Strategic Use of IS

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Managing and Using Information Systems:

A Strategic Approach Fifth Edition

Strategic Use ofInformation Resources

Keri Pearlson and Carol Saunders

Chapter2

PowerPointfiles by Michelle M. RamimHuizenga School of Business and Entrepreneurship

o!a Southeastern "ni!ersity

(c) 2013 John Wiley & Sons, Inc.


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Learning Objectives

List the identifying factors of the eras of information sage.

!no" "hat ma#es an information resorce $ala%le.

'lain ho" information resorces are sed strategically in conte't

of the *forces model. +nderstand ho" information resorces can %e sed to alter the

$ale chain.

'lain the imortance of strategic alliances.

!no" the ris#s of information resorces.



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Real World Example

ara aligns its information system strategy"ith itsbusiness

strategy.

-he system lin#s demand to manfactring and distri%tion.

stomers $isit to 1/ times er year to chec# on ne" items thatmay ha$e arri$ed.

Limited rodcts lead cstomers to immediately rchase rodctsthey li#e.

aras %siness strategy leads to a loyal and satisfied cstomer %ase.



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Real World Example !ont"#

-he S system sends daily dates to aras headarters.

4anagers reort to designers "hat sold and "hat cstomers "anted

%t cold not find.

-he information is sed to determine in$entory management.

5e" designs can %e ordered t"ice a "ee#.

-he entire rocess is atomated so that ne" designs and rodcts

can %e created ic#ly.

ara ses its information resorces to sstain its ad$antages o$er

cometitors.



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Evolution Of %nformation Resources

IS strategy from the 1670s to the 1660s "as dri$en %y internal

organi8ational needssch as9o Lo"ering e'isting transaction costs.o ro$iding sort for managers %y collecting and distri%ting

information.o :edesigning %siness rocesses.

In the 2010 era IS strategy "as dri$en %y social I- latforms and

ne" caa%ilities.o

; ne" e$oltion of alications, rocesses, and strategicoortnities.



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organi8ation

?alecreation

reatecolla%orati$eartnershis

?alecreation

reatecommnityand social

%siness

0ustify %/expenditures

:I Increasingrodcti$ityand %etterdecisionality

ometiti$eosition

ometiti$eosition

;dding $ale reatingrelationshis

/arget ofsystems

rgani8ation rgani8ation>gro

Indi$idalmanager>

gro

@sinessrocesses

ecosystem

stomer>slier

ecosystem

stomer>emloyee>

slierecosystem

%nformationmodels

;licationsecific

Aata dri$en +ser dri$en @sinessdri$en

!no"ledgedri$en

eoledri$en(orrelationshidri$en)

B John Wiley & Sons(c) 2013 John Wiley & Sons, Inc.


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Ed.#%hapter& Era %

&'()sEra %%&'*)s

Era %%%&'+)s

Era %,&'')s

Era ,2)))

Era ,%2&))

1ominanttecnology

4ainframe,

Ccentrali8ed

intelligenceD

4inicomter,

mostly

Ccentrali8ed

intelligenceD

4icrocomter,Cdecentrali8edintelligenceD

lientSer$er,Cdistri%tedintelligenceD

Internet,

glo%al

C%iitos

intelligenceD

Social

latforms,

social

net"or#s,

mo%ile,clod

asis ofvalue

Scarcity Scarcity Scarcity lentitde lentitde lentitde

nderlyingeconomics

conomicsofinformation

%ndled "itheconomics ofthings





conomics ofinformationsearated

fromeconomics ofthings

conomics ofinformationsearated

fromeconomics ofthings

conomics ofrelationshis

%ndled "ith

economics ofinformation

B John Wiley & Sons



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IS9o Eels firms address their internal and external circmstances.o na%les managers to identify and se information resorces strategically.o na%les firms to gain ad$antage o$er the cometition.


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%nformation Resources as 5trategic /ools

4anagers need to com%ine all of the firms a$aila%le resorces.o Internal resorces9


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%nformation Resources

Information resorces can %e either assetsor capabilities.o %/ assets are anythingtangi%le or intangi%lethat can %e sed %y

a firm in its rocesses for creating, rodcing, and>or offering itsrodcts, goods, or ser$ices (e.g., I- infrastrctre).

o %/ capability is something that is learned or de$eloed o$er timefor the firm to create, rodce, or offer its rodcts.



