Download C03- Information Systems, Organizations, and Strategy

C3 Information Systems,
Organizations, and Strategy
• Understand organizations to build/use IS
• Use Porter’s model and IS for strategy
• Value chain and value web to identify opportunities
• IS to use synergies, core competencies, and
network-based strategies
• Challenges posed by IS
AT&T Vs. Verizon | Grameen Phone Vs. XXX?
Competitive Advantage Vs. Technology!
IS and the Org. influences each
other
Benefit from new technologies!
IT changes Org.
rights, responsibilities
who owns information
who has access to and can
update information
who makes decisions about
whom, what, when and how
Understanding Organizations
Features
Difference
• Routines and business
processes
• Organizational politics
• Organizational culture
• Organizational
environments
• Organizational structure
• Size and types
how they might be changed or
replaced by using IT to
achieve greater efficiency
– large, small firms
• Environments
– government, competitors,
customers, financial
institutions
• Organizational culture
– set of fundamental
assumptions about what
products organization
should produce
IS Impact
• Economic impacts
– Transaction costs, agency costs
• Organizational and behavioural impacts
– IT flattens organizations
• Post-industrial organizations
• Organizational resistance to change
• The Internet and organizations
– Implications for the design and understanding of
information systems
3-11
More and more effort supervising
and managing employees
IT Makes an Organization Flat!
as transaction costs decrease,
firm size shrink
Balance all 4!
Organizational
Resistance
• cultural
assumptions
• strains on
culture,
politics and
people
3-13
Internet changed IS
Impact Of The Internet On Competitive Forces And Industry Structure
Businesses are rapidly rebuilding some of their key
business processes based on Internet technology and
making this technology a key component of their IT
infrastructures.
IS for Competitive Advantage
Porter’s competitive forces model
Four Basic Competitive Strategies
Porter’s
Competitive
Forces
Model
Traditional competitors
New market entrants
Substitute products and services
Customers
Suppliers
Value chain model highlights specific activities in the business where
competitive strategies can best be applied.
3-19
The value web
• The value web is a
networked system
that can synchronize
the value chains of
business partners
within an industry to
respond rapidly to
changes in supply
and demand.
Develop industry-wide standards for
exchanging information or business
transactions electronically
Figure 3-13
3-25
IS for Competitive Advantage …
• Synergies
– Mergers!
• Enhancing core competencies
– P&Gs InnovationNet (a KMS)
• Network-based strategies
– Network Economics
• The social network effect!
– Virtual Company Model
• Hong Kong-based Li & Fung
– Business Ecosystems: Keystone and Niche Firms
3-26
The digital firm era requires a more dynamic view of the boundaries among
industries, firms, customers and suppliers with competition occurring among
industry sets in a business ecosystem. In the ecosystem model, multiple
industries work together to deliver value to the customer.IT plays an important
role in enabling a dense network of interactions among the participating firms.
Management Issues
• Sustaining Competitive Advantage
• Aligning IT With Business Objectives
• Management Checklist
– Details in the textbook
• Managing Strategic Transitions
IS and business strategy
Business
Firm
Industry
a single firm producing
a set of related products
and services
a collection of
businesses that make
up a single,
multidivisional firm
a collection of firms that
make up an industrial
environment or
ecosystem
Firm Level Strategy
• firm as collection of
businesses
• IT to improve each
business unit
• synergies
• core competencies
Industry Level Strategy
• firms together --> industry
• information partnerships:
eg Air Canada, CIBC
(Aeroplan)
?@#$%^&??
!@#$$#@@#!
IT resistance
• New technology puts strains on culture, politics
and people
• if IT change threatens commonly held -->
resistance
Figure 3-5
3-11
Implications For The Design And Understanding
Of Information Systems
• The environment in which the organization must function
• The structure of the organization: hierarchy,
specialization, routines, and business processes
• The organization’s culture and politics
• The type of organization and its style of leadership
• The principal interest groups affected by the system and
the attitudes of workers who will be using the system
• The kinds of tasks, decisions, and business processes
that the information system is designed to assist
Characteristics of IT
• They are flexible and provide many options for
handling data and evaluating information
• They are capable of supporting a variety of
management styles, skills, and knowledge
• They are sensitive to the organization’s
bureaucratic and political requirements
Keep in mind when designing systems: