• Identify basic competitive strategies and explain
how a business can use IT to confront the
competitive forces it faces
• Identify several strategic uses of IT and give
examples of how they give competitive
advantages to a business
• Give examples of how business process
reengineering frequently involves the strategic
use of IT
• Identify the business value of using Internet
technologies to become an agile competitor or to
form a virtual company
• Explain how knowledge management systems
can help a business gain strategic advantages
• Technology is no longer an afterthought in
business strategy, but the cause and driver
• IT can change the way businesses compete
• A strategic information system is any
information system that uses IT to help an
• Gain a competitive advantage
• Reduce a competitive disadvantage
• Or meet other strategic enterprise objectives
Case 1: GE, Dell, Intel, GM and Others
• Does IT matter?
• Nicholas Carr argues that IT is infrastructure, much
• Too commonplace to offer a competitive advantage
• It is not just networks and computers
• The important part is the software and information
and how IT is used
Case Study Questions
• Do you agree with the argument made by
Nicholas Carr to support his position that IT
no longer gives companies a competitive
• Do you agree with the argument made in support
of the competitive advantage that IT can provide
to a business?
• What are several ways that IT could provide
competitive advantage to a business?
• To succeed, a business must develop strategies
to counter these forces…
• Rivalry of competitors within its industry
• New entrants into an industry and its markets
• Substitute products that may capture market share
• Bargaining power of customers
• Bargaining power of suppliers
Competitive Forces and Strategies
Five Competitive Strategies
• Cost Leadership
• Become low-cost producers
• Help suppliers or customers reduce costs
• Increase cost to competitors
• Example: Priceline uses online seller bidding so the
buyer sets the price
• Differentiation Strategy
• Differentiate a firm’s products from its
• Focus on a particular segment or niche of market
• Example: Moen uses online customer design
...are also those who gather crucial information and act on them quickly. Making informed business decisions enables businesses to accomplish their business growth and enables them to utilize the information to their competitive advantage. An adequate infrastructure that provides information across the business is needed to execute this vision.
Informationtechnology is needed to facilitate the creation of integrated management information. It is crucial in improving coordination and access to information across all business units and allows more effective management of task interdependence. Enterprise resource planning is business management software. It usually consists of integrated applications. This is used to collect, manage, store and interpret data from all business activities that includes: cost, manufacturing, product planning, service delivery, Marketing and sales, inventory management and even shipping and payment.
EPR provides an integrated view of the business core processes and often in real time. This is done by usage of common databases maintained by a database management system. ERP also tracks the business resources (raw materials, cash, and production capacity) and also the status of business commitments (purchase orders, supply orders and payroll) the applications that make up the system shares data across various departments. It facilitates the flow of...
...Informationtechnology (IT) is the application of computers and telecommunications equipment to store, retrieve, transmit and manipulate data, often in the context of a business or other enterprise. The term is commonly used as a synonym for computers and computer networks, but it also encompasses other information distribution technologies such as television and telephones. Several industries are associated withinformationtechnology, including computer hardware, software, electronics, semiconductors, internet, telecom equipment, e-commerce and computer services.[a]
Humans have been storing, retrieving, manipulating and communicating information since the Sumerians in Mesopotamia developed writing in about 3000 BC, but the term informationtechnology in its modern sense first appeared in a 1958 article published in the Harvard Business Review; authors Harold J. Leavitt and Thomas L. Whisler commented that "the new technology does not yet have a single established name. We shall call it informationtechnology (IT)." Their definition consists of three categories: techniques for processing, the application of statistical and mathematical methods to decision-making and the simulation of higher-order thinking through computer programs.
Based on the storage and processing...
Management is the backbone of an organization and informationtechnology today is at heart of a business plan. Informationtechnology has bridge the way between organizational operations with external environment. This process has facilitated the pace of activities and lessens the time needed to carry out these operations amplifying the revenues manifolds. The rise ofinformation economies has boosted the global trade and fueled the need of new business processes and models which will be effective to manage information. IT is an important part of decision making process as available information is a base to decision making. Electronic enabling of information transfer has brought together the suppliers, intermediaries, retailers, customers and external groups which react to customer demands and change right away. (Martin, Silvia, Thomas, 2009)
The integration of IT has reduced the business expenditure many times by reducing workforce and unnecessary activities of business. The IT has modified the firms in to digital instead of traditional firms. The complete digitalization of firms is still a vision still not obtained. These digital firms are quick in response and sense changes in environment faster. The flexibility to change has heated the level of competition and prosperity....
