what’s happening?! oracle to peoplesoft employees – stand by for your fedex delivery to your...
Post on 13-Jan-2016
219 Views
Preview:
TRANSCRIPT
What’s Happening?!What’s Happening?!
Oracle to PeopleSoft employees – stand by for your FedEx delivery to your home.
SBC is buying AT&T for $16 billion.
Procter and Gamble is buying Gillette for $57 billion.
P&G has 16 brands with $1 billion+ annual revenue.
Gillette has 5.
United pilots and flight attendants have ratified new contracts that include pay cuts. (Pilots – 11.8% -- $180 million, Flight attendants 9.5% --$131 million. Mechanics are balking at a 5% cut. The goal with six unions is $725 million reduction in operating costs.
Midterm Exam – Feb. 8, 2005Midterm Exam – Feb. 8, 2005
Must answer essay question 15 points Must answer essay question 20 points Answer one of two essay questions 20 points Answer three of four essay questions 45 points
Total 100 points
2 -- 20 point questions
4 – 15 point questions
Midterm Exam ClinicMidterm Exam Clinic
Wednesday, Feb. 2, 2005Wednesday, Feb. 2, 2005
4:00 to 5:00 PM4:00 to 5:00 PM
Baskin conference room 330Baskin conference room 330
Leslie ClarkLeslie Clark
Graniterock InternshipGraniterock InternshipWe are looking for someone with strong technical skills in software development using Visual Studio .NET. This person should have a passion for coding. The quote from the hiring manager was "I want that student that all the other people in the class go to for help on their coding projects". If you know any students who may be interested in an internship here at our Corporate Office in Watsonville working with the IT staff, please ask them to email me with a resume ASAP. We currently have an intern doing this work, but she will be leaving soon. Barbara Kimball Staffing Manager Human Resource Services (831) 768-2061 bkimball@Graniterock.com
Chapter 8 IntroductionChapter 8 Introduction
Evaluating Business Strategies
and
The Use of Information Systems:
The Strategic Option Generator
Where Are We?Where Are We?
Section I: The Business Environment -- Chapters 2 – 5Section I: The Business Environment -- Chapters 2 – 5
Section II: The Company Environment -- Chapters 6 – 7Section II: The Company Environment -- Chapters 6 – 7
Section III: The Use of Information Systems -- Chapters 8 – 12.Section III: The Use of Information Systems -- Chapters 8 – 12.
VisionStrategyTactics
Business Plan
• Competitive Options• Roles, Roles and Relationships• Redefine and/or Define• Telecommunications
as the Delivery Vehicle• Success Factor Profile
A Systematic Approach
Chapter ObjectivesChapter Objectives Identifying business strategies.
Relating the use of the Information Systems to gain a competitive advantage.
Strategic Option Generator
A model that can identify strategic opportunities
involving the use of information systems.
It will be used after the fact in our analysis term
papers to introduce Section III and should not get
into a large amount of detail.
A Systematic ApproachA Systematic Approach
VisionStrategyTactics
Business Plan
• Competitive Options• Roles, Roles and Relationships• Redefine and/or Define• Telecommunications
as the Delivery Vehicle• Success Factor Profile
• Competitive Options
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
MODE
DIRECTION
OFFENSIVE DEFENSIVE
USE PROVIDE
EXECUTION
STRATEGICADVANTAGE
STRATEGIC OPTION GENERATOR
Figure 8-1
TARGET
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
MODE
DIRECTION
OFFENSIVE DEFENSIVE
USE PROVIDE
EXECUTION
STRATEGICADVANTAGE
STRATEGIC OPTION GENERATOR
Figure 8-1
THRUST
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
MODE
DIRECTION
OFFENSIVE DEFENSIVE
USE PROVIDE
EXECUTION
STRATEGICADVANTAGE
STRATEGIC OPTION GENERATOR
Figure 8-1
MODE
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
MODE
DIRECTION
OFFENSIVE DEFENSIVE
USE PROVIDE
EXECUTION
STRATEGICADVANTAGE
STRATEGIC OPTION GENERATOR
Figure 8-1
DIRECTION
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
MODE
DIRECTION
OFFENSIVE DEFENSIVE
USE PROVIDE
EXECUTION
STRATEGICADVANTAGE
STRATEGIC OPTION GENERATOR
Figure 8-1
EXECUTION
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
MODE
DIRECTION
OFFENSIVE DEFENSIVE
USE PROVIDE
EXECUTION
STRATEGICADVANTAGE
STRATEGIC OPTION GENERATOR
Figure 8-1
Analysis of Federal Express
Customer
Differentiation Innovation Growth
Offensive
Use Provide
ConclusionsConclusions
The Strategic Option Generator is the first of the five The Strategic Option Generator is the first of the five factors to be used to do an analysis of the competitive use factors to be used to do an analysis of the competitive use of information systems within a company.of information systems within a company.
