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Success or Failure Factors of IS
Business
Succeed
Surviveor
Service speed quality innovation
Improve
Continuous
RadicalChange Management
Technology Organization Management
i Ethically Acceptablei Socially Responsiblei Politically control
(Behavior) (Human)i Structurei attributei decision-makingi operation
culture(Strategic Advantage)
Risks Benefit
uncertainty
strategyovercome enhance
I SA Digital Society
1) choosing strategy
2) organizing the business
3) organizing the systems management area
Ability & flexibility to compress time and space and to expand organizational knowledge and then increase flexibility
culture
HUMAN ADAPTABILITY The Driver & Servant
[ organizational change] ------Radical Change
Success or Failure Factors of IS (Cont’d)
[ organizational change] ------Radical Change
A FIRM/ORGANIZATION: Evolution of change
Efficiency(Automate)
Effectiveness
(Informate)
Innovation
(Innovate)
[Doing the things right]
-Proper utilization of resource
{Save Money}
[Doing the right things]
-Attainment of goals
{Make Money}
Restructuring Competitive Advantage
Re-engineering Cooperative Advantage
Electronic Market: flatten the organizational hierarchical structure
“ Revolutionary significance lies in generality” e.g., steam engineers--triggered the first Industrial Revolution Computers--Seem to be triggering a second one.
- property of culture
- creativity
IT Yesterday, Today and Tomorrow
YesterdayComputer age
Computer proc.
Computing
Accuracy
Automation
Efficiency
“doing things
right”
TodayInformation age
People proc.
Communication
Perspective
Information
Effectiveness
“doing the right
things”
TomorrowKnowledge age
Knowledge proc.
Connectivity
Reality
Innovation
Performance/
Innovation
“creativity”
Three Necessary Perspectives
Business
Success
• Business Environment
• Enterprises Environment
• IT Environment
Simultaneous Revolutions
The Business
New Competitors
New Political Agendas
New Technology
New Employees and New Value
New Rules of Competition
Industry structure Changes
New regulatory Environment
Increasing Customer Expectation
Business Drivers
Organization
Market Technology
Regulation Employees/Work
Business Processes
Solution to Business Requirements
A Systematic Approach
VisionStrategyTactics
Business Plan
VisionStrategyTactics
Business Plan
¨ Competitive Options¨ Roles, Roles and Relationships¨ Redefine/ Define¨ Telecommunications as the Delivery Vehicle¨ Success Factor Profile
¨ Competitive Options¨ Roles, Roles and Relationships¨ Redefine/ Define¨ Telecommunications as the Delivery Vehicle¨ Success Factor Profile
The Information Technology Environment
Administrative Framework
Regulated Monopoly
Free Market
Regulated Free Market
Primary Target
Organizational
Individual
Business Process
Justification/ Purpose
Productivity/Efficiency
Effectiveness
CompetitiveAdvantage
ERA I Data Processing
ERA II End-User Computing
ERA III Strategic Systems
Competitiveness: A Link to National Goals
Human Resources
Capital
Technology
TradePolicy
Decreased Budget Deficit
Stronger National Security
Improved Domestic
Performance
Increased Competitiveness in World Market
More andBetter Jobs
New Competition
Reduced Trade Deficit
Increased Standard of Living
The Diamond of National Advantage
Firm Strategic, Structure
and Rivalry
Related and Supporting Industries
FactorConditions
DemandConditions
Government
Chance
Figure 3-1: FIVE COMPETITIVE FORCES MODEL
THE FIRMTRADITIONAL COMPETITORS
NEW MARKET ENTRANTS
SUPPLIERS
SUBSTITUTE PRODUCTS & SERVICES
CUSTOMERS
Threats
Bargaining power
N
Port Competitive Model
BargainingPower
of Supplier
SubstituteProducts
and Services
BargainingPower
of Buyers
PotentialNew Entrants
Intraindustry Rivalry Strategic Business Unit
Figure 3-1
Wal-Mart and the Porter Competitive Model
BargainingPower
of Supplier
SubstituteProducts
and Services
BargainingPower
of Buyers
PotentialNew Entrants
Intraindustry Rivalry Strategic Business Unit
Figure 3-2
