TECH & GLOBAL COMPETITION
TECH & GLOBAL COMPETITION IB 8680
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This 77 page Class Notes was uploaded by Cesar Wisoky III on Monday September 21, 2015. The Class Notes belongs to IB 8680 at Georgia State University taught by Duane Truex in Fall. Since its upload, it has received 31 views. For similar materials see /class/209839/ib-8680-georgia-state-university in International Business at Georgia State University.
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Day 2 Chapter 1 The Information Systems Strategy Triangle 87 Georgma State hurersrtv 1B 3680 CIS Department Professor Duane Truex III Today s Learning Objectives Achieve a basic understanding of strategy and organizations Review three generic strategy models Review organization applications See the balancing relationship between business strategy org structure and IS strategy r 117 7 m L by 1 N m Lug r a w r f 397 7 j ji7 quot39 quot 39 swimmi L ECommercel nciples Professor TrueX Unintended consequences National Linen Service Motivated by increased competition and the weak economy Brought in new IS system to lower costs What was the unintended consequence What was wrong with what the system did ft Wm H glut1341 L Professor TrueX 1y Arr E CommercePrinciples Figure 11 The Information Systems Strategy Triangle The corners are interlocking Change one and all must adjust Busuless Strategy IS Strategy is affected by the other strategies a rm uses Changes in IS strategy must be accompanied by changes in the other two Information Organizational Strategy Strate 7 ray IS strategy has sometimes 5 l memes the whole concept Hilltemionab consfiqufmces Onthe Fq f w o o busmess and organlzatlonal strategles w m 2 v tlonal deSIgn Kw LL L 1 Professor Tmex E CommercePrmc1ples BRIEF OVERVIEW OF BUSINESS STRATEGY FRAMEWORKS f 1 f HT quot 5 H H H y39ml iUx L Professor Tmex E CommercePnnmples BRIEF OVERVIEW THREE BUSINESS STRATEGY FRAMEWORKS 1 Porter s Generic Strategies Framework and its variants 2 Hypercompetition and the New 7S s framework D Aveni 3 Coopetition Brandenburg and Nalebuff E I Mjimii w L 1 Professor TrueX E CommercePrinciples Porter s Three strategies for achieving competitive advantage a generic view Figure 12 Uniqueness Perceived Low Cost Position By Customer Rou h Industry and g Wide tumble typically only one Particular can be Segment product only oriented or customer oriented l 1 Li ti 39i r39xif ii lg i a l l ug L Professor Truex E CommercePrlnc1ples Five Forces Model Potential Entrants Threat at New Entrants Industry Bargaining F39ewer Cempetiters Bargaining Power at Suppliers at Buyers Suppliers U 39 Buyers Riyalry ameng eiiisting tirrris Threat of Substitute Preduets er Seryiee Substitutes r gt as y ll an a anquot ery r2 Hiatus 21 swimmer L Professor Tmex E CommercePrlnc1ples Variants on Differentiation Strategy Shareholder value model create advantage through the use of knowledge and timing Fruhan Information arbitrage Barriers to entry model rms create barriers to entry to keep competitors out of their markets see Five Forces model Unlimited resources model companies With a large resource can sustain losses more easily than onesvv yvith fewer resources These make the most sense under relatively stable conditions What of times of rapid change and LHW E CommercePrinciples Professor TrueX Hypercompetition and the New 7 S s framework D Aveni Sustained competitive advantage is not possible Only temporary advantages exist created by a company s speed and aggressiveness Assumes Every advantage becomes eroded Sustaining an advantage uses too much time and resources Instead companies must seek to stay ahead of its competitors by creating temporary advantages Goal is disruption not stability rithese are done in small steps over short competitive cles Focus on creating the next temp advantage if onstant innovation Profegsormfme FL I E CommercePrinciples H Disruption and the new 7S s Figure 13 Vision for Disruption Create temporary advantage through understanding stakeholder satisfaction or strategic soothsaying Capability for Disruption Tactics for Disruption Sustaiflf g mOmentum through Gain advantage by shifting the p Speed 39 Ti ll 5url31quotise can create rules signaling simultaneous ll 39VT IiadVantageS and sequential strategic thrusts lg i m i i 1 my L Professor Truex E CommercePrmc1ples D Aveni s new 7S s Figure 14 0 Superior stakeholder satisfaction maximize customer satisfaction by adding value strategically 0 Strategic soothsaying use new knowledge to predict new windows of opportunity Positioning for speed prepare the org to react as fast as possible Positioning for surprise surprise competitors 0 Shifting the rules of competition serve customers in novel ways 0 Signaling strategic intent communicate intensions in order to statl competitors 0 S ltaneous and sequential strategic thrusts take steps to EQCOHfuse competitors in order L Professor Truex E CommercePrinciples COOpetition Brandenburger amp Nalebu More about forming alliances to better compete Airlines Star Alliance the Value net in which companies competitors customers and suppliers are participate and compete in Key concept is complementors companies that sell complementary products and services E g hardware and software Cobranding These can often gain advantage by forming an alliance to provide a more competitive i E g work with competitors to grow a market r V V uy TV L h f n N W H 11 i if iquot or L n m l l mgr1 41k Professor Truex E CommercePnnc1ples Why are strategic advantage Models essential to Info Systems IS planning Giving up authority on IS decisions is giving up IS strategy Poorly chosen IS infrastructure undermines strategy Business strategy needs to address What is the business goal or objective What is the plan for achieving it What is the role of IS in this plan Who are the crucial competitors and cooperators and what 39 srequired of a successful player in this value net r quotit a gm I h M l we will