1) Business Processes:
Business Process: is an ongoing collection of related activities that produce a product or a service of value to the organization, its business partners,and/or its customers.
* Hard to remain techologically current.
- Information Overload.
* The Internet and other telecommunications networks are bringing a flood of information to managers. To make decisions effectively and efficiently, managers must be able to access, navigate, and utilize these vast stores of data, information, and knowledge.
---------------------------------------------------------------------------------------------------------
3) Societal/Political/Legal Pressures:
Includes social responsibility, government regulation/deregulation, spending for social programs, spending to protect against terrorism, and ethics.
- Social Responsibility.
* Social issues that affect businesses and individuals range from the state of the physical environment, to company and individual philanthropy, to education.
* Some corporations and individuals are willing to spend time and/or money to address various social problems. These efforts are known as organizational social responsibility or individual social resposibility.
Examples:
Green IT, Digital Divide.
- Compliance with Government Regulations.
* Government regulation regarding health, safety, environmental protection, and equal opportunity.
* Compliance with new laws and policies.
- Protection against Terrorist Attacks.
* Cyclone Gonu.
* National Data Center.
- Ethical Issues.
* Ethical issues are very important because they can damage an organization's image and destroy its employees morale.
* The use of IT raises many ethical issues, raning from monitoring e-mail to invading the privacy of millions of customers whose data are stored in private and public databases.
----------------------------------------------------------------------------------------------------------
Organizational Responses:
Organizations are responding to the various pressures just discussed by implementing IT such as strategic systems, customer focus, make-to-order and mass customization, and e-business.
1) Strategic Systems.
* Increase market share and/or profits.
* Better negotiate with suppliers.
* Prevent competitiors from entering their markets.
Example: P&G.
2) Customer Focus.
* Retaining current customers and attracting new onces.
Example: Amazon.com
3) Make-to-Order and Mass Customization.
* Producing customized products and services.
Example: Reebok, Dell.
4) E-Business and E-Commerce.
* Buying and selling products and services electronically.
* E-business is a broader concept than e-commerce.
* B2C, C2C, B2B.
----------------------------------------------------------------------------------------------------------
4) Competitive Advantage and Strategic Information Systems:
Business Process: is an ongoing collection of related activities that produce a product or a service of value to the organization, its business partners,and/or its customers.
- One functional area.
- Cross-functional.
Managing accounts payable, managing account receivable, managing post-sale customer follow-up, managing bills of materials, managing manufacturing change orders, applying disability policies, hiring employees.
-----------------------------------------------------------------------------------
2) Business Process Reengineering and Business Process Management:
Business Process Excellence:
- Customer satisfaction.
- Cost reduction.
- Quality.
- Differentiation.
- Cycle and fulfillment.
- Productivity.
Business Precess Reengineering (BPR): a radical redesign of a business process that improves its efficiency and effectiveness, often by beginning with a "clean sheet".
- Because BPR proved difficult to implement, organizations have tuned to business process management.
Business Process Management (BPM): is a management technique that include methods and tools to support the design, analysis, implementation, management, and optimization of business processes.
-------------------------------------------------------------------------
3) Business Pressures, Organizational Responese, and Information Technology Support:
Business Pressures:
The business environment is the combination of social, legal, economic, physical, and political factors in which businesses conduct their operations.
- Significant changes in any of these factor are likely to create business pressure on the organization.
There are three major types of business pressures:
1) Market Pressures.
2) Techonlogy Pressure.
3) Societal Pressure.
-----------------------------------------------------
1) Market Pressures:
Are generated by global economy, intense competition, the changing nature of the workforce, and powerful customers.
- Globalization: is the integration and interdependence of economic, social, cultural, and ecological facets of life, made possible by rapid advances in information technology.
Friedman identified 3 eras of globalzation:
1) Globalization 1.0 [1492 to 1800]: the force behind globalization was how much muscle, horse power, wind power, or stream power a country could replay.
2) Globalization 2.0 [1800 to 2000]: the force behind globalization was the emergence of multinational companies; which the companies that their headquarters in one country but operate in several countries.
3) Globalization 3.0 [around the year 2000]: globalization has been driven by the convergence of ten forces that Friedman calls "flatteners".These flatteners enable individuals to connect, compute, communicate, collaborate, and compete everyone and anywhere, any time and all the time.