While it can be used to identify future opportunities, it will While it can be used to identify future opportunities, it will be used after the fact in Section III of our analysis term be used after the fact in Section III of our analysis term papers.papers.
It is necessary to understand it to use it properly.It is necessary to understand it to use it properly.
Chapter 8Chapter 8
Evaluating Business Strategies and the Use of
Information Systems: Strategic Option Generator
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
MODE
DIRECTION
OFFENSIVE DEFENSIVE
USE PROVIDE
EXECUTION
STRATEGICADVANTAGE
STRATEGIC OPTION GENERATOR
Figure 8-1
Biggest MistakeBiggest Mistake
Target, thrust and mode are fairly straight-forward so they don’t tend to cause problems for students.
Direction is a source of problems and confusion since the name of the element is not self-explanatory.
This element deals with whom the use of IS is intended.
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
MODE
DIRECTION
OFFENSIVE DEFENSIVE
USE PROVIDE
EXECUTION
STRATEGICADVANTAGE
Federal Express Analysis Using the Strategic Option Generator
Figure 8-2
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
MODE
DIRECTION
OFFENSIVE DEFENSIVE
USE PROVIDE
EXECUTION
STRATEGICADVANTAGE
UPS Analysis Using the Strategic Option Generator
Figure 8-3
Chapter 9Chapter 9
The Roles, Roles and Relationships Concept
Chapter 9Chapter 9
1. Roles, Roles, Relationship Concept and
Examples.
2. Triggers of Action.
3. Technology Transfer Through
Organizational Learning.
4. IS Organization as a Business within a
Business.
5. Outsourcing the management of IS.
IS as a Competitive Resource?IS as a Competitive Resource?
• Business competitiveness is a top priority.
• What about Information Systems?
Why are some companies successful
while others are frustrated with a lack
of results and benefits from the use of
information systems?
Success Can Be Elusive!Success Can Be Elusive!
Roles, Roles and RelationshipsRoles, Roles and Relationships
1. What organizational leadership is necessary to gain a competitive advantage through the use of information systems?
2. How does an organization determine the appropriate use of information systems to gain a competitive advantage on an on-going basis?
3. Does a specific event, activity or person tend to trigger the start of a program that emphasizes the competitive use of information systems?
Roles, Roles and RelationshipsRoles, Roles and Relationships
4. Can an organization sustain a competitive advantage that is built on an information system?
5. Is this a broad based approach or is the successful use of competitive information tied to a small number of people playing key roles?
6. Does outsourcing the management of information systems impact its possible use as a competitive resource?
1. Business Leadership?
2. Information Systems Leadership?
3. A Proven Information Systems Track
Record?
4. Business Stability?
5. Information Content of the Business?
6. IS Cost and/or Risk?
How Much is Based OnHow Much is Based On
Roles, Roles and Relationship ConceptRoles, Roles and Relationship Concept**********************
1. The role of information systems is focused on competitive priorities.
2. Senior management plays a major role in positioning and
prioritizing the competitive role of information systems.
3. There is an on-going working relationship between senior
management and the information systems organization to
sustain the successful use of information systems to compete.
1. Who Makes Competitive Strategy Decisions?
Two Important QuestionsTwo Important Questions
2. Who Makes Competitive Strategy Decisions
When the Process is Built on a Computer Base?
The primary role of the top executive
is to assure the long term viability
of the business.
Top Executive Job DescriptionTop Executive Job Description
The Role of the Senior ExecutiveThe Role of the Senior Executive
• Provide a long term vision for the future of the business.
• Recognize the value of information to the organization.
• Sponsor and participate in determining the role of information systems.
The Person that Runs the Business on a Day-To-Day Basis
• Communicate the importance of the information systems role.
• Provide funding, including R&D, to address the major requirements.
• Focus on results and benefits.
• Motivate to make things happen!
Role of Other Senior ManagementRole of Other Senior Management
Understand the role of information systems within
the organization.
Identify and specify requirement for new
information systems.
Justify and fund existing and new systems.
Sponsor their information systems on an on-going
basis.
Role of IS ExecutiveRole of IS Executive
Function as a member of the senior management team.
Provide an understanding of the realm of the possible, feasible, affordable and achievable with information systems.
Posture information systems as a service and support organization in both fact and perception.
Using IS to CompeteUsing IS to Compete
Senior Management
Information SystemsOrganization
Functional Management
Users
Figure 9-1
Leadership in two forms:
- Business Leadership
- IT Leadership
Roles, Roles and RelationshipsRoles, Roles and Relationships
To assure that the corporation's present as well as future demands for information, information processes, information systems and computer-based technologies are provided in such a manner that the daily conduct of the business will not be impacted and that the future business opportunities can be capitalized on and managed by the corporation.
