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Information Technology for Strategic, Competitive Advantage: Technologies, Management and the Real World Virginia Franke Kleist, Ph.D. October 28, 2003 Assistant Professor Division of MIS/Management Welcome to the Technology Part of the Program Purpose of this class is to cover three aspects of information technology: 1. TECHNOLOGIES: Current and new trends in information technologies 2. MANAGEMENT: How can IT be used for strategic, competitive advantage? 3. REAL WORLD: Real world case of electronic commerce applications 2 What about your firm? How are you using information technology (IT) today in your firms and businesses? How successful has this been for your firm? Do you have problems that are still unresolved with Information Technology? Can IT give competitive advantage, anyway? How can one identify which technologies will best give strategic advantage? 3 Instructor Background Educational background Professional background Research focus: – Biometrics Industry Cost/Benefit – Biometrics Industry Performance – Metrics in Technology: The ROI – Electronic Markets – Network Security infrastructures 4 What are the latest technologies of interest? TCP/IP and the Internet CPU’s and hardware Software and the open source code movement Client/server computing Storage area networks Interactive multimedia Developments in Electronic Commerce Databases and Datamining Handhelds, M-commerce Knowledge Management tools and Artificial Intelligence 5 Technologies: TCP/IP and the Internet Codes, bits and bytes Analog vs. Digital transmission Packet switching and circuit switching The IP address, TCP/IP layers Domain name resolution The world is becoming digital Physical vs. Logical connectivity 6 Technologies: CPU’s and Software Hardware components of a computer system Buses, CPUs, MHz, RAM, Gigs and cache Bits and Bytes, storage Moore’s Law and price points per MIPs Mainframes, RISC computers, Parallel processing Open source movement in operating systems Enterprise Resource Planning software Object oriented programming 7 Technologies: Client Server Computing Distributed processing vs. centralized processing Network computing Servers Bridges and routers, gateways Network management Ethernet and Token Ring 8 Technologies: Storage Area Networks Mirrors and provides redundancy Fibre channel connectivity EMC, Compaq, HP Fits with trend to pushing density of corporate data further out into the “cloud” network 9 Technologies: Interactive Multimedia Groupware Voice over IP Streaming technology Flash, Maya, sophistication of Electronic Commerce pages MP3 Peer to peer sharing of applications Seeing corporate uses in training applications 10 Technologies: Electronic Commerce The client/server/database three tier model HTML, JavaScript XML vs. EDI ASP and ActiveX, PHP, CGI Ultradev, Flash, DW and development tools Security and encryption issues Intranets and Extranets 11 Technologies: Databases, Datamining Data is the company’s strategic asset (PWC) Data warehouses, multidimensional databases and data marts OLAP vs. OLTP processing Informix, Oracle and Red Brick The database management system 12 Technologies: Handhelds and M- Commerce How does a cell phone work? WAP technology Palm and Visor The Win CE platform Linux in the small devices EPOC operating system What is M-commerce and what does it mean to me? 13 Technologies: Knowledge Management Tools and Artificial Intelligence Examples of Knowledge Management systems Expert systems: the earthenware dam Neural Networks Fuzzy logic Intelligent agents 14 Management: Information Systems Planning IS plan maps to the corporate strategic plan Variety of IS planning styles: CSF, Enterprise, other formal structures Plan itself: What are the components? Organizational change from systems: TQM, BPR, paradigm shifts or simple automation? 15 Management: the Systems Development Life Cycle Systems analysis Systems design Programming Testing Conversion Production mode and ongoing maintenance 16 Management: Implementation The RFP document Financial issues for IS planning The payback concerns Programming: the mythical man/month Construction issues testing and maintenance end users prototypes and pilots outsourcing 17 Management: Security Issues System quality, reliability, accuracy Data security controls The firewall and internet issues (hackers, viruses, trojan horses, denial of service attacks) Encryption, DES, SSL, SET Biometrics 18 Strategic Advantage: IT at work IT and changes in the organization of business: flatter, leaner, teams, JIT, global Datamining and Walmart E-commerce and the supply chain at Dell M-commerce and Progressive Auto Internet and Egghead American Airlines, Baxter, Citibank 19 Strategic Advantage: How does one come up with this idea, anyway? (Laudon and Laudon, 2000) Porter’s Value Chain: primary and support activities The competitive forces model: Threats from new market entrants, suppliers, substitute products and customers Core competencies Network economics 20 Some Problems from IT for Competitive Advantage The productivity paradox Tangible vs. intangible benefits from IT Future cash flows analysis Unique vs. staying even with competition Value from simple automation projects Value from highly risky, but strategic IT projects Risk vs. return issues 21 How can your firm benefit from IT? In supply chain management through inventory management In the customer interface via ecommerce In logistics through GPS/GIS In client management through groupware In marketing through datamining In internal management through Intranets 22 Real World: The Dell Case How did Dell achieve success? What IT technologies did Dell use? How does Dell use ecommerce successfully? What are the ways that Dell uses IT for strategic, competitive advantage? What is Dell’s business model? Will Dell be able to keep this success going, given the recent troubles? 23