ISM 158

1. ISM 158 Business Strategy and Information Systems Jack Callon

2. What’s Happening?! The stock market and the crystal ball economists are saying that the economy is getting better. The airline industry has gone from bad to worse. US cities are spending money on security and protection that is causing them even more financial distress. The governator says that he will fix California’s financial problems. Graduate program enrollments are up.

3. Jack Callon • Sixth year at UCSC. • Sponsor of the ISM major. • 11 1/2 years at San Jose State (MIS program). • A careerist and not an academic. • A business person that understands IT and IS. • 28 years with IBM in sales and marketing. • International experience (fairly early in the game). • An attorney wife and three sons: No. 1 - Trying to do • an Internet application company startup in Brazil; No. • 2 - Managing Director of Morgan Stanley, Japan; • No. 3 - Wilson, Sonsini corporate attorney.

4. Objective for Today For you to decide that you are in the right class at the right time.

5. Right Class at the Right Time? • Course objectives and content. • Assignments and grading. • Your opportunities. • My expectations. • Your priorities.

6. ISM 158 - Business Strategy and IS Business Knowledge Information Systems Knowledge ISM Student Understands how to use information systems to solve business problems “ I’m ready to graduate! • Accounting • Finance • Operations • Marketing • Business • Management • Systems A&D • Programming • Database • Networks “Because I’m ready to help to run a business better.”

7. IT Doesn’t Matter May 2003 Edition of HBR By Nicholas G. Carr Editor-at-Large Harvard Business Review

8. IT Doesn’t Matter When a resource becomes essential to competition but inconsequential to strategy, the risks it creates become more important than the advantage it provides. As information technology’s power and ubiquity have grown, its strategic importance has diminished. The way you approach IT investment and management will need to change dramatically.

9. IT Doesn’t Matter What makes a resource truly strategic and gives it the capacity to be the basis for a sustained competitive advantage is not ubiquity but scarcity. You only gain an advantage over a rival by having or doing something that they can’t have or do.

10. IT Implications • The core functions of IT—data storage, data processing and data transport—have become available and affordable to all. • A distinction needs to be made between proprietary technologies and infrastructure technologies. • Infrastructure technologies offer far more value when not treated as proprietary but shared.

11. The Future of the American Programmer InformationWeek, Nov. 17, 2003 Programmers have the highest unemployment rate of all IT job categories. Distributed computing, packaged applications and low cost offshore alternatives have reduced the demand for programming. Well-trained, highly productive programmers may still be needed, though in much smaller numbers than in the past.

12. The Future of the American Programmer Business analysts have replaced programmers as the IT people with the most influence in companies.

13. Where Does an ISM Graduate Fit? Senior Management Company Information Systems Organization Users

14. Student Weaknesses 1. Lack ability to put “pieces and things” into a logical bigger perspective. 2. Communication skills, particularly oral presentations.

15. ISM Toastmasters V Involves ten students. Meets seven times for one hour during the quarter. Each student gives an impromptu talk at each meeting. There are no preparation assignments but a person needs to think about how they are doing and what needs to be done to improve. Will meet on Thursday after class at either 4:00 to 5:00 or 5:00 to 6:00 PM starting next week.

16. Introduce Yourself Stand up as if you were making a presentation. Name Something interesting about yourself. (In 3 sentences or less)

17. JDC Terminology • Information Technology (IT) • Information Systems (IS) • Computing • Telecommunications • Data Communications • Voice Communications • IS Organization

18. ISM Business Capstone Class This course is the alternative to a comprehensive exam along with CS115. This class was considered the most difficult of the MIS classes at SJSU. (10% non-pass rate) A business class for those with IT knowledge. The only class that has both CS and Econ/Business prerequisites. “Important to come to class.”

19. Class Objectives • Learn practical, useable things. • Become more savvy as to major business issues • and trends in the high-tech world. • Help you look good in job interviews. • Help you make a difference when you get hired. . . . . For a price!

20. Unstated Objective To not duplicate the performance of the Winter 02 class. 12 of 42 students did not earn passing grades.

21. Underlying Theme of Course Your job as an IS professional is to help run the business better. This can and frequently does mean that your job is to help the company to compete more effectively in a global environment.

22. An Appropriate Message This course is significantly more challenging than ISM 50. The business analysis paper in ISM 50 was a relatively easy assignment compared to the analysis term paper in this class.

23. Course Assistance Will run sessions on both the analysis term paper and pre-exam clinics.

24. A Successful Business? The right business model now and for the future. Provides value to customers. Is responsive, flexible, adaptable, innovative, resilient, talented and financially strong. Is anything else necessary to achieve and sustain business success?

25. A Challenging Business Environment • Global Economy. • Knowledge and information-based service economies. • Transformation of business enterprises. • Dramatic increase in the use of IT and a significant • shortening of IT product cycles.

