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Strategic  Information  Systems for Competitive  Advantage
The IS Pyramid TPS MIS EIS/SIS <ul><li>Questions:  </li></ul><ul><li>EIS? MIS? TPS? DSS? </li></ul><ul><li>Functionality <...
Data Warehouses , Data Marts & Data Mining   <ul><li>Transactional/Operational Systems </li></ul><ul><li>Analytical Proces...
Data Warehouses <ul><li>A data warehouse is a relational and or multidimensional database management system designed to su...
Data Warehouses <ul><li>Data Warehouse Advantages </li></ul><ul><li>It removes  barriers  among functional areas by offeri...
<ul><li>Multidimensional Database Model </li></ul><ul><ul><li>can be the core of data warehouses </li></ul></ul><ul><ul><l...
Figure 5.13  Relational databases
Figure 5.14  Multidimensional databases
<ul><li>Data Marts </li></ul><ul><ul><li>a scaled-down version of a data warehouse that focuses on a particular function a...
<ul><li>Data Mining </li></ul><ul><ul><li>provides a means of extracting previously unknown, predictive information from t...
EIS or SIS <ul><li>To address “competition” </li></ul><ul><li>To assist in determining: </li></ul><ul><li>Strategic decisi...
The Role of IT & SIS in Strategic Management <ul><li>Competitive tools (speed, service, innovation, cost and quality) </li...
Porter’s Competitive Forces Model <ul><li>Existing competitors  </li></ul><ul><li>New competitors </li></ul><ul><li>The ba...
1. Threat of New Entrants <ul><li>The ease with which firms can enter into a new market or industry is a critical variable...
1. Threat of new entrants <ul><li>Implications for firm </li></ul><ul><ul><li>Increased capacity in the industry </li></ul...
2. Bargaining Power of Suppliers <ul><li>Powerful Suppliers can exert considerable influence on the buyers (e.g. dictating...
2. Bargaining power of suppliers <ul><li>Implications for firm </li></ul><ul><ul><li>Reduced quality </li></ul></ul><ul><u...
3. Bargaining Power of Buyers <ul><li>A powerful buyer may often dictate terms to suppliers which has a strong impact on t...
3. Bargaining power of buyers <ul><li>Implications for firm </li></ul><ul><ul><li>Increased quality </li></ul></ul><ul><ul...
4. Threat of substitute products and services <ul><li>The competition engendered by a  Threat of Substitute  often comes f...
4. Threat of substitute products and services <ul><li>Implications for firm </li></ul><ul><ul><li>Losing customers for lif...
5. Rivalry among existing firms <ul><li>Pure competition among rival firms drives profits to zero. But firms strive for a ...
5. Rivalry among existing firms <ul><li>Implications for firm </li></ul><ul><ul><li>Competition in price, product distribu...
Value Chain Models Models that highlights the primary and support activities that add a  margin of VALUE to a firm’s produ...
Value Chain Model Factories Warehouse D.C. Delivery  Customers Suppliers Primary Activities Inbound Logistics Operations O...
What IT/IS Can Be Applied? Factories Warehouse D.C. Delivery  Customers Suppliers Primary Activities Inbound Logistics Ope...
What IT/IS Can Be Applied? Factories Warehouse D.C. Delivery  Customers Suppliers Primary Activities Inbound Logistics Ope...
Discussion Conflicts in Strategic Business Objectives
If you were a Chief Marketing Officer… What are your business goals?  Increase market shares Increase sales Increase reven...
If you were a Chief Manufacturing Officer… What are your business goals?  Keep low operating costs What to do to achieve t...
If you were a Chief Financial Officer… What are your business goals?  Keep investment and costs low What to do to achieve ...
Discussion Strategic Decisions Making on Supply Chain Management
Strategic Supply Chain Decisions Plants Dealers  Retailers Customers Distributors <ul><li>Site Location / Expansion </li><...
The Solutions… <ul><li>Integrated Enterprise Resource Planning and Scheduling System </li></ul><ul><li>Supply Chain Optimi...