Information Systems Organization Information Systems Organization Mission StatementMission Statement
The Reeducation of UPSThe Reeducation of UPS
• For decades UPS focused on managing physical
distribution.
• Today, new IT and relaxed regulations have made
logistics management the imperative.
• Information about a package is often as important as
the package itself.
• In one decade IT went from a limited factor to a
critical enabling resource.
Kent “Oz” Nelson ,CEO
An Essential Partnership
Using Information Systems to Using Information Systems to Gain a Competitive AdvantageGain a Competitive Advantage
Using Information Systems to CompeteUsing Information Systems to Compete
InformationSystems
Organization
Business Leadership
Senior Management
IT Leadership
Figure 9-2
1. A formal structure within the organization.
2. Integral to the way that the business is run.
RelationshipsRelationships
• Senior Management?
• Functional Management?
• Information Systems Management?
Who Should Be the Primary Who Should Be the Primary Initiator of Using Information Initiator of Using Information
Systems to Compete?Systems to Compete?
Using IS to CompeteUsing IS to CompetePrimary ResponsibilitiesPrimary Responsibilities
DirectionConceptualApproach
SpecificApproach
SeniorManagement
FunctionalManagement
I/SManagement
7
2
1
10
2
5
3
10
4
1
5
10Figure 9-4
Technology TransferTechnology TransferThrough Organizational Through Organizational
LearningLearning
There is a direct correlation between
the successful introduction of a new
information system within an organization
and the learning curve of the primary
users.
Information Technology
Computer-based Applications
Organization
Learning Curves
CompetitiveAdvantage
Action Initiators
Vision
Strategy
Tactics
ProcessImprovement
CrisisManagement
Executive Power
Business Leadership
Technology Leadership
Figure 9-5
Making It Happen!Making It Happen!
More on LeadershipMore on Leadership
1. Entrepreneur Founder
2. Corporate Managers
3. Corporate Caretakers
Bob TownsendUp the Organization
A Business
Competitors
Board of DirectorsS
uppl
iers
Custom
ersProducts/Services
Figure 9-6
InformationSystemsBusiness
Competitors
Steering CommitteeS
uppl
iers U
sers
Figure 9-7
Competitors
Steering CommitteeS
uppl
iers U
sers
InformationSystems
Organization
Opportunities Direction
I/T NeedsReal $s
ProductsPeople
Wants & NeedsJustificationReal $s?
Products& ServicesConstraintsCosts
Real Dollars
Needs and Priorities
Figure 9-8
OutsourcingHiring someone whose expertise can perform a business function or activity better, more cost effectively and/or in a more timely manner than can be achieved in-house.
Also enables the company to focus on its core competencies and those factors that mean the difference between success and failure.
Outsourcing
Outsourcing is a current, major focus of many business enterprises.
It continues to be a very hot topic.
OutsourcingOutsourcing
Logical?
Necessary?
Appropriate?
Cost-effective?
What?
With Whom?
Where?
How Long?
How Much Risk?
The Evolution of Outsourcing of Outsourcing
The concept of outsourcing is not new. For decades, companies have outsourced a number of functions such as cafeteria service, janitorial service, security guards, payroll, clerical support, manufacturing and distribution.
Outsourcing, by the old definition, was very specific, targeted, and often project based. The company might design a product, then outsource the manufacture of various components, subassemblies, even the finished product.
Things have evolved to where anything that is not a core business process is a candidate to outsource.
Outsourcing IS ManagementOutsourcing IS Management
• Strategically Significant?
• A Way to Save Money on a Short Term Basis?
• A Way to Avoid the Need to Manage Technical
People in an Environment that Keeps Changing?
UB example
Outsourcing Information Outsourcing Information Systems ManagementSystems Management
Is the outsourcing of the management of
information systems a contradiction of its
possible strategic significance?
Information System GoalsInformation System Goals
To help achieve organizational objectives by:
1. Supporting the decision making process.
2. Providing necessary information.
3. Providing a communications network.
4. Accommodating change within the
organization.
5. Maintaining an approach with a general
manager’s perspective.
IS Organization BusinessIS Organization Business
1. Designing Information Systems
2. Building Information Systems
3. Maintaining and Running Information
Systems
IT Outsourcing OptionsIT Outsourcing Options
• Software Development and/or Maintenance
• Application Service Provider
• Global Network Provider
• Network Management
• Management of Entire IS Function
• IT Training
• Consulting and Reengineering
India’s IT Outsourcing IndustryIndia’s IT Outsourcing Industry
GOOD STUFF, CHEAP
That's the reputation of India's IT outsourcing industry, and it's both a blessing and a curse.
