1 / 41

Chapter 2 Strategic Uses of Information Systems

Chapter 2 Strategic Uses of Information Systems. Learning Objectives. Explain what business strategy and strategic moves are Illustrate how information systems can give businesses a competitive advantage Identify basic initiatives for gaining a competitive advantage.

trory
Télécharger la présentation

Chapter 2 Strategic Uses of Information Systems

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 2Strategic Uses ofInformation Systems Management Information Systems, 4th Edition

  2. Learning Objectives • Explain what business strategy and strategic moves are • Illustrate how information systems can give businesses a competitive advantage • Identify basic initiatives for gaining a competitive advantage Management Information Systems, 4th Edition

  3. Learning Objectives (Cont.) • Explain what makes an information system a strategic information system • Identify fundamental requirements for developing strategic information systems • Explain circumstances and initiatives that make one SIS succeed and another fail Management Information Systems, 4th Edition

  4. Strategy and Strategic Moves • Strategy • A plan designed to help an organization outperform its competitors • Strategic Information Systems • Information systems that help seize opportunities • Can be developed from scratch, or they can evolve from existing ISs Management Information Systems, 4th Edition

  5. Strategy and Strategic Moves (Cont.) • Strategic advantage: • Using a strategy to maximize strength • Competitive advantage: • The result of the use of a strategic advantage Management Information Systems, 4th Edition

  6. Achieving a Competitive Advantage • Increase profits through increased market share • Innovation results in advantage • Strategies that no one has tried before • Example: Dell using the Web to take customer orders Management Information Systems, 4th Edition

  7. Achieving a Competitive Advantage (Cont.) Management Information Systems, 4th Edition

  8. Achieving a Competitive Advantage (Cont.) Management Information Systems, 4th Edition

  9. Initiative #1: Reduce Costs • Lower costs results in lower price • Bigger Market Share • Implement automation to become more productive • The Web has made this possible for many Management Information Systems, 4th Edition

  10. Initiative #2: Raise Barriers to Market Entrants • Patenting • High expense of entering industry • State Street, Inc. (Pension fund management business) Management Information Systems, 4th Edition

  11. Initiative #3: Establish High Switching Costs • Explicit Switching Costs • Fixed and nonrecurring • Implicit Switching Costs • Indirect costs in time and money of adjusting to a new product Management Information Systems, 4th Edition

  12. Initiative #4: Create New Products or Services • Lasts only until competition offers an identical or similar product or service for a comparable or lower price • First Mover: Creates assets • Brand Name • Better Technology • Delivery Methods • Critical Mass: body of clients that attracts other clients Management Information Systems, 4th Edition

  13. Initiative #5: Differentiate Products or Services • Product differentiation • Brand recognition • Examples of brand name success • Levi’s jeans • Chanel perfumes • Gap clothes Management Information Systems, 4th Edition

  14. Initiative #6: Enhance Products or Services • Examples • Auto manufacturers enticing customers with a longer warranty • Real estate agents providing useful financing information to potential buyers • Charles Schwab moving stock trading services on-line before Merrill Lynch Management Information Systems, 4th Edition

  15. Initiative #7: Establish Alliances • Combined service may attract customers • Lower cost • Convenience • Examples • Travel industry • HP and FedEx Management Information Systems, 4th Edition

  16. Establishing Alliances (Cont.) Management Information Systems, 4th Edition

  17. Initiative #8: Lock in Suppliers or Buyers • Bargaining Power • Purchase volume • Strengthen perception as a leader • Create a standard Management Information Systems, 4th Edition

  18. Strategic Information Systems (SIS) • An IS that helps achieve long-term competitive advantage • SIS embodies two types of ideas: • Potentially-winning business move • How to harness IT to implement that move • Two conditions for SIS: • Serve an organizational goal • Work with the managers of the other functional units Management Information Systems, 4th Edition

  19. Creating an SIS • Top management involvement • From initial consideration through development and implementation • Must be a part of the overall organizational strategic plan Management Information Systems, 4th Edition

  20. Steps for Considering a new SIS Management Information Systems, 4th Edition

  21. Steps to Take in an SIS Idea-Generated Meeting Management Information Systems, 4th Edition

  22. Re-engineering and Organizational Change • To implement an SIS and achieve a competitive advantage, organization must rethink entire operation • Goal of re-engineering • Achieve efficiency leaps of 100% or higher Management Information Systems, 4th Edition

  23. Competitive Advantage as Moving Target • SISs developed as strategic advantages quickly become standard business • Banking industry (ATMs and banking by phone) • Continuous search for new ways of utilizing information technology to their advantage • SABRE, American Airlines’ reservation system Management Information Systems, 4th Edition

