This document provides an overview and summary of chapters 3 and 5 from the textbook. It discusses key topics like Porter's five competitive forces model, strategies for gaining competitive advantage through information systems, the value chain model, quality and design, business process management, types of computer systems, client/server architecture, and storage technologies. Examples are given for each topic to illustrate the concepts.

1. MANAGEMENT
INFORMATION
SYSTEMS
Tuesday 2/4/20
L&L Chapters 3 & 5

2. TODAY’S AGENDA
• Chapter 3
• Porter’s Five Forces
• Competition
• Value Chain
• Quality & Design
• BPM
• Chapter 5
• Infrastructure
• Types of Computers
• Client/Server
• Storage
• Trends
• Software

3. Chapter 3 L&L
Achieving Competitive Advantage with
Information Systems

4. Competitive Advantage
• A firm’s ability to do something better, faster, cheaper, or
uniquely when compared with rival firms in the market.
• Firms main gain a competitive advantage because they
have access to special resources or they are able to use
resources more efficiently.

5. Porter’s Competitive Forces Model
• Provides a general view of those things that affect a firm’s
strategic position.
• The five competitive forces are:
• Traditional competitors
• New market entrants
• Substitute products and services
• Customers
• Suppliers

6. Porter’s Competitive Forces Model
In Porter’s competitive forces
model, the strategic position of
the firm and its strategies are
determined not only by
competition with its traditional
direct competitors but also by
four forces in the industry’s
environment: new market
entrants, substitute products,
customers, and suppliers.

7. IS Strategies for Dealing with
Competitive Forces
• Basic strategy: Align IT with business objectives
 75% of businesses fail to align their IT with their business objectives, leading to
lower profitability.
 How to achieve alignment of IT with business:
• Identify business goals and strategies.
• Break strategic goals into concrete activities and processes.
• Identify metrics for measuring progress.
• Determine how IT can help achieve business goals.
• Measure actual performance.

8. IS Strategies for Dealing with
Competitive Forces
Organizations may focus on one or more of these generic
strategies.
• Low-cost leadership
• Product differentiation
• Focus on market niche
• Strengthen customer and supplier intimacy

9. IS Strategies for Dealing with
Competitive Forces
• Low Cost Leadership
• Using information systems to achieve the lowest operational costs and the lowest
prices. (e.g., WalMart)
• Product differentiation
• Use IS to enable new products and services (e.g., Amazon Go)
• Use IS to greatly change the customer convenience in using your existing
products and services (e.g., McDonald’s new touchscreen ordering system)
• Use information systems to customize or personalize products to fit specifications
of individual consumers (e.g., NikeiD, Dell, M&M’s).

10. IS Strategies for Dealing with
Competitive Forces
• Focus on market niche
• Using information systems to enable a specific market focus, and serve this
narrow target market better than competitors. (e.g., FreshDirect)
• Strengthen customer and supplier intimacy
• Using information systems to tighten linkages with suppliers and develop intimacy
with customers.
• Amazon: Keeps track of user preferences for purchases, and recommends
products purchased by others
• Chrysler: Uses IS to facilitate direct access from suppliers to production
schedules, allowing suppliers to decide how and when to ship supplies to Chrysler
factories. Results in more lead time in producing goods.

11. The Internet’s Impact on
Competitive Advantage
Enables new products and services
Transforms industries
Increases bargaining power of customers and reduces bargaining power of
suppliers
Intensifies competitive rivalry
Creates new opportunities for building brands and large customer bases

12. The Value Chain Model
• Highlights specific activities in a business where competitive strategies
can best be applied and where information systems are likely to have
a strategic impact
• Two types of activities:
• Primary
• Support

13. The Value Chain Model
Figure from Jessup and Valacich, Information Systems Today: Why IS Matters

14. The Value Chain Model
Figure from Jessup and Valacich, Information Systems Today: Why IS Matters

15. The Value Chain Model
• Using the value chain model will encourage you to benchmark your
business processes against your competitors and identify industry
best practices.
• Benchmarking – setting strict standards for products, services, or activities and then
measuring performance against those standards.
• Best Practices – industry-standard business processes that have been identified as the
most successful solutions or problem-solving methods for consistently and effectively
achieving a business objective.