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L2 Sis

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  • Transcript of "L2 Sis"

    1. 1. Strategic Information Systems for Competitive Advantage
    2. 2. The IS Pyramid TPS MIS EIS/SIS <ul><li>Questions: </li></ul><ul><li>EIS? MIS? TPS? DSS? </li></ul><ul><li>Functionality </li></ul><ul><li>Whom to support? </li></ul><ul><li>What IT to adopt? </li></ul>DSS
    3. 3. Data Warehouses , Data Marts & Data Mining <ul><li>Transactional/Operational Systems </li></ul><ul><li>Analytical Processing Systems </li></ul>TPS MIS EIS Databases Enterprise Data Warehouses Manufacturing Marketing Extraction, Transformation Sales Data Marts
    4. 4. Data Warehouses <ul><li>A data warehouse is a relational and or multidimensional database management system designed to support management decision making. </li></ul><ul><li>The data in the “warehouse” is stored in a single, agreed-upon format even when underlying operational databases store the data differently. </li></ul>
    5. 5.
    6. 6. Data Warehouses <ul><li>Data Warehouse Advantages </li></ul><ul><li>It removes barriers among functional areas by offering a way to reconcile views from multiple sources, thus providing a look at activities that cross functional lines. </li></ul><ul><li>It reports on trends across multidivisional and/or multinational operating units, including trends or relationships in areas such as merchandising, production planning, and so forth. </li></ul>
    7. 7. <ul><li>Multidimensional Database Model </li></ul><ul><ul><li>can be the core of data warehouses </li></ul></ul><ul><ul><li>data are stored in arrays </li></ul></ul><ul><ul><li>consists of at least three dimensions </li></ul></ul><ul><ul><li>dimensions are the edges of the cube, and represent the primary “views” of the business data </li></ul></ul><ul><ul><li>the data are intimately related and can be viewed and analyzed from different perspectives, which are called dimensions </li></ul></ul><ul><ul><li>allows for the effective, efficient, and convenient storage and retrieval of large volumes of data </li></ul></ul>
    8. 8. Figure 5.13 Relational databases
    9. 9. Figure 5.14 Multidimensional databases
    10. 10. <ul><li>Data Marts </li></ul><ul><ul><li>a scaled-down version of a data warehouse that focuses on a particular function area </li></ul></ul><ul><ul><li>usually designed to support the unique business requirements of a specific department or business process. Example : Marketing data mart </li></ul></ul><ul><ul><li>takes less time to build, costs less, and less complex </li></ul></ul><ul><ul><li>the indiscriminate introduction of multiple data marts with no linkage to each other, or to an enterprise data warehouse, will cause problems </li></ul></ul>
    11. 11.
    12. 12. <ul><li>Data Mining </li></ul><ul><ul><li>provides a means of extracting previously unknown, predictive information from the base of accessible data in data warehouses </li></ul></ul><ul><ul><li>discovers hidden patterns, correlations, and relationships among organizational data </li></ul></ul><ul><ul><li>predicts future trends and behaviors, allowing businesses to make proactive, knowledge-driven decisions </li></ul></ul><ul><ul><li>functions of data mining </li></ul></ul><ul><ul><ul><li>classification » clustering » association </li></ul></ul></ul><ul><ul><ul><li>sequencing » forecasting </li></ul></ul></ul>
    13. 13.
