MASTER IN MANAGEMENT PROGRAMPPM - School of Management

DEC 05 2009 - Week I

0CT 11 2008

Lecturer : JONATHAN SOFIAN LUSA

Reading materials :

Applegate : Introduction, chapter 1

INTRODUCTION CORPORATE INFORMATION SYSTEM &

UNDERSTANDING BUSINESS MODEL Session 01

Chapter Outline

Understanding Business Model

Introduction

3333

2222

1111

Terminology

TERMINOLOGY

INFORMATION SYSTEM

INFORMATION TECHNOLOGY

COMPUTER

HARDWARE SOFTWARE

OrganizationManagement

Human Resources

Processes

People and Culture

Standards and Procedures

Rules and Policy

Cost andInvestment

StrategicBusiness

Plan

MacroEnvironment

Outsourcing

Research andDevelopment Products and Services

Market andCustomers

PC Desktop Operating System

InternetIntranet

Extranet

Database

Applications

Notebook and Palmtop

Programming Languages

Printer

Modem MultimediaWorkgroupComputing

Data Mining

Decision SupportSystem

Digital NervousSystemISDN, VSAT

Infrastructure

ElectronicCommerce

ElectronicData

Interchange

INFORMATION SYSTEM

INFORMATION TECHNOLOGY

COMPUTER

HARDWARE SOFTWARE

OrganizationManagement

Human Resources

Processes

People and Culture

Standards and Procedures

Rules and Policy

Cost andInvestment

StrategicBusiness

Plan

MacroEnvironment

Outsourcing

Research andDevelopment Products and Services

Market andCustomers

PC Desktop Operating System

InternetIntranet

Extranet

Database

Applications

Notebook and Palmtop

Programming Languages

Printer

Modem MultimediaWorkgroupComputing

Data Mining

Decision SupportSystem

Digital NervousSystemISDN, VSAT

Infrastructure

ElectronicCommerce

ElectronicData

Interchange

Technology, Business, and Societal Evolution during the 20th

century

Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002. Chapter 1 Figure 1- 2

1900 1950 2000

AgriculturalEconomy

IndustrialEconomy

InformationEconomy

Typical mathematical formula:D=B 2 -4AC

Equivalent FORTRAN statement:D=B ** 2-4*A*C

Telegraph

Technology Evolution

Social and Business Evolution

Photos reprinted with permission from AT&T and IBM

OPPOSING VIEWS OF INFORMATION TECHNOLOGY FUNCTION

Business executives view of IT Apprehensive Technocracy New feature focus Little relevance to real

world

IT executives view of business

Short-sighted Lacking in vision Unwilling to exploit IT

VS

Business executives view of IT

1. IT = Cost Center2. IT does not understand

business3. IT does not demonstrates

leadership

IT executives view of business

1. Business lack close relationships

2. IT does not prioritize well3. Senior executives do not

support IT

Alternative Solutions

1. Budget2. Career crossover3. CIO-CEO4. Communicate/market/negotiate5. Education/cross-training6. Liaison7. Location8. Organization (Centralized,

Decentralized, Hybrid )

EVOLVING BUSINESS MODELS Components of business model :

STRATEGY / CONCEPT : describe the opportunity and strategy. VALUE : measures the benefits. CAPABILITIES : define resources needed to execute strategy.

INDUSTRIAL ECONOMY PARADIGM : Relatively clear and steady business model. Easy to define business model.

NETWORK ECONOMY PARADIGM : Somehow, it is quite difficult to define a clear business model. Business model should be explained in detail way.

BUSINESS MODEL

A business model defines how an enterprise interacts with the environment to define a unique strategy, attract the resources and the capabilities required to execute the strategy, and to create value for all stakeholders ( 8th edition, Lynda M Applegate)

A business model guides and assists management in the process of strategy formulation.

A successful business model aligns an organization with its environment well.

Evolving Business Models

What business are you in? What is you business model? Who are our customers? Our suppliers? ASP models

Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002. Chapter 2 Figure 2-1

1. New Products TV Cable Package (TV Cable+decoder+Parabola)

2. New Services Bank + Live Insurance + Hospital + Café + Tour + Hotel

3. Efficiency (cheaper, faster, better) ATM Bersama

4. Joint Operation ( services) Billing Telephone, PAM, PLN + Bank

5. Strategic Alliances ( generic + Long term) Insurance lokal + International, School, University

6. Customer Supplier Relationship (cheaper, faster, better) Textile industry

7. Outsourcing Call Center, Customer Service, Security

8. Image Building Joint Venture local + International

Collaboration to Compete (IOS)

OUR LEARNING POINTS FOR TODAY …

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THANK

YOU