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11/26/2013
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Systems and Strategy
By
Shamira Dias
Introduction• Begins with ‘system planning activity’ that determines
which projects are started according to the needs of the enterprise
• Enables business plan to be translated into developed computer system to meet business goals
• Business goal – Relate to profit , or growth, or market share but also focus on
customer services and safety or staff development.
– Identify of key results areas which specify in turn the need for new systems
• Necessary to explore the wider context of how information systems fit into business strategy
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Cost / Benefit Analysis
The Cost/Benefit analysis part of the business case presents a description and where possible a quantification of the costs of carrying out the project and of the benefit that are expected to flow from it
Basic Types of Project Selection
Model
• Numeric
• Nonnumeric
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Types of Project Selection Models:
Nonnumeric
• Sacred Cow
• Operating Necessity
• Competitive Necessity
• Product Line
Extension
• Comparative Benefit
Model
Nonnumeric Model
• The Sacred cow
In this case the project is suggested by a senior and powerful official in the organization
• The operation necessity
if the flood is threatening the plant a project to build a protective dike does not require much formal evaluation
• The competitive necessity
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Nonnumeric Model
• The production line extension
• The Comparative benefit model
Numeric Project Selection Models:
Profit / Profitability
• Payback Period (PB)
• Average Rate of Return
• Discounted Cash Flow (NPV)
• Internal Rate of Return
• Profitability Index
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What is strategy all about
• Strategy is no about “where do you want to go” and “how do you get there”
• Strategy is not standing of an organization nor is it about the steps it should take
• Strategy is about stand
Key questions “who are you” and “what do you stand for”
What is strategy all about
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StakeholdersWho are they
• …
What do they do?
• …
What do they value?
• …
StakeholdersWho are they
•…
What do they do?
•…
What do they value?
•…
Speaker
Description
•Experienced
•New speaker
•Passionate
Duties
•Register talk
•Upload slide
•Give talk
Values
•Constructive feedback on talk
•Fast answer
Group Work
Currently there are 5 Cargill’s super markets in
Colombo.
Project: They are going to start another 15 in other parts
of Sri Lanka.
Analyze the stakeholder of the project
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SWOT Analysis
Group Work
Currently there are 5 Cargill’s super markets in
Colombo.
Project: They are going to start another 15 in other parts
of Sri Lanka.
Analyze the project using SWOT
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PESTEL Analysis
• PEST stands for political, economic, social and technological. Two more factors, the environmental and legal factors, are defined within the PESTEL analysis
• PEST analysis describes a framework of macro-environmental factors used in the environmental scanning component of strategic management
PESTEL Analysis
• Political factors consider how and to what degree
a government intervenes in the economy.
• Economic factors include economic growth,
interest rates, exchange rates and the inflation
rate. These factors have major impacts on how
businesses operate and make decisions.
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PESTEL Analysis
• Social factors include the cultural aspects and
include health consciousness, population growth
rate, age distribution, career attitudes and
emphasis on safety. Trends in social factors affect
the demand for a company's products and how
that company operates.
• Technological factors include technological
aspects such as R&D activity, automation,
technology incentives and the rate of technological
change.
PESTEL Analysis
• Environmental factors include ecological and
environmental aspects such as weather, climate,
and climate change, which may especially affect
industries such as tourism, farming, and insurance.
• Legal factors include discrimination law, consumer
law, antitrust law, employment law, and health and
safety law. These factors can affect how a
company operates, its costs, and the demand for
its products.
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Group Work
Currently there are 5 Cargill’s super markets in
Colombo.
Project: They are going to start another 15 in other
parts of Sri Lanka.
Analyze the project using PESTEL
Competition and Strategy
Porter’s view is that the essence of strategy
formulation is dealing with competition. He sees the
competitive world as a violent environment within
which the business position of an organization is
determined by five forces acting on it. Porter’s five
forces model
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Porter’s Competitive Forces Model
• The threat of entry of new competitors
• The bargaining power of suppliers
• The bargaining power of customers (buyers)
• The threat of substitute products or services
• The rivalry among existing firms in the industry
The model recognizes five major forces that could endanger a company’s position in a given industry.
Porter’s Competitive Forces Model
Bargaining power of buyers
Bargaining power of suppliers
Threat of substitutes
Threat of new entrants
Substitutes
Suppliers
Newentrants
Buyers
Industrycompetitors
Intensity of rivals
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Porter’s Competitive Forces Model
Entry Barriers
Economies of Scale
Proprietary product differences
Brand identity
Switching Costs
Capital Requirements
Access to distribution
Absolute cost advantages
Proprietary learning curve
Access to necessary inputs
Proprietary low-cost product design
Government policy
Expected retaliation
Determinants of Supplier Power
Differentiation of inputs
Switching costs of suppliers and firms in
the industry
Presence of substitute inputs
Supplier concentration
Importance of volume to supplier
Cost relative to total purchases in the
industry
Impact of inputs on cost or differentiation
Threat of forward integration relative to
threat of backward integration by firms in
the industry Determinants of Substitution Threats
Relative price/performance of substitutes
Switching costs
Buyer propensity to substitute
Rivalry Determinants
Industry Growth
Fixed (or storage) costs/value added
Product differences
Brand identity
Switching costs
Concentration and balance
Informal complexity
Diversity of competitors
Corporate stakes
Exit barriers
Determinants of Buyer Power
Buying Leverage Price Sensitivity
Buyer concentration
versus firm concentration
Buyer volume
Buyer switching costs
relative to firm switching
costs
Buyer information
Abilty to backward
integrate
Substitute products
Pull-through
Price total purchases
Product differences
Brand identity
Impact on
quality/performance
Buyer profits
Decision makers’
incentivesSubstitutes
Suppliers
Newentrants
Buyers
Industrycompetitors
Intensity of rivals
Group exercise -Analyse the competitive
forces of Cargills
Bargaining power of buyers
Bargaining power of suppliers
Threat of substitutes
Threat of new entrants
Substitutes
Suppliers
Newentrants
Buyers
Industrycompetitors
Intensity of rivals
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Porter’s Competitive Forces Model
- Cargills
Foreign General MerchandisersEstablished Retailers shifting strategy to supermarketsInternet Vendors?
Potential New Entrants
ArpicoKeells SuperPremasiriLaugfsKings, CWE, Other retailers
Intra-Industry RivalryStassensNestle, Unilever ,etc,FMCG Companies (Hemas, P&G etc.)ImportersFood Producers
Bargaining Power of Suppliers
Food ProducersKade / PolaMobile produce Sellers…
Substitute Products or Services
Consumers (Rural) Consumers (Metropolitan)
Bargaining Power of Buyers
Systems
Sequential relationship
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Project Management Frameworks
Overlapping relationship
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Scrum Elements and Artifacts
Time box Elements- Release Plan meeting- Sprint Plan Meeting- Sprint- Daily Scrum Meeting- Retrospective- Sprit Review
Principle Artifacts-Product Backlog-Sprint Backlog-Release burndown-Sprint burndown
Project Kick-off
