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IS/IT Strategic Analysis: Determining the Future Potential. Presented by: Benny Sia. Table of Contents. Objectives Analytical tools Value Chain Analysis Internal and external analysis Conclusions References. Objectives. Understand the current situation The use of analytical tools
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IS/IT Strategic Analysis: Determining the Future Potential Presented by: Benny Sia version 1.0
Table of Contents • Objectives • Analytical tools • Value Chain Analysis • Internal and external analysis • Conclusions • References version 1.0
Objectives • Understand the current situation • The use of analytical tools • Linkage of each systems • To what extent these systems enable separate activities to perform harmoniously. • Strategic thinking version 1.0
Analytical tools • Application portfolio • Porter’s 5 Forces • Value Chain models • SWOT • One problem – which to use and when? • Neuman1 recognizes that they’re a means of helping the thinking process, not a recipe for identified of strategic systems. version 1.0
Application Portfolio • Each tools will be considered as part of the process for developing IS/IT strategies. • However, high potential possibilities need for further investigation. • Provide current situation which would help in the IS/IT integration. version 1.0
Competency analysis • To gain competitive advantage. • Example, bank develop excellent mortgage product for younger people, good relationships with other banks, but why the sales are so poor? Reasons – slowness and unreliable application process using older system. The process could not deliver the ‘service promise’ inherent with product and customer. • Identify how priority IS investment are essential to competitive disadvantage. version 1.0
Value Chain Analysis • Value chain of the business unit is only one part of a larger set of value-adding activities in an industry. • The actions of other parties – customers, suppliers and competitors – will have a significant impact on what the firm does and how it does it. • People’s output can be your input. • External an Internal value chain version 1.0
External Value Chain • Maximize its value-added and minimize its costs on how well the demand and supply information are matched at all stages. • Poor information means resources are wasted will increase cost without increase revenue. • Non-profit industries such as government, health care and charities always matching of supply and demand to achieve break-even. version 1.0
External value chain • Strategic thinking • What information is available? • Who are they? • How they can be influenced? • Key of information flow can be examined to see how the process be improved in terms of accuracy, speed, cost or timeliness • Many information exchanges cannot easily be improved without willing cooperation of trading partners. version 1.0
External value chain • Example on reduction of intercompany cost due to better information exchange. • Thomas Holiday case • Introduce Top system • Enable travel agents to book holiday via their system • Immediate reduced double-handling cost and speed up the process • Save time and money for both parties version 1.0
Internal value chain • Assessing and improving how company operates • What the company does rather how it does it – look at the activities it performs to contribute to the value-adding process • 2 types of business activities – primary and support activities version 1.0
The use of value chain analysis • Information flow throughout the industry, when and where the information is available, who has it and how to turn that into advantage. Example, fashion goods – ‘demand’ information is critical factor. • Information exchange with customers and suppliers throughout the chain to improve the performance. Example, EDI version 1.0
How effectively the information flows through the primary processes • Within each activity to optimize performance • Linking activities together to avoid unnecessary cost and missed opportunities • Enable support activities to contribute to the value-adding version 1.0
Conclusion • Value chain analysis should extent their context ( industry value chain) in order to achieve maximum leverage IS/IT investment. • Future planning IS/IT should identify the business opportunities and threats presented by developing use of IS/IT in the industry. version 1.0
References • Neumann, S., (1994), Strategic Information Systems, Macmillan, London. • Porter, M.E, (1985), Competitive Advantage: Creating and sustaining Superior Performance, Free Press, New York. • Strategy: value chain analysis, (2003), [ Online], Available: http://www.tutor2u.net/business/strategy/value_chain_analysis.htm [17 August 2004]. • Ward, J. & Peppard, J., (2002), Strategic Planning for Information Systems, 3rd Edition, p. 237 – 275, Wiley & Son, UK. version 1.0