INTRODUCTION CORPORATE INFORMATION SYSTEM & UNDERSTANDING BUSINESS MODEL Session 01

1. INTRODUCTION CORPORATE INFORMATION SYSTEM &UNDERSTANDING BUSINESS MODELSession 01 Lecturer : JONATHAN SOFIAN LUSA Reading materials : Applegate : Introduction, chapter 1 MASTER IN MANAGEMENT PROGRAM PPM - School of Management DEC 05 2009 - Week I 0CT 11 2008

2. Chapter Outline 1 Introduction 2 Terminology 3 Understanding Business Model

3. TERMINOLOGY

4. Social and Business Evolution Agricultural Information Industrial Economy Economy Economy 2000 1950 1900 Typical mathematical formula: D=B -4AC 2 Equivalent FORTRAN statement: D=B ** 2-4*A*C Telegraph Technology Evolution Photos reprinted with permission from AT&T and IBM Technology, Business, and Societal Evolution during the 20th century Corporate Information Strategy and Management Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan , . Burr Ridge, IL: Chapter 1 Figure 1 - 2 McGraw - Hill/Irwin, 2002.

5. OPPOSING VIEWS OF INFORMATION TECHNOLOGY FUNCTION Business executives view of IT Apprehensive Technocracy New feature focus Little relevance to real world IT executives view of business Short-sighted Lacking in vision Unwilling to exploit IT VS

6. Business executives view of IT • IT = Cost Center • IT does not understand business • IT does not demonstrates leadership

7. IT executives view of business • Business lack close relationships • IT does not prioritize well • Senior executives do not support IT

8. Alternative Solutions • Budget • Career crossover • CIO-CEO • Communicate/market/negotiate • Education/cross-training • Liaison • Location • Organization (Centralized, Decentralized, Hybrid )

9. EVOLVING BUSINESS MODELS Components of business model : STRATEGY / CONCEPT : describe the opportunity and strategy. VALUE : measures the benefits. CAPABILITIES : define resources needed to execute strategy. INDUSTRIAL ECONOMY PARADIGM : Relatively clear and steady business model. Easy to define business model. NETWORK ECONOMY PARADIGM : Somehow, it is quite difficult to define a clear business model. Business model should be explained in detail way.

10. BUSINESS MODEL A business model defines how an enterprise interacts with the environment to define a unique strategy, attract the resources and the capabilities required to execute the strategy, and to create value for all stakeholders ( 8th edition, Lynda M Applegate) A business model guides and assists management in the process of strategy formulation. A successful business model aligns an organization with its environment well.

11. Evolving Business Models • What business are you in?  What is you business model? • Who are our customers? Our suppliers? • ASP models Corporate Information Strategy and Management Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan , . Burr Ridge, IL: Chapter 2 Figure 2 - 1 McGraw - Hill/Irwin, 2002.

12. Collaboration to Compete (IOS) • New Products  TV Cable Package (TV Cable+decoder+Parabola) • New Services  Bank + Live Insurance + Hospital + Café + Tour + Hotel • Efficiency (cheaper, faster, better)  ATM Bersama • Joint Operation ( services)  Billing Telephone, PAM, PLN + Bank • Strategic Alliances ( generic + Long term)  Insurance lokal + International, School, University • Customer Supplier Relationship (cheaper, faster, better)  Textile industry • Outsourcing  Call Center, Customer Service, Security • Image Building  Joint Venture local + International

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