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Introduction to Business InformationSystems

WEEK 2

THEME: Tour Opportunities to Contribute ( Career

!ast Wee" C# $ of Te%t Strate&y and Tec#no'o&y

(c#i''es) #ee' of CIO)s

T#is *ee": More on Strate&y and Information Systems

and E%pectations: ns*ers to Case and +ui,-E%am+uestions

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Course T#eme: Tour of Tec#no'o&y)s .o'e in Mana&ement

Strategy and

Technology

Profits from

Information

TechnologyEnabling Growth

Collaborating

using IT

Changing the

Organization

Sites of Opportunities to Contribute

Weeks !"

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WEEK 2 O/ $0

C# 2 of Te%t: Identifyin& Competiti1e d1anta&es

C# : Measurin& Success

C# 3: Or&4 Structures to Support Strate&y

E%pectations: Case (and +ui, and E%am ns*ers

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En#ancin& Competiti1e d1anta&e *it# IS

First: the Enterprises Strategic Intent:

What we choose to do (and to not do) for Competitive Advantage:

Create value for attractive groups of u!ers

Where our value " competitors and cost to deliver

#ow we do this is hard to imitate (success usuall! imitation)

$(%orters) &eneric Strateg!'

hen: Carve out and sustain Competitive Advantage

$(%orters) Five Forces' u!er value we can *eep as profits

+alue Chain: ,ore u!er value " Costs

Wh!- Avoid eing $,ordac the .enier'

Implement/ measure/ organi0e for effective Info S!stems that contriute

to strategic intent

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Success Often 5eneric Strate&y

#acia#

a

c

i

a

#acia

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Cost $eadershi% re&uires'

()educing costs from su%%liers

($ow cost* effecti+e sales and ser+ice

(Scale economies ,%roblem with Cost

$eadershi% - .ocus/

(0ttract1retain buyers with design* ser+ice

but not with costly &uality

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#ifferentiation'

()e&uires added +alue' safety of 2uattro

(3ay be defended by %ro%rietarytechnology4then less tangible image

,56e+er .ollow7/

(8eing .irst 3o+er may frustrate imitators

(Scale economies %erha%s less im%ortant

,at first/

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/ocus (2 strate&ic systems 5eneric Strate&y

Generic Strategy Supply ChainManagement Focus CustomerRelationship Focus

Cost Leadership Broad Market

(Hyundai

!eep componentcosts do"n# $ualityup# %olume high&

'ercei%ed %alue#ser%ice and )ust asgood* messages&

+i,,erentiation Broad Market

(-udi

!eep componentscosts.$uality

/alanced 0 systemsracing ahead*&

'ercei%edleadership in "hat

1uattro* ,ans%alue&

+i,,erentiation Focused Market

(Hummer

!eep componentsro/ust# muscular

"ith /alanced costs0 lo"er "eight&

'ercei%ed responseto sa,ety# greenconcerns# /ettergas e,,iciency&

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Obser1ations 5eneric Strate&y

Getting beyond Generic Strategy'

.i+e .orces and

9alue Chain 0nalysis

Generic Strategy Supply Chain

Management Focus

Customer Relationship

FocusCost Leadership

Broad Market

(Hyundai

!eep componentcosts do"n# $uality up#

%olume high&

'ercei%ed %alue#ser%ice and )ust asgood* messages&

+i,,erentiation BroadMarket

(-udi

!eep componentscosts.$uality /alanced

0 systems racingahead*&

'ercei%ed leadershipin "hat 1uattro* ,ans

%alue&

+i,,erentiation Focused Market

(Hummer

!eep componentsro/ust# muscular "ith

/alanced costs 0lo"er "eight&

'ercei%ed response tosa,ety# green

concerns# /etter gase,,iciency&

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/i1e /orces 6 7us#in& Open .oom for 7rofits

