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EMBA 610 Management Information Systems

This week's discussion focuses on the power of virtual integration and its strategic advantages for companies like Ford. We explore sustainable competitive advantage, information resource advantages, Porter's forces, value chain models, and the role of IT in business processes. We also analyze Dell's direct business model and its partnership and trust approach compared to Ford's radical business process redesign.

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EMBA 610 Management Information Systems

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  1. EMBA 610Management Information Systems Dave Salisbury davesalisbury@mail.com (email) http://faculty.cob.ohiou.edu/salisbury/ (web site)

  2. This Week’s Fun Stuff • IT for Competitive Advantage • Discussion of the Power of Virtual Integration • Ford and Virtual Integration

  3. Strategic Issues • Strategic Advantage • If you’re first, a novel technology creates an advantage • Strategic Necessity • Eventually, technology-based gains are lost because they are easily replicable

  4. Information Resource Advantages • What makes it valuable? • Who gets the value? • Is it equally distributed? • Is it mobile? • How quickly does it depreciate?

  5. Sustainable Competitive Advantage • The Environment • What happens “out there” • Foundation Factors • Something unique to leverage • Action & Strategy • What you do with the situation

  6. Porter’s Forces Substitute Competitor Customer Entrant Supplier Differentiation Low Cost Strategy Innovation Growth Alliance

  7. Value Chain Model Organization Human Resources SupportActivities Technology Purchasing Service CustomerServiceRepair InboundLogisticsMaterialsHandlingDelivery OutboundLogisticsOrderProcessingShipping Marketing& SalesProductPricingPromotionPlace OperationsManufacturingAssembly PrimaryActivities

  8. Supply Chain Management • Network of facilities and distribution options • Procurement • Transformation • Distribution • IT is obviously heavily involved

  9. Establish Requirements Specify Select Source Order Authorize/Pay for Acquire Test and Accept Integrate Monitor Upgrade Maintain Transfer/Dispose Account for Customer Resource Life Cycle

  10. IT & Business Processes • IT as an enabler of change • Reengineering • Total Quality Management

  11. Breaking Business Barriers • Time Barriers • Geographic Barriers • Cost Barriers • Structural Barriers

  12. Automation, Improvement, Reengineering • Business Process Automation (BPA) • Simply automate the existing business process • Business Process Improvement (BPI) • Business processes are changed in significant, yet incremental ways • Business Process Reengineering • Business processes are radically changed

  13. Redesign Continuum Potential Payoff, Risk, Change New Process BPR BPI BPA Existing Process

  14. Processes v. Functions • Functions • Marketing, Finance, etc. • Processes • Things that get done • Tend to cross functional barriers

  15. Processes • Beginning and end • Inputs and outputs • Set of transformational tasks • Cross functional boundaries • Metrics to assess performance • cycle time • throughput

  16. Reengineering • Outcome Analysis • Breaking Assumptions • Technology Analysis • Activity Elimination • Proxy Benchmarking • Process Simplification

  17. Enterprise Information Systems • SAP, PeopleSoft, etc. • A means to pull together scattered and fragmented IS • Modules for various operations activities • Manufacturing • Accounting • Human Resources • Sales

  18. Enterprise Information Systems • Require fundamental changes to business processes • If you have no processes in place, no biggie • If you do have existing processes, and they are a source of advantage, EIS are not appropriate • When you are out of time, it’s a canned package that works

  19. Change Management • People Don’t Generally Like Change • How to get it done? • revolutionary design • evolutionary implementation • Perceived Characteristics of Innovating • End User Involvement • Work the Culture

  20. Dell • Direct business model • Bypass the dealer channel • Inventory velocity • Technology navigator • Virtual integration

  21. Dell • Partnerships and trust • Affiliation with the customer • Fast-cycle segmentation • Trading inventory for information • Using IT to stay close to the customer

  22. Ford and Virtual Integration • Radical business process redesign • It works for Dell; will it work at Ford? • What are the similarities between the two businesses? • What are the differences between the supply chains at Dell and Ford?

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