Examples of globalization:
* Regional agreements such as the North American Free Trade Agreement (NAFTA).
* Cost of labor.
* Outsourcing/ offshoring.
* BRIC.
- The Changing Nature of the Workforce.
* The workforce is becoming more diversified.
* Increasing numbers of women, single parents, minorities, and persons with disabilities are now employed in all types of positions.
* IT is enabling people to work from home (Teleworking).
- Powerful Customers.
* Consumer sophistication and expectations increase as customers become more knowledgeable about products and services they acquire.
* Customers use the internet to find detailed information about products and services, to compare prices and to purchase items at electronic auctions.
* Customer intimacy is an important component of customer relationship management (CRM), an organization-wide effort toward maximizing the customer experiance.
-------------------------------------------------------------------------------------------------------
2) Technology Pressures:
consists of those pressure related to technology.
- Technological Innovation and Obsolescence.
* New and improved technologies rapidly create or support substitutes for products, alternative services options, and superb quality.2) Business Process Reengineering and Business Process Management:
Business Process Excellence:
- Customer satisfaction.
- Cost reduction.
- Quality.
- Differentiation.
- Cycle and fulfillment.
- Productivity.
Business Precess Reengineering (BPR): a radical redesign of a business process that improves its efficiency and effectiveness, often by beginning with a "clean sheet".
- Because BPR proved difficult to implement, organizations have tuned to business process management.
Business Process Management (BPM): is a management technique that include methods and tools to support the design, analysis, implementation, management, and optimization of business processes.
-------------------------------------------------------------------------
3) Business Pressures, Organizational Responese, and Information Technology Support:
Business Pressures:
The business environment is the combination of social, legal, economic, physical, and political factors in which businesses conduct their operations.
- Significant changes in any of these factor are likely to create business pressure on the organization.
There are three major types of business pressures:
1) Market Pressures.
2) Techonlogy Pressure.
3) Societal Pressure.
-----------------------------------------------------
1) Market Pressures:
Are generated by global economy, intense competition, the changing nature of the workforce, and powerful customers.
- Globalization: is the integration and interdependence of economic, social, cultural, and ecological facets of life, made possible by rapid advances in information technology.
Friedman identified 3 eras of globalzation:
1) Globalization 1.0 [1492 to 1800]: the force behind globalization was how much muscle, horse power, wind power, or stream power a country could replay.
2) Globalization 2.0 [1800 to 2000]: the force behind globalization was the emergence of multinational companies; which the companies that their headquarters in one country but operate in several countries.
3) Globalization 3.0 [around the year 2000]: globalization has been driven by the convergence of ten forces that Friedman calls "flatteners".These flatteners enable individuals to connect, compute, communicate, collaborate, and compete everyone and anywhere, any time and all the time.
Examples of globalization:
* Regional agreements such as the North American Free Trade Agreement (NAFTA).
* Cost of labor.
* Outsourcing/ offshoring.
* BRIC.
- The Changing Nature of the Workforce.
* The workforce is becoming more diversified.
* Increasing numbers of women, single parents, minorities, and persons with disabilities are now employed in all types of positions.
* IT is enabling people to work from home (Teleworking).
- Powerful Customers.
* Consumer sophistication and expectations increase as customers become more knowledgeable about products and services they acquire.
* Customers use the internet to find detailed information about products and services, to compare prices and to purchase items at electronic auctions.
* Customer intimacy is an important component of customer relationship management (CRM), an organization-wide effort toward maximizing the customer experiance.
-------------------------------------------------------------------------------------------------------
2) Technology Pressures:
consists of those pressure related to technology.
- Technological Innovation and Obsolescence.
* Hard to remain techologically current.
- Information Overload.
* The Internet and other telecommunications networks are bringing a flood of information to managers. To make decisions effectively and efficiently, managers must be able to access, navigate, and utilize these vast stores of data, information, and knowledge.
3) Societal/Political/Legal Pressures:
Includes social responsibility, government regulation/deregulation, spending for social programs, spending to protect against terrorism, and ethics.
- Social Responsibility.
* Social issues that affect businesses and individuals range from the state of the physical environment, to company and individual philanthropy, to education.
