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The Value Chain Administrative Coordination & Support Services Human Resource Management Technology Development Procurement of Resources Inbound Logistics Inbound Logistics Operations Outbound Logistics Outbound Logistics Marketing and Sales Marketing and Sales Customer Service Customer Service Competitive Advantage Porter’s Value Chain Primary Activities Support Activities
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Strategic Information Strategic Information SystemsSystems
Strategic Advantage and Strategic Advantage and Strategic NecessityStrategic Necessity
Strategic advantage refers to Strategic advantage refers to obtaining a sustainable competitive obtaining a sustainable competitive edge over competitors. The ability to edge over competitors. The ability to obtain a greater than normal return obtain a greater than normal return on investment.on investment.
A strategic necessity is a system that A strategic necessity is a system that must be installed to remain must be installed to remain competitive and stay in business.competitive and stay in business.
The Value ChainThe Value ChainAdministrative Coordination & Support Services
Human Resource Management
Technology Development
Procurement of Resources
InboundLogistics Operations Outbound
LogisticsMarketing
andSales
CustomerService
Com
petit
iveAd
vant
age
Porter’s Value Chain
Primary Activities
Supp
ort
Activ
ities
Strategic Roles for Information Strategic Roles for Information SystemsSystems
Improving business operationsImproving business operations Promoting business innovationPromoting business innovation Locking in customers and suppliersLocking in customers and suppliers
Interorganizational IS, EDI, automatic inventory Interorganizational IS, EDI, automatic inventory replenishment systemreplenishment system
Creating switching costsCreating switching costs make customers dependent on the continued use make customers dependent on the continued use
of innovative IS.of innovative IS. Raising barriers to entryRaising barriers to entry
discourage competitors from entering a marketdiscourage competitors from entering a market
Strategic Information Strategic Information SystemsSystems
““Systems which contribute significantly to the Systems which contribute significantly to the achievement of an organization's overall achievement of an organization's overall objectives.” (Clark, 1994)objectives.” (Clark, 1994)
““The information system to support or change an The information system to support or change an enterprise's strategy.” (Wiseman, 1985)enterprise's strategy.” (Wiseman, 1985)
““Enhance competitiveness of the organization Enhance competitiveness of the organization through the application of IT to business through the application of IT to business processes.” (Davenport)processes.” (Davenport)
A type of Information System that is aligned with A type of Information System that is aligned with business strategy and structure business strategy and structure Can help create a Can help create a competitive advantagecompetitive advantage
Strategic Information Strategic Information SystemsSystems
Technology used to gain an edge over an Technology used to gain an edge over an organization’s competitionorganization’s competition
Can be used at all levels of an organization Can be used at all levels of an organization or just a fewor just a few
Makes a differenceMakes a difference Profoundly alters the way an organization Profoundly alters the way an organization
does businessdoes business Sustained strategic, competitive advantageSustained strategic, competitive advantage
Information Systems forInformation Systems forStrategic AdvantageStrategic Advantage
How can information systems improve the How can information systems improve the value chain?value chain? By reducing the cost of primary and support By reducing the cost of primary and support
activitiesactivities How can information systems change the way How can information systems change the way
an organization reacts to its competitive forces?an organization reacts to its competitive forces? By changing the bargain power of suppliersBy changing the bargain power of suppliers By building closer ties with customersBy building closer ties with customers By increasing or decreasing barriers to entry in a By increasing or decreasing barriers to entry in a
marketmarket By serving as the basis for new products and/or By serving as the basis for new products and/or
servicesservices
Model for Development of Model for Development of Strategic Information SystemsStrategic Information Systems
BusinessProcesses
ITManagement
Commerce
InformationManagement
CustomerManagement
KnowledgeManagement
SISPlanning
Types of Strategic Information Types of Strategic Information SystemsSystems
Customer Relationship Management (CRM)Customer Relationship Management (CRM) Just-In-Time (JIT)/Build-To-Order (BTO)Just-In-Time (JIT)/Build-To-Order (BTO) E-CommerceE-Commerce Operations Support Systems (OSS)Operations Support Systems (OSS) Enterprise Resource Planning (ERP)Enterprise Resource Planning (ERP) Data Mining/Data WarehousingData Mining/Data Warehousing Decision Support Systems (DSS/GDSS)Decision Support Systems (DSS/GDSS) Supply Chain Management (SCM)Supply Chain Management (SCM)
Examples of Strategic Examples of Strategic Information SystemsInformation Systems
American AirlinesAmerican Airlines Fed ExFed Ex CitibankCitibank Wal-MartWal-Mart DellDell Amazon.comAmazon.com eBayeBay
CiscoCisco Yahoo!Yahoo! GoogleGoogle PNC CorporationPNC Corporation PriceWaterhouse PriceWaterhouse
CoopersCoopers Baxter HealthcareBaxter Healthcare
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