16. Extending the Value Chain to a
Value Web
• A firm’s value chain is linked to the value chains of its suppliers,
distributors, and customers.
• Internet technology has made it possible to create highly
synchronized industry value chains called value webs.
• A value web is a networked system that can synchronize the value
chains of business partners within an industry to respond rapidly to
changes in supply and demand.

17. Competing on Quality & Design
What is quality?
• For the producer: conformance to specifications and absence of
variation from specs
• For the customer: physical quality (durability, safety), quality of
service (responsiveness to warranties, ongoing product support),
psychological quality (courtesy of employees, reputation of product)

18. Competing on Quality & Design
• What is Total Quality Management (TQM)?
• Makes quality the responsibility of all people and functions within an
organization.
• What is Six Sigma?
• A specific measure of quality, representing 3.4 defects per million
opportunities; used to designate a set of methodologies and
techniques for improving quality and reducing costs.

19. Competing on Quality & Design
Using IS to Improve Quality
• Reduce cycle time by simplifying the product and the production
process
• Benchmarking
• Use customer demands to improve products and services
• Improve design quality and precision (using CAD software)
• Improve production precision and tighten production tolerances

20. Business Process Management (BPM)
• What is BPM?
• An approach to business which aims to continuously improve
business processes.
• Often times, the steps required to accomplish a task are combined
and streamlined to eliminate repetitive and redundant work.
• BPM is never concluded because continuous improvement requires
continual change.

21. BPM
• Steps For Effective BPM:
• Identify processes for change
• Analyze existing processes
• Design the new process
• Implement the new process
• Continuous measurement

22. Chapter 5 L&L
IT Infrastructure: Hardware and Software

23. Infrastructure Components
 IT infrastructure: Provides
platform for supporting all
information systems in the
business
- Computer hardware (Ch 5)
- Computer software (Ch 5)
- Data management technology
(Ch 6)
- Networking and
telecommunications technology
(Ch 7)
- Technology services (Ch5, Ch12)

24. Types of Computers/Computing
 Computers come in different sizes with varying capabilities for
processing information
• Personal computer
• Workstation
• Server
• Mainframe
• Supercomputer
• Grid computing

25. Types of Computers/Computing
Personal Computer (PC)
– Smartphone
– Tablet, Laptop
– Desktop
Workstation
– Fits on a desktop
– Has more powerful mathematical
and graphics-processing capabilities
than PC
– Performs data intensive processing
(e.g., design or engineering
simulation)

26. Types of Computers/Computing
• Mainframe
– Large-capacity, high-performance
computer that can process large
amounts of data very rapidly
– Support hundreds or thousands of
users simultaneously
– Used by large banks, insurance
companies, stock brokerages,
airline, etc.

27. Types of Computers/Computing
 Supercomputer
- Highly sophisticated and powerful computer that can perform very
complex computations extremely rapidly
- Most powerful and expensive computers on eart
- Thousands of times more powerful than a high-powered PC
- Used in engineering, scientific simulations, military/weapons research,
weather forecasting

28. Types of Computers/Computing
• Grid Computing
• Connects many geographically
remote computers into a single
network to act as “virtual
supercomputer”
• Combines the computational power
of all computers on the grid
• Can solve complicated problems at
supercomputer speeds with lower
cost
Example: http://folding.stanford.edu/
Figure source:
www.adarshpatil.com/newsite/grid.htm

29. Types of Computers/Computing
 Server
- A computer that is specifically
optimized to provide software
and other resources to other
computers on the network.
- Store and process shared data
and perform activities such as
managing printers, backup,
security, user authentication
- Including web, database and
application servers

30. Computer Networks and
Client/Server Computing
• Client/Server Computing
• A model for computing that splits processing between “clients” and “servers” on a network

31. Computer Networks and
Client/Server Computing
 Multitiered client/server architecture (N-tier)
- Balances load of network over several levels of servers
- E.g. Web servers, application servers, database servers
Database Server
A user types in URL
Then types in ID, password
Returns requested
web pages
Checks user ID,
password
Stores user ID,
password