* Some corporations and individuals are willing to spend time and/or money to address various social problems. These efforts are known as organizational social responsibility or individual social resposibility.
Examples:
Green IT, Digital Divide.
 |
| Green IT |
- Compliance with Government Regulations.
* Government regulation regarding health, safety, environmental protection, and equal opportunity.
* Compliance with new laws and policies.
- Protection against Terrorist Attacks.
* Cyclone Gonu.
* National Data Center.
- Ethical Issues.
* Ethical issues are very important because they can damage an organization's image and destroy its employees morale.
* The use of IT raises many ethical issues, raning from monitoring e-mail to invading the privacy of millions of customers whose data are stored in private and public databases.
----------------------------------------------------------------------------------------------------------
Organizational Responses:
Organizations are responding to the various pressures just discussed by implementing IT such as strategic systems, customer focus, make-to-order and mass customization, and e-business.
1) Strategic Systems.
* Increase market share and/or profits.
* Better negotiate with suppliers.
* Prevent competitiors from entering their markets.
Example: P&G.
2) Customer Focus.
* Retaining current customers and attracting new onces.
Example: Amazon.com
3) Make-to-Order and Mass Customization.
* Producing customized products and services.
Example: Reebok, Dell.
4) E-Business and E-Commerce.
* Buying and selling products and services electronically.
* E-business is a broader concept than e-commerce.
* B2C, C2C, B2B.
----------------------------------------------------------------------------------------------------------
4) Competitive Advantage and Strategic Information Systems:
* Competitive Strategy:
An advantage over competitors in some measure such as cost, quality, or speed, leads to control of a market and to larger than average profits.
- Strategies for Competitive Advantage:
1- Cost leadership strategy- produce products and/or services at the lowest cost in the industry.
Example: Using computer - aided manufacturing systems to lower production costs.
2- Differentiation strategy- offer different products, services, or product features than other competitors.
Example: Providing fast and complete customer support services via the Internet.
3- Innovation strategy- introduce new products and services, put new features in existing products and services, or develop new ways to produce them.
Example: introduce unique product/service that include IS compo net.
4- Operational effectiveness strategy- improve the manner in which internal business processes are executed so that a firm performs similar activities better than its rivals.
5- Customer- orientation strategy- concentrate on making customers happy.
---------------------------------------------------
* Strategic Information Systems (SISs):
Provide a competitive advantage by helping an organization implement its strategic goals and to increase its performance and productivity.
--------------------------------------------------------------------------------
Porter's Competitive Forces Model:
Porter's five competitive forces:
1) The threat of entry of new competitors.
- is high when it is easy to enter a market and low when significant barriers to entry exist.
- A barrier to entry is a product or service feature that customers expect from organization in a certain industry.
- For most firms, the web increase the threat that new competitors will enter a market.
2) The bargaining power of suppliers.
- Supplier power is high when buyers have few choices and low when buyers have many choices.
- The internet impact on supplier is mixed. Buyers can find alternative suppliers and compare prices more easily, reducing power of suppliers.
- On the other hand, as companies use the Internet to integrate their supply chains, suppliers can lock in customers.
3) The bargaining power of buyers.
- Buyers power is high when buyers have many choices from whom to buy and low when buyers have few choices.
- Internet increase buyers' access to information, increasing buyer power.
- Internet reduces switching costs, which are the costs, in money and time, to buy elsewhere. This also increase buyer power.
4) The threat of substitute products or services.
- If there are many alternatives to an organization's products or services, then the threat of substitutes is high. If there are few alternatives, then the threat is low.
- Information - based industries are in the greatest danger from this threat (e.g. music, books, software). The internet can convey digital information quickly and efficiently.
5) The rivalry among existing firms in the industry.
- The threat from rivalry is high when there is intense competition among many firms in an industry. The threat is low when the competition is among fewer firms and is not as intense.
--------------------------------------------------------------------------------
Porter's Value Chain Model:
Primary activities: are those business activities that relate to the production and distribution of the firm's products and services (core business), thus creating value for which customers are willing to pay.
Support activities: are those activities that do not add value directly to the firm's products or services, but support the primary activities.
- Support activities include the firm's infrastructure(accounting ,finance, management), human resources management, product and technology development (R & D), and procurement.