('orter2sFive Forces Model: assess, perhaps manipulaterelati%eattracti%eness

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Mic#ae' 7orter 8escribin& /i1e /orces

http3.."""4youtu/e4com."atch&%5m6F78FBC%9"
http://www.youtube.com/watch?v=mYF2_FBCvXwhttp://www.youtube.com/watch?v=mYF2_FBCvXwhttp://www.youtube.com/watch?v=mYF2_FBCvXwhttp://www.youtube.com/watch?v=mYF2_FBCvXw

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Force %rofit is etter if Force is Info S!stems Influence

u!ers %ower 1ess (fewer perceivedalternatives/ switching

$costs'/ lo!alt! rewards)

Loyalty programs

Cust. RelationshipManagement

Supplier %ower

hreat of Sustitution

hreat of 2ew Entrants

3ivalr! among E4istingCompetitors


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Buyers2 'o"er Less (,e"er percei%edalternati%es# s"itching

costs*# loyalty re"ards

Loyalty programs

Cust. RelationshipMgmnt.

Supplier %ower Less (more alternati%es#processes to com/inelo"er costs "ith good$uality and deli%ery

Glo/al B7B Marketplace(many suppliers# /uyers

'ri%ate :;change. Re%erse-uction (one /uyer

hreat of Sustitution




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u!ers %ower Less (,e"er percei%edalternati%es# s"itching


Loyalty programs





hreat of Sustitution 1ess 5ni6ue ailities C3,/1o!alt!




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Loyalty programs





hreat of Sustitution Less

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Loyalty programs





hreat of Sustitution Less

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9a'ue C#ains: Tar&etin& t#e .it Business 7rocesses

Generic Strategy + Five Forces Info S!stems contriutions

#ow much7when to spend to ma*e one of these contriutions-

A framewor* for sa!ing how much investment ma*es sense:

Business process standardi>ed set o, acti%ities to

accomplish a speci,ic task (e4g4 processing a customer order

Value chain %ie"s organi>ation as a chain o, processes#each adding cost and %alue to the product or ser%ice

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9a'ue C#ains: Tar&etin& t#e .it Business 7rocesses

9a'ue C#ain *it# umbers

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.eminder: En#ancin& Competiti1e d1anta&e *it# IS

First: Identif! the Enterprises Strategic Intent:

What we choose to do (and not do) for Competitive Advantage:




$(%orters) &eneric Strateg!'hen: Carve out and sustain Competitive Advantage



Wh!- Avoid eing $,ordac the .enier' a CI8 not focused on strateg!

Implement/ measure/ organi0e for Info S!stems that enact the enterprise9s

strategic intent

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En#ancin& Competiti1e d1anta&e *it# IS

First: Identif! the Enterprises Strategic Intent:

What we choose to do (and not do) for Competitive Advantage:




$(%orters) &eneric Strateg!'hen: Carve out and sustain Competitive Advantage



Wh!- Avoid eing $,ordac he %reventer'

Implement/ measure/ organi0e for Info S!stems that enact the enterprise9s

strategic intent

0n E:am%le4

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W#at Cou'd Canada 7ost 8o /or Ban"s;

?alue Chain ,or

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W#y Wou'd Canada 7ost Se'' ddress C#an&es to

Ban"s;

- great strategic mo%e4 :;cept de%elopment cost o%erruns# ongoing maintenance costs# sales delays ande;pensesthere "ere multiple attempts to sell this ser%iceremem/er the alignment trap&

Source3 Lucas Strategy case# 4

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I.. and et 7resent 9a'ue e*;

First3 'resent ?alue http3.."""4youtu/e4com."atch&%5B9mmN$MpO6

Phen Jet 'resent ?alue http3.."""4youtu/e4com."atch&%57s96o/pds

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WEEK 2 O/ $0




Intro to Cases

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Metrics: Efficiency and Effecti1eness

!!iciency "# metrics system per,ormance3 throughput at particular %olumes# speed#a%aila/ility# accuracy (or error rates