Minimalism L Professor TrueX E CommercePrinciples Summary of strategy frameworks Generic Strategies competitive advantage through low cost differentiation or focus Hypercompetition competitive advantage is temporary created through speed and aggression in the market Coopetition companies create alliances of firms with complementary outputs to better rl 39ompete r T TI r trt v i hi r U l onmmnmm L Professor Truex ECommercePnnc1ples OVERVIEW OF ORGANIZATIONAL STRATEGIES I4 IR r H Yrqvw m a V quot v g le LU I n Mf l iw L Professor Tmex E CommercePnnc1ples What is Organizational Strategy How to organize to implement corporate goals and business strategy Organizational Strategy includes the design choices that 0 de ne 0 setup 0 coordinate and 0 control corporate work processes m quotaquot Emil in N mug W hygien L Professor TrueX l E CommercePrinciples Understanding Organizational Strategy Means answering the following 1 What are the important structures and reporting relationships Within the organization 2 What are the characteristics experiences and skill levels of the people Within the organization 3 What are the key business processes 4 What control systems are in place 5 is the culture of the organization 3quot I J l l fly xvi quot 391 l V LN H r u e n N I l quot r ofquot L ml 39 Tquot v L Lin l hwx 01 lm lingl ll 2 Kalil ll Minimal L Professor Tmex E CommercePnnc1ples The Business Diamond Hammer and Champy Figure 16 I a asquot a N we IL I nw 41k Professor TrueX E CommercePrinciples Conventional IT Design Variables Lucas and Baroudi Fig 17 Complements Business Diamond Structural defs of org subunits reporting linking controlling mechanisms staffing IT Design vars Virtual components ebanking technological IeveHng Work Process Tasks Workflows Dependencies Output of process Buffers IT Design variables Production automation eworkflows virtual components Communications formal informal communications IT Design variables group support systems Hing I Interorganizational make vs buy decisions exchange of aterials communications I quotTI Tm m If eSIgn variables eSCM L Professor TrueX E CommercePrinciples 10 Organizatio Managerial Levers Figure 18 Organizational effectiveness Data availability e 0 pl 6 Planning Information and itrategy Control Incentives And Rewaf39 Used to assess and a n ature imamm orgamzat1on s woof J n L components Professor Tmex ECommercePrmc1ples Summary of organizational strategy frameworks Usefulness of IS Discussions Key Idea Business Using IS in an organization Diamond will affect each of these components Use this framework to identify Where these impacts are likely to occur Managerial Levers xiiiquot I J I I u 3 A r a We quot 1 IE i v j j 39 KS L3quot 22 51 IQ PM M in rv39v Ill QR A n A Prof s wintering L uu Lxuv 11 OVERVIEW OF INFORMATION SYSTEMS STRATEGY gy lrE N mg ll l Professor Truex E CommercePnnc1ples IS Strategy Matrix 0 Hardware physical components in a physical location Used by system users and system managers 0 Software programs applications and utilities that reside on the hardware Used by system users and system managers 0 Networking hardware and software that interconnects other IS components located where the networks and cables are Used by system users and system managers networking services also obtained from outside sources i ata information stored in the system Used by iyiduals who own the data Managed by system J via L Professor Truex E CommercePnnc1ples l2 Wrap Up 1 Business strategy drives organizational strategy and IS strategy Organization strategy must complement business strategy Business organization either supports business strategy or gets in the way Likewise IS strategy must complement business strategy When IS support business goals the business appears to be working well 2 Org strategy and info strategy must complement each other They must support rather than hinder each other 3 If a decision is made to change one corner of the er39triangle it is necessary to evaluate the other two prrners to ensure that the balance is preserved i qwgrmr e n 3291 ll lye rm grin N m J i t VF L l nlllg gi 117 Professor Truex E CommercePnnc1ples A Look ahead Look at organizational design alternatives Physical and Virtual For the bricks and clicks organization sin A If i l l Iquot re I K39Tl z zm 7 NFC 1331 lUlj J miw L Professor Truex E CommercePnnc1ples l3 d W E W 9 CSSTE KX gym2amp mal 14 De ning Strategy Added value and building an EC strategy 7 ersm 1B 3630 CIS Department Professor Duane Truex III Today s Learning Objectives Develop a Taxonomy of a Business Model Examine concepts of value determination Examine the Components of a Business model Ask What is a model in terms of an estrategy v l 39 gt L er magi lUMMEmlW L 39 E CommercePnnc1ples Professor Truex The Business Model Role of Business Model Dynamics in Firm Performance Dvnamics Appraisal V II Internet Performance A v 7 Environment r x 7 Lagoc an was Professor Truex E CommercePnnc1ples The Internet Business Model Answers important questions How the business Will make money How it provides competitive advantage Who are the customers What value Will be provided customers Who to charge How to price Strategies to provide and sustain that value What are the value drivers Will it be 4 a provider of services Within the Internet infrastructure supplier to the Internet or i a user of the Internet r quotTl was Earn will Managua L Professor Truex E CommercePnnc1ples FIGURE 41 Determinants of Firm Performance Business Model Customer value i Scope 39 Price Revenue sources 1 39 Connected activities i Implementation Capabilities 39 Sustainability V Internet l Performance Environment O TQTt iW you ago j 9 e i Customer Value Where does value come fromhow is it made evident to your customer Differentiation How do your products or services differ What to they offer that others do not Scope Properly identifying Where and to Whom to offer the product at the proper price Pricing Charging What the product is worth to the V