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IT and Business Advantage

IT and Business Advantage. > US$ 2 trillion spent on IT worldwide in 2007 Continued rapid spending growth Truly global spending distribution Ever increasing dependence on and impact of IT Search for opportunity Avoidance of operational risk

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IT and Business Advantage

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  1. IT and Business Advantage • > US$ 2 trillion spent on IT worldwide in 2007 • Continued rapid spending growth • Truly global spending distribution • Ever increasing dependence on and impact of IT • Search for opportunity • Avoidance of operational risk • Module 1 discusses how to leverage IT to create business advantage.

  2. Overview of Chapters • Chapter 1 • Introduces the organizing framework for the module • Defines a business model • Explores evaluation of business models • Chapters 2 • Examines the impact of IT on business models • Chapter 3 • Examines the impact of IT on organizational capabilities • Chapter 4 • Examines the impact of IT on business value

  3. The Five Competitive Forces that Shape Strategy • Michael Porter’s classical theory of strategy formulation • Original HBR article in 1979 • Simple, powerful description of five forces • Five forces analysis in practice • Five forces distinguished from contemporary “factors” (e.g. the internet) • What can we learn from this article? • How economic value is created and claimed by participants in a business network or industry • How IT might change the relative strength of each force

  4. Amazon.com: The Brink of Bankruptcy • Traces evolution of Amazon.com from founding in 1994 to 2001 • The case ends with the company poised at the “brink of bankruptcy” • What can we learn from this case? • Apply business model thinking • Demonstrate how IT can be used as a key driver of business value through its impact on strategy and organizational capabilities • Identify how to identify IT-enabled proprietary assets that can serve as a platform to exploit disruptive change

  5. Canyon Ranch • Founded in 1979 • Leader in health resort and spa industry • Facing increasing competitive pressure • Goal: leverage customer information to increase customer loyalty and cross-selling opportunities • Role of IT in building CRM capabilities • What can we learn from this case? • How to use information assets to drive business value • How IT can shape strategy and capabilities

  6. Boeing’s e-Enabled Advantage • Until late 1990s, largest commercial airplane company • Airline industry faces multiple challenges • Customers face increased cost pressure • Fragmented suppliers • Boeing drops to #2 behind government-subsidized rival, Airbus • Strategic goal: use IT to regain market dominance • More information-driven product and service offerings • Improved IT-enabled efficiency • What can we learn from this case? • How to use IT to differentiate a product and create new revenue streams by selling packaging and selling information and by creating new service offerings

  7. Royal DSM N.V.: IT enabling Business Transformation • Diversified Netherlands-based company • Coal mining, industrial chemicals, life science products, etc. • Strategic shift from highly cyclical businesses to high growth businesses • Rapid divestitures and acquisitions • Use IT to enable rapid growth and acquisition integration • Standardization of IT infrastructure and applications • IT function shifts from support to strategic • What can we learn from this case? • How to leverage IT in support of organizational flexibility and agility • How to use IT to build an organizational platform for business transformation

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