Organizational Strategy, Competitive Advantage, and Information Systems · 2016-08-24 · Discuss...

Organizational Strategy, Competitive Advantage, and Information Systems

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70 slides

1. Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

2. Differentiate between business process reengineering, business process improvement, and business process management.

3. Identify effective IT responses to different kinds of business pressures.

4. Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

[ LEARNING OBJECTIVES]

Business Processes 2.1

• Cross-Functional Processes

• Information Systems and Business

Processes

Business Processes

• A business process is:

– an ongoing collection of related activities that

create a product or service of value to the

organization, its business partners, and/or its

customers.

Business Processes


– an ongoing collection of related activities that create

a product or service of value to the organization, its

business partners, and/or its customers.

• Comprised of three elements:

– Inputs

– Resources

– Outputs

Business Processes


– an ongoing collection of related activities that create a product or service of value to the organization, its business partners, and/or its customers.

• Comprised of three elements:

– Inputs

– Resources

– Outputs

• Efficiency vs. Effectiveness

Examples of Business Processes

Examples of Business Processes (Continued)

Cross-Functional Processes

• No single functional area is responsible

• steps executed in a coordinated,

collaborative way

• Procurement & Fulfillment Cross-

functional processes

Notify Traveler

Receive Ticket Order

Reserve Seats

Charge Credit Card

Confirm Flight(s)

Issue e-Ticket

Plan Trip

Check Flights

Submit Ticket Order

Receive e-Ticket

Seats Available

Use Credit Card?

Charge OK?

Seats Available?

Notify Traveler

Frequent Flyer Mileage

Sufficient?

Subtract Mileage

NO

YES

NO

YES

NO

YES

NO

YES

Traveler Airline Web Site

YES

NO

Information Systems & Business Processes

• IS’s vital role in three areas of business

processes

– Executing the process

– Capturing and storing process data

– Monitoring process performance

Executing the Process

• IS’s help Execute the Process by:

– Informing employees when it is time to complete

a task

– Providing required data

– Providing a means to complete the task

Capturing & Storing Process Data

• Processes generate data

– Dates, times, product numbers, quantities, prices,

addresses, names, employee actions

• IS’s capture & store process data (aka,

transaction data)

• Capturing & storing data provides

immediate, ‘real time’ feedback

Monitoring Process Performance

• IS evaluates information to determine

how well a process is being executed

• Evaluations occur at two levels

– Process level

– Instance level

• Monitoring identifies problems for

process improvement

Business Process Reengineering, Business Process Improvement, and Business Process Management

2.2

• Reengineering

• Improvement

• Management

Measures of Excellence in

Executing Business Processes

• Customer Satisfaction

• Cost Reduction

• Cycle and fulfillment time reduction

• Quality

• Differentiation

• Productivity

Business Process Reengineering (BPR)

– A radical redesign of an organization’s business

processes to increase productivity and profitability

– Examines business processes with a “clean slate”

approach

Business Process Improvement (BPI)

– An incremental approach to move an organization

toward business process centered operations

– Focuses on reducing variation in process outputs

by identifying the underlying cause of the

variation


• Five basic phases of successful BPI

– Define – As is




– Measure – Numbers, Metrics





– Analyze – causes, trends






– Improve – alternatives, solutions






– Improve – alternatives, solutions

– Control - stabilize

Business Process Management (BPM)

• A management system used to support

continuous initiatives for core business

processes over time

• Important components of BPM:

– Process modeling

– Web-enabled technologies

– Business Activity Monitoring (BAM)

Business Process Management (BPM)

• Business Process Management Suite

(BPMS)

– An integrated set of applications used for BPM

• Emerging Trend of Social BPM

– Technologies enabling employees to collaborate

across functions internally and externally using

social media tools

Business Pressures, Organizational Responses, and Information Technology Support

2.3

• Business Pressures

• Organizational Responses

Business Pressures

• Market Pressures

Business Pressures


• Technology Pressures

Business Pressures


• Technology Pressures

• Societal/Political/Legal Pressures

Market Pressures

• Globalization

• Changing Nature of the Workforce

• Powerful Customers

Globalization

• The integration and interdependence of

economic, social, cultural, and

ecological facets of life, made possible

by rapid advances in IT.

