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UNIT - I Part - VII

The document discusses how information systems can provide competitive advantage through automation, organizational learning, and strategic support. It explains that information systems can help lower costs, differentiate products and services, and support a company's overall strategy. Additionally, the document outlines how being an early adopter of new technologies can provide a competitive edge if a company can deploy emerging systems effectively.

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Ram Mohanreddy
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46 views25 pages

UNIT - I Part - VII

The document discusses how information systems can provide competitive advantage through automation, organizational learning, and strategic support. It explains that information systems can help lower costs, differentiate products and services, and support a company's overall strategy. Additionally, the document outlines how being an early adopter of new technologies can provide a competitive edge if a company can deploy emerging systems effectively.

Uploaded by

Ram Mohanreddy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Information Systems for

Competitive Advantage

Information Systems Today


Learning Objectives
• Understand the IS in automation, organizational
learning, and strategic support
• Understand IS for strategic organizational success
• Understand the need for making an IS business case
• Understand technological innovations to improve
competitive advantage
Why Use Information
Systems?

• Automating: doing things faster


• Organizational learning: doing things better
• Supporting Strategy: doing things smarter
Automating:
Doing Things Faster
• Technology is used to automate a manual
process
– Doing things faster, better, cheaper
– Greater accuracy and consistency
• Loan application example
– Manual processing
– Technology-supported process
– Completely automated
Organizational Learning:
Doing Things Better
• Going beyond automation
– Involves learning to improve the day-to-day activities
within the process
– Looking at patterns and trends
• Organizational Learning
– Using acquired knowledge and insights to improve
organizational behavior
• Total Quality Management (TQM)
– Monitoring an organization to improve quality of
operations, products, and services
Supporting Strategy:
Doing Things Smarter
Strategic Planning
1. Create a vision: setting the direction
2. Create a standard: performance targets
3. Create a strategy: reaching the goal
Types of Competitive Advantage
• Low-Cost Leadership
– Best prices on goods/services
– Examples: Dell, Target
• Differentiation
– Best products or services
– Examples: Porsche, Nordstrom, IBM
• Best-Cost Provider (middle-of-the-road)
– Reasonable quality, competitive prices
– Example: Wal-Mart
Information Systems for
Competitive Advantage
• A clear strategy is essential
• Sources of competitive advantage:
– Best-made product
– Superior customer service
– Lower costs
– Superior manufacturing technology
– Shorter lead times
– Well-known brand name
– High value per cost
Information Systems for
Competitive Advantage
• IS and Value Chain Analysis
– VC Analysis: adding value within an organization
– Organizations as big input/output processes
– IS can automate many value chain activities:
• Purchased supplies inbound logistics
• Operations
• Outbound logistics
• Sales and marketing
• Service
Organizational Value Chain
Information Systems for
Competitive Advantage
• The Role of IS in Value Chain Analysis
• IS competitive advantage in VCA:
– Internet link with suppliers, dealers
• Extranets: using the Internet for B2B interactions
– Computer-aided manufacturing systems
– Web site with online product ordering
– Customer service response system
– Computer-aided design
Information Systems for
Competitive Advantage
• The Technology/Strategy Fit
– An IS implementation should create a significant
organizational change consistent with the
business strategy
• Business Process Reengineering (BPR)
Making the Business Case for a
System
• The Productivity Paradox (how to quantify gains?)
– Measurement problems
– End-user development
– Decision support systems (DSS)
– Strategic systems
– Time lags
– Redistribution
– Mismanagement
Making the Business Case for a
System
• Making a Successful Business Case
– Arguments Based on Faith
– Arguments Based on Fear
• Industry factors
• Stage of maturity
• Regulation
• Nature of competition or rivalry
– Arguments Based on Facts
• Cost-benefit analysis for a web-based system
– Recurring/nonrecurring costs
– Tangible/intangible costs
– Tangible/intangible benefits
Presenting the Business Case
• Know the Audience
– The IS Manager
– Company Executives (VPs and higher)
– Steering Committee
• Convert Benefits to Monetary Terms
Presenting the Business Case
• Devise Proxy Variables
– Measure changes in terms of perceived value
• Develop a Work Profile Matrix
– Time spent on each job, each type of work
• Measure What Is Important to Management
• Conoco: Making a Business Case
• Changing Mindsets About Information
Systems
Competitive Advantage
in Being at the Cutting Edge
• Deploying new technologies faster, better,
and cheaper than competitors
• Using new technology in innovative ways
Competitive Advantage
in Being at the Cutting Edge
• The Need for Constant IS Innovation
• On the lookout for new technologies that
impact business
Competitive Advantage
in Being at the Cutting Edge
• E-Business Innovation Cycle
– Choosing enabling/emerging technologies
– Matching with economic opportunities
– Executing business innovation for growth
– Assessing client value
Competitive Advantage
in Being at the Cutting Edge
• Implications of E-Business Innovation Cycle
– Begin with technology when considering
successful business strategies
– Marketing is secondary to IT
– Emerging technology cycle is ongoing
Competitive Advantage
in Being at the Cutting Edge
Terms and Concepts
• E-commerce (Internet-related)
• E-business (any IT that supports business)
• Enabling technologies
• Economic opportunities
Competitive Advantage
in Being at the Cutting Edge
The Cutting Edge vs. The Bleeding Edge
• Information systems are often bought from, or
built by, someone else
• An organization typically cannot patent an IS
• Rivals can copy emerging information systems
• Therefore, one’s IS competitive advantage can be
short-lived
Competitive Advantage
in Being at the Cutting Edge

Requirements for Being at the Cutting Edge


• Consider Porter’s competitive forces
• To deploy emerging systems well:
– Organization must adapt well to change
– Human capital available for deployment (knowledge,
time, skills)
– Tolerance of risk and uncertainty

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