----------------------------------------------------------------------------------
5) Business - Information Technology Alignment:
Business- Information technology alignment: is the tight integration of the IT function with the strategy, mission, and goals of the organization.
There are six characteristics of excellent alignment:
1) Organization view IT as an engine of innovation.
2) Organization view their internal and external customers and their customer service function as supremely important.
3) Organization rotate business and IT professionals across department and job functions.
4) Organizations provide overarching goals that are completely clear to each IT and Business employee.
5) Organizations ensure that IT employees understand how the company makes (or loses) money.
6) Organizations create a vibrant and inclusive company culture.
---------------------------------------
Why business - IT Alignment Fails?
* Business managers and IT managers have different objectives.
* The business and IT department are ignorant of the other group's expertise.
* A lack of communication.
An advantage over competitors in some measure such as cost, quality, or speed, leads to control of a market and to larger than average profits.
- Strategies for Competitive Advantage:
1- Cost leadership strategy- produce products and/or services at the lowest cost in the industry.
Example: Using computer - aided manufacturing systems to lower production costs.
2- Differentiation strategy- offer different products, services, or product features than other competitors.
Example: Providing fast and complete customer support services via the Internet.
3- Innovation strategy- introduce new products and services, put new features in existing products and services, or develop new ways to produce them.
Example: introduce unique product/service that include IS compo net.
4- Operational effectiveness strategy- improve the manner in which internal business processes are executed so that a firm performs similar activities better than its rivals.
5- Customer- orientation strategy- concentrate on making customers happy.
* Strategic Information Systems (SISs):
Provide a competitive advantage by helping an organization implement its strategic goals and to increase its performance and productivity.
--------------------------------------------------------------------------------
Porter's Competitive Forces Model:
Porter's five competitive forces:
1) The threat of entry of new competitors.
- is high when it is easy to enter a market and low when significant barriers to entry exist.
- A barrier to entry is a product or service feature that customers expect from organization in a certain industry.
- For most firms, the web increase the threat that new competitors will enter a market.
2) The bargaining power of suppliers.
- Supplier power is high when buyers have few choices and low when buyers have many choices.
- The internet impact on supplier is mixed. Buyers can find alternative suppliers and compare prices more easily, reducing power of suppliers.
- On the other hand, as companies use the Internet to integrate their supply chains, suppliers can lock in customers.
3) The bargaining power of buyers.
- Buyers power is high when buyers have many choices from whom to buy and low when buyers have few choices.
- Internet increase buyers' access to information, increasing buyer power.
- Internet reduces switching costs, which are the costs, in money and time, to buy elsewhere. This also increase buyer power.
4) The threat of substitute products or services.
- If there are many alternatives to an organization's products or services, then the threat of substitutes is high. If there are few alternatives, then the threat is low.
- Information - based industries are in the greatest danger from this threat (e.g. music, books, software). The internet can convey digital information quickly and efficiently.
5) The rivalry among existing firms in the industry.
- The threat from rivalry is high when there is intense competition among many firms in an industry. The threat is low when the competition is among fewer firms and is not as intense.
Porter's Value Chain Model:
Primary activities: are those business activities that relate to the production and distribution of the firm's products and services (core business), thus creating value for which customers are willing to pay.
Support activities: are those activities that do not add value directly to the firm's products or services, but support the primary activities.
- Support activities include the firm's infrastructure(accounting ,finance, management), human resources management, product and technology development (R & D), and procurement.
5) Business - Information Technology Alignment:
Business- Information technology alignment: is the tight integration of the IT function with the strategy, mission, and goals of the organization.
There are six characteristics of excellent alignment:
1) Organization view IT as an engine of innovation.
2) Organization view their internal and external customers and their customer service function as supremely important.
3) Organization rotate business and IT professionals across department and job functions.
4) Organizations provide overarching goals that are completely clear to each IT and Business employee.
5) Organizations ensure that IT employees understand how the company makes (or loses) money.
6) Organizations create a vibrant and inclusive company culture.
---------------------------------------
Why business - IT Alignment Fails?
* Business managers and IT managers have different objectives.
* The business and IT department are ignorant of the other group's expertise.
* A lack of communication.
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