Transcript Issues in the Application of Information Technology for Strategic

MBA Essentials
Information Technology for
Strategic, Competitive Advantage
Virginia Franke Kleist, Ph.D.
Assistant Professor
Division of MIS/Management
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?
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Contact Information
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Virginia Franke Kleist, Ph.D.
[email protected]
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 (8th ed.).
• Some material adapted from Burgelman, Christensen
and Wheelwright, (2004), Strategic Management of
Technology and Innovation, Boston: McGraw-Hill Irwin
(4th ed.).
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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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Strategic Information
Systems
Strategic Information System
• Technology used to gain an edge over an
organization’s 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
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Examples of Strategic Information
Systems
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American Airlines
Fed Ex
Citibank
Wal-Mart
Abitibi Consolidated
Simonton Windows
(SBR)
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USA Today
Benetton
Sheetz
PNC Corporation
PriceWaterhouse
Coopers
• Baxter Healthcare
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Four types of Information Systems
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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 ROI’s
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Current Technologies for
Strategic Information
Systems
What are the latest
technologies of interest?
• CPU’s 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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Technologies: CPU’s and
Software
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Hardware components of a computer system
Buses, CPUs, MHz, RAM, Gigs and cache
Bits and Bytes, storage
Moore’s 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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Technologies: Client Server
Computing
• Distributed processing vs. centralized
processing
• Network computing
• Servers
• Bridges and routers, gateways
• Network management
• Ethernet and Token Ring
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Technologies: Interactive
Multimedia
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Groupware
Voice over IP
Streaming technology
Flash
MP3
Seeing corporate uses in training
applications
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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?
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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
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Technologies: TCP/IP and the
Internet
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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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Technologies: Databases,
Datamining
• Data is the company’s 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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Technologies: Handhelds and
M- Commerce
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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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Technologies: Knowledge
Management Tools and Artificial
Intelligence
• Examples of Knowledge Management
systems
• Expert systems: the earthenware dam
• Neural Networks
• Fuzzy logic
• Intelligent agents
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Technologies: Wireless
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802.11b, a and g
Weaknesses in security in wireless
Access points
Use firewalls behind access point
Netstumbler and war driving
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Managing for
Information Systems
Strategic Advantage
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
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Management: the Systems
Development Life Cycle
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Systems analysis
Systems design
Programming
Testing
Conversion
Production mode and ongoing
maintenance
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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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Management: Implementation
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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
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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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Management: Legal Issues with
Information
• HIPAA. Health Insurance Portability and
Accountability Act, 1996
• Gramm-Leach-Bliley Act, 1999
• Sarbanes-Oxley Act of 2002
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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
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Strategic Advantage: How does
one come up with this idea,
anyway?
(Laudon and Laudon, 2000)
• Porter’s 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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Some Problems from IT for
Competitive Advantage
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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
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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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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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Class Discussion: The Dell
Case
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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 Dell’s business model?
• Will Dell be able to keep this success going,
given the recent troubles?
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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?
MBA Essentials
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