Chapter 12 Notice Systems for Strategic Usage V. LECTURE NOTES SECTION I: Fundamentals of Strategic Usage Notice technology can shift the way vocationes contend. For this infer, you should survey notice classifications strategically, that is, as life-containing competitive networks, as a media of formal renewal, and as a requipose cannonade in technologies that acceleration an execution end its strategic objectives. Analysing GATX Capital We can gather a lot about the strategic use of notice technology for competitive usage from the Real Cosmos-community Case of GATX Capital.
Take a few minutes to discaggravate it, and we get sift-canvass it (See GATX Capital City in exception XI). 12-1Competitive Temporization Concepts: [Figure 12. 2] The strategic role of notice classifications envelops using notice technology to clear results, usages, and capabilities that afford a union strategic usages aggravate the competitive forces it faces in the global bargainplace. This imagines strategic notice classifications, notice classifications that livelihood or standard the competitive pose and strategies of an execution. So a strategic notice classification can be any skin of notice classification (TPS, MIS, DSS, etc. that accelerations an form: 1. Fashion a competitive usage 2. Diminish a competitive disusage 3. Coalesce other strategic execution objectives According to Michael Porter, a strong can outlast and complete in the covet run if it consummationfully clears strategies to face five competitive forces that standard the foundion of rivalry in its activity. These grasp: 1. Rivalry of antagonists incompact its activity 2. Threat of new entrants 3. Threat of substitutes 4. Bargaining command of customers 5. Bargaining command of suppliers A miscellany of competitive strategies can be cleared to acceleration a strong face these competitive forces.
These grasp [Figure 12. 3]: Exact Leadership Strategy- Befit a lowexact purpose of results and usages - Experience ways to acceleration suppliers or customers diminish their exacts - Acception the exacts of antagonists. Differentiation Strategy-Develop ways to propagate results and usages from antagonists. - Diminish the differentiation usages of antagonists. Newfangledness Strategy- Experience new ways of doing vocation: a) clear new results & usages b) penetrate new bargains or bargaining members. c) demonstrate new vocation cooperations ) experience new ways of surrendering results/services e) experience new ways of distributing results/services Result Strategies-Significantly spread the union=s compatpower to remainder goods and usages. - Spread into global bargains - Diversify into new results and usages - Integrate into connected results and usages. Coagency StrategiesEstablish new vocation convergeages and cooperations succeeding a occasion customers, suppliers, antagonists, consultants and other companies (mergers, acquisitions, junction ventures, forming implied companies, etc. ). 12-2Strategic Roles for Notice Systems:
How can the former competitive temporization concepts be applied to the strategic role of notice classifications? Notice technology can be used to instrument a miscellany of competitive strategies. These grasp the five basic competitive strategies (differentiation, exact, newfangledness, result, cooperation), as polite as other ways that companies can use notice classifications strategically to fashion a competitive aspect. For pattern: 1. Inferior Costs 2. Propagate 3. Innovate 4. Promote Result 5. Clear Alliances 6. Correct sort and willingness 7. Found an IT platform 8. Other strategies use interorganizational notice classifications to imagine switching exacts that lock in customers and suppliers. - use cannonades in IT to found barriers to entrance abutting activity outsiders. - use IT components to reach supply of competing results uninteresting. Beseeming Vocation Processes: Investments in notice technology can acceleration reach a strong’s agencyal regularityes actually further efficient, and its directorial regularityes abundant further efficient. By making such increases to its vocation regularityes a strong may be efficacious to: 1. Dramatically cut exacts 2.
Improve the sort and customer usage 3. Clear innovative results for new bargains Promoting Vocation Newfangledness Investments in notice classifications technology can remainder in the clearment of new results, usages, and regularityes. This can: 1. Imagine new vocation opportunities 2. Enefficacious a strong to penetrate new bargains 3. Enefficacious a strong to penetrate into new barfind members of existing bargains. Lock In Customers & Suppliers Investments in notice technology can besides grant a vocation to lock in customers and suppliers (and lock out antagonists) by founding computefficacious new relationships succeeding a occasion them.
This can be obliging by: 1. Deters twain customers and suppliers from surrendering a strong for its antagonists or imminent a strong into accepting near acquisitionefficacious relationships. 2. Offer reform-sort usage to customers grants a union to propagate themselves from their antagonists. 3. Imagine interorganizational notice classifications in which telecommunications networks electronically converge the terminals and computers of vocationes succeeding a occasion their customers and suppliers, remaindering in new vocation cooperations and partnerships.
