e-business systems: e-business/e-commerce models – enterprise e-business systems –ecommerce...
TRANSCRIPT
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
1/35
Module 7
Organization and Information
Technology
By:
Monica M
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
2/35
Syllabus
IT Capabilities and their organizational impact
Fundamentals of strategic advantage
Using IT for strategic advantages
Refer: Kenneth C Laudon & Jane P Laudon
Chapter No. 3
2
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
3/35
Organization
Organization
A formal collection of people and other resources
established to accomplish a set of goals
An organization is a stable, formal social structure that
takes resources from the environment & processes
them to produce output
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
4/35
Organization- Technical Definition
4
Capital and labor (the primary production factors provided by theenvironment) are transformed by the firm through the production
process into products and services (outputs to the environment).
The products and services are consumed by the environment, which
supplies additional capital and labor as inputs in the feedback loop.
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
5/35
Organization & IT
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
6/35
Organization & IT
The Interaction between IT and Organizationis very complex & Influenced by the mediatingfactors
Environment Culture
Structure
Business process
Politics
Management Decision
6
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
7/35
Organization & IT Features/Factors
Organizational Environment: Organization reside in environment from where they draw
resources and to which they supply goods and services
IT is the key instrument for environmental scanning, helpsmanagers to identify the changes in the environment
Organizational Culture: The set of assumption the organization and people will
follow in an organization
The major understandings and assumptions for a business,a corporation, or an organization
The organizational culture is a powerful restraint on changeespecially technological changes ( Resistant to change)
Organization avoids to do changes in the basic assumption
7
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
8/35
Organization & IT Features/Factors
Organization Structure: Organizational subunits and the way theyare related to the overall organization
Flat organizational structure
Information systems can reduce the number of levels in an
organization by providing managers with information tosupervise larger numbers of workers and by giving lower-levelemployees more decision-making authority
An organizational structure with a reduced number of layers ofmanagement
Business process: The business process will become very effective over time as
individuals develops routine for producing goods and services
Firm is able to reduce the cost and increases the effectiveness byuse of IT in an organization
8
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
9/35
Organization & IT Features/Factors
Organization politics:
The resources, rewards, and punishments will
create the differences in both managers and
employees, that result in the political struggle forresources, competition and conflict
Management Decision:
As Managers, need to decide which system will bebuilt, how it is beneficial to the organization, how
to implement
9
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
10/35
Organization, IT & IS
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
11/35
Strategy
Strategy is a long term plan formulated and
executed over a period of time by firms such
that their resources are best utilized and output
of the firm is optimized
(a) Where are we right now?
(b) Where do we want to go?
(c) How do we get there?
11
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
12/35
Fundamentals of Strategic Advantage
12
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
13/35
Fundamentals of Strategic Advantage
Information technology can change the way
businesses compete. For this reason, you
should view information systems strategically,that is, as vital competitive networks, as a
means of organizational renewal, and as a
necessary investment in technologies that help
an enterprise achieve its strategic objectives.
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
14/35
Strategic Advantage and Strategic Necessity
Strategic advantage refers to obtaining a
sustainable competitive edge over
competitors. The ability to obtain a greaterthan normal return on investment.
A strategic necessity is a system that must
be installed to remain competitive and stay
in business.
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
15/35
Strategic uses of Information system
15
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
16/35
Eight ways to gain strategic advantage
Reduce Costs
Raise barriers to new entrants
Establish High Switching Costs
Create New Products/Services
Differentiate Products/Services
Enhance Products/Services
Establish Alliances
Lock in suppliers and buyers16
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
17/35
Eight ways to gain strategic advantage
1. Reduce Costs: If a firm can operate at a reduced cost
the impact will be there on the Margins.
2. Raise barriers to new entrants: The easier it is to
enter into a business venture, the more will be the
number of people who would try various things. That
gives a lot of variety for the consumer to choose from
and hence becomes difficult to differentiate oneoffering from the other
E.G - One click purchase by amazon.com, Banks- ATM
17
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
18/35
Eight ways to gain strategic advantage
3. Establish High Switching Costs: Switchingcosts are costs incurred when a customer wantsto switch over to a competitors
products/service4. Create New Products/Services: This gives
companies an advantage called the FirstMover Advantage.
5. Differentiate Products/Services: In a worldthat is full of competition, there is no end toproduct variety E.G Pepsi and Coke
18
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
19/35
Eight ways to gain strategic advantage
6. Enhance Products/Services: Enhancing productexperience is another strategy to gain competitiveadvantage. Adding new features to theproduct/service
7. Establish Alliances: Alliances with suppliers,vendors and customers are critical to the success ofany businesses. For example, Intel sells its processors to IBM as well as
HCL and DELL. But, lets say, if IBM has a strategicalliance in which, using its own supply chain, IBM candeliver back reusable components of microchips to Inteland help it to reduce its cost, then Intel would be willingto supply microprocessors to IBM at a cheap cost
19
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
20/35
Eight ways to gain strategic advantage
8. Lock in suppliers and buyers: Suppliers andbuyers can be locked in by asking them tocollaborate only and only with the businessentity and not with any competitors.
For example, if
Toyota puts in a condition that a person who
owns Toyota Showroom cannot own any othercar showroom in the city, then Toyota hasattempted to lock in a retailer into its network.
20
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
21/35
Strategic Information System
Information systems that provide a firm
with competitive products and services
which give it a strategic advantage overits competitors in the marketplace.
