Information Technology for Strategic Advantage Soetam Rizky.
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Transcript of Information Technology for Strategic Advantage Soetam Rizky.
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Information Technology for Strategic Advantage
Soetam Rizky
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Strategic Information System
Any information system--EIS, OIS, TPS, KMS--that changes the goals, processes, products, or environmental relationships to help an organization gain a competitive advantage or reduce a competitive disadvantage.
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Strategic Information System
• An advantage over competitors in some measure such as cost, quality, or speed
Competitive Advantage
• Employee productivity & Operational efficiency
Improving Core
Competency
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Before we continue
• SIS born because all of industrial competition
• SIS need Strategic Management……
• SIS is not ordinary Information System…..
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Strategic Management ?
Strategic management is the way an organization maps or crafts the strategy of its future operations.
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Strategic Management IT
Innovative applications: Create innovative applications that provide direct strategic
advantage to organizations.
Competitive weapons: Information systems themselves are recognized as a competitive
weapon
Changes in processes: IT supports changes in business processes that translate to
strategic advantage
Links with business partners: IT links a company with its business partners effectively
and efficiently.
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Strategic Management IT
Cost reductions: IT enables companies to reduce costs.
Relationships with suppliers and customers: IT can be used to lock in suppliers and customers, or to build in
switching costs.
New products: A firm can leverage its investment in IT to create new products that are in demand in the marketplace
Competitive intelligence: IT provides competitive (business) intelligence by collecting and analyzing
information about products, markets, competitors, and environmental changes
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Quick Summary
Strategic Information System
Competitive Advantage
Improving Core Competency
Innovative application
Process Change
Link with partners
Cost Reduction
New Products
Relationship
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Porter’s Competitive Forces Model
External Competitive
Forces
The threat of entry of
new competitor
s
The bargaining power of suppliers
The bargaining power of
customers (buyers)
The threat of
substitute products or
services
The rivalry among existing
firms in the industry
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Porter’s Competitive Forces Model
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Competitor Analysis
First Competitive
Force
What Drives them?
What are they Doing
and can do?
What are their
strengths & weaknesses?
Is Competition
intense?
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New Entry Barriers
Second Competitive
Force
If nothing slows entry of
competitors competition will become intense
Incumbent Reaction?
What Actions are required to build market
share?
Production Process?
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Substitute Products
Third Competitive
Force
Products or services from
another industry enter
the market
Customers becoming
acclimated to using
substitutesIs the
substitute market
growing?
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Supply Chain
Fourth & Fifth
Competitive Forces
Who controls the
transaction?
Each element adds value – question who captures it?
The Suppliers
The Buyers
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Quick Summary
Porter’s Competitive Forces Model
Competitor analysis
New Entry Barriers
Substitute Products
The Suppliers
Buyers and transaction
controls
Are we competitive enough ?
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Sustaining a Strategic Information System
• Strategic information systems are designed to establish a profitable and sustainable position against the competitive forces in an industry
• Experience also indicates that information systems, by themselves, can rarely provide a sustainable competitive advantage
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Sustaining a Strategic Information System
Key Resources
Rarity
Substitutability
Appropriability
Imitability
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IT PLANNING APPROACHESBusiness-led approach: The IT investment plan is
defined on the basis of the current business strategy.
Method-driven approach: The IS needs are identified with the use of techniques and tools.
Technological approach: Analytical modeling and other tools are used to execute the IT plans.
Administrative approach: The IT plan is established by a steering committee.
Organizational approach: The IT investment plan is derived from a business-consensus view of all
stakeholders in the organization
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IT PLANNING ACTIVITIES
Strategic IT planning: Establishes the relationship between the overall organizational plan and the IT
plan.
Information requirements analysis: Identifies broad, organizational information requirements to establish a strategic information architecture that can be used
to direct specific application development.
Resource allocation: Allocates both IT application development resources and operational resources.
Project planning: Develops a plan that outlines schedules and resource requirements for specific IS
projects.
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IT PLANNING – APPLICATION PORTFOLIO
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Before we continue…….
• SIS must be sustainable….
• IS Development Concept :–80% planning–20% implementation
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Summary
IS for Competitive Advantage
Improving Core
Competency
Competitive Force Model
Planning Approaches & Activities
Application Portfolio
SIS Sustainibility
Do you think IS really can be strategic ?
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Questions / Comments ?