The blessing is that India has finally been able to move onto the global stage by harnessing its greatest natural resource—people—and focusing on filling the world's need for IT skills and services.
India has grown its IT exports in less than a decade from $150 million to more than $4 billion—10.5% of India's total overseas sales. Its success is built on a solid record for developing IT talent as well as delivering top-notch legacy system maintenance and software applications.
India’s IT Outsourcing IndustryIndia’s IT Outsourcing Industry
The curse is that, despite what IT outsourcing has meant for India's economy, the country's top IT vendors have been typecast and they have major competition from Ireland, China, the Philippines and Israel.
India’s IT Outsourcing IndustryIndia’s IT Outsourcing IndustryNobody can beat their price!
Software programming in India costs roughly $35 per hour, as opposed to $200 in the United States—and their quality is world-class.
Of the 23 companies worldwide that have been awarded the US Software Engineering Institute's Capability Maturity Model Level 5 rating for fault-free software engineering processes (the equivalent of a perfect 10 in Olympic competition), 15 of those elite companies are Indian, among them Infosys, NIIT and Wipro.
China Versus India for OutsourcingChina Versus India for Outsourcing
India’s global advantage in IT rests on a tripartite
foundation:
1) Good IT education
2) Competitive wages
3) English language competency.
On the first two, China already competes. That leaves
English which has improved significantly in the past ten
years.
Most managers are used to managing internal resources and staff directly, and having total control over the decision-making process in their area.
There are some fundamental differences in managing an outsourced function.
US CorporationsUS Corporations
The Corporation Today
A company must ensure that internal
resources are dedicated to core competencies
and that the right outside relationships are
established, maintained, and nurtured.
Chief Resource Officer (CRO)
New Organizational Model is Creating a New Management Role.
Outsourcing has rapidly changed and evolved -- from vertical to virtual, tactical to strategic, cost-cutting to cutting-edge.
The stakes have increased, the risks and the rewards have soared, yet the manner in which outsourcing engagements are conducted and supervised has remained the same.
The CRO is a strategic position, charged not with managing corporate resources (time, money, and personnel), but with managing the complex series of relationships the modern corporation must have with its outside resources.
The CRO evaluates the need for resources in each function, finds the resources required outside the company, and implements and nurtures the relationship to the company's best advantage.
Chief Resource Officer
Chief Resource ManagerChief Resource Manager
Outsourcing deals fall apart because there was no one in a Chief Resource Manager position to manage and follow-up on objectives and contractual agreements.
A CRO-type position means taking a global, visionary, forward-thinking role in how to use resources and make them effective and efficient for an organization.
There is a definite need to manage change during the life of an outsourcing contract.
CRO Skill Profile
1. Experience managing different businesses
2. Experience managing costs
3. Project management
4. Contract negotiations
5. Political and cultural consciousness
6. Ability to think out of the box
7. Comfortable with change
Evaluation CriteriaEvaluation CriteriaIt is important in considering offshore outsourcing to
address the following with a potential vendor:
a) Do they have offices in US and in proximity to
them. Developing long term products require lot of
interaction with the vendor locally.
b) Get resumes of IT professionals who will work
on your project in foreign country and/or the US. If an
offshore vendor has experienced IT professionals working
for them for a good length of time, they have good retaining
and employee policies.
Evaluation CriteriaEvaluation Criteria
c) Understand the vendor process to develop and
deliver the project on a timely basis.
d) Get references on where they have successfully
completed similar projects.
e) Clearly understand the financial and property rights of
such a relationship.
f) Make sure that you have a way out if things do not go
well or according to schedule.
Benefits Realized from Outsourcing IS Management
0% 10% 20% 30% 40% 50% 60% 70%
Vendor Expertise
Increased Focus on CoreCompetencies
Improved Quality and Delivery
Cost Reduction
Balance Sheet Improvement
Actual Benefits
Expected Benefits
Deloitte & Touche Survey
A Well-Structured AllianceA Well-Structured Alliance
• Strategic Synergy. The two (or more) organizations
together can achieve a high level of benefits. • Clarity of purpose. The goals and benefits are explicit
and clear. • Growth opportunity. The relationship--and its benefits--
can be expanded. • Less risk. The relationship reduces the level of risk. • Excellent chemistry. There a good "fit" between the two
or more organizations. • Win-Win Proposition. Each party can benefit fairly from
the relationship.
Outsourcing Resources
The Outsourcing Institute
http://www.outsourcing.com
ASP Outsourcing Center
http://www.asp-outsourcing-center.com
Some Basic Conclusions Some Basic Conclusions
1. There are common factors among companies that have gained a competitive advantage through the use of information systems.
2. The difference between the good examples and the
less successful ones is getting bigger.
top related