    14. 14. EIS or SIS <ul><li>To address “competition” </li></ul><ul><li>To assist in determining: </li></ul><ul><li>Strategic decisions </li></ul><ul><li>Planning horizon </li></ul><ul><li>Competitive forces </li></ul><ul><li>Value-added activities </li></ul><ul><li>Information technology </li></ul>TPS MIS EIS Competitive Advantages: Cost, Quality, and Velocity Executive Information Systems / Strategic Information Systems
    15. 15. The Role of IT & SIS in Strategic Management <ul><li>Competitive tools (speed, service, innovation, cost and quality) </li></ul><ul><li>Reengineering business processes </li></ul><ul><li>Inter-organizational linkage (networking, telecommunications, EAI, e-commerce, supply chain optimization, etc.) </li></ul><ul><li>Knowledge management – competitive (business) intelligence (products, customers, competitors, markets, environments, regulation, technology, etc.) </li></ul>
    16. 16. Porter’s Competitive Forces Model <ul><li>Existing competitors </li></ul><ul><li>New competitors </li></ul><ul><li>The bargaining power of suppliers </li></ul><ul><li>The bargaining power of customers/buyers </li></ul><ul><li>Substitutes </li></ul>Response Strategies?                                         
    17. 17. 1. Threat of New Entrants <ul><li>The ease with which firms can enter into a new market or industry is a critical variable in the strategic management process. </li></ul><ul><ul><li>AMD vs. Intel </li></ul></ul><ul><ul><ul><li>AMD began producing chips that could compete with Intel products </li></ul></ul></ul><ul><ul><li>Word vs. WordPerfect </li></ul></ul><ul><ul><ul><li>WordPerfect dominated word processing in the 1980’s but Microsoft introduced a competing product and kept chipping away at WordPerfect domination. Today Word Dominates. </li></ul></ul></ul>
    18. 18. 1. Threat of new entrants <ul><li>Implications for firm </li></ul><ul><ul><li>Increased capacity in the industry </li></ul></ul><ul><ul><li>Reduced prices </li></ul></ul><ul><ul><li>Decreased market share </li></ul></ul><ul><li>Potential Use of IS to Combat Competitive Force </li></ul><ul><ul><li>Better web site to reach customers and differentiate product </li></ul></ul><ul><ul><li>Inventory control system to lower costs and better manage excess capacity </li></ul></ul>
    19. 19. 2. Bargaining Power of Suppliers <ul><li>Powerful Suppliers can exert considerable influence on the buyers (e.g. dictating terms, controlling prices). </li></ul><ul><li>Examples: </li></ul><ul><ul><li>MICROSOFT was so powerful with Windows it insisted that Windows Explorer be the default Web browser. - It took government intervention to reduce that power </li></ul></ul>
    20. 20. 2. Bargaining power of suppliers <ul><li>Implications for firm </li></ul><ul><ul><li>Reduced quality </li></ul></ul><ul><ul><li>Prices raised </li></ul></ul><ul><li>Potential Use of IS to Combat Competitive Force </li></ul><ul><ul><li>Use internet to establish closer electronic ties with suppliers and to create relationships with new suppliers located far away </li></ul></ul>
    21. 21. 3. Bargaining Power of Buyers <ul><li>A powerful buyer may often dictate terms to suppliers which has a strong impact on the way they do business </li></ul><ul><li>Example: </li></ul><ul><ul><li>Dell Computer: Dell’s JIT delivery demands forced suppliers to build facilities near Dell. </li></ul></ul>
    22. 22. 3. Bargaining power of buyers <ul><li>Implications for firm </li></ul><ul><ul><li>Increased quality </li></ul></ul><ul><ul><li>Reduced prices </li></ul></ul><ul><ul><li>Demand for more services, quicker delivery, etc. </li></ul></ul><ul><li>Potential Use of IS to Combat Competitive Force </li></ul><ul><ul><li>Implement CRM system to serve customers better </li></ul></ul><ul><ul><li>Implement CAD/CAM system to improve product quality </li></ul></ul>
    23. 23. 4. Threat of substitute products and services <ul><li>The competition engendered by a Threat of Substitute often comes from products outside the industry . </li></ul><ul><ul><li>Computers destroyed the typewriter industry </li></ul></ul><ul><ul><li>TV nearly destroyed newspapers </li></ul></ul><ul><ul><li>Airlines threaten busses & trains </li></ul></ul><ul><ul><li>Online trading replaces human brokers. </li></ul></ul>