SBU: Wal-Mart Rivals:Kmart, Target, Toys R Us, Specialty Stores
i Foreign General Merchandisers or Discounts
i Established Retailer Shifting Strategy to Discounting or Megastores
i U.S. Product Manufacturei Foreign Manufacturei Local Governmenti IT Product and Service Suppliers
i Consumers in Small Town, U.S.A i Consumers in Metropolitan Areas in
the U.S.i Canadian and Mexican consumersi Other Foreign Consumers
i Mail Order i Home
Shopping Network
i Electronic
i Telemarketingi Buying Clubsi Door-to-door Sales
FIVE COMPETITIVE FORCES MODEL
THE FIRMTRADITIONAL COMPETITORS
NEW MARKET ENTRANTS
SUPPLIERS
SUBSTITUTE PRODUCTS & SERVICES
CUSTOMERS
Threats
Bargaining power
N
Activities of Value Chain
Inbound Logistics
OperationsOutbound
Logistics
Marketingand Sales
Services
Administrative and Other Indirect Value Added
Administrative and Other Indirect Value Added
Primary Activities
Support Activities
The Value Chain
Com
petitive
Adv
anta
ge
(Value)
Manufacturing Industry Value Chain Product and Service Flow
Research and Development
EngineeringProduction
and Manufacturing
Marketing Sales and
DistributiionService
Administrative and Other Indirect Value Added
Administrative and Other Indirect Value Added
Figure 3-5
Examples of the Value Chain
NDr. Chen, The Trends of the Information Systems Technology TM -18
Generic Value ChainFigure 3-7
Financial Policy
Regulatory Compliance Legal Accounting
Actuary Training Actuary Training Claims Training
Claims Training
IT Communication
i Product Development
i Market Research
i Actuarial Methods
i Investment Practice
i Policy Rating
i Underwriting
i Investment
i Independent Agent Network
i Billing and Collections
i Policy Sales
i Policy Renewal
i Agent Management
i Advertising
i Claims Settlement
i Loss Control
Inbound
Logistics
Operations Outbound
Logistics
Marketing and Sales
Service
Firm InfrastructureHuman Resource ManagementTechnology Development
Procurement
Generic Value ChainFigure 3-8
Inbound
Logistics
Operations Outbound
Logistics
Marketing and Sales
Service
Firm InfrastructureHuman Resource ManagementTechnology Development
Procurement
Information Systems Technology Planning and Budgeting Technology Office Technology
Training Technology Motivation Technology Information Technology
Product Technology Computer-Aided Technology Pilot Plant Technology
Software Development Tools Information Systems Technology
Information System Technology Communication Technology Transportation System Technology
i Transportation Technology
i Material Handling
i Storage and Preservation Technology
i Communication System Technology
i Information Technology
i Basic Technology
i Materials Handling
i Machine Tool Technology
i Material Handling Technology
i Packaging Technology
i Information Technology
i Transportation Technology
i Material Handling Technology
i Packaging Technology
i Communication System Technology
i Information Technology
i Multimedia Technology
i Communication System Technology
i Information Technology
i Diagnostic and Testing
i Communication System Technology
i Information Technology
Porter’s Competitive Model
BargainingPower
of Supplier
SubstituteProducts
and Services
BargainingPower
of Buyers
PotentialNew Entrants
Intraindustry Rivalry
Figure 4-2
SBU: American Airlines Rivals: United, Delta, USAir Northwest, Southwest
i Aircraft Manufactures Aircraft i Leasing Companiesi Labor Unions i Food Service Companiesi Airporti Local Transportation Servicei FAA (Air Traffic Controllers0i Hotels
i Foreign Carriers i Regional Carrier Start-
upsi Cargo Carrier Business
Strategy Change
i Travel Agentsi Business Travelersi Pleasure Travelsi Charter Servicei U.S. Militaryi Cargo and Mail
i Alternate Travel Servicesi Fast Trainsi Boats
i Private Transportationi Videoconferencing
Generic Value ChainFigure 4-3
Financial Policy
Regulatory Compliance
LegalAccounting
Inbound
Logistics
Operations Outbound
Logistics
Marketing and Sales
Service
Firm InfrastructureHuman Resource ManagementTechnology Development
Procurement
Community Affairs