Creating Switching Costs A superior argument in strategic notice classifications is to found switching exacts into the relationships betwixt a strong and its customers or suppliers. That is, cannonades in notice classifications technology can reach customers or suppliers hanging on the continued use of innovative, mutually acquisitionable interorganizational notice classifications. Then, they befit disinclined to pay the exact in term, coin, trial, and molest that it would engage to shift to a strong’s antagonists.
Example: APOLLO (USA) airline appropriation classification, and GEMNI (CAN) airline appropriation classification Raising Barriers to Entrance Cannonade in notice technologies that acception agencyal willingness can found barriers to entrance for new players in the activity, and can intimidate strongs already in the bargain. This can be obliging by: 1. Increasing the sum of cannonade or the complication of the technology exactd to contend in a barfind member. 2. Intimidate strongs already in the activity and indispose exterior strongs from penetrateing the activity. Leveraging a Strategic IT Platform
Information technology strengthens a strong to found a strategic IT platform that grants it to engage usage of strategic opportunities. Typically, this media acquiring hardware and software, clearing telecommunications networks, hiring notice classification specialists, and trailing end users. A strong can then leverage cannonade in notice technology by clearing new results and usages. Developing a Strategic Notice Ignoble Notice classifications grant a strong to clear a strategic notice ignoble that can procure notice to livelihood the strong's competitive strategies.
A strongs’ axiomsignoble is considered a strategic contrivance which is used to livelihood strategic planning, bargaining, and other strategic initiatives. These contrivances are substance used by strongs in such areas as: 1. Strategic planning 2. Marketing campaigns 3. Erecting barriers to entrance for antagonists 4. Finding reform ways to lock in customers and suppliers 12-3Breaking Vocation Barriers: [Figure 12. 7] Various life-containing capabilities of notice technology that rupture oral barriers to strategic vocation consummation grasp: 1.
Break term barriers. 2. Rupture geographic barriers. 3. Rupture exact barriers. 4. Rupture structural barriers. Nonobservance Term Barriers Notice technology is used to abridge the intervals betwixt the diverse exact steps in a vocation regularity. Telecommunications is a lot recklesser than most other forms of communications, thus, it procures notice to foreign locations forthafter a occasion succeeding it is requested. Nonobservance Geographic Barriers Telecommunications networks enefficacious you to impart succeeding a occasion crowd approximately anywnear in the cosmos-people.
Telecommunications and computing technologies reach it practicable to bisect key vocation activities to wnear they are needed, wnear they are best produced, or wnear they best livelihood the competitive usage of a vocation. Nonobservance Exact Barriers Computers and telecommunications can frequently significantly diminish the exact of vocation agencys when compared succeeding a occasion other media of notice regularitying and communications. For pattern, they can diminish exacts in such areas as formation, list, classification, or communications.
Information technologies bear besides accelerationed companies cut labour exacts, minimize list rolls, diminish the estimate of classification centres, and inferior communications exacts. The New Economies of Information: The internetworking of vocationes and consumers via the Internet, intranets, and extranets is ruptureing the exact barriers tall by oral economic trade-offs in notice satisfied and exhibition. In communicating succeeding a occasion each other and consumers, vocationes bear had to reach trade-offs betwixt: Reach:The estimate of crowd receiving or exchanging notice.
Richness:The bandwidth, customization, and interactivity of notice. Bandwidth is the sum of notice satisfied delivered incompact a affordn term end. Customization is the range to which notice satisfied is customized for its case. Interactivity is the sum of discourse betwixt the notice procurer and the case. Nonobservance Structural Barriers Computers and telecommunications networks can acceleration a vocation clear strategic relationships by demonstrateing new electronic convergeages succeeding a occasion customers, suppliers, and other vocation entities.
For pattern, telecommunications networks can livelihood newfanglednesss in the exhibition of usages, acception the occasion and insight of bargains, and imagine strategic cooperations succeeding a occasion customers, suppliers, and plain a strong’s antagonists. 12-4The Compute Tie and Strategic IS: [Figure 12-10] An main concept that can acceleration a director conestablished opportunities for strategic notice classifications is the compute tie concept as cleared by Michael Porter. This concept: 1. Views a strong as a course or "chain,” of basic activities that add compute to its results and usages and thus, add a aspect of compute to the strong. 2.
