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Agenda:

Agenda:. Recap Chapter 4 – Making Case for IT Team Time. Disruptive Technology (Recap). What is disruptive technology? Why disruptive technology is essential for creating and sustaining firm’s competitive advantage? Provide example.

malcolm-gonzales
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Agenda:

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  1. Agenda: • Recap • Chapter 4 – Making Case for IT • Team Time

  2. Disruptive Technology (Recap) • What is disruptive technology? • Why disruptive technology is essential for creating and sustaining firm’s competitive advantage? Provide example.

  3. Disruptive technologies - technologies that improve a product or service in ways that the market does not expect and they are particularly threatening to the leaders of an existing market, because they are competition coming from an unexpected direction. Disruptive Technology

  4. Advantages and disadvantages of Outsourcing (Recap) • What are the advantages and disadvantages of outsourcing? • What kind of activities are normally outsourced?

  5. Outsourcing

  6. Marketing Channel Conflict • What is the likelihood that cannibalism would happen in Li and Fund case when the company created Li&Fund.com? Please explain.

  7. Team Time (DIY) • Bloomberg Business Week Article: Wal-Mart’s Rocky Path from Bricks to Clicks: After 15 years online, the retailer still trails well behind Amazon.com and Ebay • Is there any channel conflict between local Walmart Stores and walmart.com? Please explain. • If you are the CEO of Wal-Mart, how would you make your e-commence division more competitive?

  8. Course Road Map

  9. Chapter 4: Making the Case for IT Do you agree with Carr’s assumptions? Why? Why not?

  10. Chapter 4: Making the Case for IT Carr’s Solutions • Spend as little as possible on IT • Concentrate IT investments on driving cost savings • Follow rather than lead when adopting new IT, allowing others to bear the risk and cost of testing new technologies • Concentrate on managing risk, rather than searching for IT opportunities Do you agree with Carr’s solutions? Why? Why not?

  11. Chapter 4: Making the Case for IT – Counterpoints John Seely Brown and John Hagel stated: • Overestimate the strategic value of IT • Overspend on IT • Need to manage for reliability and security However, they also argued: • IT remains a profound catalyst for the creation of strategic differentiation. • IT maybe ubiquitous but the insight required to harness its potential is not.

  12. Chapter 4: Making the Case for IT – Counterpoints Vijay Gurbaxani claimed: • The scare resource never was technology; it was the set of managerial capabilities needed to create value with that technology. Paul Strassman asserted: • Carr’s logic is defective because his examples deal exclusively with capital intensive goods.

  13. Chapter 4: Making the Case for IT – Counterpoints Applegate et al. stressed: • Carr’s arguments are based on the traditional mainframe-base and client-server approach to building IT infrastructure, which is very costly. (Legacy Mindset) • Today, open source and ubiquitous IT infrastructures are designed to be shared and become more valuable when shared. (Network Externality) • Cost and time are reduced to launch new IT-enabled strategic initiatives. As such IT becomes more strategic and relevant. What are your perspectives?

  14. Chapter 4: Making the Case for IT Legacy System and Centralized IT Architecture

  15. Chapter 4: Making the Case for IT Client and Server (Distributed) IT Architecture

  16. Enterprise Application Integration (EAI) Approach Legacy Application ERP Middleware Legacy Application SCM Database 2 Database 1

  17. Using Business Models to Frame the Business Case for IT – “IT Business Value” Mindset

  18. Chapter 4: Making the Case for IT IT Value Framework

  19. Chapter 4: Making the Case for IT – Infrastructure Leveraging Infrastructure • Infrastructure: IT operations and supporting enterprise processes • Outsourcing to specialized shared services providers (e.g., IBM Global Service and EDS) • Build best-in-class shared (with other divisions) service IT infrastructure: off-shoring its shared services (data centers, call center and even ERP) • Options Value of Investments in IT Infrastructure

  20. Chapter 4: Making the Case for IT Cash Flows – MedCo A

  21. Chapter 4: Making the Case for IT MedCo A vs. MedCo B

  22. Chapter 4: Making the Case for IT MedCo B Leverages Infrastructure and Exercises Options

  23. Chapter 4: Making the Case for IT Value of Leveraging Infrastructure and Exercising Options

  24. Chapter 4: Making the Case for IT – Profitability and Proprietary Driving Profitable Growth • Revenue-generating capabilities can be enhanced • IT-enabled product/service or business offerings can be launched Achieving Proprietary Advantage • Entry and Exit Markets • Strategic Positioning • PE Ratio

  25. Team Time (DIY) • How well do you understand the linkages among the elements of your organization’s business model – its strategy, the capabilities and infrastructure built to execute the strategy, and the value that can be created for all stakeholders (e.g., customers, suppliers, partners, employees, investors)? • Organization Choice • You team can pick your own organization. • Charles Schwab • Southwest Airline • Amazon.com

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