Flight, Route and Yield Analyst Training
Pilot Training
Safety Training
Baggage Handling Training Agent Training Inflight
Training
Information Technology Communication
Computer Reservation System, Inflight System Flight Scheduling System, Yield Management System
Product Development Market Research
Baggage Tracking System
¨ Route Selection¨ Passenger
Service System¨ Yield
Management System(Pricing)
¨ Fuel¨ Flight
Scheduling¨ Crew
Scheduling¨ Facilities
Planning¨ Aircraft
Acquisition
M Ticket Counter Operation
M Gate Operation
M Aircraft Operations
M Onbord Service
M Baggage Handling
M Ticket Offices
M Baggage System
M Flight Connection
M Rental Car an d Hotel Reservation System
M Promotion
M Advertising
M Advantage Program
M Travel Agent Programs
M Group Sales
M Lost Baggage Service
M Complaint Follow-up
Interorganizational Systems
Your Company
Customers
Vendors
Support Services
Business Partners
Competitors
Industry Forces Government
Association Info Sources
Figure 5-1
Payment Process IndustryFigure 5-2
Visa International or Mastercard
Merchants
Card Holders• Individuals• Businesses
MemberBanks
EDI Applications
ElectronicData
Interchange
AdvanceShippingNotices
Inventory/Sales Data
PurchaseOrders
Invoices
FreightBills
Figure 5-3
EDI System Obstacles
DataCompany data versus standards
Cross-industry standardsStandards administration
Company data versus standardsCross-industry standardsStandards administration
CommunicationTime zones and windowsCommunication protocols
Telecommunications equipmentService cost and balance
Time zones and windowsCommunication protocols
Telecommunications equipmentService cost and balance
Application IntegrationFeatures and function supported
Interface
IntegrationFeatures and function supported
Interface
Figure 5-4
Electronic Data Interchange (EDI)Through the Use of a Van
Customer order
i Time Schedulei Time Zonei Data Formati Communication
Protocolsi Data Transmission
Speed
Customer order
i Time Schedulei Time Zonei Data Formati Communication
Protocolsi Data Transmission
Speed
Electronic Mailbox
Conversion/Translation
Vendor Systems:
Mainframes
Minicomputers
Microprocessors
No Computer
Figure 5-5
Figure 5 -- extra Values Beliefs
Principles
Mission
GoalsCulture
Vision
Strategies
Tactics
Business Plan
Objectives and Measurements
Authority and Responsibility
The Vision -to-Action ProcessImplementation
(Action)
Agreement and Commitment
Tactics and
Business Plan
Strategy
Vision
Sensing Opportunity
Feedback
Pyramid of Excellence Stakeholder Value
Where
Way
What
How
Value -Creating Objectives
Worldwide Excellence
System
Total QualityGrowth & InnovationLeadership
Vision
Value
People
commitment
Customer
Satisfaction
Fact-Based
Management
Strategic
Planning
Measurement
& Results
Customer
Satisfaction
Whirlpool PeopleQuality Process
& Products
Figure 6-4 Reprint with permission of Whirlpool Corporate
Vision and Information Systems
Vision
ApplicationNetworks
Tools
Asset
ExpenseStrategic
Tactical
Invest
Save Money
Figure 6-6
The Three Components of a New Strategy
Figure 7-1
Vision
External Assessment
Internal Assessment
A New Strategy
Strategic Management Process
Environmental AnalysisGeneral Environment
Operating EnvironmentCompetitive Positioning
Directions for Development
Opportunitie
s
Threa
ts
CompanyVision
Company StrategicHistory
CurrentStrategy
Chosen Strategy
Realized Strategy
StakeholderAnalysis
Vision &Strategy
Company AnalysisStructure
Value/ CultureCompetitive Positioning
Resources
Strengths
Weakness
es
Figure 7-2
Strategy ImplementationSenior Management
Visionand Macro-Strategies
Empowered Implementors
Micro-Strategies
andTactics
Company Culture
Risks to be Avoided
Critical Performance Factors
Key Enterprise Business Processes
Business Uncertainties
Figure 7-3
Managing for Results
i Objectivesi Authorityi Responsibilityi Trainingi Motivationi Performancei Resultsi Reward
i Objectivesi Authorityi Responsibilityi Trainingi Motivationi Performancei Resultsi Reward
Control
Figure 7-4
