Innovation as a Response to Change in Market and Technology

1. Innovation as a Response to Change in Market and Technology Technological Opportunities Advances in Technology EFFICINCY EFFECTIVENESS INNOVATION INNOVATION New Products and Services Market Needs Socio-political Changes Market Time

2. Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) Before Copy of Purchase Order Purchasing Purchase Order  Payment Accounts Payable Vendor Invoice Goods Receiving Document Receiving

3. Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) After Purchasing  Purchase Order Payment  Accounts Payable Database Vendor Goods Receiving

4. The Information Age vs. the Computer Age The Computer Age Time-sharing Computer 1960’s Interactive Computing Mini/Micro provide user with computer power (as of Mainframe) but with little cost Advances in telecommunications(link terminals/PC mainframe) End of the computer age Beginning of the information age Software advances in application packages (e.g. , DBMS, spreadsheet PC as DSS tool to access information stored in the center computer files to support management decision-making process.

5. Firm Infrastructure (general management, accounting, finance, strategic planning Human Resource Management (recruiting , training , development) Technology Development (R&D, product and process improvement) Profit Margin Procurement (purchasing of raw materials, machines, supplies) Outbound Logistics (warehousing and distribution of finished product) Marketing and Sales (advertising, promotion, pricing, channel relations) Service (installation, repair, parts) Operations (machining, assembling, testing) Inbound Logistics (raw materials handling and warehousing) Primary Activities THE GENERIC VALUE CHAIN Support Activities

6. Information Engineering PLANNING ANALYSIS DESIGN CONSTRUCTION

7. What is Information Engineering • The application of an interlocking set of formal techniques for the planning, analysis, design and construction of IS, applied ton an enterprise-wide basis or across a major sector of an enterprise. • An enterprise-wide set of automated disciplines for getting the right information to the right people with the right form at the right time.

8. SDLC ANALYAIS DESIGN IMPLEMENTATION MAINTENANCE BUSINESS ENVIRONMENT IS PROFESSIONALS MANAGERS ENVISION DESIGN BUILD OPERATE BUSINESS ENVIRONMENT IS CHANGING RAPIDLY RADICALLY AND PERPLEXINGLY MANAGMENT IS DEVELOPMENT REENGINEERING INFLUENCE CAPABILITY LEADERSHIP CONTROL

9. BUSINESS ENVIRONMENT IS CHANGING RAPIDLY RADICALLY AND PERPLEXINGLY IS PROFESSIONALS MANAGERS ENVISION DESIGN BUILD OPERATE SDLC ANALYAIS DESIGN IMPLEMENTATION MAINTENANCE MANAGMENT IS DEVELOPMENT REENGINEERING INFLUENCE CAPABILITY LEADERSHIP CONTROL

10. Figure: Relationship and linkage of proposed system projects with strategic factors and the business plan Objective Proposal Business Plan Strategic Factors System Project • Decrease direct labor and overhead by 20% • Increase our customer order-filing rate to 95% • Produce timely tracking and sales information for inventory • managers • Increase labor productivity • Improve service differentiation • Provide managers with better information • A standard cost accounting system that provides online labor rate and efficiency variances • An inventory management system that provides recorder points, EOQ’s, quantity on hand, and sales by item and salesperson. Supports Supports

11. Enablers Inhibitors • Technological • Increase connectivity capabilities • Favorable cost-per-formance trends • Vendor push-system solutions • Organizational • Strategic vision for integration through an IT platform • Centrality of IT to the strategic context • Technological • Uncertainty • Cost of integration • Organizational • Lack of strategic vision for integration • Organizational inertia • Centralization -decentralization conflict Internal Integration: Enablers and Inhibitors IT-induced reconfiguration: Level Two

12. Enablers Inhibitors • Electronic filing initiative by IRS • IT-based value-added services • Perceived benefits of an integrated platform • IT-based strategic advantages • Inability to view IT in strategic terms • Low economies of scale for integration • Inexperience with IT and IT-based applications • Mismatch with market needs IT-industry business reconfiguration in level 2: Enables and Inhibitors in the tax return preparation business IT-induced reconfiguration:tax return preparation business

13. Enablers Inhibitors • Ability to specify and/or create standards for integration • Identification of value-added services • Recognition of mutual benefits • Lack of standards • Lack of vision and understanding • Lack of commitment to integration • Possible erosion of market positions Business network redesign: Enablers and inhibitors IT-induced reconfiguration: Level Four

14. Strategic options for business network redesign Tightly coupled Business Network redesign Collaborative advantage Business Governance Electric infrastructure Competitive advantage Loosely coupled Common role Unique role Information Technology Governance

15. Business Scope Redefinition: Shifting the business domain using IT Traditional business scope Products Products Markets Markets Increased role for information technology in operations Technology Technology Traditional operating technology Before After

16. Most likely quadrant-to-quadrant movement HIGH Preemptive Penetration Chaotic Proliferation Interrelatedness L O w Barroom Brawl Clash of the Titans LOW HIGH Exploitability