strategic use of is
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Managing and Using Information Systems:
A Strategic Approach Fifth Edition
Strategic Use ofInformation Resources
Keri Pearlson and Carol Saunders
Chapter2
PowerPointfiles by Michelle M. RamimHuizenga School of Business and Entrepreneurship
o!a Southeastern "ni!ersity
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Learning Objectives
List the identifying factors of the eras of information sage.
!no" "hat ma#es an information resorce $ala%le.
'lain ho" information resorces are sed strategically in conte't
of the *forces model. +nderstand ho" information resorces can %e sed to alter the
$ale chain.
'lain the imortance of strategic alliances.
!no" the ris#s of information resorces.
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Real World Example
ara aligns its information system strategy"ith itsbusiness
strategy.
-he system lin#s demand to manfactring and distri%tion.
stomers $isit to 1/ times er year to chec# on ne" items thatmay ha$e arri$ed.
Limited rodcts lead cstomers to immediately rchase rodctsthey li#e.
aras %siness strategy leads to a loyal and satisfied cstomer %ase.
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Real World Example !ont"#
-he S system sends daily dates to aras headarters.
4anagers reort to designers "hat sold and "hat cstomers "anted
%t cold not find.
-he information is sed to determine in$entory management.
5e" designs can %e ordered t"ice a "ee#.
-he entire rocess is atomated so that ne" designs and rodcts
can %e created ic#ly.
ara ses its information resorces to sstain its ad$antages o$er
cometitors.
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Evolution Of %nformation Resources
IS strategy from the 1670s to the 1660s "as dri$en %y internal
organi8ational needssch as9o Lo"ering e'isting transaction costs.o ro$iding sort for managers %y collecting and distri%ting
information.o :edesigning %siness rocesses.
In the 2010 era IS strategy "as dri$en %y social I- latforms and
ne" caa%ilities.o
; ne" e$oltion of alications, rocesses, and strategicoortnities.
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organi8ation
?alecreation
reatecolla%orati$eartnershis
?alecreation
reatecommnityand social
%siness
0ustify %/expenditures
:I Increasingrodcti$ityand %etterdecisionality
ometiti$eosition
ometiti$eosition
;dding $ale reatingrelationshis
/arget ofsystems
rgani8ation rgani8ation>gro
Indi$idalmanager>
gro
@sinessrocesses
ecosystem
stomer>slier
ecosystem
stomer>emloyee>
slierecosystem
%nformationmodels
;licationsecific
Aata dri$en +ser dri$en @sinessdri$en
!no"ledgedri$en
eoledri$en(orrelationshidri$en)
B John Wiley & Sons(c) 2013 John Wiley & Sons, Inc.
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Pearlson
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Ed.#%hapter& Era %
&'()sEra %%&'*)s
Era %%%&'+)s
Era %,&'')s
Era ,2)))
Era ,%2&))
1ominanttecnology
4ainframe,
Ccentrali8ed
intelligenceD
4inicomter,
mostly
Ccentrali8ed
intelligenceD
4icrocomter,Cdecentrali8edintelligenceD
lientSer$er,Cdistri%tedintelligenceD
Internet,
glo%al
C%iitos
intelligenceD
Social
latforms,
social
net"or#s,
mo%ile,clod
asis ofvalue
Scarcity Scarcity Scarcity lentitde lentitde lentitde
nderlyingeconomics
conomicsofinformation
%ndled "itheconomics ofthings
conomicsofinformation
%ndled "itheconomics ofthings
conomicsofinformation
%ndled "itheconomics ofthings
conomics ofinformationsearated
fromeconomics ofthings
conomics ofinformationsearated
fromeconomics ofthings
conomics ofrelationshis
%ndled "ith
economics ofinformation
B John Wiley & Sons
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IS9o Eels firms address their internal and external circmstances.o na%les managers to identify and se information resorces strategically.o na%les firms to gain ad$antage o$er the cometition.
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%nformation Resources as 5trategic /ools
4anagers need to com%ine all of the firms a$aila%le resorces.o Internal resorces9
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%nformation Resources
Information resorces can %e either assetsor capabilities.o %/ assets are anythingtangi%le or intangi%lethat can %e sed %y
a firm in its rocesses for creating, rodcing, and>or offering itsrodcts, goods, or ser$ices (e.g., I- infrastrctre).
o %/ capability is something that is learned or de$eloed o$er timefor the firm to create, rodce, or offer its rodcts.