Management Information Needs
Figure 7-5
Senior Management
Emerging Opportunities and ThreatsExternal Impact of Strategies and Tactics
Internal Impact of Strategies and TacticsPerformance Measurements
Enpowered Implementors
IT-Based Strategies
Figure 7-6
Marketplace Operation
SignificantStructureChange
TraditionalProductsand Processes
Federal ExpressUSA Today
Charts Schwab
USAAL.L.Bean
McKesson
WhirlpoolXerox
Banc OneBoeing
Frito-LayWal-Mart
Company Infrastructure
Figure 7-7
i Data Managementi User Applicationsi Voice Managementi Network Managementi Planning Processi Financial Strategyi Organization
i Data Managementi User Applicationsi Voice Managementi Network Managementi Planning Processi Financial Strategyi Organization
Strategy Option Generator
Figure 8-1
Target
Supplier Customer Competitor
Thrust
Differentiation Cost Innovation Growth Alliance
Mode
Offensive Defensive
Direction
Use Provide
Execution
Strategic Advantage
Strategy Option Generator
Figure 8-2
Target
Supplier Customer Competitor
ThrustDifferentiation Cost Innovation Growth Alliance
Mode
Offensive Defensive
Direction
Use Provide
Execution
Strategic Advantage
Roles, Roles and Relationships
Figure 9-1
Senior Management
Users
Functional Management
Informational Systems Organization
Using IS to Compete
Figure 9-2
Users
SeniorManagement
InformationSystems
Organization
Bus
ines
s L
eade
rshi
p
IT
Leadership
Technology Transfer Through Organizational Learning
Figure 9-3
InformationTechnology
InformationTechnology
ApplicationsApplications
OrganizationOrganization
Using IS to Compete: Primary Responsibilities
Figure 9-4
7
Direction ConceptualApproach
SpecificApproach
2 1
2 5 4
1 3 5
10 10 10
Senior ManagementFunctional Management
IS Management
Making It Happen!
Figure 9-5
Vision
Tactics
Strategy
CrisisManagement
ExecutivePower
ProcessImprovement
CompetitiveBusiness L
eadership
Technology Leadership
Action Initiators
Figure 9-6
A Business
Products/Services
Board of Directors
Competitors
Cu
stomersS
up
pli
ers
Figure 9-7
InformationSystems
Organization
Board of Directors
Competitors
Cu
stomersS
up
pli
ers
Figure 9-8
InformationSystems
Organization
Steering Committee
Competitors
UsersS
up
pli
ers
Opportunities Direction
IT NeedsReal Dollars
ProductsPeople
Wants & NeedsJustification
Real Dollars?
Products & ServicesConstraints Costs
Needs and
Priorities
Real Dollars
Value to Customer Chart
Figure 10-1
Value-Added Process
Value-Added Process
What the Customer Buys
What the Customer Buys
Product/ServiceProduct/Service
Del
iver
y P
roce
ss
Pr o
du
c t/ S
erv i
c e
Value to Customer
Value to Customer AnalysisCharles Schwab & Co.
Figure 10-2
i Computer-based Tradesi Client-broker Service
Street SmartTelebrokerEqualizerOneSource• Electronic Transfers• Trade Risk Analysis
i Computer-based Tradesi Client-broker Service
Street SmartTelebrokerEqualizerOneSource• Electronic Transfers• Trade Risk Analysis
i Stock, Bond and Mutual Fund Tradesi Financial Product Optionsi Competetive Feesi Timely Execution of Trades and Money Transferi Personal Servicei Confidence in Financiali Custodial Responsibilty
i Stock, Bond and Mutual Fund Tradesi Financial Product Optionsi Competetive Feesi Timely Execution of Trades and Money Transferi Personal Servicei Confidence in Financiali Custodial Responsibilty
Product/ServiceProduct/Service
Del
iver
y P
roce
ss
Pr o
du
c t/ S
erv i
c e
Value to CustomerValue-Added Process What the Customer Buys
Value to Customer AnalysisMervyn’s
Figure 10-3
i Point-of-Sale(POS) System: Ticketed Merchandise UPC Scanning Price Look-up Credit Card Approval
i Wireless Portable POSi Warehouse Managementi EDI System with Vendorsi Infobot Voice Response System
i Point-of-Sale(POS) System: Ticketed Merchandise UPC Scanning Price Look-up Credit Card Approval
i Wireless Portable POSi Warehouse Managementi EDI System with Vendorsi Infobot Voice Response System
i Qualify Apparel/Home Fashions
i Competitive Pricesi High Merchandise
Availabilityi Personal Servicei Fast, Accurate Check-outi Fast Credit Approvali Access to Credit i Information