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%/ 7ssets

IS infrastrctre9o Incldes data, technology, eole, and rocesses.o ro$ides the fondation for deli$ery of a firms rodcts or ser$ices.

Information reository9o Logically-relateddata that is catred, organi8ed, and retrie$a%le

%y the firm.o Aesigned to imro$e the firms efficiency.



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%/ 7ssets !ont"#

We% 2.0 sace incldes resorces sed %t not o"ned %y the firm(e.g., e@ay,


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!ategories of %/ !apabilities

/ecnical s8ills * alied to designing, de$eloing, andimlementing IS.

%/ management s8ills * critical for managing I- fnction and I-roFects.

Relationsip s8ills * can %e either e'ternally*focsed or sanacross deartments.

ommitting and de$eloing information resorces reiress%stantial financial resorces.



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oroffering its rodcts (goods or ser$ices).

%5 infrastructure @ase fondation of the I- ortfolioshared throgh the firm

Eard"are, soft"are, net"or#, datacomonents, rorietary technology, "e%*

%ased ser$ices

%nformationrepository

Aata that is logically related andorgani8ed in a strctred form

accessi%le and sa%le for decisionma#ing roses.

ritical information a%ot cstomers that can%e sed to gain strategic ad$antage. 4ch of

this information is increasingly a$aila%le on the"e%.

%/ !apability Something that is learned or de$eloed o$er time in order for the firm to create,rodce, or offer its rodcts in I- assets.

/ecnical s8ill ;%ility alied to designing,de$eloing, and imlementinginformation systems

roficiency in systems analysis and designGrogramming s#ills

%/ management s8ills ;%ility to manage I- fnction and I-roFects

@eing #no"ledgea%le a%ot %siness rocessesand managing systems to sort themGe$alating technology otionsG en$isioningcreati$e IS soltions to %siness ro%lems

Relationsip s8ills ;%ility of IS secialists to "or# "itharties otside the IS deartment.

Sanning9 ha$ing a good relationshi %et"eenI- and %siness managers'ternally*focsed9 ha$ing a good relationshi

"ith an otsorcing $endor(c) 2013 John Wiley & Sons, Inc. (c) John Wiley & Sons


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7dvantages of %nformation Resource

%nformation resource value9o ras I throgh III = $ale "as deri$ed from scarcity, reflected in the

cost to rodce the information.o ra I? = $ale "as deri$ed from lenitde.o

:et;or8 effects9the $ale of a net"or# node to a erson ororgani8ation increases "hen others Foin the net"or# (e.g., e*mail).o :ather than se rodction costs to gide the determination of rice,

information rodcts might %e riced to reflect their $ale to the%yer.



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!ont"# %nformation resource appropriation9

o Aetermining "here a resorces $ale lies and ho" it can %e imro$edin a firms fa$or.

o -he attri%tes of information resorces that imact the $ale ma#e itossi%le to create and sstain cometiti$e ad$antage (e.g., ara).

%nformation resource distribution across firms9o arly adoters may e'erience a cometiti$e ad$antage from sing an

information resorce.o -he e'erience gained may lead to ineities %et"een firms.o Aifferent e'eriences "ith a resorce create $aleand a strategic

ad$antage.



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!ont"#o -he $ale of information mshrooms nder conditions of information

asymmetries.o ossessor of information may se it against, or sell it to, comanies or

indi$idals "ho are not other"ise a%le to access the information.


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!ont"# Ae%riefing "ith team mem%ers at the conclsion of each roFect.

+sing social technologies to record interactions and acti$ity streams.

Information resorces %ecome obsolete and lose $ale o$er time.

+nderstanding the natre of the information resorces at hand is a

rereisite to sing them effecti$ely.

;ligning IS strategy "ith %siness strategy ena%les the general

manager to ma'imi8e rofit otential.



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%nformation Resources 5trategy

4anagers confront elements that inflence the cometiti$e

en$ironment.

Slim tolerance for error.

4anagers mst ta#e mltile $ie"s of the strategic landscae9o


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sing %nformation Resources to %nfluence

!ompetitive =orces orters fi$e forces model sho"s the maFor forces that shae the cometiti$e

en$ironment of the firm (


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!ompetitive =orce %/ %nfluence on !ompetitive =orce

/reat of :e;Entrants

aras I- sorts its tightly*#nit gro of designers, mar#et secialists, rodction managers,and rodction lanners. 5e" entrants are nli#ely to ro$ide I- to sort relationshis thatha$e %een %ilt o$er time.


