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 (TQM & Effectiveness) Organizational Learning (Informating) Providing support to improve day-to-day operations by creating, acquiring, and transferring knowledge (TQM & Effectiveness) 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

2-7 B ENEFITS OF A UTOMATION – L OAN E XAMPLE

2-8 O RGANIZATIONAL L EARNING E XAMPLE

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

2-10 S TRATEGY

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

2-12 V ALUE C HAIN A NALYSIS Is a process of analyzing an organization’s activities ( processes) to determine where value is added to products and/or services and what costs are incurred in doing so.

2-13 I NFORMATION S YSTEMS R OLES IN THE V ALUE C HAIN

14 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

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 Based on Faith Based on Fact Based on fear

B USINESS CASE ARGUMENTS BASED ON FAITH Arguments based on beliefs about organizational strategy, competitive advantage, industry forces, customer perceptions, market share, and so on

B USINESS CASE ARGUMENTS BASED ON FEAR 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

B USINESS CASE ARGUMENTS BASED ON FEAR Factors to consider Industry factors Regulation Nature of competition

20 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 Arguments based on data, quantitative analysis and/or indisputable factors

P RESENTING THE BUSINESS CASE Know the audience The IS manager Company executives Convert to Monetary termsDevise proxy variables Measure what is important to management Assessing value for IT infrastructure Changing mindsets about IS

C OMPETITIVE ADVANTAGE IN BEING AT THE CUTTING EDGE The need for constant IS innovation The cutting edge vs. the bleeding edge Requirements for being on the cutting edge Predicting the new, new thing

24 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?

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

2-26 S TRATEGY

2-27 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.