i Qualify Apparel/Home Fashions
i Competitive Pricesi High Merchandise
Availabilityi Personal Servicei Fast, Accurate Check-outi Fast Credit Approvali Access to Credit i Information
Product/ServiceProduct/Service
Del
iver
y P
roce
ss
Pr o
du
c t/ S
erv i
c e
Value to CustomerValue-Added Process What the Customer Buys
Value to Customer AnalysisBoeing Commercial Airplane Group
Figure 10-4
i CAD Design System and Review Process
i Customer Input Through Network
i Co-Design Process WITH Customer
i Quality Control Systemi Vendor EDI System
i CAD Design System and Review Process
i Customer Input Through Network
i Co-Design Process WITH Customer
i Quality Control Systemi Vendor EDI System
i Aircraft Designed for Passenger,Comfort, Operational Efficiency and Safety
i Flexible Design Configuration
i Competitive Pricei Logical Support
i Aircraft Designed for Passenger,Comfort, Operational Efficiency and Safety
i Flexible Design Configuration
i Competitive Pricei Logical Support
Product/ServiceProduct/Service
Del
iver
y P
roce
ss
Pr o
du
c t/ S
erv i
c e
Value to CustomerValue-Added Process What the Customer Buys
Telecommunications Models
Communication
People
Machines
MachinesPeople
Figure 11-1
Linking Users to Information Within Application on Networks
Business Enterprise
Network Application
Users
Information
i LAN
i WAN
i Public
i Private
i Wired
i Wireless
i Functionsi Organizational Processesi Personal
i Enterprisei Organizatio
n
i Departmenti Individual
i Traditional Datai Texti Images
i Graphicsi Voicei Videoi Multimedia
Figure 11-2
Information Systems Support of Business Requirements
Business and InformationTechnology Dynamics
Multi-Vendor/ Multi-Products
Information System ArchitectureOpen Systems
Standards
Vendor Hardware Software Products and Services
User OrganizationG Application FunctionG Ease Of UseG Seamless and TransparentFigure 11-3
Open Systems Environment
3.Database
4. User Interface
1.Operating Systems
2. Communication Service
Other Service
6. Systems Management
Services
SoftwareApplication
SoftwareApplication
5. Software Development Tools
Figure 11-4
A Telecommunications Perspective
Objective Voice Data
EfficiencyVoice Message
VolumesTransmission
Volumes
CompetitiveAdvantage
Voice ApplicationsPlus Linkage
PCs and Application Packages
Integrated Voice /Data Application
Figure 11-5
Success Factor Profile
Figure 12-1
Management Importance Responsibility AssessmentBusiness VisionCultureRisk ManagementPlan ImplementIS Integral to the BusinessIS Justification Mgmt. Process
Executive-IS Mgr. Partnership
Executive IS Experience
Operational Automation
Linkage to Suppliers
Linkage to Customers
Linkage to Customers Service
Pervasive Computing LiteracyIS ArchitectureIS MarketingIS User Relations
Information Systems Organization
Figure 13-1
IS Vice-President
Development &Maintenance
ProjectManagement
SystemAnalysis
Programmers
Planning
SystemsSupport
SystemsProgramming
Finance &Administration
DatabaseAdministration
ComputerOperations
NetworkManagement
DevelopmentCenter
Information Center
Future IS Organization? IS Executive CIO
Figure 13-2
Client InterfaceGeneral and
Administration IS Utility Telecommunications
CompetitiveSystems
Professionaland Technical
Support
Client SystemsGroups
Administration
Finance
Equipment
DataCenter
Performanceand Planning
DevelopmentCenter
DataNetwork
Voice Systems
Information Systems Value
Figure 14-1
G Company/Enterprise
G Function/Development
G Personal/Individual
Infrastructure
Application
Personal Applications and Tools
Evolution of Financial Strategy
Figure 14-2
Initiation
IExpansion
IIControl
IIIMaturity
IV
Application
Motivation
DP Planning
Organization
Single Area Proliferation ContainmentOrganization
Strategy
People Displacement
CostAvoidance
DP Efficiency
CompetitiveAdvantage
FinancialJustification
BudgetBusiness Case
InstallationAudit
Charge-OutSystem
ManagementProcess
Little Reactive Directed Proactive
Finance Dept.
MultipleDept.
