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Agendas

Agendas. Recap IT and Strategy (Chapter 1). Recap. Carr’s three key assumptions about IT. Chapter 4: Making the Case for IT. Recap. Can IT create sustainable advantages? How? Examples. Using Business Models to Frame the Business Case for IT – “IT Business Value” Mindset.

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Agendas

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  1. Agendas Recap IT and Strategy (Chapter 1)

  2. Recap Carr’s three key assumptions about IT

  3. Chapter 4: Making the Case for IT

  4. Recap Can IT create sustainable advantages? How? Examples.

  5. Using Business Models to Frame the Business Case for IT – “IT Business Value” Mindset

  6. Chapter 4: Making the Case for IT IT Value Framework

  7. Chapter 4: Making the Case for IT – Infrastructure Leveraging Infrastructure • Infrastructure: IT operations and supporting enterprise processes • Outsourcing to specialized shared services providers (e.g., IBM Global Service and EDS) • Build best-in-class shared (with other divisions) service IT infrastructure: off-shoring its shared services (data centers, call center and even ERP) • Options Value of Investments in IT Infrastructure

  8. Enterprise Application Integration (EAI) Approach Legacy Application ERP Middleware Legacy Application SCM Database 2 Database 1

  9. Chapter 4: Making the Case for IT Cash Flows – MedCo A

  10. Chapter 4: Making the Case for IT Value of Leveraging Infrastructure and Exercising Options

  11. Course Road Map

  12. Chapter 1: IT and Strategy – Business Model • Business Model Defines how an enterprise interacts with its environment to define a unique strategy, attract the resources and build the capabilities to execute it, and in the process, create value for all stakeholders • Strategy dimension: Revenue model • Capability dimension: Cost model

  13. Chapter 1: IT and Strategy – Business Model Components of a Business Model

  14. Team Time (DIY) • How well do you understand the linkages among the elements of your organization’s business model – its strategy, the capabilities and infrastructure built to execute the strategy, and the value that can be created for all stakeholders (e.g., customers, suppliers, partners, employees, investors)? • Organization Choice • You team can pick your own organization. • Charles Schwab • IBM

  15. Chapter 1: Analyzing Value Profit Margin; Asset Efficiency; Leverage

  16. Chapter 1: Strategic Positions Strategic Positions • Market/Channel positioning • Product positioning • Value chain/Value network positioning • Boundary positioning Sustainable advantage

  17. Chapter 1: IT and Strategy – Strategic Positions Analyzing Competitive Forces and Strategic Positioning

  18. Chapter 1: Strategic Audits • Customer Audit • Competitor Audit Porter’s Five Forces Model • Product/Market Positioning Audit • Value Network Audit • Business Context Audit

  19. Chapter 1: IT and Strategy – Strategic Audits Porter’s Five Forces Model

  20. Chapter 1: Product/Market Positioning Audit Product/Market Positioning

  21. Product/Market Positioning (DIY) Rolls Royce, BMW, Honda, and Kia Broad Narrow Market Positioning Low Cost Value - added Product Positioning

  22. Chapter 1: IT and Strategy – IT Impact and Alignment Strategic Grid IT impact on business IT impact on strategy Support Factory Turnaround Strategic

  23. Chapter 1: IT Impact (Strategic Grid) Strategic Grid

  24. Strategic Grid Exercise (DIY) • Place the following organizations in the Strategic Grid: • Covenant Health System (RFID) • Southwest Airlines • Bank of America • Caterpillars

  25. Strategic Grid Exercise High Low Impact on Operations Low High Impact on Strategy

  26. Chapter 1: IT and Strategy – Opportunities and Risks • Crisis (危机) means both risks (危: wei) and opportunities (机: ji) in Chinese • Opportunities Can IT change the basis of competition? Why? Why not? Can IT change the nature of relationships and the balance of power among buyers and suppliers? Why? Why not? Can It build or reduce barriers to entry? Why? Why not? Can IT increase or decrease switching costs? Why? Why not? Can IT add value to existing products and services or create new ones? Why? Why not?

  27. Chapter 1: IT and Strategy – Opportunities and Risks • Risks Can emerging technologies disrupt current business models? Are we too early or too late to exploit an IT opportunity? Does IT lower entry barriers? Does IT trigger regulatory action? • Disruptive Technologies Examples

  28. Chapter 1: IT and Strategy - Disruptive Technologies Analyzing Disruptive Technologies

  29. Chapter 1: IT and Strategy – Windows of Opportunity Cash Flow vs. Windows of Opportunity Analyzing the Cash Flow Curve

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