llCustomer if i WE mKTquot lul ij bluf L Professor TrueX arging exactly the right price E CommercePrinciples Customer Value Differentiation Product features Product Mix Speed specialized Choice content personalized M t t d product ass cus om1za 10D an personalization T1m1ng Linka es F1rst to market g 0 Who endorses ou Locat1on y Ease of access In info goods PDA cell phone telephone It s the real thmg o LOW COSt Cobranding Brand Name desk repairs Perception of the best 7amp2 limusmut L Professor Truex E CommercePnnc1ples Before Pricing comes Scope And Scope is fxrr Professor TrueX Market segmentation By Customer demographic Customer lifestyle Geography Customer ethnicity or cultural identity L E CommercePrinciples What are the key questions about Scope Whom do we wish to serve 0At what price can we should we serve them r 7 l a an o ml 1 1h Lnv F 1 Professor TrueX a 95 quot 35 l A LL r C g a maxitension L E CommercePrinciples The Pricing Decision An important relationship k r Profits II If P Q where P is the price per unit of the produch is the per unit variable cost Q is the total number oi units soltl and is the Lip Irrml or fixed costs we fi rid h 111 in 999 f f ng n SQ j an Wm 3951 439 KmGLLEQLr M lit f x Aquot iv H vf jf i39vw V Daing 39 L R LL ECommercePrinciples Professor TrueX Price markets share margins and growth in ebusiness How are these ideas related In information goods there are high xed Ie sunk costs and VERY low marginal costs 0 In fact the marginal cost is near zero At the margin everyone can produce as near the same price once in the business Hence volume market share and sustainability are EVERYTHING jCAVEATz Given the right price of course Professor Truex ECommercePrmc1ples Pricing Example given market share in a growing market TABLE 42 Market Share and Pro tability for Ki iowledgeBased Products NQJN 299 3000 Market Market Market Market Share Market Share Market Share Share t 1000 Profits Share t I000 Protits Share t 000 Pro ts rm Ulth t t millions 2 units t i millions 7 units 9 millions Firm A 80 800 3H 80 8000 1000 80 80000 H100 2000 H0 20 20000 3400 Firm B 20 00 40 30 Tm g r m aw ti Mme L Professor TrueX E CommercePrinciples Share is important because Volume spreads the xed cost across more units Pricing creative or aggressive pricing Critical to acquiring and holding market share Hence critical to sustainability and pro tibility Pricing choices until lockin or share is acquired i H Eree deeply discounted quotLg4 f r quotit mum vng 51 Marxism L Professor Truex E CommercePnnc1ples Pricing types and choices Menu or xed price Take it or leave it Strategic value or problems Onetoone pricing Variable and negotiated prices some more some less Auction Reverse auction Barter Emma c mi x If iquot L H n l l Dip Professor Truex E CommercePnnc1ples Cost structures of egoods or info goods Information is costly to produce and cheap to reproduce The variable cost of additional units does not increase even With large numbers of copies Once the rst is produced copies are almost cost free a great marketing opportunity and challenge Information goods can become commoditized A danger Yellow pages eg CD Phone book music Fompetition pushes prices to near zero WHEELE L Professor Truex E CommercePnnc1ples Market structures and strategy for information goods Differentiate the product Must add value to the raw product Achieve cost leadership If it is hard to differentiae at least sell a LOT of it Make your average cost the lowest If you are dominant achieve cost leadership through economies of scale and of scope yReduce average cost through volume sales r qu uyTvqn h n yv v ggx39l ll l tw m L Professor Truex E CommercePnnc1ples Ebiz Pricing Lessons lSt know your cost of production and sales Your variable cost 2nd If forced to compete in a commodity market be aggressive but not greedy Grab market share price aggressively and exploit economies of scale 3rd Differentiate by personalization and price 4th Invest in collecting data about your market Coupons focus groups promotions cookies and registration 5th Use customer information to sell personalized products 3 6th halyze the pro tability of selling to certain groups 39i mine price sensitivity attractiveness of groups i gikm humanism L Professor TrueX E CommercePrinciples Perfect Price Discrimination This is charging each customer just what he is willing to pay Personalized pricing 0 Eg Quicken TurboTaX rst releases of books and software Versioning Group Pricing 4 Education Sr Citizen Professor TrueX E CommercePrinciples Sources of Revenue in Ebiz Pure information goods Value is in the content Intangible service goods Value is provided by people with expertise and advice Agents brokers etc Tangible Hard goods Value is mostly in the product small amount in complementary information Q Sighow do you make money and charge And lU jmiifl lml L 39 E CommercePnnc1ples Professor TrueX lO TABLE 43 Evolution of Advertising Metrics for Portals Metric Definition Comment Number of hits Count of each time data is Number of hits does not say 0 requested from a server while much about the types of cus a Web surfer is at a website tomers and what they were There may be more than one doing r hit each time a user clicks a t mouse a Page views The number of individual Number of SurferS who HTML Pages that a Surfer respond to an ad still not pulls out while at a website oiven g Click through Percent of prospective cus NO information on he Gus tome Who I ESPOHd 0 an tomers themselves online advertisement Unique visitors Count of individuals using their intemet protoeol IP address visit a page on a specific web site in a given month Length of stay How long the user has been on the website Registered users Measure of website users likely to come back Repeat visitors The number of visitors at a website for two or more e Reach Percent of sampled users who 1 C times aim g f 1 Ci scuf ng L Source S V Haar Web Metrics Go Figure Business 20 June 1999 pp 4647 Professor Truex E