING THINGS SMARTER Sources of Competitive Advantage best-made product superior customer service lower cost than rivals proprietary manufacturing technology shorter lead-times in developing & testing new products brand name and reputation more value for their money Achieving Strategy Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals

2-12 S TRATEGY

I S FOR COMPETITIVE ADVANTAGE IS and Value Chain Analysis The roles of IS in Value Chain Analysis The technology strategy Fit

2-14 V ALUE C HAIN A NALYSIS 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.

2-15 I NFORMATION S YSTEMS R OLES IN THE V ALUE C HAIN

16 1. Describe Net Flix’s competitive advantage and what are the sources of that competitive advantage ? 2. Discuss where you feel Net Flix uses of information systems helps them add value in the Value chain. Net Flix

M AKING THE BUSINESS CASE FOR A SYSTEM Business Case Identifying the value provided by an information system Business Case Development Issues Several common issues create difficulty in defining business cases for information systems including: Measurement Problems Time Lags Redistribution Mismanagement

2-18 M AKING THE BUSINESS CASE FOR A SYSTEM Time Lags Describes the difference in time from when the IT expenditure was made and when the benefits are realized Why? Measurement Problems benefits are difficult to pinpoint --may be measuring the wrong things Expected benefits 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 Measurement Problems benefits are difficult to pinpoint --may be measuring the wrong things Expected benefits 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

2-19 M AKING THE BUSINESS CASE FOR A SYSTEM Redistribution 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. Mismanagement IS has not been implemented and managed 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

M AKING 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

B USINESS CASE ARGUMENTS BASED ON FAITH

B USINESS CASE ARGUMENTS BASED ON FEAR

24 THE FIVE FORCES MODEL – ANALYZE COMPETITIVE FORCES IN AN I NDUSTRY How IS can have a factor in the industry Loyalty programs B2B marketplace Switching costs Ex ATM

B USINESS CASE ARGUMENTS BASED ON FACT

P RESENTING THE BUSINESS CASE

C OMPETITIVE ADVANTAGE IN BEING AT THE CUTTING EDGE

28 UTZ C HIPS CASE A NSWER THE FOLLOWING Analyze the industry that UTZ is in using the porter five forces model, is it a good industry to be in? What competitive advantage do you feel Utz has? ( which generic strategy) 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?

29 THE FIVE FORCES MODEL – ANALYZE COMPETITIVE FORCES IN AN I NDUSTRY How IS can have a factor in the industry

2-30 S TRATEGY

2-31 V ALUE C HAIN A NALYSIS 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.