CentralizedCentralized
DecentralizedDistributed
Management Process
Figure 14-3
Management Incentive
EliminateSimply
Automate
Business Case Process
IS Development Discipline
Interlock Management
Benefit Measurement
Figure 15-1
OrganizationalResponses to
Business Drives
Organizationg Downsizingg Outsourcingg Business Partneringg Corp. Alliance
New Markets, Opportunities
and Competitors
Process
Reengineering
Redefining
TQM
Employeeg Empowermentg Quality Circles g Teams Product
Customizationg Marketsg Customersg Global Standards
Time, Flexibility and Responsiveness as Competitive
Factors
Traditional Roles in Planning
Vision
Strategic
Tactical
Traditional IS Role
Figure 15-2
Strategic Planning Model
OpportunitiesTreats
OpportunitiesTreats
StrengthsWeaknesses
StrengthsWeaknesses
MissionVision
MissionVision
Culture(Explicit/Implicit)
Culture(Explicit/Implicit)
Goals
Objectives
StrategiesPositioning
Goals
Objectives
StrategiesPositioning
Business Unit
Functional Programs
Major Project
Business Unit
Functional Programs
Major Project
Detailed Projects
Resources:Headcount, Capital and ExpenseBudgets
Detailed Projects
Resources:Headcount, Capital and ExpenseBudgets
Environment (External)
Enterprise(internal)
Strategy Plan Tactical Plan Business Plan
Figure 15-3
What to PlanStrategic Enterprise
Planning
Strategic InformationPlanning
ArchitecturePlanning
TacticalPlanning
ImplementationPlanning
Enterprise Strategies
Information Strategies
Architecture
Time Oriented Objectives
Project Plans
Figure 15-4
Barriers to Aligning IS with Business Objectives
Figure 15-5
IS Track Record and Credibility?
Senior ManagementPerception of IS?
Communication ofBusiness Plan?
Executive Skills of IS Executive
Clear IS Role?
Effective IS Management?
IS Organization?
IS Skills and Capabilities?
IS Policies?
A problem with IS Capacity?
Does IS Organization Have a
User/Business Focus?
Managing IS to Business Objectives?
Business Plan
Is keeping IS aligned with the business objectives someone’s high-priority objective?
Business-IS Planning
Figure 15-6
Business Strategy
Information Technology
IS StrategyDictates
BenefitsDetermines
Business-IS Planning
Figure 15-7
Corporate Vision
Opportunities Technology Environment
Business Strategy
IS Strategy
Information Technology
1. Strategic Capability 2. Technology-driven Business Change
Dictates
Enterprise-wide Information Systems Strategic Planning Process
Business Domain Information Technology Domain
Information Technology Opportunities
Strategic PlanImpact
AlignmentBusiness Processes and Organization
Information Systems Architecture and
Organization
Org
aniz
atio
n
Op
port
unit
y
Figure 15-8
Xerox History
Figure 16-1
1959 1972 1979 1980 1983 1989 1990s
914
Cop
ier
Intr
oduc
edC
ompe
titio
n In
crea
ses
Ben
chm
arki
ng S
tart
edQ
ualit
y C
ircl
e St
arte
d Fu
ji
Xer
ox W
on D
emin
g A
war
d
Lea
ders
hip
Thr
ough
Qua
lity
Initi
ated
U.S
. Xer
ox W
on B
aldr
idge
Aw
ard
Continuous Improvement
Important Supporting Elements
Figure 16-3
Recognition and Reward
Tools and Processes
TransitionTeam
Training CommunicationSenior
ManagementBehavior
Xerox is a Total Quality
Company
A Win-Win Proposition
Delighted Customers
Satisfied Stockholders
Proud Employees
Enhanced Community
Successful Partners
Figure 16-5
Organizational Response to Business Drivers
High Medium Low
IS Significance
¨ New Markets, Opportunities and Competitors
¨ Time, Flexibility and Responsiveness as Competitive Factors
¨ Product Customization
¨ Process Reengineering, Redefining and TQM
¨ Employee Empowerment and Cross-Functional Teams
¨ Organization Downsizing, Outsourcing, Business Partnering and Alliances
Figure 17-1
Organizational Response
Mandatory Necessary Marginal
IS Role
Figure 17-2
Business Success Factors
¨ Business Leadership
¨ Fitting Pieces into the Big Picture
¨ Organizational Responsiveness and Resilience
¨ Realizing that Solving Customer Problems Requires a Team Approach
¨ A Strong Company¨ Ability and Willingness to
Innovate, Change and Take Risks¨ Accomplishing All of These Factors While Maintaining Necessary Balance
¨ Good Communication Throughout the Entire Organization
Porter Competitive Model for the Commercial Aircraft Industry
BargainingPower
of Supplier
SubstituteProducts
and Services
BargainingPower
of Buyers
PotentialNew Entrants
Intralndustry Rivalry SBU: Boeing Airbus McDonnell Douglas
i Tupolev, from Former Soviet Union i Mitsubishi Heavy Industries in Japani Taiwan Aerospace, Other Emerging
Industrial Poweri Other Small-Aircraft Manufactures or
Aerospace, Military Companies: Dassault, ATR, Lockheed
i Engine Manufacturesi Electronics, Semiconductors, etc.i Other Material Suppliers,
Specialty Metals, Composite Materials, etc.