!!ectiveness "# metrics impact o, =P on /usiness3 customer ac$uisition satis,actionand retention# con%ersion rates# sellUthrough increases# ,inancial contri/utions (RI=# =RR

#radeo!!s: Security and pri%acy are important dimensions o, e,,ecti%eness they ha%e acost they reduce e,,iciency

$o% do %e &no% i! %e're (ptimal area)

; =nternally3 -re "e doing /etter&

; :;ternally3 Ho" do "e Benchmark against others&

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!!iciency "# metrics system per,ormance3 throughput at particular %olumes# speed#

a%aila/ility# accuracy (or error rates






What 3etric is

3issing

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!!iciency "# metrics system per,ormance3 throughput at particular %olumes# speed#

a%aila/ility# accuracy (or error rates






Contribution to

Strategic Intent>

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Metrics: Efficiency< Effecti1eness and

'i&nment

Pe;t/ook2s PradeUo,,s More than PradeUo,,3 Linkage

On the left' a theoretical and technical +iew

On the right' a fact!based management +iew

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'i&nment

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'i&nment

0 fact!based management +iew' a direction toward good results

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WEEK 2 O/ $0




Intro to Cases

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IT E%ecuti1e .o'es

Chie, =n,ormation I,,icer (C=I3o%ersees =P uses# alignment o, =P "ith strategic

intent (see "eek 73 a leader# a manager and a communicator4 Main concerns3

Chie, Pechnology I,,icer (CPI3 responsi/le ,or ensuring the throughput# speed#

accuracy# a%aila/ility# and relia/ility o, =P

Chie, Security I,,icer (CSI3 the security o, =P systems

Chie, 'ri%acy I,,icer (C'I3 the ethical and legal use o, in,ormation

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IT E%ecuti1e .o'es

Chie, =n,ormation I,,icer (C=I3o%ersees =P uses# alignment o, =P "ith strategic

intent (see "eek 73 a leader# a manager and a communicator4 Main concerns3

Chie, Pechnology I,,icer (CPI3 responsi/le ,or ensuring the throughput# speed#

accuracy# a%aila/ility# and relia/ility o, =P

Chie, Security I,,icer (CSI3 the security o, =P systems

Chie, 'ri%acy I,,icer (C'I3 the ethical and legal use o, in,ormation

0nything 3issing=

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!oo"in& for t#e Missin& Concern:

Si% 8ecisions IT S#ou'dn)t Ma"e

+ecision -rea Si; +ecisions

@hat Role ,or Phe :;ecuti%e PopLeadership&

@hat happens i, the Pop Leadershipdoesn2t ,ul,il that role (-/dicate*&

Strategy Ho" much to spend on =P&

@hich processes to spendon&

@hich =P ,unctions should /e

,irmU"ide&:;ecution Ho" good do =P ,unctions

need /e&

'ri%acy security risksaccepta/le&

Blame i, =P initiati%e ,ails&

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!oo"in& for t#e Missin& Concern:

Si% 8ecisions IT S#ou'dn)t Ma"e

+ecision -rea Si; +ecisions :;ec Role -/dication

Strategy Ho" much to spend on =P& +e,ine.,und role Jo impact ,or /ig


+ecide I%er"helmed M=S


,irmU"ide&

+ecide Bureaucracy.chaos

:;ecution Ho" good do =P ,unctionsneed /e&

Business choices 'oor RI= on =P


:thical choices Someone elsemakes them

Blame i, =P initiati%e ,ails& -ssign a leaderMeasure results

'oor RI= in =P

Research /y M=P pro,essors# Har%ard Business Re%ie"# Jo%em/er 7DD7

Ultimate Challenge to CIOs Effectiveness?

