1. MBA Essentials Information Technology for Strategic, Competitive Advantage Virginia Franke Kleist, Ph.D. Assistant Professor Division of MIS/Management

2. Welcome to the Technology Part of the Program

• How are you using information technology (IT) today in your firms and businesses?

• How successful has this been for your firm?

• Do you have problems that are still unresolved with Information Technology?

• Can IT give competitive advantage, anyway?

• How can one identify which technologies will best give strategic advantage?

3. Contact Information

• Virginia Franke Kleist, Ph.D.

• [email_address]

• www.be.wvu.edu/divmim/mgmt/kleist

• 304-293-7939

• I welcome your comments and contacts!

• Several drawings are adapted from Laudon and Laudon, (2005), Management Information Systems: Managing the Digital Firm , New Jersey: Prentice Hall (8 th ed.).

• Some material adapted from Burgelman, Christensen and Wheelwright, (2004), Strategic Management of Technology and Innovation , Boston: McGraw-Hill Irwin (4 th ed.).

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6. What will we learn?

• Strategic advantage from information technology

• Latest information technologies

• How do you successfully select, implement and manage a new IT?

• How can your firm benefit from IT?

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8. Strategic Information Systems

9. Strategic Information System

• Technology used to gain an edge over an organizations competition

• Can be used at all levels of an organization or just a few

• Makes a difference

• Profoundly alters the way an organization does business

• Sustained strategic, competitive advantage

10. Examples of Strategic Information Systems

• American Airlines

• Fed Ex

• Citibank

• Wal-Mart

• Abitibi Consolidated

• Simonton Windows (SBR)

• USA Today

• Benetton

• Sheetz

• PNC Corporation

• PriceWaterhouse Coopers

• Baxter Healthcare

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12. Four types of Information Systems

• Operational

• Decision Support

• Managerial

• Executive

• Decision-making becomes more complex the more executive the level

• Operational systems have been around a long time and tend to have good ROIs

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14. Current Technologies for Strategic Information Systems

15. What are the latest technologies of interest?

• CPUs and software, open source code

• Client server computing

• Interactive multimedia

• Developments in Electronic Commerce

• TCP/IP and the Internet

• Databases and Datamining

• Handhelds, M-commerce

• Knowledge Management tools and Artificial Intelligence

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18. Technologies: CPUs and Software

• Hardware components of a computer system

• Buses, CPUs, MHz, RAM, Gigs and cache

• Bits and Bytes, storage

• Moores Law and price points per MIPs

• Mainframes, RISC computers, Parallel processing

• Open source movement in operating systems

• Enterprise Resource Planning software

• Object oriented programming

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20. Technologies: Client Server Computing

• Distributed processing vs. centralized processing

• Network computing

• Servers

• Bridges and routers, gateways

• Network management

• Ethernet and Token Ring

21. Technologies: Interactive Multimedia

• Groupware

• Voice over IP

• Streaming technology

• Flash

• MP3

• Seeing corporate uses in training applications

22. History of Technology

• 1960s: Mainframe computers, MIS not superb at meeting budgets or deadlines

• 1980s: First PCs emerge, beginning of schism between departments and centralized MIS

• 1990s: MIS and departments work together well, networks key techno

• 2000: Enterprise networks

• Next: Vice Presidents of Electricity?

23. Technologies: Electronic Commerce

• The client/server/database three tier model

• HTML, JavaScript

• XML vs. EDI, ASP and ActiveX, PHP, CGI

• Web Services

• Interdev and development tools

• Security and encryption issues

• Intranets and Extranets

24. Technologies: TCP/IP and the Internet

• Codes, bits and bytes

• Analog vs. Digital transmission

• Packet switching and circuit switching

• The IP address, TCP/IP layers

• The world is becoming digital

• VoIP

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29. Technologies: Databases, Datamining

• Data is the companys strategic asset

• Data warehouses, multidimensional databases and data marts

• Informix, Oracle and Red Brick

• The database management system

• Data mining is a type of software application that finds patterns in data that can guide decision-making

• Data mining allows focused differentiation and the ability to narrow target markets

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32. Technologies: Handhelds and M- Commerce

• Cellular technology

• WAP technology

• Handheld market and applications

• The Win CE platform

• Linux in the small devices

• What is M-commerce and what does it mean to me?