i Government Institutions
i Airlinesi Leasing Companiesi Government Institutionsi FAA, IATA, EPAi Other Regulating Bodies
Figure 2
i Capital Sources, banks, investors
i FAA, IATA, EPAi Other Regulating Bodiesi IT Vendors
i Advances in Small, Short-Haul, Turboprop Technology
i Advances in Automotive Industry and Infrastructure
i Fast Train for Distances Less than 400 Miles
i Advances in Telecommunications, Videoconferencing, etc.
Porter Value Chain for Boeing
Figure 3
Inbound
Logistics
Operations Outbound
Logistics
Marketing and Sales
Service
Firm InfrastructureHuman Resource ManagementTechnology Development
Procurement
Information Systems Technology Planning and Budgeting Technology Office Technology
i Material qualification
i Engine selection
i Partners & joint programs
i Electronics, etc.
i Concurrent engineering
i Flexible & modular manufacture
i Wide choice in capacity with “family” concept
i Fly-by-wire technology
i Short development cycles
i Quick to market with short manufacturing cycles
i Worldwide presence
i Early involvement of customers in product definition
i Promotion, advertising
i Lobbying U.S. and foreign governments
i Seeking powerful partners
i Facilitation of financing
i Trade shows
i Repair, spare partsi Maintenance
servicei Inspection & testi Upgradesi Training facilities
for customers
Procurement training Managing relationship with suppliersQualification of suppliers New materials Partners
IS inventory management JIT, production forecast
CAD/CAM systems Assembly of planes & parts tracking
R&D, Partnerships Defense contracts
Hiring & training of engineers, test pilots, skilled workers
Training for competitiveness company-wide
People familiar with national & international economics and politics
Product development Market research Regulation & Policies
Customer relationships Tracking of issues
Relationships Between Senior Executives at Boeing
Figure 5
Frank ShrontzCEO
Create the Vision
Phil Condit PresidentRuns the Day-to-Day
Buisness
John Warner Information Service
Group Implements the Information Systems
Ron Woodard CommercialAirplane Group
Runs the Airplane Business
Jerry King Defense& Space Group
Runs the Defense Business
Dale Hougardy Head of the 777 ProgramDevelops the 777
Boeing Value to Customer Chart
Figure 6
Boeing Aircraft
Product/ServiceProduct/Service
¨ CAD/CAM system, review, process, concurrent engineering¨ Customer and partner/supplier through the network¨ Co-design with customer¨ Qualify control system¨ Vender EDI system
¨ CAD/CAM system, review, process, concurrent engineering¨ Customer and partner/supplier through the network¨ Co-design with customer¨ Qualify control system¨ Vender EDI system
¨ An aircraft designed for passenger comfort, operational efficiency and safe¨ Flexible design configuration¨ Competitive price¨ On-time delivery¨ Logistical support, training, maintenance ----Peace of mind
¨ An aircraft designed for passenger comfort, operational efficiency and safe¨ Flexible design configuration¨ Competitive price¨ On-time delivery¨ Logistical support, training, maintenance ----Peace of mind
Value to CustomerValue-Add Process What the Customer Buys
Organizational Response
Mandatory Necessary Marginal
IS Role
Figure 17-2
Business Success Factors
¨ Business Leadership
¨ Fitting Pieces into the Big Picture
¨ Organizational Responsiveness and Resilience
¨ Realizing that Solving Customer Problems Requires a Team Approach
¨ A Strong Company¨ Ability and Willingness to
Innovate, Change and Take Risks¨ Accomplishing All of These Factors While Maintaining Necessary Balance
¨ Good Communication Throughout the Entire Organization