+ecision -rea Si; +ecisions :;ec Role -/dication

Strategy Ho" much to spend on =P& +e,ine.,und role Jo impact ,or /ig


+ecide I%er"helmed M=S


,irmU"ide&

+ecide Bureaucracy.chaos

:;ecution Ho" good do =P ,unctionsneed /e&

Business choices 'oor RI= on =P


:thical choices Someone elsemakes them

Blame i, =P initiati%e ,ails& -ssign a leaderMeasure results

'oor RI= in =P

Research /y M=P pro,essors# Har%ard Business Re%ie"# Jo%em/er 7DD7

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Some Ot#er C#a''en&es for IT E%ecuti1es

4 - Gap in 'erspecti%es3

Business e;pertise3 ,unctions like marketing# accounting# and sales4 =P e;pertise3 technological e;pertise Fre$uent communication gaps

74 :thics and security increasingly important

4 Security needs attention A its Financial =mportance

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s" CIBC=4on >anuary $?< 2@@A

The bank said4it lost4%ersonal

details of ?@A*AAA accounts4in late

#ecember

The information4could be used by

criminals for4identity theft

0 CI8C s%okesman

said4Breassurance* reassurance*

reassurance4

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Is nyone .eassured;

CI8C Story

Winners

Story

6ational Post' anuary D* AA@* %age 0A

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Ho* Easi'y Cou'd a /irm)s 8ata !ea";

-ccidentally3

http3.."""4c/sne"s4com.%ideo."atch.&id5O7E7nQtag5mgVe%eningne"s

Jo -ccident3

Shady R-P (-ugust 7D3http3.."""4youtu/e4com."atch&%5;:9d%Lsec (Wuly 7D

http3.."""4youtu/e4com."atch&%5cdGi!moMQ,eature5relm,u
http://www.cbsnews.com/video/watch/?id=6412572n&tag=mg;eveningnewshttp://www.youtube.com/watch?v=xEXdvLUSd0khttp://www.youtube.com/watch?v=c388dGiKmoM&feature=relmfuhttp://www.youtube.com/watch?v=c388dGiKmoM&feature=relmfuhttp://www.youtube.com/watch?v=xEXdvLUSd0khttp://www.cbsnews.com/video/watch/?id=6412572n&tag=mg;eveningnews

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!esson=4

a CIOFs challenges include getting To% $eadershi% Su%%ort for'

0%%ointing and su%%orting a Chief Security Officer*

Paying attention* and

Sustaining E:ecuti+e $eadershi% in+ol+ement to security

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Et#ics ('i"e Security .euire !eaders#ip

:thical issues stemming ,rom Pechnology -d%ances

Phey matter to Customers

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WEEK 2 O/ $0




E%pectations: Case (and +ui, and E%am ns*ers

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Wee" )s +ui, $: on B0< B< B3 and !et IT .iseD

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!e1i)s >eans Into Wa'Mart

E4ample of focusing Information S!stems on Strategic Intent:

1evis flagging performance ;;< to =>>?/ caught $in the @aws of

death' etween low and highend competitors

#igh volume distriutors li*e Wal,art were *e! to recover!

Walmarts re6uirement for uptodate suppl! chain

management s!stems

1evis didnt have them

1evis organi0ed to address the gap and sales recovered

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!e1i)s >eans Into Wa'Mart (continued

Consider a Buestion:

E4plain how 1evis achieved usiness success through the use ofinformation/ information technolog! and people

2e4t = slides illustrate A/ and C case answers

A answers: D >

answers: ;

C answers: <

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Case< +ui, and E%am +ua'itati1e E%pectations

http3.."""4utm4utoronto4ca.regcal.@:BG:J4html
http://www.utm.utoronto.ca/regcal/WEBGEN94.htmlhttp://www.utm.utoronto.ca/regcal/WEBGEN94.html

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E4plain how 1evis achieved usiness success through the use of

information/ information technolog! and people&rade Attriute of Answer Bualit! (5, Calendar) E4ample

