Organizational Strategy, Competitive Advantage, and Information Systems. 70 slides

Transcription

1 2 Organizational Strategy, Competitive Advantage, and Information Systems 70 slides

2 [ LEARNING OBJECTIVES] 1. Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area. 2. Differentiate between business process reengineering, business process improvement, and business process management. 3. Identify effective IT responses to different kinds of business pressures. 4. Describe the strategies that organizations typically adopt to counter Porter s five competitive forces.

3 2.1 Business Processes Cross-Functional Processes Information Systems and Business Processes

4 Business Processes A business process is: an ongoing collection of related activities that create a product or service of value to the organization, its business partners, and/or its customers.

5 Business Processes A business process is: an ongoing collection of related activities that create a product or service of value to the organization, its business partners, and/or its customers. Comprised of three elements: Inputs Resources Outputs

6 Business Processes A business process is: an ongoing collection of related activities that create a product or service of value to the organization, its business partners, and/or its customers. Comprised of three elements: Inputs Resources Outputs Efficiency vs. Effectiveness

7 Examples of Business Processes

8 Examples of Business Processes (Continued)

9 Cross-Functional Processes No single functional area is responsible steps executed in a coordinated, collaborative way Procurement & Fulfillment Crossfunctional processes

10 Traveler Plan Trip Check Flights Receive Ticket Order Seats Available YES Reserve Seats Airline Web Site NO Notify Traveler NO NO Seats Available? YES Submit Ticket Order Use Credit Card? Charge Credit Card Charge OK? YES NO NO Frequent Flyer Mileage Sufficient? YES Subtract Mileage Notify Traveler Receive e-ticket YES Confirm Flight(s) Issue e-ticket

11 Information Systems & Business Processes IS s vital role in three areas of business processes Executing the process Capturing and storing process data Monitoring process performance

12 Executing the Process IS s help Execute the Process by: Informing employees when it is time to complete a task Providing required data Providing a means to complete the task

13 Capturing & Storing Process Data Processes generate data Dates, times, product numbers, quantities, prices, addresses, names, employee actions IS s capture & store process data (aka, transaction data) Capturing & storing data provides immediate, real time feedback

14 Monitoring Process Performance IS evaluates information to determine how well a process is being executed Evaluations occur at two levels Process level Instance level Monitoring identifies problems for process improvement

15 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management Reengineering Improvement Management

16 Measures of Excellence in Executing Business Processes Customer Satisfaction Cost Reduction Cycle and fulfillment time reduction Quality Differentiation Productivity

17 Business Process Reengineering (BPR) A radical redesign of an organization s business processes to increase productivity and profitability Examines business processes with a clean slate approach

18 Business Process Improvement (BPI) An incremental approach to move an organization toward business process centered operations Focuses on reducing variation in process outputs by identifying the underlying cause of the variation

19 Business Process Improvement (BPI) Five basic phases of successful BPI Define As is

20 Business Process Improvement (BPI) Five basic phases of successful BPI Define As is Measure Numbers, Metrics

21 Business Process Improvement (BPI) Five basic phases of successful BPI Define As is Measure Numbers, Metrics Analyze causes, trends

22 Business Process Improvement (BPI) Five basic phases of successful BPI Define As is Measure Numbers, Metrics Analyze causes, trends Improve alternatives, solutions

23 Business Process Improvement (BPI) Five basic phases of successful BPI Define As is Measure Numbers, Metrics Analyze causes, trends Improve alternatives, solutions Control - stabilize

24 Business Process Management (BPM) A management system used to support continuous initiatives for core business processes over time Important components of BPM: Process modeling Web-enabled technologies Business Activity Monitoring (BAM)

25 Business Process Management (BPM) Business Process Management Suite (BPMS) An integrated set of applications used for BPM Emerging Trend of Social BPM Technologies enabling employees to collaborate across functions internally and externally using social media tools

26 2.3 Business Pressures, Organizational Responses, and Information Technology Support Business Pressures Organizational Responses

27 Business Pressures Market Pressures

28 Business Pressures Market Pressures Technology Pressures

29 Business Pressures Market Pressures Technology Pressures Societal/Political/Legal Pressures

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31 Market Pressures Globalization Changing Nature of the Workforce Powerful Customers

32 Globalization The integration and interdependence of economic, social, cultural, and ecological facets of life, made possible by rapid advances in IT.