Information systems that promote business
innovation, improve operational efficiency.
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
22/35
Strategic Roles for Information Systems
Improving business Process
Promoting business/product innovation
Locking in customers and suppliers
Interorganizational IS, EDI electronic data interchange,
automatic inventory replenishment system
Creating switching costs
Make customers dependent on the continued use of
innovative IS.
Raising barriers to entry
discourage competitors from entering a market
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
23/35
IT Capabilities
Capabilities: routine processes that reflect a
firms ability to perform repeatedly a productive
task which relates either directly or indirectly to afirms capacity for creating value (Grant 1996).
IT Capabilities: The ability of firms to develop,
use, and manage IT effectively to achieve firm
objectives
The focus in this study:business-orientedITcapabilities
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
24/35
IT capabilities & their Organizational
Impacts
Capability Organizational Impact / Benefit
Transactional IT can transform unstructured processes into routine transactions
Geographical IT can transfer information with rapidity and ease across large
distancesAutomational IT can replace or reduce human labor in a process
Analytical IT can bring complex analytical methods and solve
Informational IT can bring vast amount of detailed information
Sequential IT can enable to execute the sequence of tasks effectively
Knowledge
ManagementIT allows the capture and dissemination of knowledge and
expertise to improve the process
Tracking IT allows the detailed tracking of task status, inputs, and outputs
Disintermediation IT can be used to connect two parties who would otherwise
communicate through an intermediary
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
25/35
E.G: Mumbai Dabbawallas
Competition: Its difficult to replicatedabbawallass supply chain network
New entrants: Fast food joints as well as officecanteens. However, since neither of these serve
home food, the dabbawallas' core offeringremains unchallenged.
Bargaining power of buyers: Delivery ratesare so nominal (about Rs 300 per month) that onesimply wouldn't bargain any further.
Bargaining power of sellers: minimuminfrastructure and practically no technology is
used, hence they are not dependent on suppliers.
Threat of a new substitute product orservice: Nosubstitutes to home cooked food inIndian scenario, hence threat to the dabbawalla
service is not an issue at least in the foreseeablefuture.
Porters 5 Force Model
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
26/35
Using Information Systems to Achieve
Competitive Advantage
Rivalry among current competitors
All firms share market space with competitors who
are continuously devising new products, services,
efficiencies, switching costs
New market entrants
Some industries have high barriers to entry, e.g.
computer chip business New companies have new equipment, younger
workers, but little brand recognition
26
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
27/35
Using Information Systems to Achieve
Competitive Advantage
Substitute products and services
Substitutes customers might use if your prices becometoo high, e.g. iTunes substitutes for CDs
Customers / Buyers Can customers easily switch to competitors products?
Can they force businesses to compete on price alone intransparent marketplace?
Suppliers
Market power of suppliers when firm cannot raise pricesas fast as suppliers
27
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
28/35
The value chain of a firm
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
29/35
Value Chain Model
According to Porters Value chain model, theactivities conducted in any manufacturingorganizations can be divided into two parts:Primary activities and support activities.
Primary activities are most directly related to theproduction and distribution of the firms productsand services that create value for the customer.Inbound logistics, operations, outbound logistics,marketing and sales, and customer service.
Support activitiesinclude procurement ofresources, technology development, humanresources management, and administrativecoordination.
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
30/35
Managerial Challenges Of Information Technology
*Speed and flexibilityrequirements of product
development,
manufacturing, and
delivery cycles,
*Integration of e business
and e commerce into the
organizations strategies,
process, structure, and
culture
Business/IT ChallengesBusiness/IT
Developments
* Use of theinternet, intranets,
extranets, and the
WEB
Business/IT Goals
*Give customers whatthey want, when and
how they want it, at
the lowest cost
*Coordination of
manufacturing andbusiness process with
suppliers and
customers
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
31/35
Strategic capabilities using IT
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
32/35
Capabilities of IT
Overcome/Breaking Time Barriers
Information technology is used to shorten the intervalsbetween the various critical steps in a business process.Telecommunications is a lot faster than most other
forms of communications, thus, it provides informationto remote locations immediately after it is requested.
Overcome/Breaking Geographic Barriers
Telecommunications networks enable you to
communicate with people almost anywhere in theworld. Telecommunications and computingtechnologies make it possible to distribute key businessactivities to where they are needed, where they are bestperformed, or where they best support the competitive
advantage of a business. 32
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
33/35
Capabilities of IT
Overcome/Breaking Cost Barriers
Computers and telecommunications can often significantly reduce
the cost of business operations when compared with other means
of information processing and communications. For example,Information technologies have also helped companies cut labor
costs, minimize inventory levels, reduce the number of
distribution centers, and lower communications costs.
Overcome/Breaking Structural Barriers Computers and telecommunications networks can help a business
develop strategic relationships by establishing new electronic
linkages with customers, suppliers, and other business entities.
33
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
34/35
Thank You..
By:
Monica M
-
7/29/2019 E-Business systems: E-Business/E-commerce models Enterprise e-Business systems Ecommerce systems Essential e-Commerce processes Electronic payment processes
35/35
Important Questions
Explain organization and IT
Explain IT Capabilities and their impact on
organization
Explain how company can achieve strategic
advantages
What are the strategic capabilities of IT
Using Information Systems to Achieve
Competitive Advantage
35