...Chapter 2: Competing with InformationTechnology
Contributors: John Richardson, Kim Wandersee, Les Pang, Marlene Wilcox
Chapter 2 introduces fundamental concepts of competitive advantage through informationtechnology and illustrates major strategic applications of information systems.
InformationTechnology (IT) professionals must understand how to use IT systems andtechnology to deliver a competitive advantage to the organization. Information systems and technology should provide more than a cost savings benefit to organizations. Today, IT solutions are expected to provide the means to surpass a competitor’s performance. As discussed in Chapter 1, the role of IT professionals is changing. Currently, there is an evolving term, business technology, which is used to describe the emerging role in IT. IT professionals are becoming more and more integrated with the business operations of an organizations. The Real World Case Study 4, "IT Leaders: Reinventing IT as a Strategic Business Partner," describes how one organization is reorganizing to better utilize IT to increase business benefits and contribute to a competitive advantage. It is important for an IT organization to utilize IT to reduce the cost of running the business, grow the business, or develop new services to change the business.
...Management Information System
Faiz Moazzam Dar
Submitted to Sir Humayun Zaheer
Department of Computer Science
BAHRIA UNIVERSITY, ISLAMABAD
UPS COMPETES GLOBALLY WITH INFORMATIONTECHNOLOGY
Q1. What are the inputs, process, and outputs of UPS’s package tracking system?
Scan able barcoded label
Pickup and Delivery Information
Customer Information / Signature
Current Location of the Parcels (while en route)
Billing and Customer Clearance Documentation
The data is transmitted to a central computer and stored for retrieval. Data is also organized in such a way that it can be tracked by the customer.
Pickup and Delivery Times
Proof of Delivery
Position of Parcel
Signatures of Receiver
Reports on the Stages of Delivery
Summary Reports for Management
Q2. What technologies are used by UPS? How are these technologies related to UPS’s business strategy?
Following are the technologies used by UPS:
Handheld Computers called Delivery Information Acquisition Device (DIAD)
Wired and Wireless Communication Networks (GPRS and CDMA)
Bluetooth and Infrared Pot for Instant Messaging
In-house GPS Tracking Software
Many Professional groups have explicit rules governing ethical behavior in the workplace. For example, doctors and lawyers who commit egregious violations of their professions’ canons of conduct can be removed from practice. Unlike the medical and legal fields, however, the InformationTechnology field in general, and the information security field in particular, do not have a binding code of ethics. Instead, professional associations—such as the Association for Computing Machinery (ACM) and the Information Systems Security Association—and certification agencies—such as the International Information Systems Security Certification Consortium, Inc., or (ISC)—work to establish the profession’s ethical codes of conduct. While these professional organizations can prescribe ethical conduct, they do not always have the authority to banish violators from practicing their trade. We begin exploring some of the ethical issues particular to information security by looking at the Ten Commandments of Computer Ethics.
THE 10 COMMANDMENTS OF COMPUTER ETHICS
From The Computer Ethics Institute
1. Thou shalt not use a computer to harm other people.
2. Thou shalt not interfere with other people’s computer work.
3. Thou shalt not snoop around in other people’s computer files.
4. Thou shalt not use a computer to steal....
...1. In what respect does business strategy resemble military strategy?
In military strategy, business strategy resembles a framework or an approach to obtaining an advantageous position.
2. Refer to Chapter 1’s discussion of different types of information systems. Which types of ISs can gain strategic advantage and which cannot? Why?
Maximizing sales and lowering costs are two strategies in information systems that help gain strategic advantage because it helps to maximize its strength and results in a competitive advantage.
3. What should an information system achieve for an organization in order to be considered a strategic information system?
An information system that takes a certain amount of creativities, imaginations, and vision to identity an opportunity or to create on and act on it, that also helps to seize opportunities.
4. What strategic goal can an IS attain that does not involve wresting market share from competitors?
To maximize profits by lowering costs and increasing revenue.
5. What conditions must exist in an organization planning an SIS?
a. The information system must serve an organizational goal rather than simply provide information,
b. The organization’s IS unit must work with managers of other functional units to achieve the organizational goal.
6. Sometimes it is difficult to convince top management to...