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34. Technologies: Knowledge Management Tools and Artificial Intelligence

• Examples of Knowledge Management systems

• Expert systems: the earthenware dam

• Neural Networks

• Fuzzy logic

• Intelligent agents

35. Technologies: Wireless

• 802.11b, a and g

• Weaknesses in security in wireless

• Access points

• Use firewalls behind access point

• Netstumbler and war driving

36. Managing for Information Systems Strategic Advantage

37. Management: Information Systems Planning

• IS plan maps to the corporate strategic plan

• Variety of IS planning styles: CSF, Enterprise Planning

• Components of Information Systems Strategic Plan

• Organizational change from systems: TQM, BPR, paradigm shifts or simple automation

38. Management: the Systems Development Life Cycle

• Systems analysis

• Systems design

• Programming

• Testing

• Conversion

• Production mode and ongoing maintenance

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40. Management: IS Strategic Plan

• Purpose linked to strategy

• Current situation

• Systems: What do you have, what will you need to meet future

• New developments in corporation

• Management strategies with techno: Bleeding edge, leading edge, lagging edge, single vendor strategy, outsource

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42. Management: Implementation

• The RFP document

• Financial issues for IS planning

• The payback concerns

• Programming: the mythical man/month

• Construction issues

• Testing and maintenance

• End users

• Prototypes and pilots

• Outsourcing

43. Management: Security Issues

• System quality, reliability, accuracy

• Threats: hackers, viruses, Trojan horses, denial of service attacks, identity theft

• Controls

• The firewall and internet issues Encryption, DES, SSL, SET

• Biometrics

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45. Management: Legal Issues with Information

• HIPAA. Health Insurance Portability and Accountability Act, 1996

• Gramm-Leach-Bliley Act, 1999

• Sarbanes-Oxley Act of 2002

46. Strategic Advantage: IT at work

• IT and changes in the organization of business: flatter, leaner, teams, JIT, global

• Datamining and Walmart

• E-commerce and the supply chain at Dell

• M-commerce and Progressive Auto

• Internet and Egghead

• American Airlines, Baxter, Citibank

47. Strategic Advantage: How does one come up with this idea, anyway? (Laudon and Laudon, 2000)

• Porters Value Chain: primary and support activities

• The competitive forces model: Threats from new market entrants, suppliers, substitute products and customers

• Core competencies

• Network economics

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50. Some Problems from IT for Competitive Advantage

• The productivity paradox

• Tangible vs. intangible benefits from IT

• Future cash flows analysis

• Unique vs. staying even with competition

• Value from simple automation projects

• Value from highly risky, but strategic IT projects

• Risk vs. return issues

51. Technology Life Cycle (Little, 1981)

• Emerging techno- Not demonstrated potential

• Packing techno- Has demonstrated potential

• Key techno- Embedded, major impact, proprietary

• Base techno- Minor impact

• Can a technology cause innovation? Leadership?

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55. How can your firm benefit from IT?

• In supply chain management through inventory management

• In the customer interface via ecommerce

• In logistics through GPS/GIS

• In client management through groupware

• In marketing through datamining

• In internal management through Intranets

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58. Class Discussion: The Dell Case

• How did Dell achieve success?

• What IT technologies did Dell use?

• How does Dell use ecommerce successfully?

• What are the ways that Dell uses IT for strategic, competitive advantage?

• What is Dells business model?

• Will Dell be able to keep this success going, given the recent troubles?

59. What have we learned?

• Strategic advantage from information technology

• Latest information technologies

• How do you successfully select, implement and manage a new IT?

• How can your firm benefit from IT?