  24. JetBlue: A Success Story • Gained competitive advantage where others failed • Proper technology and management methods • Reducing costs resulting in reduced pricing • Improving service Management Information Systems, 4th Edition

  25. JetBlue: A Success Story (Cont.) • Massive Automation • Automation of services with software • Combination reservation system and accounting system • Supports customer services and sales tracking Management Information Systems, 4th Edition

  26. JetBlue: A Success Story (Cont.) • Massive Automation, continued • Electronic tickets • No paper handling or expense • Encourages online ticket purchases • Avoids travel agents • Significant savings in cost Management Information Systems, 4th Edition

  27. JetBlue: A Success Story (Cont.) • Massive Automation, continued • Maintenance information system • Logs all airplane parts and time cycles • Reduces manual tracking costs • Flight planning software • Maximize seats occupied on a flight • Reduced planning costs Management Information Systems, 4th Edition

  28. JetBlue: A Success Story (Cont.) • Massive Automation, continued • Blue Performance • In-house software for tracking operational data • Updated on a flight by flight basis • Accessible by airline’s 2,800 employees • Managers are able to respond immediately to problems Management Information Systems, 4th Edition

  29. JetBlue: A Success Story (Cont.) • Massive Automation, continued • Wireless devices for employees • Report and respond to irregular events • Quick response • Events recorded for future analysis • Training records stored electronically • Easy to update • Efficient retrieval Management Information Systems, 4th Edition

  30. JetBlue: A Success Story (Cont.) • Away from Tradition • Decision to not use the hub and spoke routing method • Paperless Cockpits • Laptops for Pilots • Harnessing IT to maintain a strategic gap Management Information Systems, 4th Edition

  31. JetBlue: A Success Story (Cont.) • Enhanced Service • Available on all flights and all class tickets • Live TV through contract with DirecTV • Leather Seating • Excellent on-schedule arrivals and departures • Fewest mishandled bags • Rapid check-in time • Security upgrades Management Information Systems, 4th Edition

  32. JetBlue: A Success Story (Cont.) • Impressive Performance • Maintains excellent statistics • 7 cent cost per available seat-mile (CASM) • 78% of seats are filled • Late Mover Advantage • New Technology vs. legacy systems Management Information Systems, 4th Edition

  33. Ford on the Web: A Failure Story • The Ideas • Wingcast telematics • Technology in vehicles to enable Web access • Business to Business: Covisint • Joint venture with General Motors and DaimelerChrysler • Electronic market for parts suppliers • Vendor bidding for proposals from automakers Management Information Systems, 4th Edition

  34. Ford on the Web: A Failure Story (Cont.) • The Ideas (cont.) • Business to Consumer: FordDirect.com • Sell vehicles direct to consumers via the Web • Bypass dealerships • Provide service while saving dealer fees • ConsumerConnect • Special unit to build Web site and handle direct sales Management Information Systems, 4th Edition

  35. Ford on the Web: A Failure Story (Cont.) • Hitting the Wall • Wingcast: Failed • Buyers not interested • Product eliminated in June 2001 • Covisint: Successful • Now includes more automakers Management Information Systems, 4th Edition

  36. Ford on the Web: A Failure Story (Cont.) • Hitting the Wall • FordDirect.com: Failed • Not a result of faulty technology • Ford failed to consider state laws and dealership relationships • Dealership relationship was still needed for purchases not on the Web Management Information Systems, 4th Edition

  37. Ford on the Web: A Failure Story (Cont.) • The Retreat • ConsumerConnect disbanded • FordDirect.com used by dealerships now • Sells used cars • Price tag for failure: $1 billion • FordDirect.com today results in 10,000 sales transactions a month Management Information Systems, 4th Edition

  38. Success and Failure on the Web • Being first is not enough for success • Business ideas must be sound • An organization must carefully define what buyers want • Establishing a recognizable brand name is important but does not guarantee success; satisfying needs is more important Management Information Systems, 4th Edition

  39. The Bleeding Edge • Business owners must develop new features to keep the system on the leading edge • Adopting a new technology involves great risk • No experience from which to learn • No guarantee new technology will work or customers and employees will welcome it Management Information Systems, 4th Edition

  40. The Bleeding Edge (Cont.) • The bleeding edge: failure in an organization’s effort to be on the technological leading edge • Allow competitors to assume the risk • Risk losing initial rewards • Can quickly adopt and even improve pioneer organization’s successful technology Management Information Systems, 4th Edition

  41. Summary • Business strategy and strategic moves can give an organization an advantage • Basic initiatives for gaining a competitive advantage • Strategic information systems require fundamental elements • Circumstances and initiatives that make one SIS succeed and another fail Management Information Systems, 4th Edition

More Related