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%/ 7ssets
IS infrastrctre9o Incldes data, technology, eole, and rocesses.o ro$ides the fondation for deli$ery of a firms rodcts or ser$ices.
Information reository9o Logically-relateddata that is catred, organi8ed, and retrie$a%le
%y the firm.o Aesigned to imro$e the firms efficiency.
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%/ 7ssets !ont"#
We% 2.0 sace incldes resorces sed %t not o"ned %y the firm(e.g., e@ay,
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!ategories of %/ !apabilities
/ecnical s8ills * alied to designing, de$eloing, andimlementing IS.
%/ management s8ills * critical for managing I- fnction and I-roFects.
Relationsip s8ills * can %e either e'ternally*focsed or sanacross deartments.
ommitting and de$eloing information resorces reiress%stantial financial resorces.
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oroffering its rodcts (goods or ser$ices).
%5 infrastructure @ase fondation of the I- ortfolioshared throgh the firm
Eard"are, soft"are, net"or#, datacomonents, rorietary technology, "e%*
%ased ser$ices
%nformationrepository
Aata that is logically related andorgani8ed in a strctred form
accessi%le and sa%le for decisionma#ing roses.
ritical information a%ot cstomers that can%e sed to gain strategic ad$antage. 4ch of
this information is increasingly a$aila%le on the"e%.
%/ !apability Something that is learned or de$eloed o$er time in order for the firm to create,rodce, or offer its rodcts in I- assets.
/ecnical s8ill ;%ility alied to designing,de$eloing, and imlementinginformation systems
roficiency in systems analysis and designGrogramming s#ills
%/ management s8ills ;%ility to manage I- fnction and I-roFects
@eing #no"ledgea%le a%ot %siness rocessesand managing systems to sort themGe$alating technology otionsG en$isioningcreati$e IS soltions to %siness ro%lems
Relationsip s8ills ;%ility of IS secialists to "or# "itharties otside the IS deartment.
Sanning9 ha$ing a good relationshi %et"eenI- and %siness managers'ternally*focsed9 ha$ing a good relationshi
"ith an otsorcing $endor(c) 2013 John Wiley & Sons, Inc. (c) John Wiley & Sons
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7dvantages of %nformation Resource
%nformation resource value9o ras I throgh III = $ale "as deri$ed from scarcity, reflected in the
cost to rodce the information.o ra I? = $ale "as deri$ed from lenitde.o
:et;or8 effects9the $ale of a net"or# node to a erson ororgani8ation increases "hen others Foin the net"or# (e.g., e*mail).o :ather than se rodction costs to gide the determination of rice,
information rodcts might %e riced to reflect their $ale to the%yer.
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7dvantages of %nformation Resource
!ont"# %nformation resource appropriation9
o Aetermining "here a resorces $ale lies and ho" it can %e imro$edin a firms fa$or.
o -he attri%tes of information resorces that imact the $ale ma#e itossi%le to create and sstain cometiti$e ad$antage (e.g., ara).
%nformation resource distribution across firms9o arly adoters may e'erience a cometiti$e ad$antage from sing an
information resorce.o -he e'erience gained may lead to ineities %et"een firms.o Aifferent e'eriences "ith a resorce create $aleand a strategic
ad$antage.
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7dvantages of %nformation Resource
!ont"#o -he $ale of information mshrooms nder conditions of information
asymmetries.o ossessor of information may se it against, or sell it to, comanies or
indi$idals "ho are not other"ise a%le to access the information.
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7dvantages of %nformation Resource
!ont"# Ae%riefing "ith team mem%ers at the conclsion of each roFect.
+sing social technologies to record interactions and acti$ity streams.
Information resorces %ecome obsolete and lose $ale o$er time.
+nderstanding the natre of the information resorces at hand is a
rereisite to sing them effecti$ely.
;ligning IS strategy "ith %siness strategy ena%les the general
manager to ma'imi8e rofit otential.
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%nformation Resources 5trategy
4anagers confront elements that inflence the cometiti$e
en$ironment.
Slim tolerance for error.
4anagers mst ta#e mltile $ie"s of the strategic landscae9o
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sing %nformation Resources to %nfluence
!ompetitive =orces orters fi$e forces model sho"s the maFor forces that shae the cometiti$e
en$ironment of the firm (
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!ompetitive =orce %/ %nfluence on !ompetitive =orce
/reat of :e;Entrants
aras I- sorts its tightly*#nit gro of designers, mar#et secialists, rodction managers,and rodction lanners. 5e" entrants are nli#ely to ro$ide I- to sort relationshis thatha$e %een %ilt o$er time.