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.orter>s ,alue !ain


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Resources to 7ttain !ompetitive

7dvantage ; resourceis considered $ala%le "hen it ena%les the firm to %ecome

more efficient or effecti$e.

; resorce is rare "hen other firms do not ossess it.o Sta#es or resorces reired Fst to %e in the %siness(e.g., %an#s and

;-4s).o Initially rare and $ala%le resorces "ere the commnities many

comanies imlemented sing social I-.o -hese commnities "ere a $ala%le resorce for the firms that

sonsored them, and only a fe" e'isted.



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Resources to 5ustain !ompetitive

7dvantage 4any firms that in$ested in systems learned that gaining a

cometiti$e ad$antage does not atomatically mean that yo can

sstain it o$er the long term.

5eed to contine to inno$ate and to rotect against resorce

imitation, s%stittion, or transfer.

-echnical #no"ledge, esecially relating to the firms oerationG a

gng*ho comany cltreG and managerial e'erience in the firms

en$ironment is less easy to o%tain and isconsidered harder to

transfer to other firms.



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5trategic 7lliances

;n interorgani8ational relationshi that affords a strategic ad$antage to

one or more comanies in the relationshi.o .g., -he alliance %et"een ynga and


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/ypes of 5trategic 7lliances

!o-opetition9a ne" strategy "here%y comanies cooerate and

comete at the same time "ith other comanies in their $ale net.o reates the %est ossi%le otcome for %sinesses %y otimally com%ining

cometition and cooeration.

,alue net incldes a comany, its cometitors, comlementors,

cstomers, and sliers and the interactions among all of them.

!omplementor9a comany "hose rodcts or ser$ices are sed in

conFnction "ith a articlar rodct or ser$ice to ma#e a more sefl

set for the cstomer.



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.otential Ris8s

-here are many otential ris#s that a firm faces "hen attemting to se

I- to otace their cometition.

7;a8ening a sleeping giant = a large cometitor "ith deeer

oc#ets may %e ndged into imlementing IS "ith e$en %etter featres

(i.e


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.otential Ris8s !ont"#

%mplementing %5 poorly = information systems that fail %ecase they

are oorly imlemented (e.g., ?irgin ;merica, Eershey


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!o-creating %/ and usiness 5trategy

Information is increasingly a more rominent core comonent of the

rodcts or ser$ices offered %y firms.

I- strategy is %siness strategyG they cannot %e created "ithot each

other. Some comanies main rodct is information (financial ser$ices).


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!apter 2 - ?ey /erms

!ustomer relationsip management (:4) (. 6) * a tool tootimi8e the rocessing of cstomer information.!o-opetition(. 7) * the strategy for creating the %est ossi%leotcome for a %siness %y otimally com%ining cometition and

cooeration.Enterprise resource planning (:) (. 6) * a tool that atomatesfnctions of the oerations acti$ities of the $ale chain.%nformation resources (. H/) * the a$aila%le data, technology, eole,and rocesses a$aila%le to erform %siness rocesses and tas#s.



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!apter 2 - ?ey /erms !ont"#

%/ asset (. H/) * anything tangi%le or intangi%le that can %e sed %y a firmin its rocesses for creating, rodcing, and>or offering its rodcts, goods,or ser$ices (e.g., I- infrastrctre).%/ capability (. H/) * something that is learned or de$eloed o$er time

for the firm to create, rodce, or offer its rodcts.:et;or8 effects (. H) * the $ale of a net"or# node to a erson ororgani8ation increases "hen others Foin the net"or# (e.g., e*mail).:ather than se rodction costs to gide the determination of rice,information rodcts might %e riced to reflect their $ale to the

%yer.



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!apter 2 - ?ey /erms !ont"#

Resource-based vie; (:@?) (. 6) * cometiti$e ad$antage comes

from the information and other resorces of the firm.5trategic alliance (. 7H) = an interorgani8ational relationshi thataffords a strategic ad$antage to one or more comanies in the relationshi.

5upply cain management (S4) (. 6) * an aroach to ho"comanies sorce materials for oerations.Web 2") (. H/) * otential resorces that are a$aila%le to the firm as aser$ice %t are not necessarily o"ned %y the firm.



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!opyrigt 2)&3 0on Wiley @ 5onsA %nc"

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(c) 2013 John Wiley & Sons Inc

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