32. Storage Technology
• Primary Storage
• Part of the computer that temporarily stores program instructions and
data being used by the instructions
• Example:
• RAM (random access memory)
• Provides temporary storage for computer operation
• Stores data programs and data currently in use
• Instructions are considered volatile

33. Storage Technology
• Secondary Storage
• Relatively long-term, nonvolatile storage of data outside the CPU and
primary storage
• Examples:
• Flash memory
• USB flash drives, solid-state drives
• Magnetic disk
• Magnetic hard drives
• RAID (Redundant Array of Inexpensive Disks): Can package hundreds of drives for message storage
requirements
• Optical disks
• CD-ROM, CD-RW, DVD
• Magnetic tape

34. Contemporary Hardware Trends
• The mobile digital platform
• Emerged as alternatives to PCs and larger computers.
• Quickly becoming the primary means of accessing the Internet
• Mobile devices, smartphone, netbooks and tablet computers, E-book readers
• Consumerization of IT and BYOD
• New technology that emerges in consumer market spreads into business
organizations
• BYOD (bring your own device): business use of personal mobile devices

35. Contemporary Hardware Trends
• Virtualization
• Allows multiple virtual machines, with heterogeneous operating
systems to run in isolation, side-by-side on the same physical
machine
• Benefits:
• Reduces hardware and power expenditures
• Increases server utilization rates

36. Contemporary Hardware Trends
• Cloud Computing
• Refers to a model of computing in which firms and individuals obtain computing resources
and software applications over the Internet
• Three types of services:
• Cloud Infrastructure as a Service (e.g., processing, storage, networking)
• Cloud Platform as a Service (e.g., programming tools)
• Cloud Software as a Service
• Drawbacks:
• Responsibility for data storage and control is in hands of provider
• Security risks
• System reliability

37. Contemporary Hardware Trends
• Green Computing
• Refers to practices and technologies for the designing,
manufacturing, using, and disposing of computer hardware to
minimize the impact on the environment.
• Key priority is power reduction
• Example: Google’s Hamina Data Center

38. Systems Software vs.
Application Software
• System Software
• Generalized programs that manage the computer’s resources, such as the central
processor, communications links, and peripheral devices.
• Includes:
• Operating System: manages and controls the computers activities
• Language Translators: convert programming languages into machine
language
• Utility Programs: perform common processing tasks, such as copying,
sorting, or computing a square root.

39. Systems Software vs.
Application Software
• Application Software
• Programs written for a specific application to perform functions specified by end
users.
• Includes:
• Programming Languages: used by programmers to develop operating systems and
application software (e.g., C, C++, Visual Basic, Java)
• Fourth-Generation Languages: software tools that enable end users to develop
software applications with minimal or no technical assistance or that enhance
professional programmers’ productivity (e.g., query languages, report generators)
• Desktop Productivity Tools: enable end users to perform their daily tasks (e.g., word
processing, spreadsheets, data management, web browsers, presentation graphics)

40. Software Trends
• Open Source Software
• A special class of software that includes operating systems, application software, and
programming languages in which the source code (the actual program code) is freely
available to the general public for use and/or modification (e.g. Linux, Mozilla Firefox)
• Cloud-Based Software Services/Tools
• Mashups: combine two or more online applications to create a new application or service
that provides more value than the original pieces (e.g., gasbuddy.com)
• Apps: small specialized software programs that run on the Internet, on your computer, or
on your mobile phone or tablet.

41. Principal Issues in Managing Hardware
and Software Technology
• Capacity Planning
• The process of predicting when a computer hardware system becomes saturated
• Ensures that the firm has enough computing power for its current and future
needs
• Scalability
• The ability of a computer, product, or system to expand to serve a large number
of users without breaking down

42. Managing Hardware and Software
Technology
• Total Cost of Ownership (TOC)
• Designates the total cost of owning technology resources, including initial
purchase costs, the cost of hardware and software upgrades, maintenance,
technical support, and training
• Using Technology Service Providers
• Outsourcing: the practice of contracting computer center operations,
telecommunications networks, or applications development to external vendors
• Using Cloud Services

43. Homework
• Read L&L Chapter 6
• L&L Chapter 6 Quiz on Blackboard