26. Important Business Topics • Direct Business Model • E-Commerce • E-Business • Supply Chain Management (Customer • Relationship Management) • Outsourcing • Reengineering Core Business Processes • Managing Change

27. Business Strategy and Information Systems • Concepts • Relative To (Bigger Picture) • Company Examples

28. Specific Class Premises Every enterprise faces unprecedented competitive challenges. The source of this competition is becoming more global and the pace of change within the business environment is accelerating. A business enterprise needs to understand where it is going. The business vision and its supporting strategies should drive the role and use of information systems within the organization. The compression of time and events has significantly increased information needs for the growing number of people involved in making decisions within an enterprise.

29. Class Premises For the above reasons the potential role of information systems as a competitive resource has increased. Innovative use of information technology needs (dictates) a systematic approach. To accomplish this, it is essential that there be an on-going working relationship between those that run the business and the people charged with a responsibility for information systems. Conclusion: It is necessary to establish and maintain three distinct perspectives.

30. Three Perspectives 1. Business Environment (Industry) 2. Company 3. IT Role, Use, and Management

31. [ [ Management Of With Information Systems This course is about managing a business with the support of information systems.

32. Competitive Enabler Of all the things that can change the rules of competition, technology change is among the most prominent. IT/IS are enablers.

33. Why Aren’t All Companies Equally Good in Using IS to Compete? 1. Business Reasons. 2. Information Technology Reasons.

34. Four Important C’s Competition Computers Complexity Change

35. A Satisfied Student 1. ”I never realized that Information Systems played such a significant role in so many very successful companies.” 2. “I really enjoyed doing a paper on Wal-Mart and learned a great deal from the experience.” 3. “I feel that I can personally do an objective assessment of a company as to their effective use of information systems to gain a competitive advantage.”

36. A Systematic Approach Vision Strategy Tactics Business Plan Class Road Map • Competitive Options • Roles, Roles and Relationships • Redefine and/or Define • Telecommunications • as the Delivery Vehicle • Success Factor Profile

37. Emphasis • A revised list of companies for the analysis term papers. • Business management content. • The implications of globalization and the significance of the Internet.

38. What Isn’t New There should definitely be times when you say, “that’s obvious or it certainly isn’t new to me.” My reaction will be, “good, the message of using information systems to support major business strategies and core business processes has previously gotten through.”

39. Course Syllabus is on my web page http://www.cse.ucsc.edu/~callon/

40. Grade Structure Analysis Term Paper 49 % (10, 10, 25, 4) Introduction Letter 2 % Midterm Exam 15 % Oral Presentations (2) 4 % Comprehensive Final Exam 30 % Note: Exams will not be open book or open notes.

41. TextbookCompetitive AdvantageThrough Information Technologyby Jack Callon This book is dedicated to those that must compete in an increasingly complex, dynamic and global business environment. I wish you the best of success in your competitive endeavors and hope that the contents of this book provide the help that is intended.

42. Textbook Status • Structure and concepts are current and valid. • Company examples and status are dated in some cases.

43. Textbook Structure 1. Introduction Chapter 2. Business Environment 3. Company Assessment 4. Structured Analysis of IS Use 5. Management Issues

44. Textbook Preface: Book Overview Chapter 1: Business and Information Systems Management Challenges

45. Textbook Section I - The First of Three Perspectives: Business Environment Chapter 2: Business Competitive Environment Chapter 3: The Porter Competitive Model for Industry Structure Analysis Chapter 4: Airline Industry Analysis Chapter 5: Information Systems Can Redefine Competitive Boundaries

46. Section II - The 2nd Perspective: Company Environment Chapter 6: Business Vision Chapter 7: Implementing a Vision: Strategy, Tactics and Business Plan

47. Section III - The 3rd Perspective: Information Systems Use Chapter 8: Evaluating Business Strategies and the Use of Information Systems Chapter 9: The Roles, Roles and Relationship Concept Chapter 10: The Redefine and/or Define Concept and Change Management Chapter 11: Telecommunications as the Delivery Vehicle Chapter 12: A Success Factor Profile

48. Section IV: Major Information Systems Management Issues Chapter 13: Information Systems Organization and Personnel Considerations Chapter 14: Information Systems Value and Financial Strategy Chapter 15: Integrating Information Systems into the Business Plan Chapter 16: Total Quality Management and the Role of Information Systems **

49. Chapter 17: Conclusions Exhibit I - Why Change When You Are Flying High? An Analysis of The Boeing Company Read the Boeing and Wal-Mart papers for background and understanding of the assignment. Don’t overdo duplicating how they were done.

50. My Personal “Expert Profile” Peter Drucker - Business Visionary Michael Porter - Business Competition Peter Keen - IS Management and Trends Jim Collins - Successful Businesses Jack Welch - Business Management