33 Globalization 1.0 (1 st Era) Focus: Countries Drivers: Muscle Horse power Wind power Steam power

34 Globalization 2.0 (2 nd Era) Focus: Companies Main Driver: Multinational Companies First Half of 2.0 Driver: Falling transport costs Second Half of 2.0 Driver: Falling telecom costs

35 Globalization 3.0 (3 rd Era) Present Focus: Groups & Individuals Drivers: Convergence of 10 forces or Flatteners

36 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls

37 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls 2. 8/9/1995: Netscape Goes Public

38 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls 2. 8/9/1995: Netscape Goes Public 3. Development of Workflow Software

39 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls 2. 8/9/1995: Netscape Goes Public 3. Development of Workflow Software 4. Uploading

40 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls 2. 8/9/1995: Netscape Goes Public 3. Development of Workflow Software 4. Uploading 5. Outsourcing

41 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls 2. 8/9/1995: Netscape Goes Public 3. Development of Workflow Software 4. Uploading 5. Outsourcing 6. Offshoring

42 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls 2. 8/9/1995: Netscape Goes Public 3. Development of Workflow Software 4. Uploading 5. Outsourcing 6. Offshoring 7. Supply Chaining

43 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls 2. 8/9/1995: Netscape Goes Public 3. Development of Workflow Software 4. Uploading 5. Outsourcing 6. Offshoring 7. Supply Chaining 8. Insourcing

44 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls 2. 8/9/1995: Netscape Goes Public 3. Development of Workflow Software 4. Uploading 5. Outsourcing 6. Offshoring 7. Supply Chaining 8. Insourcing 9. Informing

45 The Ten Flatteners 1. 11/9/1989: Berlin Wall Falls 2. 8/9/1995: Netscape Goes Public 3. Development of Workflow Software 4. Uploading 5. Outsourcing 6. Offshoring 7. Supply Chaining 8. Insourcing 9. Informing 10.The Steriods

46 Changing Nature of the Workforce Workforce is Becoming More Diversified Women Single Parents Minorities Persons with Disabilities IT is Enabling Telecommuting Employees

47 Powerful Customers Increasing consumer sophistication & expectations Consumer more knowledgeable about Products and services Price comparisons Electronic auctions Customer Relationship Management

48 Technology Pressures Technological Innovation & Obsolescence Rapid development of both New and Substitute Products & Services

49 Technology Pressures Technological Innovation & Obsolescence Rapid development of both New and Substitute Products & Services Information Overload Vast stores of data, information, & knowledge Difficulties in managing data for decision making

50 Societal / Political / Legal Pressures Social Responsibility

51 Societal / Political / Legal Pressures Social Responsibility Compliance with Government Regulations

52 Societal / Political / Legal Pressures Social Responsibility Compliance with Government Regulations Protection against Terrorist Attacks Ethical Issues

53 Societal / Political / Legal Pressures Social Responsibility Compliance with Government Regulations Protection against Terrorist Attacks Ethical Issues

54 Social Responsibility Green IT Facilities design and management Carbon management International and U.S. state environmental laws Energy management

55 Social Responsibility Green IT Facilities design and management Carbon management International and U.S. state environmental laws Energy management Digital Divide One Laptop per Child (OLPC)

56 Organizational Responses Strategic Systems

57 Organizational Responses Strategic Systems Customer Focus

58 Organizational Responses Strategic Systems Customer Focus Make-to-Order and Mass Customization

59 Organizational Responses Strategic Systems Customer Focus Make-to-Order and Mass Customization E-Business & E-Commerce

60 2.4 Competitive Advantage and Strategic Information Systems Competitive Strategy A statement identifying a business s approach to compete, it s goals, and the plans and policies required to attain those goals.

61 2.4 Competitive Advantage and Strategic Information Systems Strategic Information Systems (SIS) An information system that helps an organization achieve and maintain a competitive advantages

62 Porter s Competitive Forces Model

63 Porter s Value Chain Model Value Chain A sequence of activities through which the organization s inputs are transformed into valuable outputs. Primary Activities Relate to Production & Distribution of Products & Services Support Activities Support Primary Activities Contributing to Competitive Advantage

64 Primary Activities Five Primary Activities for Manufacturing 1. Inbound Logistics (inputs) 2. Operations (manufacturing & testing) 3. Outbound Logistics (storage & distribution) 4. Marketing & Sales 5. After Sales Services

65 Support Activities Four Support Activities 1. Firm s Infrastructure (accounting, finance, management) 2. Human Resources Management 3. Product & Technology Development (R&D) 4. Procurement

66 Strategies for Competitive Advantage Cost Leadership Differentiation Innovation Operational Effectiveness Customer-Orientation

67 FIGURE 2.5 Strategies for competitive advantage.

68 2 Organizational Strategy, Competitive Advantage, and Information Systems The End