Globalization 1.0 (1st Era)

1492 - 1800

• Focus:

– Countries

• Drivers:

– Muscle

– Horse power

– Wind power

– Steam power

Globalization 2.0 (2nd Era) 1800 - 2000

• Focus:

– Companies

• Main Driver:

– Multinational Companies

• First Half of 2.0

– Driver: Falling transport costs

• Second Half of 2.0

– Driver: Falling telecom costs

Globalization 3.0 (3rd Era)

2000 - Present

• Focus:

– Groups & Individuals

• Drivers:

– Convergence of 10 forces or “Flatteners”

The Ten “Flatteners”

1. 11/9/1989: Berlin

Wall Falls


1. 11/9/1989: Berlin

Wall Falls

2. 8/9/1995: Netscape

Goes Public


1. 11/9/1989: Berlin

Wall Falls

2. 8/9/1995: Netscape

Goes Public

3. Development of

Workflow

Software


1. 11/9/1989: Berlin

Wall Falls

2. 8/9/1995: Netscape

Goes Public

3. Development of

Workflow

Software

4. Uploading


5. Outsourcing

1. 11/9/1989: Berlin

Wall Falls

2. 8/9/1995: Netscape

Goes Public

3. Development of

Workflow

Software

4. Uploading


5. Outsourcing

6. Offshoring

1. 11/9/1989: Berlin

Wall Falls

2. 8/9/1995: Netscape

Goes Public

3. Development of

Workflow

Software

4. Uploading


5. Outsourcing

6. Offshoring

7. Supply Chaining

1. 11/9/1989: Berlin

Wall Falls

2. 8/9/1995: Netscape

Goes Public

3. Development of

Workflow

Software

4. Uploading


5. Outsourcing

6. Offshoring

7. Supply Chaining

8. Insourcing

1. 11/9/1989: Berlin

Wall Falls

2. 8/9/1995: Netscape

Goes Public

3. Development of

Workflow

Software

4. Uploading


5. Outsourcing

6. Offshoring

7. Supply Chaining

8. Insourcing

9. Informing

1. 11/9/1989: Berlin

Wall Falls

2. 8/9/1995: Netscape

Goes Public

3. Development of

Workflow

Software

4. Uploading


5. Outsourcing

6. Offshoring

7. Supply Chaining

8. Insourcing

9. Informing

10.The Steriods

1. 11/9/1989: Berlin

Wall Falls

2. 8/9/1995: Netscape

Goes Public

3. Development of

Workflow

Software

4. Uploading

Changing Nature of the Workforce

• Workforce is Becoming More Diversified

– Women

– Single Parents

– Minorities

– Persons with Disabilities

• IT is Enabling Telecommuting

Employees

Powerful Customers

• Increasing consumer sophistication &

expectations

• Consumer more knowledgeable about

– Products and services

– Price comparisons

– Electronic auctions

• Customer Relationship Management

Technology Pressures

• Technological Innovation &

Obsolescence

– Rapid development of both New and Substitute

Products & Services

Technology Pressures

• Technological Innovation &

Obsolescence

– Rapid development of both New and Substitute

Products & Services

• Information Overload

– Vast stores of data, information, & knowledge

– Difficulties in managing data for decision making

Societal / Political / Legal Pressures

• Social Responsibility



• Compliance with Government

Regulations



• Compliance with Government

Regulations

• Protection against Terrorist Attacks

• Ethical Issues

Social Responsibility

• Green IT

– Facilities design and

management

– Carbon management

– International and

U.S. state

environmental laws

– Energy management

Social Responsibility

• Green IT

– Facilities design and management

– Carbon management

– International and U.S. state environmental laws

– Energy management

• Digital Divide

– One Laptop per Child (OLPC)

Organizational Responses

• Strategic Systems



• Customer Focus



• Customer Focus

• Make-to-Order and Mass Customization



• Customer Focus

• Make-to-Order and Mass Customization

• E-Business & E-Commerce

Competitive Advantage and Strategic Information Systems

2.4

• Competitive Strategy

– A statement identifying a business’s

approach to compete, it’s goals, and the

plans and policies required to attain those

goals.

Competitive Advantage and Strategic Information Systems

2.4

• Strategic Information Systems

(SIS)

– An information system that helps an

organization achieve and maintain a

competitive advantages

Porter’s Competitive Forces Model

Porter’s Value Chain Model

• Value Chain – A sequence of activities through which the

organization’s inputs are transformed into valuable outputs.

• Primary Activities – Relate to Production & Distribution of Products &

Services

• Support Activities – Support Primary Activities Contributing to

Competitive Advantage

Primary Activities

• Five Primary Activities for

Manufacturing

1. Inbound Logistics (inputs)

2. Operations (manufacturing & testing)

3. Outbound Logistics (storage & distribution)

4. Marketing & Sales

5. After Sales Services

Support Activities

• Four Support Activities

1. Firm’s Infrastructure (accounting, finance,

management)

2. Human Resources Management

3. Product & Technology Development (R&D)

4. Procurement

Strategies for Competitive Advantage

• Cost Leadership

• Differentiation

• Innovation

• Operational Effectiveness

• Customer-Orientation

FIGURE 2.5 Strategies for competitive advantage.

Organizational Strategy, Competitive Advantage, and Information Systems

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Organizational Strategy, Competitive Advantage, and Information Systems · 2016-08-24 · Discuss...

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