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IT IMPACT ON BUSINESS MODEL Session 02

IT IMPACT ON BUSINESS MODEL Session 02. Lecturer : JONATHAN SOFIAN LUSA Reading materials : Applegate chapter 2. MASTER IN MANAGEMENT PROGRAM PPM - School of Management DEC 05 2009 - Week I. 0CT 11 2008. Chapter Outline. 1. Analyzing IT Impact. 2. The Search for Opportunity. 3.

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IT IMPACT ON BUSINESS MODEL Session 02

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  1. IT IMPACT ON BUSINESS MODELSession 02 Lecturer : JONATHAN SOFIAN LUSA Reading materials : Applegate chapter 2 MASTER IN MANAGEMENT PROGRAM PPM - School of Management DEC 05 2009 - Week I 0CT 11 2008

  2. Chapter Outline 1 Analyzing IT Impact 2 The Search for Opportunity 3 GPA Case Study

  3. ANALYZING IT IMPACTCASE STUDY : BORDERLESS MANUFACTURING AT LI & FUNG Lining TAIWAN Shell KOREA by  Filler CHINA Label, elastic, studs, toggle and string HONG KONG Zipper JAPAN Assembly CHINA Made in Hong Kong

  4. LI & FUNG’S BUSINESS PARADIGM Raw Material Sourcing Product Developm’t Product Design Consumer Needs Supply Chain Management Local Forwarding Consolidation Customs Clearance Factory Sourcing Mfg Control Export Docu- mentation Forwarder Consolidation Supply Chain Financing Financing Financing Financing Financing Supply Chain Factories Shipping Airlines Wholesale Importer Raw Material Mill Retailer Consumer

  5. THE CHANGING ROLE OF THE TRADING COMPANY Supply Chain Management Level of Value Added Virtual Manufacturing Borderless Manufacturing Sourcing Buying Agency

  6. ANALYZING IT IMPACT • IT impact on strategy • Determining product, market, business network, and boundary positioning • IT impact on capabilities. • Building processes, infrastructure, people, partner, organization & culture, leadership, governance

  7. ANALYZING IT IMPACTIBM Path to Business transformation

  8. ANALYZING IT IMPACTIBM Path to Business transformation • Goal: Use IT to improve end to end operating processes • Business Sponsor: Business Unit & Shared service Leaders ( suppliers, customer, partner) • Business Value: Reduce cost, decrease cycle time, improve org or extended enterprise operating performance, improve total cost of IT Ownership. • Risk & Uncertainty: moderate to high, business & tech complexity and volatility, org change, required integration. • Investment: Corporate Budgeting, steering committee. • Goal: Transform organization n industry, differentiate strategy, develop proprietary asset. • Business Sponsor: BOD, strong project leadership. • Business Value: Enable sustained capital efficient profitable growth, improve market share, deliver sustainable competitive advantage. • Risk & Uncertainty: High, new business model needed, new tech needed, organizational change, integration of new business. • Investment: Integrated with corporate strategy, Review by committee, change control process n system • Goal: Pursue opportunities that enable launch of new products / business, entry into new market • Business Sponsor: Executive Committee, business unit leadership. • Business Value: Grow Revenue, launch new product, enter high growth industries and market • Risk & Uncertainty: High, new business model needed • Investment: Staged commitments and investments base on milestones, base on business plan, new venture risk management • Goal: Use IT to improve local operating performance • Business Sponsor: Local Manager, team, individuals. • Business Value: Reduce cost & Improve local operating performance. • Risk & Uncertainty: Low to moderate • Investment: Local Budgeting

  9. BASIC QUESTIONS Five key questions can be used to guide executives as they search for value creating opportunities to use IT to support and drive the business strategy Can IT change the basis of competition? Can IT change the nature of relationship and the balance of power among buyers and suppliers Can IT build or reduce barriers to entry? Can IT increase or decrease switching costs? Can IT add value to existing products and services or create new ones?

  10. GROUP PURCHASING ALLIANCE New concept for health care industry CASE STUDY

  11. FACT

  12. FACT

  13. % COST DIFFERENCES 350% 18 X 24 474% 24 X 30243% 30 X 40259% 35 X 35 249% D5W138% D10W 164% SALINE140% RINGERS164% 1ml347% 2ml337% 5ml334% 10ml247% GLOVE FILM I.V.SOLNS DISP SYRINGES

  14. SOLUTIONS ?

  15. CONSEPT Infomediaries

  16. GPA Components Hospitals: Power Force of GPA Bank: Financial support GML: Representer of Hospital Distributor/Manufacturer: Product supplier

  17. GPA Components

  18. GML Transaction Scheme GML

  19. BENEFIT HOSPITAL BANK DISTRIBUTOR GML

  20. OUR LEARNING POINTS FOR TODAY … ______________________________ ______________________________ ______________________________ ______________________________ ______________________________ ______________________________ ______________________________

  21. THANK YOU

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