Transcript Lecture_Strategic_role_of_IS_v2.ppt

Effective use of IS/IT (Continued)
Strategic Role of Information Systems
Dr. V.T. Raja
Oregon State University
Outline
• Business value added when using IS/IT:
– to automate existing business processes
– for organizational learning and change in addition to automation
– BPR; Competitive Advantage; As a strategic enabler
• Effect of IS/IT on Competition
– Porter’s competitive forces model
• Value Chain and IS/IT
– Internal/External linkages facilitated by IS/IT
• Strategic Information Systems
– What is SIS?
– Why would some top executives hesitate to invest in SIS or IS/IT in
general?
– Suggestions to convince top management to invest in SIS or IS/IT?
Class Participation Exercise
• Examples
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IBM Credit Corporation
Retail Store – Diaper Sales
Ford Motor Company
Flower Company
Business Process Reengineering (BPR)
• BPR - Radical redesign of business process(es) to
achieve dramatic improvements in measures of
performance such as quality, cost, speed, and
services that facilitate gaining competitive
advantage or enhancing/changing business
strategy.
• IT/IS facilitates BPR
– Examples
• IBM Credit Corporation
• Ford
BPR - Characteristics
• Advantages
– Cycle time reduction
– Effective communication
– Restructuring organization
• Single point of contact for customer
• Hierarchical – Flattened – Networked
organizations
BPR - Characteristics
• Disadvantages
– Laying off employees
• Voluntary retirement
– Retraining employees
• Retraining costs
– Transfer of employees
Some Characteristics of a
Virtual Organizations
• An organization composed of several business
partners sharing costs and resources for the
purpose of producing a product or service
• Each partner creates a portion of a product or
service, in an area in which they have special
advantage such as expertise or low cost
• Example: Flower Company
Example - Virtual Organization (VO)
6. Sends pick up
info electronically
FedEx
7. Picks up
order
Flower
Supplier
Makes
e-payment
Makes
e-payment
3. Passes
e- order
Amex
Master Card
Makes
e-payment
Sends
monthly
bill
2. E - validates
payment
VO - Flower Company
4. E-acceptance
Order
8. Delivers
flowers
Customer
5. Accepts
Order
1. Places
Order - Web
Some Characteristics of a
Virtual Organization
•
•
•
•
•
•
•
Excellence - All star winning team
Resource Utilization - Competitive advantage
Opportunism – Making use of market opportunities
Lack of borders - Redefines traditional boundaries
Adaptability – to change
Trust - Essential between/among business partners
Technology - Basic ingredient
Resources of business partners remain in their original
locations but are integrated via information systems.
Strategic Information Systems (SIS)
• What is SIS?
• Why would some top executives hesitate to
invest in SIS or IS/IT in general?
• Suggestions to convince top management to
invest in SIS or IS/IT?
• Examples of risks associated with SIS