    24. 24. 4. Threat of substitute products and services <ul><li>Implications for firm </li></ul><ul><ul><li>Losing customers for life </li></ul></ul><ul><ul><li>Decreased market share </li></ul></ul><ul><li>Potential Use of IS to Combat Competitive Force </li></ul><ul><ul><li>Use DSS and customer purchase database to assess trends and customer needs better </li></ul></ul><ul><ul><li>Use CAD systems to redefine products </li></ul></ul>
    25. 25. 5. Rivalry among existing firms <ul><li>Pure competition among rival firms drives profits to zero. But firms strive for a comparative advantage over rivals … continuously changing to keep an edge </li></ul><ul><li>If you don ’ t change – you ’ re DEAD! </li></ul><ul><ul><li>Wal-mart is a price leader </li></ul></ul><ul><ul><li>Pharma developed alliances </li></ul></ul><ul><ul><li>Car Manufacturers rely on improving quality and innovation </li></ul></ul>
    26. 26. 5. Rivalry among existing firms <ul><li>Implications for firm </li></ul><ul><ul><li>Competition in price, product distribution, and service </li></ul></ul><ul><li>Potential Use of IS to Combat Competitive Force </li></ul><ul><ul><li>Implement information system to reduce costs and be able to act and react more quickly </li></ul></ul><ul><ul><li>Implement web site to offer better service to customers </li></ul></ul>
    27. 27. Value Chain Models Models that highlights the primary and support activities that add a margin of VALUE to a firm’s products and/or services where the information systems can be applied to achieve a competitive advantage.
    28. 28. Value Chain Model Factories Warehouse D.C. Delivery Customers Suppliers Primary Activities Inbound Logistics Operations Outbound Logistics Marketing Sales Services Support Activities
    29. 29. What IT/IS Can Be Applied? Factories Warehouse D.C. Delivery Customers Suppliers Primary Activities Inbound Logistics Operations Outbound Logistics Marketing Sales Services Support Activities Automated Warehousing Systems Integrated Manufacturing Planning & Control Systems Automated Shipment & Scheduling Systems Marketing Research DSS; CRM Field Service Scheduling Systems; Equipment Maintenance Systems
    30. 30. What IT/IS Can Be Applied? Factories Warehouse D.C. Delivery Customers Suppliers Primary Activities Inbound Logistics Operations Outbound Logistics Marketing Sales Services Support Activities E-Administration; Office Automation Workforce Planning Systems Computer-Aided Design Computerized Ordering Systems; CRM
    31. 31. Discussion Conflicts in Strategic Business Objectives
    32. 32. If you were a Chief Marketing Officer… What are your business goals? Increase market shares Increase sales Increase revenues High customer service level What to do to achieve these goals? Offer high product availability Offer high product variability – mass customization Impacts?
    33. 33. If you were a Chief Manufacturing Officer… What are your business goals? Keep low operating costs What to do to achieve these goals? Keep long production runs on a few products (mass production) Keep fewer changeovers Maintain high inventories of raw materials and work-in-process subassemblies Impacts?
    34. 34. If you were a Chief Financial Officer… What are your business goals? Keep investment and costs low What to do to achieve these goals? Keep long production runs on a few products (mass production) Keep fewer changeovers Maintain low inventories of raw materials and work-in-process subassemblies Impacts?
    35. 35. Discussion Strategic Decisions Making on Supply Chain Management
    36. 36. Strategic Supply Chain Decisions Plants Dealers Retailers Customers Distributors <ul><li>Site Location / Expansion </li></ul><ul><li>Facility Missions / New Lines / New Processes </li></ul><ul><li>Product Sourcing / To Make or to Buy? </li></ul><ul><li>Inventory Deployment Strategy </li></ul><ul><li>Transportation Strategy </li></ul><ul><li>Service Territory Alignment </li></ul>Suppliers
    37. 37. The Solutions… <ul><li>Integrated Enterprise Resource Planning and Scheduling System </li></ul><ul><li>Supply Chain Optimization & Synchronization </li></ul>
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