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Strategic Impact of Information Technology

Strategic Impact of Information Technology. Information technology allows operations, strategies and competitive advantages not possible before. Enabling technology.

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Strategic Impact of Information Technology

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  1. Strategic Impact of Information Technology

  2. Information technology allows operations, strategies and competitive advantages not possible before. Enabling technology • Operational dependency occurs when time, volume or other physical conditions makes IT unique to perform a task. It is related to the organization's EFFICIENCY. • Strategic impact occurs when a policy, strategy or product uniquely requires IT for its implementation. It is related to the organization's EFFECTIVENESS.

  3. Strategic impact

  4. Potential new entrants Competitive forces intraindustry Strategic Bargaining Bargaining power buyers business unit power suppliers competition Substitute products, services

  5. from Mass Production

  6. to Mass Customization

  7. Strategic Advantage Cost Leadership Differentia- tion Innovation Competitive Strategies Growth Alliance Other Strategies Rivalry of Competitors Threat of New Entrants Threat of Substitutes Bargaining Power of Customers Bargaining Power of Suppliers Competitive Forces

  8. Value Chain & Strategic IT Support Processes • Administrative Coordination and Support Services • Human Resources Management • Technology Development • Procurement of Resources

  9. Value Chain & Strategic IT Primary Business Processes • Inbound Logistics • Operations • Outbound Logistics • Marketing and Sales • Customer Service

  10. COMPETITIVE ADVANTAGE Value Chain & Strategic IT The Value Chain of a Firm Administrative Coordination & Support Services Collaborative Workflow Intranet Human Resources Management Employee Benefits Intranet SUPPORT PROCESSES Technology Development Product Development Extranet with Partners Procurement of Resources E-Commerce Web Portals for Suppliers Inbound Logistics Outbound Logistics Marketing & Sales Customer Service Operations PRIMARY BUSINESS PROCESSES Computer- Aided Flexible Manufactu- ring Customer Relation- ship Manage- ment Online Point-of-Sale And Order Processing Automated Just-in-Time Warehousing Target Marketing

  11. Building Customer Value Customer Place Orders Directly Customer Orders Through Partners Customer Database by Preferences & Profitability Internet Intranets Extranets Transaction Database Customer Database Customers Linked With Distribution Web Personal- ization Builds Loyalty Employee View of Customer is Complete Customers Check Own History Intranets Extranets Internet Intranets Build a Web Community of Customers, etc.

  12. Business Improvement Business Reengineering Incremental Radical Improved New Version of Process Brand New Process Existing Processes Clean Slate One-time or Continuous Periodic One-time Change Long Short Broad, Cross- Functional Narrow, Within Functions Past and Present Future Bottom-up Top-down Cultural Cultural Structural Statistical Control Information Technology Moderate High Reengineering Business Processes Level of Change Process Change Starting Point Frequency of Change Time Required Typical Scope Horizon Participation Path to Execution Primary Enabler Risk

  13. The Virtual CompanyInterenterprise IS Alliance - Subcontractors Boundary of a Firm Alliance - Major Supplier Customer Response and Order- Fulfillment Teams Intranets Alliance - Major Customer Extranets Manufacturing Teams Alliance - Small Suppliers Alliance - Complementary Services Cross-Functional Teams Engineering Teams

  14. Virtual Company Strategies • Share Infrastructure and Risk with Alliance Partners • Link Complementary Core Competencies • Reduce Concept-to-Cash Time Through Sharing • Increase Facilities and Market Coverage • Gain Access to New Markets and Share Market or Customer Loyalty • Migrate from Selling Products to Selling Solutions

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