CommercePnnc1ples Exercise Where does value lie Information goods Intangible service goods Tangible Hard goods Q Who suffers most in an Eenabled world Q What are the killercom s Eg Barnes amp Nobel vs Amazoncom What can Amazon provide do that BampN cannot 14 39 3x v39 I t r H F aquot s iiivquot quot sr ww m its Jam r t n 7 l f a1qi l u L Vi hiifjig do the 12 principles apply g principles i Professor Truex E CommercePnnc1ples 11 Finally EStrategy development r gtV t 739 VVE J Jquot 39 i39i39 H u l l tilminim L Professor Tmex E CommercePnnc1ples EStrategy Where does added value lie 0 Can the customer see it Part of the strategy is adding value making that evident in the process AV product features X information enrichment What does this mean What does it mean to S T RA T EGI CALLY 7 r gt quotM M PW vn Lr e win 1 r e 7 gal 15 N as Lug r 1 W7 7 f Mm tensrui L Professor TrueX E CommercePrinciples l2 A 2 quoti i lt7 litter FIGURE 54 Internet Technology Life Cycle EMERGING or GROWTH or MATURE or FLUID TRANSITIONAL STABLE Locate pro t site 0 Determine strengths and Defend competitive weaknesses of business model advantage 0 Build business model Internet 0 Decide where in Build capabilities actions the Internet value Build network network you Invest in infrastructure want to be 0 Win customers 39 Build brand name 0 Team upRun FIGURE 52 Who Pro ts from Innovation Dif cult to Holder of make money complementary assets makes money IV 111 Inventor makes Party with both money technology and assets or with bargaining power makes money Imitability Freely Available Tightly Held or Unimportant and Important Complementary Assets 39 Vision Having clear sense of who you are Where you Wish to go Sense of the value you addoffer Sense of the customer and her needs Scope of Productsservices Customer Industry Markets e g the enviornment r fnqu HTan a n ViaEKJ39LK mmh U H H l l L Professor Truex E CommercePnnc1ples Vision guides Resource allocation Choice of opportunities Identi cation and choice of your Driving Force for strategy What should drive the rm Productdriven focused product or product family Marketdriven e g target markets e g AHS Technologydriven Production capacity driven Marketing driven the old IBM Distributiondriven quotJ ii iNatural resources driven mining oil etc 1 quotiZe or growth driven e g GE 9 in the business of 39ng business H x 7 iv 7 immensitva L Professor TrueX E CommercePrinciples l4 Strategy statement aka Mission statement Encompasses the vision Describes the driving force Identi es the strategic and distinctive advantages of the rm or its products Forward thinking and projecting Future oriented r sq w Tm iv n yv v g 71quot57 K m k l if N 3733 L H n l l up L Professor TrueX l E CommercePrinciples Your strategy vis a vis your competitor s strategy Know the competition Size it up Know its strengths and weaknesses It becomes part of the competitive landscape or the environment If possible change the rules of the game Must identify critical issues a rolling horizon and play to those issues g the Internet and its features in the blanks here r quotr b kinfuv am x r 21 lLMmremmir L Professor TrueX E CommercePrinciples 15 Question What is a strategic alliance What is a bundle Advantage Value add Must it be complements only Is it a way to deepen penetration To further lockin a N W H 11 x If iquot L H n l l up L Professor Truex E CommercePnnc1ples Day 2 Wrap Up Taxonomy of a Business Model Examine concepts of value determination Examine the Components of a Business model What is a model in terms of an estrategy str gy r Tl dw mf anquot TLquot quot m la N m u will ll lnnmm L U LULPLUH39 E CommercePrinciples Professor Truex ld these new concepts into the notion of ec l6 39EQ AIL 2 1 1 JL an K39 a We A E a r L mgmlga 4 1 Day 2 Ch 2 Strategic IS b hmersmr B 8680 C18 Department Professor Duane Truex III Today s Learning Objectives Describe how the strategic use of information resources has evolved Explain the difference between simply using IS and using IS strategically Articulate how information resources can be used to support the strategic goals of an organization 7 Sec Professor Truex ECommercePIinciples External Business Systems Data Sources Dss GDSS Content Transaction amp EIS Search Editng amp Processing 01111116 Engines Production Systems Analytical amp tools tOOIS T133 Processing OLAPgt Deductive Data Production Warehouse Knowledge Repos1tory Database Data Organizational Minin Memory Collaboration g Management Informatlon and Inductlve Information reasoning System Coordlnatlon SillsEggs OMIS tools Eras of information usage in organizations 19603 19703 19803 2000 Primary Ef ciency Effectiveness Strategic Value creation Role of IT Justify IT ROI Increasing Competitive Adding expenditure PTOdUCtiVity position Value and decision making Target of Organization Individual Business Customer systems manager processes supplier Group ecosystem Information Application Datadriven Business Knowledge model speci c Driven driven Dom Mainframe Minicomputer ClientServer Intemet based based distribution ubiquitous a intelligence intelligence Professor Truex E The Information Systems Strategy Triangle Business Strategy Organizational Information Strategy 7 i 3 Professor Truex ECommercePIinciples 3 as Using Information resources to create strategic advantage Strategic advantage must be crafted by combining all of the firm s resources including production resources human resources and Information resources Information resources include not only data blg lso technology people and processes Professor Truex ECommercePIinciples Examples of information resources available to a rm 0 IS infrastructure 0 Information and knowledge 0 Proprietary technology 0 Technical skills of the IT staff 0 End users of the IS 0 Relationship between IT and business managers Emsiness processes KW T I I Professor Tmex ECommercePnnmples What advantages might an information resource create 0 A manager might consider the following to understand the type