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.orter>s ,alue !ain
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Resources to 7ttain !ompetitive
7dvantage ; resourceis considered $ala%le "hen it ena%les the firm to %ecome
more efficient or effecti$e.
; resorce is rare "hen other firms do not ossess it.o Sta#es or resorces reired Fst to %e in the %siness(e.g., %an#s and
;-4s).o Initially rare and $ala%le resorces "ere the commnities many
comanies imlemented sing social I-.o -hese commnities "ere a $ala%le resorce for the firms that
sonsored them, and only a fe" e'isted.
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Resources to 5ustain !ompetitive
7dvantage 4any firms that in$ested in systems learned that gaining a
cometiti$e ad$antage does not atomatically mean that yo can
sstain it o$er the long term.
5eed to contine to inno$ate and to rotect against resorce
imitation, s%stittion, or transfer.
-echnical #no"ledge, esecially relating to the firms oerationG a
gng*ho comany cltreG and managerial e'erience in the firms
en$ironment is less easy to o%tain and isconsidered harder to
transfer to other firms.
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5trategic 7lliances
;n interorgani8ational relationshi that affords a strategic ad$antage to
one or more comanies in the relationshi.o .g., -he alliance %et"een ynga and
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/ypes of 5trategic 7lliances
!o-opetition9a ne" strategy "here%y comanies cooerate and
comete at the same time "ith other comanies in their $ale net.o reates the %est ossi%le otcome for %sinesses %y otimally com%ining
cometition and cooeration.
,alue net incldes a comany, its cometitors, comlementors,
cstomers, and sliers and the interactions among all of them.
!omplementor9a comany "hose rodcts or ser$ices are sed in
conFnction "ith a articlar rodct or ser$ice to ma#e a more sefl
set for the cstomer.
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.otential Ris8s
-here are many otential ris#s that a firm faces "hen attemting to se
I- to otace their cometition.
7;a8ening a sleeping giant = a large cometitor "ith deeer
oc#ets may %e ndged into imlementing IS "ith e$en %etter featres
(i.e
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.otential Ris8s !ont"#
%mplementing %5 poorly = information systems that fail %ecase they
are oorly imlemented (e.g., ?irgin ;merica, Eershey
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!o-creating %/ and usiness 5trategy
Information is increasingly a more rominent core comonent of the
rodcts or ser$ices offered %y firms.
I- strategy is %siness strategyG they cannot %e created "ithot each
other. Some comanies main rodct is information (financial ser$ices).
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!apter 2 - ?ey /erms
!ustomer relationsip management (:4) (. 6) * a tool tootimi8e the rocessing of cstomer information.!o-opetition(. 7) * the strategy for creating the %est ossi%leotcome for a %siness %y otimally com%ining cometition and
cooeration.Enterprise resource planning (:) (. 6) * a tool that atomatesfnctions of the oerations acti$ities of the $ale chain.%nformation resources (. H/) * the a$aila%le data, technology, eole,and rocesses a$aila%le to erform %siness rocesses and tas#s.
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!apter 2 - ?ey /erms !ont"#
%/ asset (. H/) * anything tangi%le or intangi%le that can %e sed %y a firmin its rocesses for creating, rodcing, and>or offering its rodcts, goods,or ser$ices (e.g., I- infrastrctre).%/ capability (. H/) * something that is learned or de$eloed o$er time
for the firm to create, rodce, or offer its rodcts.:et;or8 effects (. H) * the $ale of a net"or# node to a erson ororgani8ation increases "hen others Foin the net"or# (e.g., e*mail).:ather than se rodction costs to gide the determination of rice,information rodcts might %e riced to reflect their $ale to the
%yer.
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!apter 2 - ?ey /erms !ont"#
Resource-based vie; (:@?) (. 6) * cometiti$e ad$antage comes
from the information and other resorces of the firm.5trategic alliance (. 7H) = an interorgani8ational relationshi thataffords a strategic ad$antage to one or more comanies in the relationshi.
5upply cain management (S4) (. 6) * an aroach to ho"comanies sorce materials for oerations.Web 2") (. H/) * otential resorces that are a$aila%le to the firm as aser$ice %t are not necessarily o"ned %y the firm.
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!opyrigt 2)&3 0on Wiley @ 5onsA %nc"
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