Information Systems and Competitive

Advantages

Agenda

• Developing Business & I/S Strategies

• Classical Problem Solving using Information Systems

Developing Business Strategies

• The goal is to establish a strategic plan that will give a company a competitive advantage -- a distinct competence, expertise, talent, resource and so forth, that creates a capability gap between the organization and its competitors.

• “By failing to plan, we are planning to fail”

Strategic Planning Breakdown

• Starting a the top of the organization, a clear and concise vision is developed. this vision is translated into a few achievable goals -- the corporate goals

• Everyone in the organization manages their job as though they personally own the corporation and that every activity performed every day is related to how it affects and is affected by the corporate goals

Develop a Vision

• A corporate vision describes the future condition of the organization, that is, what it would look or feel like at the desired end state.

• Example :• To be the most profitable company, providing

superior return to our shareholders, exceptional service to our customers and excellent opportunities to our employees. We will be regarded as a company of excellence and ethics in dealing with our customers, employees, investors and vendors. We will be the top-rated company in customer satisfaction, services and product quality in our market.

Develop a Mission• The mission is synthesized and the findings are

mapped into clear and succinct mission statements for each functional unit of the organization. A mission is the purpose or reason for being.

• Examples:• We will be driven by the needs of our customers. We will

achieve our position as first choice among our customers through product and service innovation and reliable and predictable support. We will dominate the market and continuously defend our market position. We will be the premier company with respect to operating profitability. We will be one of the top three sales companies in our market.

Define Critical Success Factors

• In every organization, irrespective of the size or type, there are a fixed number of essentials that are crucial to the success or failure of the enterprise.

• Each of the critical success factors also includes clearly specified success, acceptance, and completion criteria for the organization, so that members will have clear goals to work toward.

Critical Success Factors Examples

• Expand distribution by n% in each of the first three years.

• Acquire n distribution companies with total profit contribution of $n.

• Develop and operate new related businesses by 19xx.

• Increase overall profitability by n% within n years.

• Develop the reputation of the number one vendor in quality and customer satisfaction.

• Ensure operating profitability of 10 to 15 % of sales.

• Capture greater than 25% of the market share.• ** Communicate strategic direction to 100% of

the organization.

Models to Develop Strategies and Determine CSF’s

• Porter’s 5-Forces Model– One of the most important developments in

the area of Business Strategy in the last 50 years

• SWOT Analysis

• Value Chain Analysis

Porter’s 5-Forces Model

Strategies

• Differentiation-based strategies

• Cost-based strategies

SWOT Analysis

• INTERNAL– STRENGTHS

• people, structure, facilities, technology

– WEAKNESSES• if any of the strengths are not good

• EXTERNAL– OPPORTUNITIES

• Demographics, culture, environment

– THREATS• Governmental regulations, new entrants, substitutes

Value Chain Analysis• Primary Activities

– Directly related to the production and distribution of a firm’s products and services

• Support Activities– Activities that assist in the development and

delivery of the primary activities

Primary Activities

• Primary Activities– Inbound Logistics– Operations– Outbound Logistics– Sales and Marketing– Service

Support Activities

• Administration and Management

• Human Resources

CSF’s and I/S

• Most corporate managers still do not have the information they truly need for evaluating the critical measures.

• Executives often get data that overwhelms them with too much specification -- much of it irrelevant and only partly digestible.

I/T Roles in Strategic Planning

• Help optimize efficiency

• Increase barriers

• Creates a Strategic data base

• Innovation advantages

Define Objectives

• Objectives describe major departmental accomplishments that will be delivered in pursuit of the missions and critical success factors.

• Examples:• Strengthen marketing• Increase customer base by n% in each of the first

three years• Stabilize earnings• Control costs and expenses

Develop Strategies• Strategies are a set of critical

maneuvers built around decisions and events that are used for horizontal integration, vertical deployment and the alignment of objectives.

• Examples:• Increase research and development budget• Get non-regulated sales• Open new markets• Develop aggressive marketing infrastructure

Develop Tactics

• Tactics are specific actions that are invoked to use the strategies to accomplish the objectives.

• Examples:• Become insensitive to weather fluctuations• Implement load control• Coordinate marketing efforts• Business/Technology prioritization• Develop export markets

Values• The values of an organization describe its culture. • Values are the ethical principles that clearly state

what the organization believes in and that guide the behaviors invoked in pursuit of those ambitions.

• Examples:• There will be open and honest communication that will be deployed down and across every

level of the organization. • We will strive to develop mutual confidence and trust at (and between) all level of the

organization.• Our employees are highly valued assets of the organization.• People are valued by management and by each other. Managers will be open-minded and

willing to listen and give serious attention to the ideas and suggestions made by the workers.

How to use I/S to Accomplish Business Goals and Objective

• Strategic Business Planning must come first

• Plan Large-scale Systems that will be required– Financial, Inventory, Sales, etc.

• Project Ranking and Prioritization

• Project Development

The Systems Approach to Problem Solving

• Define the problem

• Gather data about the problem

• Identify alternative solutions

• Evaluate alternatives

• Select the best solution

• Implement

• Evaluate the level of success

Project Development within an Information Systems Environment

• 5 Distinct Steps– A Preliminary Study– Systems Analysis– Systems Design– Implementation– Review

Preliminary Study

• A Quick Feasibility Study

• What opportunities exist

• Used to screen projects

• Determine the need

Systems Analysis

• Results in a Functional Design or business requirements

• Most critical phase

• Each of the following should be checked :– Input– Processing– Output– Feedback and Control

Methods of Systems Analysis

• Interviews

• Prototyping and Modeling

• Personal Observations

Requirements and Analysis

• Need to look at 4 aspects of the system– Data Model– Flow Model– Control Model– Interface

Data Model

• Enables you to create database solutions

• Output from the data model is an E/R diagram

• The data model must become static

• Consists of Entities and Attributes

Flow Model

• Defines the processes of the system

• Output from the Flow Model is the Data Flow Diagram (DFD)

Control Model

• Defines the sequences or timing necessary

• Defines simultaneous and concurrent events

Interfaces

• Defines user acceptance and efficiency

• Could be Icon, Menu or Command driven

• Considerations for the Interface

Systems Design

• Acquire or Develop

• Generates a system that is developed and tested according to the functional design

• Tradeoffs may be required

Implementation & Post Implementation Review

• Placing the information system into an environment which can be used by the intended clients

• A pre-designated period of time in which the information system is monitored, minor adjustments made (if necessary), and evaluated

Classic Problems in Systems Development

• Incorrect or ill-defined specifications

• Communication failures

• Overruns

• Politics

• Integration with other systems

• Business changes and fluctuations

• User Acceptance

Project Management in Information Systems

• Develop a work breakdown structure

• Assign tasks to personnel

• Define network and/or scheduling dependencies

• Provide cost estimates