MELJUN CORTES - Using Information Tech Competitive Advantage

8/9/2019 MELJUN CORTES - Using Information Tech Competitive Advantage

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Using Information Technology

for Competitive Advantage

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What is a Firm?

Physical System

Closed-loop

Controlled by managementUses feedback to ensure objectives met

Open because of environmental interaction

Managed through use of a conceptualsystem

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Importance of Environment

Very reason for a firms existence

Firm takes resources from environment,

transforms them, and returns goods andservices to environment

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Society

FinancialCommunity

GovernmentGlobal

Community

SuppliersThe

Firm

Laborunions

Stockholdersor owners

Customers

Competitors

The Firms Environment

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The Firm Is Connected to Its

Environment by Resource Flows

Physical and conceptual

Some flows are major

Some should not occur at all

All resources that enter the firm from theenvironment eventually return to the

environment

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Competitive Advantage

Computer field perspective

Use of information to gain leverage in

marketplaceRelies on more than physical resources

Addressed with strategic objectives

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A Value Chain

Firm Infrastructure

Human resource management

Technology development

Procurement

Inbound

logistics

Operations Outbound

logistics

Marketing

and

sales

Service

Support

Activities

Primary Activities2-7

Source : Michael E. Porter


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Channelvalue

chains

Suppliervalue

chains

Buyervalue

chains

Firmvalue

chain

A Value System

2-8Source : Michael E. Porter


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The Information Resources

Two views of information management

1. Manage data by implementing computer-based database management systems

(DBMS)

2. Manage resources that produce theinformation

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The Information Resources

Facilities

Software DatabaseHardware

Information

Specialists

Users

Information

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The Information Resource

Manager -- the CIO

Chief Information Officer (CIO) is not

simply a title, but role

Manager of information services Contributes managerial skills

Solves information resources problems

Solves problems in other areas of firmsoperations

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The CIO Attitude

The business is what counts

Build partnerships/ties with the rest of the

firm Improve basic business processes

Communicate in business terms, not IS

jargon

Provide reliable IS services

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Strategic Planning

Long-range planning

Intends to give firm most favorable position in

its environmentSpecifies strategies for achieving objectives

Need for each business area to create its

own strategic plan

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Strategic

planning for

information resources

Strategic

planning for

marketing

resources

Strategic

planning for

manufacturing

resources

Strategic

planning for

human

resources

Strategic

planning for

financial resources

The Functional Areas Should Cooperate

in Developing Their Strategic Plans

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Strategy Set Transformation

Organizationalstrategy set

MISstrategy set

Mission

Objectives

Strategy

Otherstrategicorganizationalattributes

System

objectives

Systemconstraints

Systemdesignstrategies

MIS

strategicplanningprocess

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Strategy Set Transformation:

Basic Flaw

Business areas do not always have the

resources to ensure accomplishment of

strategic objectives

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SPIR

Strategy set transformation; support the

firms objectives

Strategic planning for information resources(SPIR) develops firm and IS strategic plans

concurrently

SPIR content 1. What is to be achieved

2. What will be required

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Strategic Planning for

Information Resources

Businessstrategy

Informationresourcesand

ISstrategy

Influence onBusinessStrategy

Influence onInformationResources

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Strategic Plan Framework for


Strategic Plan

for Information

Resources

AIS

Objectives

MIS

Objectives

DSS

Objectives

Virtual

Office

Objectives

Knowledge-

based systems

Objectives

Required

Information

Resources

Required

Information

Resources

Required

Information

Resources

Required

Information

Resources

Required

Information

Resources

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The Strategic Implications of

End-User Computing (EUC)

Levels of end users in terms of capabilities

menu-level end users

command-level end usersend-user programmers

functional support personnel

EUC application considerationsshifts workload so that end-users and

information specialists talents are better used

reduces communications gap2-20


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EUC Risks

Poorly aimed systems

Poorly designed/ documented systems

Inefficient use of information resources

Loss of data integrity

Loss of security

Loss of control

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Management (IRM) Concept

Realization that firms information

resources go far beyond the information

itself Activity pursued by managers at all levels

Identifying, acquiring, and managing

information resources needed to satisfyinformation needs

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IRM - Required Elements

A recognition that competitive advantage

can be achieved by means of superior

information resources A recognition that information services is a

major functional area

A recognition that the CIO is a top-levelexecutive

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IRM-Required Ingredients (cont.)

A consideration of the firms information

resources when engaging in strategic

planning A formal strategic plan for information

resources

A strategy for stimulating and managingend-user computing

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Th IRM M d l


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The firms executives

CIO Other executives

Central computingresources

Disbursed computingresources

FUNCTIONAL AREAS

Users engaged inend-user computing Other users

ENVIRONMENTAL INFLUENCES

Internal influences Firms strategic plan

INFORMATION RESOURCES

DATA AND INFORMATION

The IRM Model

Information

servicesHuman

resources

Manufacturing MarketingFinance

The environment of the firm

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IRM Model: Firm Environment

Provides setting for achieving competitive

advantage

Executives are aware of need to manageresource flows to meet needs of

environmental elements

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IRM Model: Firms Executives

Includes CIO

Guides firm toward objectives

Key activity is strategic planning

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IRM Model: Business Areas

Information services is a major business

area

Each area develops own strategic plans One business area strategic plan is for

information resources

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IRM Model: Information

Resources

Strategic plan for information resources

details acquisition and management

Information resourcesCentralized

Dispersed throughout firm

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IRM Model: Users

Details data and information flows between

resources and users

Some users engage in end-user computing

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Summary

Environment of a firm consists of eightelements

Firms attempt to achieve competitive

advantageMargin - value of products and services over

cost

Value chain

Information resources

Hardware, software, facilities, database,

information specialists, information, and users

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MELJUN CORTES - Using Information Tech Competitive Advantage