NYU Stern BTEP.UB.

0003
Fundamentals of Information Technology
Lesson 2: IT Strategy

Professor Navin Manglani

[email protected]
 Lesson 1 Re-Cap
• Reviewed Class Objectives, Procedures & Grading
• Defined IS & IT
• Identified Differences Between Digital and Analog Technology
• Defined & Differentiated Jobs in IS
Lesson 2 Agenda
• Understand the components of Prof Manglani’s IT Strategy Framework
• Apply the Prof Manglani’s IT Strategy Framework to Examples
• Discuss Objectives of Individual Presentations
I. IT Strategy Framework
 Prof Manglani’s IT Strategy Framework
1) Industry + Company Analysis: Porter’s Five Forces
2) Strategy Ideation / Classification: Cognizant’s Digital Transformation Circle
3) Strategy Fit / Execution: Mission Compatibility
4) Strategy Validation: CBA (Cost Benefit Analysis)
 1. Industry + Company Analysis: Porter’s Five Forces
This model helps a company Threat of New
establish whether it is competitive Entrants
or not, and the urgency with which
to pursue a strategy. It can also
help guide the direction of the
strategy.

Bargaining Power of Rivalry Bargaining Power of

Suppliers Among Buyers
Existing
Competitors

Threat of Substitute
Products
1. Industry + Company Analysis: Porter’s 5 Forces (cont’d)
1. Threat of New Entrants: Likelihood of others entering your market
- Is your market easy to enter? Barriers to entry (patent, rights, etc)? Regulation?

2. Threat of Substitution: Likelihood your customers will replace your product or service with another.
- Differentiators between your products and substitutes? Cost of switching?

3. Bargaining Power of Suppliers: How much suppliers can increase prices by.
- Unique suppliers? Variety of suppliers? Can you find alternative suppliers?

4. Bargaining Power of Buyers: The ability of buyers to drive your price down
- How many buyers do you have? Size of orders? Importance of your product to buyers?

5. Rivalry Among Existing Competitors: Strength of your existing competitors

- How many? How do you compare to them?
 industry, so for each market and organization, the framework must be tailored to ensure proper
fit. For instance, not every organization is ready to operate its business in line with the Agile
methodology.

2. Strategy Ideation: Cognizant’s Digital Transformation FW

Note that when an organization decides to use this digital framework, it should be introduced in
a staged approach rather than all at once; therefore, it is vital to set priorities and identify the
most important areas of focus.
• The framework below is a good tool to inspire digital strategy.

Cognizant’s Digital Transformation Framework ©

Digitize the Digital Connected Digitize

marketing
customer products products &
experience Omni-channel
services
Pay per use

er Pr

tom

od
Customer Predictive

uct
Cus
insight Digital usage

Transformation
Digital Framework© Customer-
collaboration centric &

em es &
Org
& innovation standard
es t

s
an
platforms

s
za c
ti o o
P r Sys

i
n
Digital skills Agile
& virtual approaches
workforce Dynamic to work
Digitize the Anytime, Digitize
partner anywhere,
organization ecosystems any device
operations

Figure 1

https://www.cognizant.com/InsightsWhitepapers/a-framework-for-digital-business-transformation-codex-1048.pdf
 2. Strategy Ideation / Classification (cont’d)
Implications of Digital Transformation:

1. Reduce Costs through Improved Operations

2. Improve productivity /employee retention through digitization
3. Improve Customer Experience
4. Digitize existing products / introduce new digital product

Can lead to better company equity.

 3. Strategy Fit / Execution: Mission Compatibility Model
Does your digital strategy fit in with your IT (or Digital) Mission & Vision? If not, it is not a good strategy! If so,
proceed to step # 4.

Company Mission
Statement
Company Vision
Statement

IT / Digital Mission
Statement
IT / Digital Vision

IT / Digital Strategy
 3. Strategy Fit / Execution: Mission Compatibility Model
• Mission statement: communicates the most important overarching goal of organization
- Includes how the goals will be achieved

• IT mission statement: describes the role of IT in the organization

- Should be compatible with the organizational mission statement

• IT Vision: Includes the ideal combination of hardware, software, and networking to support the mission
- The ideal technology for the corporation
4. Cost Benefit Analysis
• With any strategy, digital or not, it is important to weigh the costs of a strategy against the likely benefit.
Failure to do so can result in result in significant losses!

