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  • A03StrategicFramewor..

    1. 1. Strategic Frameworks for Project Justification MIS 5113
    2. 2. Organization Goals <ul><li>Business </li></ul><ul><li>Vision </li></ul><ul><li>Mission </li></ul><ul><li>Objective </li></ul><ul><li>Tactic </li></ul><ul><li>= Business Justification </li></ul><ul><li>IS </li></ul><ul><li>Vision </li></ul><ul><li>Mission </li></ul><ul><li>Objective </li></ul><ul><li>Tactic </li></ul><ul><li>= Project Contribution </li></ul>
    3. 3. Roles <ul><li>Sponsor: funds and champions the project in the organization </li></ul><ul><li>Client: reviews the project milestones and decision points from the business point of vies </li></ul><ul><li>User: works with the system on a regular basis </li></ul>
    4. 4. Strategic Information Systems <ul><li>IS that help gain strategic advantage </li></ul><ul><li>Significantly change manner in which business supported by the system is done </li></ul><ul><li>Outwardly aimed at direct competition </li></ul><ul><li>Inwardly focus on enhancing the competitive position </li></ul><ul><li>Create strategic alliances </li></ul>
    5. 5. Firm Infrastructure (general management, accounting, finance, strategic planning) Human Resource Management (recruiting, training, development) Technology Development (R&D< product and process improvement) Procurement (purchasing of raw materials, machines, supplies) Support Activities Primary Activities Inbound Logistics (raw materials handling and warehous- ing) Operations (machine assembling, testing) Outbound Logistics (warehous- ing and distribution of finished product) Service (installation, repair, parts) Marketing and Sales (advertising, promotion, pricing, channel relations)
    6. 6. Value Chain Model <ul><li>Chain of basic activities that add to firm’s products or services </li></ul><ul><li>Primary activities </li></ul><ul><li>Secondary activities </li></ul>
    7. 7. Value Chain Primary Activities <ul><li>Inbound </li></ul><ul><li>Outbound </li></ul><ul><li>Operations </li></ul><ul><li>Marketing and Sales </li></ul><ul><li>After-Sale Services </li></ul>
    8. 8. Value Chain Support Activities <ul><li>Technology development </li></ul><ul><li>Procurement </li></ul><ul><li>Human Resources Management </li></ul><ul><li>Management Control </li></ul><ul><ul><li>accounting/finance </li></ul></ul><ul><ul><li>coordination </li></ul></ul><ul><ul><li>general management </li></ul></ul><ul><ul><li>central planning </li></ul></ul>
    9. 9. Competitive Forces <ul><li>Threat of entry of new competition </li></ul><ul><li>Bargaining power of suppliers </li></ul><ul><li>Bargaining power of buyers </li></ul><ul><li>Threat of substitute products or services </li></ul><ul><li>Rivalry among existing firms </li></ul>
    10. 10. Strategies for Competitive Forces <ul><li>Note - strength of force is determined by factors in industry </li></ul><ul><li>Gain a competitive edge </li></ul><ul><li>Build defenses against forces </li></ul><ul><li>Formulate actions to influence forces </li></ul>
    11. 11. Three Generic Strategies <ul><li>Cost leadership (lowest cost in industry) </li></ul><ul><li>Differentiation (of products/services/quality) </li></ul><ul><li>Focus (finding a specialized niche) </li></ul>
    12. 12. Be Low Cost Producer - IT strategic if it can: <ul><li>Help reduce production costs & clerical work </li></ul><ul><li>Reduce inventory, accounts receivable, etc. </li></ul><ul><li>Use facilities and materials better </li></ul><ul><li>Offer interorganizational efficiencies </li></ul>
    13. 13. Produce Unique Product - IT strategic if it can: <ul><li>Offer significant component of product </li></ul><ul><li>Offer key aspect of value chain </li></ul><ul><li>Permit product customization to meet customer’s unique needs </li></ul><ul><li>Provide higher/unique level of customer service/satisfaction </li></ul>
    14. 14. Fill Market Niche - IT strategic if it can: <ul><li>Permit identification of special needs of unique target market </li></ul><ul><li>Spot and respond to unusual trends </li></ul>
    15. 15. Strategic Questions <ul><li>Can IT create barriers to entry? (new entrants) </li></ul><ul><li>Can IT build in switching costs? (buyers) </li></ul><ul><li>Can IT strengthen customer relationships? (buyers) </li></ul>
    16. 16. Strategic Questions (cont) <ul><li>Can IT change the balance of power in supplier relationships? (suppliers) </li></ul><ul><li>Can IT change the basis of competition? (competitors) </li></ul><ul><li>Can IT generate new products?(competitors, substitutes) </li></ul>
    17. 17. Risks of IS Success <ul><li>Change the Basis of Competition </li></ul><ul><li>Lower Entry Barriers </li></ul><ul><li>Promote Litigation or Regulation </li></ul><ul><li>Awake Sleeping Giant </li></ul><ul><li>Reflect Bad Timing </li></ul><ul><li>Are Too Advanced </li></ul>
    18. 18. Transformational Information Systems <ul><li>Radical changes in an organization’s business processes </li></ul><ul><li>Radical changes in an organization’s structure </li></ul><ul><li>Radical changes in an industry’s value streams </li></ul>
    19. 19. Business Process Reengineering (BPR) <ul><li>Completely changes manner in which business is done </li></ul><ul><li>Fewer steps, shorter cycle times </li></ul><ul><li>Complete, more expert handling of events </li></ul><ul><li>Not incremental improvement </li></ul><ul><li>Typically uses IT as an enabler </li></ul><ul><li>Involves discontinuous thinking </li></ul>
    20. 20. Characteristics of BPR <ul><li>Combining jobs </li></ul><ul><li>Empowering employees </li></ul><ul><li>Jobs done simultaneously </li></ul><ul><li>Customizing product/service </li></ul><ul><li>Work performed where most logical </li></ul><ul><li>Single point of customer contact </li></ul>
    21. 21. Transformational Information Systems <ul><li>Radical changes in an organization’s structure </li></ul><ul><ul><li>reduce layers of management </li></ul></ul><ul><ul><li>empower front-line workers </li></ul></ul><ul><ul><li>loosely couple work units </li></ul></ul><ul><li>Radical changes in an industry’s value streams </li></ul><ul><ul><li>disintermediation </li></ul></ul><ul><ul><li>creating new markets </li></ul></ul>