of advantage the information resource might create What makes the information resource valuable Who appropriates the value created by the information resource Is the information resource equally distributed across rms Is the information resource highly mobile flow quickly does the information resource depreciate IFI Professor Tmex ECommercePnnmples HOW CAN INFORMATION RESOURCES BE USED STRATEGICALLY ECommercePIinciples Aligning IS strategy With business strategy Using multiple approaches to evaluating the strategic landscape is helpful in determining strategic opportunities 0 Here we look at three such approaches Porter s ve forces model of the competitive advantage of firms Porter s value chain model of internal norganizational operations s theory of strategic thrusts and iiGerj ga39SB rategic option generator Professor Tmex ECommercePnnmples Porter s competitive forces with potential strategic use of information Strategic use Cost effectiveness Market access Differentiation of product or service Potential threat of new entrants l Strategic use Switching costs Access to distribution channels Economics of scale Bargaining power of suppliers Strategic use Selecti9 of supplier gleackward I Threatltg t a i m l y y Industry Bargaining competitors power of buyers 1 Strategic use Threat of substitutes Buyer selection Switching costs Strategic use Differentiation Redef1ne products and services Imprlpve priceperformance CornmercePnncrples The Five Forces Model and IS 0 The Five Forces Model provides a way to think about how information resources can create competitive advantage Using Porter s Model General Managers can Identify key sources of competition they face Identify uses of information resources to enhance their competitive position against competitive threats nsider likely changes in competitive threats over ECornmercePrinciples Porter s Value Chain Model Porter s Value Chain Model looks at increasing competitive advantage by reorganizing the activities related to create support and deliver a firm s product or service These activities can be divided into two broad categories Primary activities that relate directly to how value is created for a product or service jarz upport activities that make the primary activities sible and that manage the coordinate of different Seem Professor Tmex ECommercePnnmples Value Chain of the Firm Firm Infrastructure Support Human Resource Management ACtiVitieS Technology Development Procurement Inbound Operations Outbound Marketing Service Logistics Logistics amp Sales Matenals Mfg amp Order Product Customer h assembly processing Pncmg serv1ce Prlmary W1 Shipping Promotlon Repalr ACtIVItles Gm w Place Prof sor True ECommercePrinciples Gaining competitive value The Value Chain model suggest that competition can come from two sources Lowering the cost to perform an activity and Adding value to a product or service so buyers will be willing to pay more 0 Lowering costs only achieves competitive advantage if the firm possesses information on the competitor s costs Adding value is a strategic advantage if a firm 7 asesses accurate information regarding its vio mer such as which products are valued Where vr 1 quotn A 952 1 51 fun 0 Professor Truex ovements be made ECommercePIinciples The Value System 0 The model can be extended by linking many value chains into a value system Much of the advantage of supply chain management comes from understanding how information is used within each value chain of the system This can lead to the formation of entire new businesses designed to change the information component of valueadded activities Senior If J millu g g Professor TrueX ECommercePIinciples The value system interconnecting Relationships between organizations Supplier s Firm s value value Channel s chai chain value chains rf em pi quot Buyer s IigSr J I quotl i value Prof ECommercePIinciples h c a1ns The Value System and Strategic Alliances Many industries are experiencing the growth of strategic alliances that are directly linked to sharing information resources across existing value systems 0 An alliance between American Airlines Marriott and Budget RentACar called AMRIS provides travelers with a single point of contact 0 Thus electronically pooling information services Gigseveral companies can create competitive g antage by saving customers time my ECommercePIinciples Wiseman 8 Strategic Options Generator What is the strategic target Supplier Customer i Competitor What is the strategic market Differentiation Cost Innovation i Growth iAlliance 4v What is the mode Offensive Defensive V What is the direction Use I EF Provide Wiseman s Strategic Options Generator Wiseman asks three questions to re ne the process of identifying strategic opportunities or Thrusts What is the mode of the thrust What is the direction of the thrust hat is the strategic target of the thrust ECommercePrinciples 10 Types of Strategic Thrusts Differentiation Thrusts focus resources on unfilled product or service gaps Cost Thrusts focus is on reducing costs or increasing competitor s costs 0 Innovation Thrusts focus on creating new products or new ways to sell create produce or deliver products Growth Thrusts focus on increasing size of the market size or adding more value adding activities in the value chain 0 Akqance Thrusts combine with other groups to create if Competitive position i 77 i l j 4 Professor Tmex ECommercePnnmples Wiseman s Strategic Options Generator What is the mode of the thrust What is the direction of the thrust What is the strategic target of the thrust ECommercePIinciples ll What is the Mode 0 A firm has two choices for the mode of a a strategic thrust The rm can act offensively to improve its competitive advantage or A rm can act defensively to reduce the opportunities available to competitors 0 For example a firm can innovate offensively to gain product leadership in a market while others use innovation defensively to imitate the product leader w ECommercePIinciples