• On a high level, a good way to validate this is to list out the benefits against the costs, and get a rough sense
of whether it is worth it.

• Challenges with CBAs: Estimating the benefit accurately… most companies have a difficult time truly
determining the benefit of a particular digital strategy.

Buzz/PR
Design Customer Loyalty
Revenue Brand Equity
Marketing Expenses
Staffing Build
 Prof Manglani’s Digital Strategy Framework
1) Industry + Company Analysis: Porter’s Five Forces
2) Strategy Ideation / Classification: Cognizant’s Digital Transformation Circle
3) Strategy Fit / Execution: Mission Compatibility
4) Strategy Validation: CBA (Cost Benefit Analysis)
II. Digital Strategy In-Class Exercise
 Digital Strategy In-Class Exercise
1. Analyze Porter’s Five Forces for each company / industry around the time of the strategy was executed
based on your knowledge and research online.
2. What is the strategy launch? Is it operations-driven? A new product? Digitization of existing product?
How does it fit into the Cognizant model?
3. Search for the Mission & Vision for the company. How does it tie into Mission & Vision Statement of the
company? Is this strategy compatible?
4. What do you think the cost / benefit analysis is for each?
5. What is your overall assessment of the strategy?
6. Is there any positive or negative impact on society?

You will have 20 minutes to work on this exercise. We will then share insights for each company with the class.
 Digital Strategy In-Class Exercise (Companies)
A. Netflix: Launching own content (2013)
B. Apple: Apple Watch (2015)
C. Barnes & Noble: Launch of Nook (2009)
D. Facebook: Purchase of Instagram (2012)
E. Yelp: Reservation Launch (2014)
F. Capsule Pharmacy: Launch (2015)
G. Clubhouse: Launch (2020)
H. NYU: Move from NYU Classes to Brightspace (2021)
III. Individual Presentations
 Individual Presentations
Based on your experiences at work or research (e.g. from WSJ Tech, CNet or other news sources), identify a
digital strategy or innovation you believe the class would appreciate. For this digital strategy or innovation and
the company do the following:
1) Analyze the competitive environment for the company using ONE Porter’s 5 forces but list all (15 seconds)
2) What is the strategy or innovation? Is it digitizing a product? Customer Experience? Operations?
Organization? (15 seconds)
3) Does it fit into the company’s strategy and mission? (15 seconds)
4) What are two costs associated with the strategy? Two benefits? (20 seconds)
5) If the strategy is one that was executed in the past, how did the strategy fare? If the strategy is a current
strategy, what are your predictions on how it will do? (20 seconds)
6) How does it impact society? (20 seconds) 1:40 seconds total, some time for buffer
Please prepare no more than FIVE slides (more should focus on the innovation itself). You will have 2
minutes for your presentation.

There will be a strict TWO MINUTE TIME LIMIT, with the opportunity to answer 1 peer question (ONE
MINUTE TIME LIMIT) or a question from me.
DUE DATE: T 2/15… See prompt on classes for additional instructions on submission, etc.
 Individual Presentations: Grading
Grades will be stack-ranked out of 10 with an average of 8.5. Most of you will receive between an 8 and 9. If it
is an absolutely exceptional presentation, it will receive a 0 or just above (like 9.1 or 9.2), and presentations that
fail to meet the criteria will receive less. Scores will be based on the following:

1) Completeness of exercise
2) Quality of analysis
3) Uniqueness of strategy
 Individual Presentations: Tips
• Don’t forget to complete every part.

• Try to find something that you feel will be interesting to the class and to me. Feel free to pull strategies you
have come across in your current or former industry / company.
Re-Cap
• Understood the components of Prof Manglani’s IT Strategy Framework
• Applied the Prof Manglani’s IT Strategy Framework to Examples
• Discussed Objectives of Individual Presentations
 Reading for This Class / Next Class
• This Class:
- Cognizant Digital Strategy Framework: https://www.cognizant.com/InsightsWhitepapers/a-framework-
for-digital-business-transformation-codex-1048.pdf

- HBS Porter’s Five Forces: https://www.investopedia.com/terms/p/porter.asp

• Next Class: Chapter 3 in textbook

• REQUIRED:
- Kimball’s Restaurant Case in Chapter 1, 2 & 3 as well!