Session 4 it architecture and competitive advantage

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  • Session 4 it architecture and competitive advantage

    1. 1. IT & Strategy
    2. 2. 2 things
    3. 3. IT-strategy alignment
    4. 4. modularization & IT architecture
    5. 5. how do I align my technology to my firm’s strategy?
    6. 6. TODAY: conventional views
    7. 7. 1.0
    8. 8. what does a firm do?
    9. 9. materials market firm product needs money
    10. 10. what is a product?
    11. 11. customer’s needs
    12. 12. a product is a solution package
    13. 13. mobilize commodities to deliver the product
    14. 14. 2.0
    15. 15. what dose IS do? Accounting Finance Sales Human Production Resources MIS is the “glue” that ties businesses together… …and uses the technology that makes business work.
    16. 16. IT reduces communication & coordination cost
    17. 17. IT architecture
    18. 18. shows how hardware, software, database and network will be coordinated
    19. 19. to achieve strategic goal of the firm
    20. 20. a master plan that provides a technology vision for the company
    21. 21. more than IT architecture “A digital nervous system requires a combination of hardware and software; it's distinguished from a mere network of computers by the accuracy, immediacy, and richness of the information it brings to knowledge workers and the insight and collaboration made possible by the information.” Bill Gates, Business @ The Speed of Thoughts © copyright 2007, youngjin yoo
    22. 22. Scott McNealy on Gates “He is right - I would be very nervous if my systems were based on their (Microsoft’s) platforms and products!” © copyright 2007, youngjin yoo
    23. 23. also includes
    24. 24. organizational control
    25. 25. funding model
    26. 26. standardization
    27. 27. 3.0
    28. 28. strategy question how do you build sustainable competitive advantage?
    29. 29. 3.1
    30. 30. Michael Porter it’s all about positioning five forces three generic strategies
    31. 31. Threat of new entrants Bargaining power Rivalry among Bargaining power of suppliers existing competitors of buyers Threat of substitute products or services
    32. 32. three generic strategies
    33. 33. cost leadership
    34. 34. differentiation
    35. 35. focus
    36. 36. 3.2
    37. 37. CK Prahalad it is about unique resources capabilities core competencies
    38. 38. 3.3
    39. 39. Kathleen Eisenhardt it is about ability to innovate dynamic capability hyper competition
    40. 40. 4.0
    41. 41. how can you exploit IT to build sustainable competitive advantage?
    42. 42. it depends!
    43. 43. 4.1
    44. 44. positioning
    45. 45. Wal-Mart and EDI
    46. 46. 4.2
    47. 47. create unique resources
    48. 48. 4.2.1
    49. 49. unique IT
    50. 50. Mrs. Fields Cookie American Airline City Bank IBM-Mayo Clinic HyperActive Bob
    51. 51. 4.2.2
    52. 52. technology is a commodity utility
    53. 53. others
    54. 54. they will copy it
    55. 55. if not the same system
    56. 56. similar enough is enough
    57. 57. IT value will evaporate
    58. 58. first mover makes all the mistakes
    59. 59. second mover will learn
    60. 60. price will go down
    61. 61. consumer will benefit
    62. 62. ATM Airline reservation systems ERP
    63. 63. 4.2.3
    64. 64. Managerial Technology Sustainable Capabilities (Efficiency) competitive (Uniqueness) Advantage © copyright 2007, youngjin yoo
    65. 65. IT + culture IT + ownership structure IT + access to capital IT + operation excellence IT + brand IT + HR
    66. 66. Some statistics © copyright 2007, youngjin yoo
    67. 67. 4.3
    68. 68. first mover
    69. 69. Amazon vs Barns & Noble
    70. 70. Me First vs. Me Too
    71. 71. Amazon Introducing new feature
    72. 72. Barns & Noble integration with inimitable resources (physical stores)
    73. 73. Sustainable Competitive IT-enabled Advantage innovation Time & History
    74. 74. it’s like a garden
    75. 75. time matters!
    76. 76. 5.0
    77. 77. Modularization & IT architecture
    78. 78. 5.1
    79. 79. mass production
    80. 80. physical machines
    81. 81. maximizing the throughputs
    82. 82. economy of scale
    83. 83. upstream & downstream integration
    84. 84. economy of scope
    85. 85. diversification
    86. 86. vertical integration
    87. 87. m-form organization
    88. 88. internalization of value activities
    89. 89. traditional view Back-end Systems Executives & Managers A firm’s value chain Suppliers Transaction Systems (ERP, MRP, TPS) Customers Enterprise DB © copyright 2005, youngjin yoo
    90. 90. control
    91. 91. everyone thinks “I am unique!”
    92. 92. centralized
    93. 93. decentralized
    94. 94. hybrid
    95. 95. 5.2
    96. 96. modularization of products
    97. 97. system view of a product
    98. 98. subsystems and components
    99. 99. design hierarchy and design rules
    100. 100. components interfaces
    101. 101. stereo system amplifier speakers CD players radio tuner
    102. 102. so, what’s the big deal?
    103. 103. containing complexity
    104. 104. innovation through mix & match
    105. 105. agility
    106. 106. what does IT have to do with this?
    107. 107. reduction of communication and coordination cost
    108. 108. making externalization of activities cheaper
    109. 109. facilitating modularization
    110. 110. disintegration of vertically integrated firms
    111. 111. network-centric view (service oriented architecture) for modular organizations CRM support Service Center Sales force Call ERP Manufacturing CRM infrastructure services Distribution Sales and Financials Resource Human RDBMS Middleware EAI Commerce Server ERP infrastructure services Shopping Payment Catalog Cart Application Server RDBMS RDBMS © copyright 2007, youngjin yoo
    112. 112. service oriented architecture
    113. 113. modular interoperable reusable flexible scalable
    114. 114. standards common infrastructure
    115. 115. SOA
    116. 116. 6.0
    117. 117. IT infrastructure is a strategic asset
    118. 118. more than a tool
    119. 119. not utility
    120. 120. no overhead
    121. 121. “let’s just have ERP” wouldn’t work
    122. 122. it is a strategic decision
    123. 123. must be a part of strategic decision- making process
    124. 124. aligning business goals to IT
    125. 125. how do I really know if IT is a strategic resource in my firm?
    126. 126. where is your CIO in your organization?
    127. 127. how is IT being funded?
    128. 128. is IS a part of corporate G&A?
    129. 129. where is IS plan in your strategic planning?
    130. 130. who makes the decision?
    131. 131. so, why should I care?
    132. 132. accelerating technology innovations
    133. 133. challenging long-held assumptions
    134. 134. new ways of organizing relationship inside
    135. 135. new ways of organizing relationship outside
    136. 136. agility and innovations
    137. 137. it is as strategic as it gets when it comes to information systems

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