Slide introduction to information ssstem 10th obien chap002 eng

James A O’Brien Introduction to Information Systems Chapter Competing with Information Technology Irwin/McGraw-Hill James A O’Brien Introduction to Information Systems Chapter Objectives • Identify several basic competitive strategies and explain how they can be used to confront the competitive forces faced by a business • Identify several strategic uses of information technology and give examples of how they give competitive advantages to business • Identify several strategic uses of Internet technologies for electronic business and commerce, and give examples of each Irwin/McGraw-Hill James A O’Brien Introduction to Information Systems Chapter Objectives • Give examples of how business process reengineering involves the strategic use of information technology • Identify how total quality management differs from business process reengineering in its use of information technology • Identify how information technology can be used to help a company be an agile competitor, or to form a virtual company to meet strategic business opportunities Irwin/McGraw-Hill James A O’Brien Introduction to Information Systems Chapter Objectives • Explain how knowledge management systems can help a business build a knowledge-creating company Irwin/McGraw-Hill James A O’Brien Introduction to Information Systems The Competitive Environment Threat of New Entrants Bargaining Power of Suppliers Rivalry Among Existing Competitors Threat of Substitutes Irwin/McGraw-Hill Bargaining Power of Customers James A O’Brien Introduction to Information Systems Fundamental Competitive Strategies Cost Cost Leadership Leadership Strategies Strategies Irwin/McGraw-Hill Differentiation Differentiation Strategies Strategies Innovation Innovation Strategies Strategies Growth Growth Strategies Strategies Alliance Alliance Strategies Strategies James A O’Brien Introduction to Information Systems Strategic Uses of Information Technology Strategy IT Role Outcome Irwin/McGraw-Hill Improving Business Process Use IT to reduce costs of doing business Enhance Efficiency Promote Business Innovation Use IT to create new products or services Create New Business Opportunities Locking in Customers and Suppliers •Use IT to improve quality •Use IT to link business to customers and suppliers Maintain Valuable Customers and Relationships James A O’Brien Introduction to Information Systems Strategic Uses of Information Technology Strategy IT Role Outcome Irwin/McGraw-Hill Raise Barriers to Entry Increase amount of investment or complexity of IT needed to compete Increase Market Share Build a Strategic IT Platform Leverage investment in IS resources from operational uses to strategic uses Create New Business Opportunities Build a Strategic Information Base Use IT to provide information to support firm’s competitive strategy Enhance Organizational Collaboration James A O’Brien Strategic Positioning of Internet Technologies Customer Competition Connectivity High External Drivers Introduction to Information Systems Global Market Penetration Product and Services Transformation Strategy E-Commerce Website Value-added IT Services E-Business; Extensive Intranets and Extranets Solution Cost and Efficiency Improvements Performance Improvements in Business Effectiveness E-Mail, Chat Systems Low Irwin/McGraw-Hill Intranets and Extranets E-Business Processes Connectivity Internal Drivers High James A O’Brien The Value Chain Procurement of Resources Marketing Inbound Outbound Customer Operations and Logistics Logistics Service Sales Irwin/McGraw-Hill t it i ve Technology Development t ag n va d A Human Resource Management e Administrative Coordination & Support Services Co mp e Introduction to Information Systems James A O’Brien 1 Introduction to Information Systems The Internet Value Chain Internet Capability Benefits to Company Opportunity for Advantage Irwin/McGraw-Hill Marketing and Product Research Data for market research, establishes consumer responses Enhance Efficiency Sales and Distribution Support and Customer Feedback •Low cost distribution •Reaches new customers •Multiplies contact points •Access to customer comments online •Immediate response to customer problems Create New Business Opportunities Maintain Valuable Customers and Relationships James A O’Brien Introduction to Information Systems Customer-Focused E-Business Let customers place orders directly Let customers check order history and delivery status Build a community of customers, employees, and partners Irwin/McGraw-Hill Customer Database Give all employees a complete view of customers Let customers place orders thru distribution partners Transaction Database Link Employees and distribution partners James A O’Brien Introduction to Information Systems Business Reengineering and Quality Management Business Quality Improvement Definition Target Potential Payback Risk Business Reengineering Incrementally Improving Existing Processes Radically Redesigning Business Systems Any Process Strategic Business Processes 10%-50% Improvements 10-Fold Improvements Low High Same Jobs - More Efficient Big Job Cuts; New Jobs; What Changes? Major Job Redesign Primary Enablers Irwin/McGraw-Hill IT and Work Simplification IT and Organizational Redesign James A O’Brien The Customer- Focused Agile Competitor Cu tim stom et o mer’s ar ke t f st o ion Co sact n Tra of ded st Co ue-ad l Va vices r Se Irwin/McGraw-Hill Leverage the Impact of People and IS Resources Tim e Give GiveCustomers Customers Solutions Solutions to toProblems Problems Conformance Organize to Master Change lity Customization De li v ery Anticipation of future needs Cooperate Cooperatewith with Business BusinessPartners Partners and andCompetitors Competitors Ac ce ss ibi Introduction to Information Systems James A O’Brien Introduction to Information Systems Virtual Corporations Adaptability Borderless Excellence Six Characteristics of Virtual Companies Technology Irwin/McGraw-Hill Trust-Based Opportunism James A O’Brien Introduction to Information Systems Knowledge Management Systems Solution Knowledge Technical Support Staff Customers Development Engineers Irwin/McGraw-Hill Intranet Product Managers The Internet Other Vendors James A O’Brien Introduction to Information Systems Key Factors for Sustaining Strategic Success Environment Irwin/McGraw-Hill • Size • Geographical scope • Product scope • Organization structure • Technological resources • Knowledge resources Firm • Creating switching costs • Exploiting knowledge • Developing response strategies • Managing risks Performance James A O’Brien Introduction to Information Systems Chapter Summary • Information systems can play several strategic roles in business • The Internet, intranets, extranets, and other Internet-based technologies can be used strategically for E-Business and E-Commerce • A key strategic use of Internet technologies is to build an E-Business which develops its business value by making customer value its strategic focus Irwin/McGraw-Hill James A O’Brien Introduction to Information Systems Chapter Summary (cont) • IT is a key ingredient in reengineering business operations, by enabling radical changes to business processes that dramatically improve their efficiency and effectiveness • IT can be strategically used to improve the quality of business performance • A business can use IT to help it become an agile company, that can respond quickly to changes in its environment Irwin/McGraw-Hill James A O’Brien Introduction to Information Systems Chapter Summary (cont) • Forming virtual companies has become an important competitive strategy in today’s dynamic global market • Lasting competitive advantages today can only come from innovative use and management of organizational knowledge by knowledge creating companies and learning organizations • Successful strategic information systems are not easy to develop and implement They may require major change in how businesses operate Irwin/McGraw-Hill ... Valuable Customers and Relationships James A O’Brien Introduction to Information Systems Customer-Focused E-Business Let customers place orders directly Let customers check order history and delivery... Business BusinessPartners Partners and andCompetitors Competitors Ac ce ss ibi Introduction to Information Systems James A O’Brien Introduction to Information Systems Virtual Corporations Adaptability... process reengineering in its use of information technology • Identify how information technology can be used to help a company be an agile competitor, or to form a virtual company to meet strategic