INFORMATION SYSTEMS FOR
COMPETITIVE ADVANTAGE
Chapter 2
SIX MAJOR ROLES AND GOALS OF
IT
 1.
Increase employee productivity by reducing time,
errors and costs using
 2.
Enhance decision making
 3.
Improve team collaboration
 4.
Create business partnerships and alliances
 5.
Enable global reach all over the world taking into
consideration the culture of each nation or society.
 6.
Facilitate organizational transformation as the
organization evolves and responds to the ever-changing
marketplace.
2
1831
Competitive advantage
Significant, long-term benefit to a company
over its competition
Ability to establish and maintain a competitive
advantage is vital to a company’s success
NFL Coaches
NFL Coaches
•
What sources of competitive advantage
can you identify the New England Patriots
have by using information technology?
•
Are these long term, sustainable
competitive advantages?
•
From our list of Roles and goals of
Technology, what does the IS of the NFL
do?
4
THREE PRIMARY USES OF INFORMATION
SYSTEMS
Automation
Providing support to complete a task faster, more cheaply, and
perhaps with greater accuracy and/or consistency
Organizational Learning (Informating)
Providing support to improve day-to-day operations by
creating, acquiring, and transferring knowledge
Achieving Strategy
Providing support in a way that enables the firm to gain
or sustain competitive advantage over rivals
2-5
WHY USE INFORMATION SYSTEMS
IS FOR AUTOMATING:
DOING THINGS FASTER
Automation
Providing support to complete a task faster, more cheaply, and
perhaps with greater accuracy and/or consistency
Styles of Processing
• Manual Processing
• Technology Supported Processing
• Fully Automated Processing
BENEFITS OF AUTOMATION – LOAN EXAMPLE
2-8
IS FOR ORGANIZATIONAL LEARNING
DOING THINGS BETTER
Organizational Learning (Informating)
Providing support to improve day-to-day operations by
creating, acquiring, and transferring knowledge
Informating
Effectiveness
TQM
ORGANIZATIONAL LEARNING EXAMPLE
2-10
IS FOR SUPPORTING STRATEGY
DOING THINGS SMARTER
Achieving Strategy
Providing support in a way that enables the firm to gain or
sustain competitive advantage over rivals
Sources
•
•
•
•
•
•
•
of Competitive Advantage
best-made product
superior customer service
lower cost than rivals
proprietary manufacturing technology
shorter lead-times in developing & testing new products
brand name and reputation
more value for their money
STRATEGY
2-12
IS FOR COMPETITIVE ADVANTAGE
IS and Value Chain Analysis
 The roles of IS in Value Chain Analysis
 The technology strategy Fit

VALUE CHAIN ANALYSIS
2-14
Is a process of analyzing an organization’s activities to
determine where value is added to products and/or services
and what costs are incurred in doing so.
INFORMATION SYSTEMS ROLES IN THE VALUE
CHAIN
2-15
Net Flix
Net Flix
1.
2.
Describe Net Flix’s competitive advantage and what are
the sources of that competitive advantage ?
Discuss where you feel Net Flix uses of information
systems helps them add value in the Value chain.
16
MAKING THE BUSINESS CASE FOR A SYSTEM
Business Case
Identifying the value provided by an information system
Business Case Development Issues
Several common issues create difficulty in defining business
cases for information systems including:
• Measurement Problems
• Time Lags
• Redistribution
• Mismanagement
MAKING THE BUSINESS CASE FOR A SYSTEM
Measurement Problems
• benefits are difficult to pinpoint --may be measuring the
wrong things
• Expected benefits not always defined in advance, so they are
never seen (they must be identified to measure).
• The biggest increases in productivity come from system
effectiveness but many metrics focus on system efficiency
Time Lags
• Describes the difference in time from when the IT
expenditure was made and when the benefits are realized
• Why?
2-18
MAKING THE BUSINESS CASE FOR A SYSTEM
Redistribution
• IS may be beneficial to individual firms, but not for an
entire industry or the economy as a whole
• Strategic information systems may help one firm increase its
market share at the expense of others (redistributing)
• Expectations have increased as technology has become
prevalent. We forget the gains that have been realized.
Mismanagement
• IS has not been implemented and managed well
• Some believe that people simply build bad systems,
implement them poorly, and rely on technology fixes for
problems that require joint technology/process solutions
• Inappropriate IS investments can mask or even increase
organizational slack and inefficiency
2-19
MAKING A SUCCESSFUL BUSINESS CASE

Individuals in organizations generally use one, or in
most cases, a combination of the following
argument types to justify investments in information
systems
Based on
Faith
Based
on fear
Based
on Fact
BUSINESS CASE ARGUMENTS BASED ON
FAITH

Arguments based on beliefs about organizational
strategy, competitive advantage, industry forces,
customer perceptions, market share, and so on
BUSINESS CASE ARGUMENTS BASED ON
FEAR
Arguments based on the notion that if the system
is not implemented, the firm will lose out to the
competition or, worse, go out of business
BUSINESS CASE ARGUMENTS BASED ON
FEAR
Factors to
consider
Industry
factors
Regulation
Nature of
competition
THE FIVE FORCES MODEL –
ANALYZE COMPETITIVE FORCES IN AN INDUSTRY

How IS can have a factor in the industry
Switching costs
B2B marketplace
Loyalty programs
Ex ATM
24
BUSINESS CASE ARGUMENTS BASED ON
FACT
Arguments based on data,
quantitative analysis and/or
indisputable factors
PRESENTING THE BUSINESS CASE
Know the audience
• The IS manager
• Company executives
Convert to Monetary terms
Devise proxy variables
Measure what is important to management
Assessing value for IT infrastructure
Changing mindsets about IS
COMPETITIVE ADVANTAGE IN BEING AT THE
CUTTING EDGE
The need for
constant IS
innovation
The cutting
edge vs. the
bleeding edge
Requirements
for being on the
cutting edge
Predicting the
new, new thing
UTZ CHIPS CASE
ANSWER THE FOLLOWING

Analyze the industry that UTZ is in
using the porter five forces model, is it a
good industry to be in?

What competitive advantage do you feel
Utz has? ( which generic strategy) How
does information play into that
competitive advantage

Where in the value chain should they
next upgrade their use of technology for
the biggest biggest gains – how would
you present that to management?
28
THE FIVE FORCES MODEL –
ANALYZE COMPETITIVE FORCES IN AN INDUSTRY

How IS can have a factor in the industry
29
STRATEGY
2-30
VALUE CHAIN ANALYSIS
2-31
Is a process of analyzing an organization’s activities to
determine where value is added to products and/or services
and what costs are incurred in doing so.