Wiseman s Strategic Options Generator What is the mode of the thrust lWhat is the direction of the thrust What is the strategic target of the thrust a r1 Professor Truex ECommercePIinciples 12 What is the Direction 0 Two choices for the direction of a a strategic thrust The rm can use the information system to create competitive advantage or A rm can provide the system to its chosen strategic target firms have done both developed systems for internal use and then offered them to customers or suppliers For example although FedEx developed its Powership system internally it was able to offer it to its best customers thereby increasing their switching costs ECommercePIinciples Wiseman s Strategic Options Generator What is the mode of the thrust What is the direction of the thrust lWhat is the strategic target of the thrust a r1 Professor Truex ECommercePIinciples l3 What is the Strategic Target suppliers Customers Competitors Raw materials Channel Direct Information distributors Potential Labor Consumers Substitute Capital Industrial Insurance Reseller Utilities Government Tr 39139 f gorta on International ECommercePIinciples Example Strategic Options Generator Wiseman combined mode direction and strategic thrust into a strategic options generator Example Dell computer s initial thrust Strategic Target direct market to the customer Mode Offensive Direction Use IS to gain advantage Second thrust provide customer information to suppliers 0 Third thrust let customers autoconfigure systems via the Internet f ECommercePIinciples 14 FOOD FOR THOUGHT TIME BASED COMPETITIVE ADVANTAGE ECommercePIinciples TimeBased Competitive Advantage The Internet is increasing the pace of technological change by refocusing competitive efforts towards creating timebased competitive advantage Information resources are the key to creating those advantages For example Dell s direct strategy has been to build and deliver computers in as little as 5 days Thus the speed at which an organization adapts its business processes will the true measure of its ability l naintain competitive advantage ECommercePIinciples 15 Wrap Up Using Technology for strategic advantages requires a strong infrastructure and an awareness of how to either protect or to span boundaries ECommercePIinciples A Look ahead How may we use technology to change business processes Professor Truex ECommercePIinciples 16 Il 1 17 Day 12 Chapter 10 Project Management 3 Ii versus 1B 8680 CIS Department Professor Duane Truex III WHAT DEFINES A PROJECT A project is a temporary endeavor undertaken to create a unique product or services Temporary means that every project has a de nite beginning and a de nite end Unique means that the product or service is different in some distinguishing way from all similar products or services Project Management Institute 1996 prw Ln HRH WIN Ill H F W w bl L Professor TrueX E CommercePrinciples A framework for IS development methods Higher Use Participation Highly Highly Structured Emergent 4 F quot vFvFF iWL w W l Easy l l 9 new i l 5 giltFur quot H r i ll fl ii in L V Tm Low Us rmne incrs tion Degree of structure in IS development approaches Highly Highly Structured Emergent 4 P o Highly Llfe eyele Dally customized amp approaches PTOtOtYng build contingent e g eg Waterfall o Amethodieal methad Rapid Application Systems Development geve10pment R Deferred Systems Design l l OR 7 M e ihod OZ 0 gy Engineering quota H H H mar5mm L Professor True E CommercePnnCIples Relative degree of user participation in system development Higher User Participation A Customized approaches eg UK SPRINT AmSD ETHICS Soft systems methodology Generalized life cycle S t hn 1 d 1 t approaches oc1o ec 1ca eve opmen Structrjre analysis and design H a L E C P 1 Professor Tm Low User Part1c391quotnamteiorlmcllo es MiamiDade County IS Development 2 Higher User Participation A r x 4 MIAMIBABE Hrghly H1ghly Str tured Emelrgent State of Georgia Telus r quot lt11 g mm M llli39rt tiagaw m L Y P fL T UL E Co CIeJEI39inc39 les ro essor rueX LOW User Pa 1 ip thn Proposed Project Phases PHASE TASK GOAL OUTCOME Initial Phase Determine fit between Miami Dade County and FIU team Agree on project scope and deadlines Initial statement of work Phase One 1 Initial study of MiamiDade County organization 2 Determine requirements for Understand what methodology is needed Develop a mission Initial framework for methods Stages for method rm 1 394 it39ll methodologyies core users and collaborative work adaptations and key success factors methods Phase Two Create the MiamiDade Secure user A prototyped and County MDC development participation and buy accepted methodology and rollout methodology in for new methodology Educate MiamiDade Disseminate the MDC Single methodological L developers in the new methodology E Commerc methodology across the organization Principles standard for Miami Dade County Professor T UUA Today s Learning Objectives De ne a the concept of a software project Describe generic approaches to running such projects Articulate the notion of software life cycle approaches piv wmmr rm km Lilli l H ll in Professor TrueX ECommercePrinciples Typical Project Manager Activities Ensuring progress of the project according to de ned metrics Identifying risks and assessing their probability of occurrence Ensuring progress toward deliverables Within constraints of time and resources Running coordination meetings of the project team Negotiating for resources on behalf of the project rquot P 1 m n 1m Wag 15 o f39 7 l n r m m L Professor TrueX E CommercePrinciples Project leadership elements model r f 7 warv7 fquot lQl Duj J l m H wants L Professor TrueX E CommercePrinciples Project Cycle Plan Nearly all projects contain three phases 1 requirements de nition 2 development 3 productiondistribution Managers must also attend to the following during each phase Technical aspects of the project Budget aspects of the project gusiness aspects of the project Professor TrueX E CommercePrinciples