Porter’s Generic Value Chain Support Activities Primary Activities Profit Margin Profit Margin Infrastructure Human Resource Management Technology Development Procurement Elapsed Time - Value added time cost Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
Potential IS Contributions Support Activities Primary Activities Profit Margin Profit Margin Infrastructure - Planning Models Human Resource - Skills & Experience Databases Technology - Computer-Aided Design Procurement - On-line parts ordering Elapsed Time - Value added time cost Automated Warehouse Inbound Logistics Automated Check Clearing Operations Point of Sale Scanners Outbound Logistics E-Commerce Marketing & Sales Remote Equipment Servicing Service
Project Selection Factors Development Project Selection Decision - Accept - - Reject - - Redefine - - Postpone - - Proof of Concept - Available Organizational Resources Timing of Project Commitment Support From Top Management Degree of Perceived Need Within the Firm Established Evaluation Criteria
IS Planning Process Assess the current state of affairs with regard to IT assets Create a set of “ blueprints” that represent the desired state of affairs Create a prioritized schedule of projects
Project Process Flow Model Physical Physical Logical Logical Current System New System “ What” “ How” 1 2 3 4 5
Project Evaluation Criteria Evaluation Criteria Description of Criteria Potential Organizational Benefits The degree to which the proposed project will improve profits, customer service, organizational performance, etc. and the expected duration of these benefits. Strategic Fit The degree to which the proposed project will assist the organization in achieving its strategic objectives and other long-term goals. Level of Resource Allocation The various types of resources and their expected levels associated with the proposed project, including time, labor, capital, and identifiable opportunity costs. Value Chain Analysis The degree to which the proposed project contributes value to the manufacture or delivery of goods and services to the marketplace.
Measurable vs. Unmeasurable Measurable Benefits Unmeasurable Benefits Market share will improve to a sustainable minimum of 35%. We will be one of the leading suppliers in the market. Line throughput will increase by 7% within the first quarter and by at least 3% each quarter thereafter. Line throughput will be dramatically increased and will continue this trend over time. Product quality will increase such that rework will be reduced more than 12% annually. Product quality will increase and rework will decrease. Production costs for the auxiliary power unit will be reduced by at least $3.00 per unit. Production costs for the auxiliary power unit will go down significantly.
Corporate IS Strategy Objectives A corporate IS strategy is necessary to define: what IS services will be provided and to whom; who is responsible for providing specific IS services; how these services will be provided; priorities for provision of new facilities and improvement of existing facilities; who has access to what information; how access to IS services will be distributed and supported; what common standards should be applied; what resources are required and how resources available should be utilized; mechanisms for understanding and mapping current and future business processes; a mechanism for maintaining and renewing the strategy.