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T Ch3: Strategic Information Systems

T Ch3: Strategic Information Systems. LEARNING OBJECTIVES Strategic Information Systems & Their adv. Some Str Info System Frameworks (4 ITOP) Port’s 5-Force analysis & how to use it for ITOP. Value Chain Model and how to use it for ITOP Porter & Millar’s 5-step process .

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T Ch3: Strategic Information Systems

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  1. T Ch3: Strategic Information Systems LEARNING OBJECTIVES • Strategic Information Systems & Their adv. • Some Str Info System Frameworks (4 ITOP) • Port’s 5-Force analysis & how to use it for ITOP. • Value Chain Model and how to use it for ITOP • Porter & Millar’s 5-step process. • Customer Resource Life Cycle framework (CRLC) • Global Business Drivers Sheu

  2. Strategic Information Systems • Strategic Competitive Advantages (SCA) • Relative advantages of our org. vs competitors that: • Have broad impacts in scope and organizations • Have long term impact • Are hard to reverse in a shorter time frame (< 1yr) • Usually need long time to plan and implement • Often involve use of significant resources • Sustainable Strategic (Competitive) Advantage • SCA that is hard for competitors to copy or overcome for a long time. ( say, 5 yr or longer) • SIS (Strategic Information System) • An info sys that is characterized by its: • Ability to create/enhance Str. Competitive Advantages. • Ability to change significantly the manner the business is done. NB: SIS ≠Strategic-level Information System Sheu

  3. Common Competitive Strategies • Porter’s 3 generic strategies for SCA • Low Cost • Product differentiation • Functions/Features; Quality • Focus (Niche Market) • We should also add: • Lead time • Service • Flexibility (to order changes, etc.) • Central issue of the course: How to use IT to help create SCAs like those listed above. • => ITOP for the best advantage of the org. • Additional interest: desire sustainable SCA. • There are systematic way of finding ITOP. Sheu

  4. 進入障礙： ．規模經濟 ．產品差異化 ．品牌辨認 ．更換成本 ．資本需求 ．運輸通路 ．絕對成本優勢 ．學習曲線 ．產品設計 ．政府政策 ．預期報復 敵對決定因素： ．產業成長 ．固定成本/附加價值 ．間斷性產能過剩 ．產品差異化 ．品牌辨認 ．更換成本 ．集中與均衡 ．資訊複雜 ．競爭者之多樣化 ．公司賭注退出阻礙 新進入者 產業競爭者 強烈的敵對競爭 買方 供應商 供應商 議價能力 買方 議價能力 替代品威脅 替代品 供應商力量之決定因素： ．投入之差別化 ．產業中供應商之更換成本 ．替代投入品之存在 ．供應商集中度 ．供應商之重要數量 ．相對於產業購貨之成本 ．投入成本或差異化之影響 ．公司在產業中向前整合對向後整合之威脅 替代品威脅之決定因素： ．替代品之價格表現 ．更換成本 ．買方對於替代品之偏好 決定買方力量之因素： ．議價槓桿．價格敏感性 ．買方對公司集中度．價值/總購買量 ．買方數量．產品差異化 ．買方更換成本相對．品牌辨認 　於公司之更換成本 ．買方對於後向整合．品質績效之影響 　之資訊 ．替代品．買方獲利率 ．決策者之激勵 Recall 5-Force Analysis Sheu

  5. 5-Force Model (fg 3.4) Sheu

  6. Porter’s Model for Wal-Mart Sheu

  7. Using 5-Force Analysis 4 ITOP:Method 1: consider determinants one by one Ask ourselves questions: • Can an IS help us to: • Diminish Supplier bargaining power ? • Reduce supplier differentiation to us? • Lower switching cost of supplier? • … • Create Entry Barriers ? • Create economy of scale ? • Create proprietary product diff? • Gain competitive edge w/i existing industry ? • Create growth • Brand identity • .… Sheu

  8. Using 5-Force Analysis 4 ITOP:Method 2: matching player w/ determinants (fg 3.5) Step 1: The players in each force are listed.(fg 3.5) Step 2: Analysis to relate the determinants (fg 3.4 & more) to each player in fg 3.5. • W/ each player: Analyze if we can achieve the effect as implied by each determinant. Eg: Step 3: Devise a strategy to defend org. against the listed threats. Strategies could be grouped/integrated. Step 4: Look for IT to support the business strategy. <Steps 3 & 4 could be mutual adjusting. Iterating back ad forth to find a set of ITOP.> Sheu

  9. Wal-Mart Example of 5-Force Analysis Sheu

  10. Optional HW: 5-Force Analysis for ITOP • Use your project company/organization or industry as the central organization. • Apply 5-force analysis to analyze the competitive dynamics of your subject organization. • Pick one force & one target player in that force: • Identify areas where: • You think are needing a boost to enhance your bargaining power & competitive position. • Where application of IT can help to enhance your position. • Submit HW in terms of: • BRIEF Co. & industry description • 5-force analysis (Method 1 or 2) • IT opportunities: IS name / Functionality / Benefits sought Sheu

  11. L: Fg 2.13 Value Chain Model & Examples Sheu

  12. Value Chain Analysis (Method 1) • Step 1: As-is description • Present value chain from (process) segments to Individual processes. Clearly identify the sequence (chain) of the processes. • May also have branches. • Step 2: Simplification/Rationalization/Standardization • Examine the value/function for each process. (Is the step necessary? Can it be removed?) • Ask: Is it possible to integrate/re-arrange steps to make the overall processes simpler. • Step 3: IT opportunity • Is it possible to use IT to make a target process more efficient? • Is it possible to use IT to integrate/re-arrange steps. • Can we build an integrated IS to make the whole process more efficient? • Step 4: Requirement analysis • List the system requirements of such an IT system. Sheu

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  17. Information Intensity & Content • Information Intensity: (I-I) • Measures the actual and planned usage of information. (High intensity  High level of Info usage) • Measured separately 4 each link in the value chain. • Information Content: (I-C) • Refers to the amount of info included in the creation of a product or service. Sheu

  18. Porter/Millar’s 5-step Process(VCA Method 2) • Step 1: Assess info intensity • Assess I-I of each link in each of their value chain • If supplier/customer highly dept on info, I-I is high => likely to have strategic oppr for IS. • Step 2: Determine Role of IT in industry structure. • Know how buyers/suppliers/competitors might be affected by & react to IT. • Step 3: Identify & rank ITOP • Step 4: Investigate how IT might spawn new business • What Info generated should be sold? • What IT capability could be used to start a new business • Can IT help produce new items for sale? • Step 5: develop a plan 4 the ITOP. • Process should be business driven rather than technology driven. • Benetton SPA case • Italian fashion retailer. • S1: Low I-C product but high I-I in its value chain. (Cloth design/production/sale highly dept on timely/accurate info flow) (20% of new fashion dept on previous ideas.) => ITOPs exist. • S2: Det the role ot IT. • Reduce lead time improv response time to customer req. S3: via computerized mfg env. Benetton can let W.W. customer to receive items in 2-3 wks (3 times faster than major competitors. S5: Plan developed & implemented.

  19. Customer Resource Life Cycle F. (CRLC) • Idea: Org. differentiate itself from competitor in the eyes of customers. • => Determine stages customers go thru in their transaction cycle. (Original: 13 stages but not quite good) (tbl 3.3) • On each stage of the life cycle Seek ITOP. • Global Business Drivers • tbl 3.4 Sheu

  20. On Sustainability • Pure IS can rarely provide sustainable SCA. • When SIS are combined w/ structural changes in org => could provide sustainable SCA. • How? • Inward vs Outward systems Sheu

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