Elements of Project Management Identi cation of requirements Organizational integration Team management Q3 What is Project planning this Risk and Opportunity management Project control Project Visibility Project status OOONONUIPPJNE Corrective action A A kind of 10 leadership llfecycle model J cum M 39 917 5 r r V rr p MEL lli 39 J W L Professor TrueX quot E CommercePrinciples Systems Development Life Cycle SDLC Initiation and Feasibility Requirements De nition Functional Design Technical Design and Construction Veri cation lnlplementation liaintenance amp ReV1ew n r n mr Ltlmt emmt L Professor TrueX E CommercePrinciples I Initiation amp Feasibility 0 Project objectives amp Scope 0 Preliminary survey amp feasibility Technical Economic Operational 39 Project proposal and schedule 0 quotMmentify assumptions amp constraints r 397 7 in u nJr quot39Ti 1 lvv39lvquot l hi Q5524 ti N W 1 n Emmy Lil H m n wasqu L Professor TrueX E CommercePrinciples 11 Requirements De nition Problem Opportunity de nition Analyze current system Focus on decisions and related information needs De ne business functionality quotflan for training user acceptance L Professor Truex E CommercePrinciples Problem Opportunity De nition 0 Symptoms vs real problems 39 Question decision maker s statement of problem 0 Bound problem realistically 0 Try to ascertain actual cause 39 ometimes guring out the problem is the solution lb tl w bluf L 39 Professor True E CommercePnnCIples Analyze Current System Understand activities involved Identify decision points Help identify problems amp de ciencies Be aware of history 7quot 313ias thinking Ki gum a la 3 V 195 gag U l r m m L Professor TrueX E CommercePrinciples 111 Functional Design 0 Focus on business needs usability reliability Logical design Outputs Inputs Presentation Processes Databases y Personnel r r 7 in u nJrn quot39Ti 1 l 39lvquot l h 5524 la N W 1 Mawenslth L Professor True E CommercePnnCIples IV Technical Design and Construction 39 Finalize architecture and acquire hardware 39 Complete technical de nition of data access and other system components 0 Make program vs buy 39 Develop test plans quot39ylSC schedule plan and costs Ti rm 1 KW r mmrzw l quot Lei Z gagIquot Ulr m m L Professor TrueX E CommercePrinciples V Veri cation Program Testing Structured walkthrough Code inspection Unit test Pairs testing 39 Veri cation stress user and security Lillmnmiemmf L Professor TrueX E CommercePrinciples lO VI Implementation Cutover Parallel conversion Direct cutover Pilot conversion Phased conversion r tra1n1ng L Professor TrueX E CommercePrinciples VII Maintenance and Review 0 Postimplementation audit Ends information requirements information performance Means process Maintenance correcting bugs amp scheduled maintenance E CommercePrinciples Professor TrueX ll SDLC Reasons for Failure Scope too broad or too narrow 0 Lack of needed skills 0 Incomplete speci cations No controlno framework 0 Lack of managementuser involvement quotgoo timeconsuming Ti rm UK va r mmb quot LTL lamaIquot lLllt m m L Professor TrueX E CommercePrinciples Alternatives to SDLC approaches Prototyping and RAD SDLC may not work for all situations SDLC often requires a lot of planning Dif cult to implement quickly Communications to establish requirements may be problematic O r rg O F 2 lt E o 5 0 0 533 D Q U 3 D a F D H D g lt D E CommercePrinciples Iterative Development System Concept Software Development Process L Professor Tmex E CommercePrinciples Uses of Prototyping o Verifying user needs 0 Verifying that design specifications 0 Selecting the best design 0 Developing a conceptual understanding of novel situations 0 Testing a design under varying environments 0 Demonstrating a new product to upper management 0 Implementing a new system in the user environment quickly Professor True E CommercePnnCIples 13 Prototyping Proposed Advantages Disadvantages in practice Improved user Prototypes are used as is communication Integration often Users like it difficult Low risk Design flaws Poor performance Difficult to manage process Avoids overdesign Experimentation and innovation Creates unrealistic Spreads labor to user expectations department Documentation is difficult l rrj h mr leu quotTdv39 1quot7 t M WEI L1 ll W Professor Tmex E CommercePnnc1ples Rapid Applications Development RAD 0 Like prototyping uses iterative development 0 Uses tools to speed up development GUI reusable code code generation programming language testing and debugging l 4L 3 t n 22 7P xngtm blm L Professor TrueX E CommercePrinciples l4 IT project risk assessment factors Cost analysis Opportunity cost 0 Vendor management Software development practices Political risk Project risk factors investment size project size technical risk Intended bene t risk factors business impact customer needs ROI Org impact 7 t39ion risk factors exibility compatibility Professor TrueX E CommercePrinciples Project Review Questions for Risk Assessment 1 Are we doing the right things 2 Are we doing it in the best way 3 How do we know how well we are doing 4 What impacts are we having on the business 5 Is the project cost effective 6 Is there clear accountability for the project Are key assets protected Professor True E CommercePnnCIples 15 iuhw gm lt33 1 Topic Database Introduction Day 6 FIU FLORIDA INTERNATIONAL UNIVERSITY Miami s puHic research univerxity Frnfessnr Duane Tnsz m Introduction to Databases 1 Define general data management concepts and teIms LEARNING OBJ ECT IVES 2 Identify the common functions performed by all database management systems DBMS pmhsmma Orgamzauaml lnfa Systems Traditional Filebased Developmmt and r r Professor rm Engmammal m was Data Organization and Management The Hierarchy of Data 0 Database 7 Collection of organized data 0 Database management system DBMS 7 Software consisting of a group of programs that manipulate the database and provide an interface between the database and the application programs Professor rm Engmammal m was Hierarrhy