INFORMATION SYSTEMS FOR COMPETITIVE ADVANTAGE

Chapter 2

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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.

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• 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

NFL Coaches

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THREE PRIMARY USES OF INFORMATION SYSTEMS

______________Providing support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency

______________Providing support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency

____________________________Providing support to improve day-to-day operations by creating, acquiring, and transferring knowledge

____________________________Providing support to improve day-to-day operations by creating, acquiring, and transferring knowledge

____________________________Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals

____________________________Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals

WHY USE INFORMATION SYSTEMS

IS FOR AUTOMATING: DOING THINGS FASTER   

Styles of Processing

• Manual Processing• Technology Supported Processing• Fully Automated Processing

AutomationProviding support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency

AutomationProviding support to complete a task faster, more cheaply, and perhaps with greater accuracy and/or consistency

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BENEFITS OF AUTOMATION – LOAN EXAMPLE

Table 2.1

IS FOR ORGANIZATIONAL LEARNINGDOING 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

____________________________

______________

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ORGANIZATIONAL LEARNING EXAMPLE

IS FOR SUPPORTING STRATEGYDOING THINGS SMARTER

Sources of Competitive Advantage• best-made ___________• superior ______________ service• lower cost than rivals• proprietary ______________ technology• shorter lead-times in ___________ & testing new products• brand name and ______________• more ___________ for their money

____________________________Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals

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STRATEGY

IS FOR COMPETITIVE ADVANTAGE

IS and Value Chain Analysis The roles of IS in Value Chain Analysis The technology strategy Fit

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VALUE CHAIN ANALYSIS

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.

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INFORMATION SYSTEMS ROLES IN THE VALUE CHAIN

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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 FlixNet Flix

MAKING THE BUSINESS CASE FOR A SYSTEM

Business CaseIdentifying the ___________ provided by an information system

Business Case Development IssuesSeveral common issues create difficulty in defining business

cases for information systems including:• Measurement ___________• Time Lags• ___________ • Mismanagement

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MAKING THE BUSINESS CASE FOR A SYSTEM

___________ Lags• Describes the ___________ in time from when the IT

expenditure was made and when the ___________ are realized

• Why?

___________ Problems• benefits are difficult to pinpoint --may be ___________ the

wrong things• Expected ___________ 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

___________ Problems• benefits are difficult to pinpoint --may be ___________ the

wrong things• Expected ___________ 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

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MAKING THE BUSINESS CASE FOR A SYSTEM

___________ 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.

___________ IS has not been ___________ and ___________ 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

MAKING 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 ___________

Based on _________

__

Based on _________

__

BUSINESS CASE ARGUMENTS BASED ON ___________

Arguments based on beliefs about organizational strategy, competitive advantage, industry forces, customer perceptions, market share, and so on

BUSINESS CASE ARGUMENTS BASED ON ___________

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

BUSINESS CASE ARGUMENTS BASED ON FEAR

Factors to consider

Industry factors RegulationNature of

competition

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THE FIVE FORCES MODEL – ANALYZE COMPETITIVE FORCES IN AN

INDUSTRY

How IS can have a factor in the industry

BUSINESS CASE ARGUMENTS BASED ON ___________

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

PRESENTING THE BUSINESS CASE

Know the _________

• The IS manager• Company executives

Convert to _________terms

Devise _________ variables

Measure what is _________to management

Assessing value for IT _________

Changing mindsets about IS

COMPETITIVE ADVANTAGE IN BEING AT THE CUTTING EDGE

The need for constant IS _________

The cutting edge vs. the

_________ edge

Requirements for being on the _________ edge

_________ the new, new thing

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UTZ CHIPS CASE ANSWER THE FOLLOWING Analyze the industry that UTZ is in

using the porter model, is it a good industry to be in?

What competitive advantage do you feel Utz has? 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?