l006 it strategy (2016)

IT STRATEGYMANAGING INFORMATION SYSTEMS IN ORGANIZATIONSPrepared by: Jan Wong Download at: www.slideshare.net/janwong

TECHNOLOGY or MANAGEMENT OF TECHNOLOGY?

WHICH IS MORE IMPORTANT?

TECHNOLOGY or MANAGEMENT OF TECHNOLOGY?

WHICH IS MORE IMPORTANT?

• IT is so accessible and open therefore businesses can’t complete on technology alone.

• Competitive advantage is derived from how technology is used instead.

• It’s not about investing in IT but where and how.

IT PLAYS A BIG ROLE IN BUSINESS INNOVATION

IT STRATEGY

IT PLAYS A BIG ROLE IN BUSINESS INNOVATION

IT STRATEGY

• Allows creation of applications that has strategic advantages.

• It’s a competitive weapon. • It supports strategic change. • Allows networking between partners. • Potential cost reduction. • Provides competitive business intelligence.

COMPETITIVE INTELLIGENCE

Many competitors monitor their competitors. But why?

The internet plays a vital role in supporting competitive intelligence.

COMPETITIVE INTELLIGENCE

Many businesses monitor their competitors. But why?

The internet plays a vital role in supporting competitive intelligence.

• Increases market knowledge of the business. • It drives business performance. • Raising the quality of strategic planning.

WAYS ON HOW TECH AFFECTS COMPETITION3

#1: CHANGES OF INDUSTRY STRUCTURE & ALTERS THE RULE OF COMPETITION

#1: CHANGES OF INDUSTRY STRUCTURE & ALTERS THE RULE OF COMPETITION• Increases the power of buyers. • Raises barrier of entry. • Influencing the threat of substitution.

#2: GIVES COMPETITIVE ADVANTAGE TO OUT-PERFORM RIVALS• Lowering cost. • Enhancing differentiation. • Changing competitive scope.

#3: SPAWNS NEW BUSINESSES, EVEN FROM OWN OPERATIONS• Creates derived demand for new products. • Creating new business from old ones. • New businesses become feasible with

technology.

CASE STUDY: PORT OF SINGAPOREProblem: As one of the world’s largest international port, faced increased global competition.Solution: Implementing an intelligent system (i.e. port management system).Results: Reduced cycle time to 4 hours (versus 16-20 hours in neighbouring ports) and 30 seconds in loading time (versus 4-5 minutes in neighbouring ports).

BUSINESSES HAVE TO CONSIDER SOME MAJOR ISSUES

Despite the notable benefits of Information Systems,

MAJOR ISSUES TO CONSIDERWHEN IMPLEMENTING AN INFORMATION SYSTEM

4

JUSTIFICATION• COST • BENEFITS CAN BE INTANGIBLE • NEGATIVE EXPERIENCES • INSUFFICIENT KNOWLEDGE • POSSIBLE INCONVENIENCE

1

RISKS & FAILURES• UNFORESEEN CHALLENGES • CHANGE OF TECHNOLOGY OR BUSINESS

PROCESSES • POTENTIAL LOOPHOLES OR SECURITY FLAWS • USER ADAPTATION CAN BE A CHALLENGE

2

FINDING APPROPRIATE I.S.• NOT AN EASY TASK ESPECIALLY IN LARGE

ORGANISATIONS • THERE IS NO ONE-SIZE-FITS-ALL • A BALANCE BETWEEN COST, BENEFITS, RISK

AND SCALABILITY • TIME CONSUMING PROCESS

3

MANAGERIAL ISSUES• REQUIRES MUCH PLANNING • RISKY AS IT INVOLVES THE ORGANISATION AS

A WHOLE • THE ABILITY TO SUSTAIN COMPETITIVE

ADVANTAGE • ETHICAL ISSUES THAT MAY LEAD TO LEGAL

DISPUTES • CONSIDERATION OF PRIVACY ISSUES

4

BUSINESSES HAVE TO FIND WAYS TO SUSTAIN I.S. ADVANTAGE

Understanding the major issues,

BUSINESSES HAVE TO FIND WAYS TO SUSTAIN I.S. ADVANTAGE

Understanding the major issues,

1. Create inward systems Not visible to competitors and has limited external access.

2. Create a system that is difficult to duplicateComprehensive, innovative, expensive and complex.

3. Combine system with structural changesIncludes business process, workflows, organisational structure.

GUEST SPEAKERTECHNOLOGY DIRECTOROPENMINDS MALAYSIA

PORTER’S 5 FORCES

A method to study your competitive landscape

To determine the severity or the intensity of competition.

• Threat of New Entry • Bargaining Power of Suppliers • Bargaining Power of Buyers • Threat of Substitution • Rivalry among Existing Firms

PORTER’S 5 FORCES

A method to study your competitive landscape

To determine the severity or the intensity of competition.

PORTER’S 5 FORCES

Substitutes (Existing companies that provides an alternative

product / service)

BuyersSuppliers

Potential Entrants (Existing companies that

have yet to enter the market)

Industry Competitors (Existing companies that competes in the exact

market space)

Bargaining Power of Suppliers

Bargaining Power of Buyers

Threats of New Entry

Rivalry Among Existing Firms

Threat of Substitute Products or Service

PORTER’S 5 FORCES

How can businesses overcome the competitive forces?

RESPONSE STRATEGIES TO THE 5 FORCES8

To reduce the intensity of competition and to increase the barrier of entry in the industry.


1. Cost Leadership Providing products / services at the lowest cost in the industry.

2. DifferentiationHave a unique selling proposition.

3. FocusSelecting a niche market; being the big fish in a small pond.

4. GrowthIncrease market share by acquiring more customers or by selling more products.



5. Improve Internal EfficiencyImprove employee and customer satisfaction / productivity.

6. AlliancesWorking with business partners for growth opportunities.

7. Customer Relationship Management (CRM)Emphasising on customer-oriented approaches.

8. InnovationAlways developing new products and services.


Questions, anyone?

l006 it strategy (2016)

Business