of duh n I 7 A0 7 i370 F45 e Steven 85 r 77 r 1001 Buckley am 2 779 7 i0 7 5321 Johns Francine 1077765 98 es 00 40 l370 Fiske Sisvan l585 SSN la quotquotquotquotquotquotquotquotquotquotquotquot quot name The Hierarchy of Data Example Data is generally organized in a hierarchy that begins with the smallest piece of data a bit and lProieci database k z 3 Personnel File 39 Reconl conlaming sr and first lure dulel Chowder 3495 Professor Tmex FiskeE Losinomeiieidi Lower F in ASClll orgamzauonai Info Systems progresses through the hierarchy to a database Data Entities Attributes and Keys Last name First name Hire date Dept number Entities Johns Francine l 0765 257 Buckley Bill 2l 779 650 reco rd 5 Generalized class of people places or things for which data Fiske Steven 1585 598 Key field Fields used to uniquely d identify recor Professor Tmex Attributes fields Characteristics of an entity orgamzauonai Info Systems i collected stored and maintained Data Entities Attributes and Keys Key 7 A eld or set of elds in a record that is used to identify the record 7 Primary key 0 A eld or set of elds that uniquely identi es the record 7 Secondary key 0 A eld in a record that does not uniquely identify the record Organizau anal Infa Systems The Traditional Approach to Data Management 77 D Flaws in the Traditional Approach 0 Data redundancy 7 Duplication of data in separate les 0 Data integrity 7 The degree to which the data in any one le is accurate 0 Programdata dependence 7 Potential for incompatible programs and data between applications Refuse rm Elmmammal m mm The Database Approach to Data Management 0 Data management in which a pool of related data is shared by multiple application programs 0 Rather than having separate data files each application uses a collection of data t are either joined or related in the database Refuse rm Elmmammal m mm The Database Approach tn Data M2112 09m ent Advantages of the Database Approach Improved strategic use of corporate data Reduced data redundancy Improved data integrity Easier modification and updating Data and program independence Orgzmzauunal Infu Systems Commued Advantages of the Database Approach 0 Better access to data and information 0 Standardization of data access 0 A framework for program development 0 Better overall protection of the data 0 Shared data and information resources Refuse rm uxgmmmi in mm Disadvantages of the Database Approach 0 Relatively high cost of purchasing and operating a DBMS in a mainframe operating environment 0 Need for specialized staff 0 Increased vulnerability Refuse rm uxgmmmi in mm Types of Database Design 0 Logical design 7 An abstract model of hoW the database should be structured and arranged to meet an organization s information needs eg Entity Relationship Diagram 0 Physical design 7 A model ofhoW the data will be organized and located Within the database meassm39 rm uxgmmmx m mm Data Modeling and EntityRelationship Diagrams 0 Data model 7 A map or diagmm of entities and their inter relationships 0 Enterprise data modeling 7 Data modeling done at the level of the entire organization meassm39 rm uxgmmmx m mm An EntityRelationship Diaram a meassm39 rm Chgmammal m mm Relational Models pawn W Dom Inle 3 Manage le Lon numl rim mm Him dm Dopt number cosloam Jam 42155997 Ions 257 54v771om Buddy 7550073192 24 77 50 WEJO V 370 Fish 093101370 P585 598 meassm39 rm Chgmammal m mm Data Dictionary Assists programmers in designing and Writing programs Simplifies database modi cations Helps achieve advantages of the database approach 7 Reduced data redundancy 7 Increased data reliability 7 Faster program development 7 Easier modification of data and information Refuse rm Engmammal m was Provides a standard definition ofterms and data elements Manipulating Data and Generating Reports 0 Data Manipulation Language DML 7 Contains the commands used to manipulate the database 7 Allows managers and other database users to access modify and make queries about data contained in the database to genemte reports 7 Example ofDML Structured Query Language SQL Refuse rm Engmammal m was Pm fessur Selecting a Database Management System Begins by analyzing database needs and characteristics 7 Performance 7 Integration 7 Features 7 The vendor 7 Cost Orgamzauunal Infu Systems Pm fessur Data Warehouse A database organized and designed speci cally to support management decision making through on line analytical processing Truex Data Warehouse Concepts Data mart r Subset of a data Warehouse 7 Brings the data Warehouse concept to a smaller segment eg department of a compan Data minin 7 Automated discovery of patterns and relationships in a data Ware ouse Multidimensional databases 7 Viewing data as a cube or a matrix MESHrm Oxgzmncmnl Mo Systems Obj ectOriented Databases Databases that store data as objects which contain both the data and the processing instructions needed to complete the database transaction Vendor Imam mama Muran Ob eci Design In Obiedsvore Imam computer aided design elecammunim mz Financial senmes Versunlobiacnthlogy Versanl Cows Teleeommunimliuus heullhmre lnvemel Financial was Cameraman Gemsim Syslems lnlt Gemstone Finandul servkes mines insumme manuh vring Obieclivity lu ObiecnvinDB 50mm denim 5 telemmumculions prunes antral pm swam Curpnrmun rm swam developers lnlemet 0mm 71 Om DBExplumv mm men n magmaquot Gamma 39munuul 15mins MESHn Oxgzmncmnl Mo Systems Image Hypertext and Hypermedia Databases 0 Image databases 7 Store data in the form of images 0 Hypertext databases 7 Allow users to search and manipulate alphanumeric data in an unstructured Way 0 Hypermedia databases 7 Allow businesses to search and manipulate multimedia forms ofdata meassm39 rm uxgmmmr m mm Responsibilities of Database Administrators 0 Overall design and coordination of the database 0 Development and maintenance of schemas and subschemas 0 Development and maintenance of the data dictionary 0 Implementation of the DBMS 0 Database recovery meassm39 rm uxgmmmr m mm