Materi 2Using Information Technology for Competitive Advantage2-*

What is a Firm?Physical System

Closed-loopControlled by managementUses feedback to ensure objectives metOpen because of environmental interactionManaged through use of a conceptual system

2-*

Importance of EnvironmentVery reason for a firms existenceFirm takes resources from environment, transforms them, and returns goods and services to environment

2-*

Society

GovernmentSuppliersTheFirmCustomersCompetitors

The Firms Environment2-*

The Firm Is Connected to Its Environment by Resource FlowsPhysical and conceptual Some flows are majorSome should not occur at allAll resources that enter the firm from the environment eventually return to the environment

2-*

Competitive AdvantageComputer field perspective

Use of information to gain leverage in marketplaceRelies on more than physical resourcesAddressed with strategic objectives

2-*

A Value ChainFirm InfrastructureHuman resource managementTechnology developmentProcurementInboundlogisticsOperationsOutboundlogisticsMarketingandsalesServiceMarginMarginSupportActivitiesPrimary Activities2-*Source : Michael E. Porter

ChannelvaluechainsSuppliervaluechainsBuyervaluechains

FirmvaluechainA Value System2-*Source : Michael E. Porter

The Information ResourcesTwo views of information management

1. Manage data by implementing computer-based database management systems (DBMS)2. Manage resources that produce the information2-*

The Information Resources

Facilities

SoftwareDatabase

Hardware

InformationSpecialistsUsersInformation2-*

The Information Resource Manager -- the CIOChief Information Officer (CIO) is not simply a title, but roleManager of information servicesContributes managerial skills

Solves information resources problemsSolves problems in other areas of firms operations2-*

The CIO AttitudeThe business is what countsBuild partnerships/ties with the rest of the firmImprove basic business processesCommunicate in business terms, not IS jargonProvide reliable IS servicesBe positive, not defensive

2-*

Strategic PlanningLong-range planning

Intends to give firm most favorable position in its environmentSpecifies strategies for achieving objectivesNeed for each business area to create its own strategic plan

2-*

Strategicplanning forinformation resourcesStrategicplanning for marketingresourcesStrategicplanning for manufacturingresourcesStrategicplanning forhuman resourcesStrategic planning forfinancial resourcesThe Functional Areas Should Cooperate in Developing Their Strategic Plans2-*

Strategy Set Transformation

Organizational strategy setMISstrategy setMission

Objectives

Strategy

Other strategicorganizationalattributesSystemobjectives

Systemconstraints

System design strategies

MISstrategicplanningprocess2-*

Strategy Set Transformation: Basic FlawBusiness areas do not always have the resources to ensure accomplishment of strategic objectives

2-*

SPIRStrategy set transformation; support the firms objectivesStrategic planning for information resources (SPIR) develops firm and IS strategic plans concurrently

SPIR content1. What is to be achieved2. What will be required2-*

Strategic Planning for Information Resources

Business strategyInformationresourcesandISstrategy

Influence on BusinessStrategyInfluence onInformation Resources2-*

Strategic Plan Framework for Information Resources

Strategic Plan for Information Resources

AISObjectives

MISObjectives

DSSObjectives

Virtual OfficeObjectives

Knowledge-based systemsObjectivesRequired Information ResourcesRequired Information ResourcesRequired Information ResourcesRequired Information ResourcesRequired Information Resources2-*

The Strategic Implications of End-User Computing (EUC)Levels of end users in terms of capabilities

menu-level end userscommand-level end usersend-user programmersfunctional support personnelEUC application considerations

shifts workload so that end-users and information specialists talents are better usedreduces communications gap2-*

EUC RisksPoorly aimed systemsPoorly designed/ documented systemsInefficient use of information resourcesLoss of data integrityLoss of securityLoss of control

2-*

Information Resources Management (IRM) ConceptRealization that firms information resources go far beyond the information itselfActivity pursued by managers at all levelsIdentifying, acquiring, and managing information resources needed to satisfy information needs

2-*

IRM - Required ElementsA recognition that competitive advantage can be achieved by means of superior information resourcesA recognition that information services is a major functional areaA recognition that the CIO is a top-level executive

2-*

IRM-Required Ingredients (cont.)A consideration of the firms information resources when engaging in strategic planningA formal strategic plan for information resourcesA strategy for stimulating and managing end-user computing

2-*

The firms executivesCIOOther executives

Central computing resourcesDisbursed computingresources

FUNCTIONAL AREASUsers engaged in end-user computingOther usersENVIRONMENTAL INFLUENCESInternal influencesFirms strategic planINFORMATION RESOURCESDATA AND INFORMATIONThe IRM ModelInformationservicesHumanresourcesManufacturingMarketingFinanceThe environment of the firm2-*

IRM Model: Firm EnvironmentProvides setting for achieving competitive advantageExecutives are aware of need to manage resource flows to meet needs of environmental elements

2-*

IRM Model: Firms ExecutivesIncludes CIOGuides firm toward objectivesKey activity is strategic planning

2-*

IRM Model: Business AreasInformation services is a major business areaEach area develops own strategic plansOne business area strategic plan is for information resources

2-*

IRM Model: Information ResourcesStrategic plan for information resources details acquisition and managementInformation resources

CentralizedDispersed throughout firm2-*

IRM Model: UsersDetails data and information flows between resources and usersSome users engage in end-user computing

2-*

SummaryEnvironment of a firm consists of eight elementsFirms attempt to achieve competitive advantage

Margin - value of products and services over costValue chainInformation resources

Hardware, software, facilities, database, information specialists, information, and users2-*

Summary [cont.]Executives perform strategic planning

SPIRAll firms managers need to engage in IRM

Recent revelationIntegrating concept2-*