1 / 16

Creating Business Advantage with IT

Creating Business Advantage with IT. Vision and business models . Demonstration of the telephone in the late 1800s While it is a wonderful invention, businessmen will never use it. Rutherford B. Hayes 19 th President of the USA. Technological innovations. Internet and broadband networks

roscoe
Download Presentation

Creating Business Advantage with IT

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. Creating Business Advantage with IT

  2. Vision and business models Demonstration of the telephone in the late 1800s While it is a wonderful invention, businessmen will never use it. Rutherford B. Hayes 19th President of the USA

  3. Technological innovations • Internet and broadband networks • WWW and high performance servers • Flexible, standardized, powerful platform for creating and storing information in all its forms • URL Uniform Resource locator and Browser • Common approach for identifying and locating information anywhere on the internet • Multimedia digital devices • Portable internet access devices that provide internet access to voice, television and information • Laptops, palm pilots, cell phones, … • Wireless networks and protocols • JAVA, XML and other OO languages and database technologies

  4. Economies • Economy of scale • When a participant or network of participants is able to leverage capabilities and infrastructure to increase its revenues and profitability within a single product line or market. • Economy of scope • When a participant or network of participants is able to leverage capabilities and infrastructure to launch new product lines or enter new markets.

  5. Porter’s Value Chain(well suited for analyzing product/manufacturing firms)

  6. Value Chain Applied to AirlinesIdentifies uses of IT for each element of the value chain

  7. Market Roles Corporate Information Strategy and Management Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan , . Burr Ridge, IL: Chapter 1 Figure 1 - 4 McGraw - Hill/Irwin, 2002.

  8. Industrial vs. Network Economy

  9. Forces Influencing Industry and Competitive Advantage Corporate Information Strategy and Management Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarland , . Burr Ridge, IL: Chapter 1 Figure 1 - 5 McGraw - Hill/Irwin, 2002.

  10. Impact of IT: questions 1 of 5. • Can IT be used to reengineer core value acti-vities and change the basis of competition? • Uses IT not just to automate but also to transform and to inform • Benefits of conducting business online • AHSC American Hospital Supply Corporation • American Airlines • Internet to reengineer value chain and the basis of competition

  11. Impact of IT: questions 2 of 5. • Can IT change the nature of relationships and the balance of power among buyers and suppliers? • AHSC • Customers recognized the value of a multivendor marketplace but were unwilling to put up with the problems of using multiple different supplier systems • AHSC became channel manager • Electronic market places: Oracle, CommerceOne, Ariba, …

  12. Impact of IT: questions 3 of 5. • Can IT build or reduce barriers to entry? • Consultancy companies: knowledge technology • Technology based advantage: AHSC, AA, … • The internet can decrease the impact: low cost, ease of penetration • Knowledge and community barriers are more sustainable • Proprietary infrastructure and channels to market are at a particular disadvantage relative to new entrants when they attempt to create second-order barriers to entry (Amazon.com as new entrant with transaction, information and community infrastructures)

  13. Impact of IT: questions 4 of 5. • Can IT increase or decrease switching costs? • Switching to another system might become difficult and costly in proprietary systems • With the internet switching costs are substantially reduced difficult to achieve customer loyalty • Intuit increased the switching cost • Provided easy to use inexpensive financial service software • Won users via ease-of-use • Hooked via simple ways of storing the information that should be reentered if the customer switches to a different product

  14. Impact of IT: questions 5 of 5. • Can IT add value to existing products and services or create new ones? • Grocery stores are also in the business of selling information (client profiles) • Information content of existing products (cars) • Digital distribution of books, music, and video will dramatically alter existing publishing and entertainment industries. • Manure and fertilizer company provides information.

  15. Summary • Exploiting the opportunities afforded by IT, while avoiding the pitfalls requires vision, sound execution, and the ability to respond quickly • Risks increase when executives • Have poor understanding of sources of competitive dynamics • Fail to understand the long-term implications of a strategic system (their own or a competitor) • Launch a system that brings on litigation or regulation to the detriment of the innovator • Fail to account for the time, effort, and cost required to ensure user adoption, assimilation and effective utilization

  16. Summary (cont) • Investments should be examined on sustainable advantage • Movement of IT-personnel results in rapid proliferation of strategic ideas • Questions • What business are we in? Who are our customers, suppliers, partners? • Who are our biggest competitors, today and in the future? • How effective are our core operating activities and processes? • Are there big changes looming at the horizon and what can we do? • Will changes in related industries influence our industry? • Did we identified the strategic risks today and in the future? • Have we appropriately prioritized our business investments?

More Related