A

Sa!s what *e!elements of coursecontent made the

difference

E%ce''ent: Stron& e1idence ofori&ina' t#in"in&F &oodor&ani,ation< capacity toana'y,e and synt#esi,eFsuperior &rasp of subGect

matter *it# sound critica'e1a'uationsF e1idence ofe%tensi1e "no*'ed&e base

See 2e4t Slide

ies the answer tocourse material

5ood: E1idence of &rasp ofsubGect matter< some e1idenceof critica' capacity and ana'yticabi'ityF reasonab'eunderstandin& of re'e1antissuesF e1idence of fami'iarity

*it# t#e 'iterature

C G IS components includeI/ people/ procedures/ data

and purpose

C

States the answer deuate: Student is profitin&from t#e uni1ersity e%perienceFunderstandin& of t#e subGectmatterF abi'ity to de1e'opso'utions to simp'e prob'ems int#e materia'

1evis made the changesneeded to meet Wal,arts

IS re6uirements (SC,)

htt%'11wwwButmButorontoBca1regcal1WE8GE6D?Bhtml
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E4plain how 1evis achieved usiness success through the use of information/

information technolog! and people

Simplified E4ample: &rade A Answer

First/ 1evis found the right people CI8 (ergen) and CE8(,arineau) had the e4perience and the vision to lead 1evis ac* upthe ladder of success (give e4amples of e4perience)

Second/ ergen focused on the information needs of theorgani0ations Strategic "ntent #e *new that ,arineaus plan toanticipate customer wants would re6uire detailed information that

was currentl! not availale at 1evis (e4ample: suppl! chainmanagement s!stem (SC,) status dashoard)

hird/ 1evis successful transformation of its SC, allowed the

compan! to partner with Wal,art ergens new s!stems were asuccess/ and the percentage of products delivered ontime 6uic*l!rose from

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%urpose:; @hat strategic purpose is ser%ed /y this system& (strategic purpose 5choicee;traordinary %alue ,or attracti%e customers*competiti%ead%antage 0 hard to imitate

%eople and %rocedures:

; @ho "ill use an =S to achie%e its purpose&; @hat "ill moti%ate them to do that&

; Ho" "ill they kno" ho"&

; @hat else might they do (ask Mordac&

Information echnolog! and .ata

; @hat CIM'

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%urpose:; @hat strategic purpose is ser%ed /y this system& (strategic purpose 5

choicee;traordinary %alue ,or attracti%e customers*competiti%ead%antage 0 hard to imitate

%eople and %rocedures:

; @ho "ill use an =S to achie%e its purpose&; @hat "ill moti%ate them to do that&

; Ho" "ill they kno" ho"&

; @hat else might they do (ask Mordac&

Information echnolog! and .ata

; @hat CIM'

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Submittin& our Case ns*er for Mar"in&

Be,ore midnight the day /e,ore the tutorial "hen your team ans"er "ill /e presented3

Su/mit your "ritten ans"er to the case $uestion (in a @ord document see the

course outline ,or ,ormat to turnitin4com

Je"

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ote on 7resentin& Case ns*ers

6ou ha%e minutes3 that means to slidesK

@hen you start presenting# you "on2t ha%e e;tra time4 Get on "ith your ans"er

Suggestion3

Slide one3 the $uestion

Slide t"o3 "hat "e think is the ans"er

Slide three3 "hy "e chose our ans"er Slide ,our3 "hy this $uestion and ans"er matter in understanding /usiness

in,ormation systems

Fi,teen minutes3

'ractice

Changing presenters "astes time (=2ll sur%ey "ho contri/uted to the ans"er P- "ill stop you "hen time2s up (e%en i, you2re not ,inished

Phese tutorials are yours U make them countK

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Case ns*er Mar"in&

4 @ritten case ans"ers3 see the Le%y Case e;ample o, e;pectations

74

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.eminder: Course Out'ine

Whats due in =? wee*s- Bui0 preparation First case team answers (on turnitin) and presentations in tutorials

What to read efore ne4t wee*s lecture- Ch ?: Implementing Competitive Advantage

Ch

week 2 fall 2011 rev0 (1)

Documents