Some vocation activities are surveyed as primary activities, and others are livelihood activities. This framework can excellentlight wnear competitive strategies can best be applied in a vocation. 3. Managerial end users should try to clear strategic notice classifications for those activities that add the most compute to a union’s result or usages, and thus to the aggravateall vocation compute of the strong. SECTION II: Strategic Applications and Issues in Notice Technology: [Figure 12-11] Figure 12-11 illustrates diverse ways in which forms survey and use notice technology. These grasp: 1. Strategic . Offensive 3. Defensive 4. Cost-justified 5. Controlled 12-5Reengineering Vocation Processes One of the most affectd competitive strategies today is vocation regularity reengineering (BPR), most frequently merely denominated reengineering. Reengineering is the primary rethinking and extreme redesign of vocation regularityes to end meretricious increases in exact, sort, press, and usage. BPR combines a temporization of promoting vocation newfangledness succeeding a occasion a temporization of making superior increases to vocation regularityes so that a union can befit a abundant stronger and further consummationful antagonist in the bargainplace.
The implicit payback of reengineering is excellent, but besides is its roll of imperil and hostility to the formal environment. The Role of Notice Technology Notice technology plays a superior role in reengineering vocation regularityes. The press, notice regularitying command, and ease-of-use of recent computer hardware, software, and networks can meretriciousally acception the willingness of vocation regularityes, and communications and collaboration incompact the crowd legal for their agency and government. 12-6Improving Vocation Sort No unmarried entrance to formal shift is mismisappropriate for all proviso.
One main strategic push is uniform sort increase, affectdly denominated aggregate sort government (TQM). Previous to TQM, sort was defined as consultation demonstrateed standards or specifications for a result or usage. Statistical sort administer programs were used to mete and correct any deviations from standards. Aggregate Sort Management: Sort is defined as consultation or complete the fitnesss and expectations of customers for a result or usage. This may envelop manifold features and attributes such as: 1. Deed 2. Relipower 3. Durpower 4.
Responsiveness 5. Aesthetics 6. Reputation Aggregate sort government uses a miscellany of tools and methods to follow uniform increase of sort, resultivity, flexibility, termliness, and customer responsiveness. 12-7Becoming an Swift Competitor: [Figure 12-20] Agility in competitive deed is the power of a vocation to flourish in expeditiously changing, frequently fragmenting global bargains for excellent-quality, excellent-performance, customer-configured results and usages. An swift union can: 1. Reach a acquisition in bargains succeeding a occasion wide result ranges and less standard lifetimes 2.
Process nod in irresponsible lot sizes 3. Offer individualized results occasion maintaining excellent volumes of formation. Swift companies continue heavily on notice technology to: 1. Enriched its customers succeeding a occasion customized solutions to their needs. 2. Cooperate succeeding a occasion other vocationes to induce results to barfind as expeditiously and exact-efficient as practicable. 3. Combine the yielding, multiple formal foundions it uses. 4. Leverage the competitive collision of its crowd and notice contrivances. The Role of Notice Technology IT is a strategic fitness for swift result clearment and exhibition.
Information classifications procure the notice crowd need to livelihood swift agencys, as polite as the notice built into results and usages. 12-8Creating a Implied Company: [Figure 12-21] A implied union is an form that uses notice technology to converge crowd, possessions, and ideas. Six basic characteristics of consummationful implied companies grasp: 1. Adaptpower 2. Opportunism (opportunity-exploiting form) 3. Excellence 4. Technology 5. Bordernear 6. Trust-based Implied Union Strategies: Forming implied companies bear befit an main competitive temporization in today=s dynamic global bargains.
Information technology plays an main role in providing computing and telecommunications contrivances to livelihood the communications, coordination, and notice flows needed. Managers of a implied union continue on IT to acceleration them administer a network of crowd, recognition, financial, and substantial contrivances procured by manifold vocation partners to undeviatingly engage usage of expeditiously changing standard opportunities. Vocation strategies of implied companies grasp: 1. Divide infraerection and imperil 2. Converge complementary centre contendncies 3. Diminish concept to coin term through sharing 4.
Increase facilities and barfind coverage. 5. Fashion advent to new bargains and divide barfind or customer fealty 6. Migrate from selling results to selling solutions. 12-9Building the Knowledge-Creating Union To manifold companies today, enduring competitive usage can barely be theirs if they befit recognition-creating companies or group forms. That media gratefully creating new vocation recognition, disseminating it widely throughout the union, and undeviatingly founding the new apprehendlaspect into their results and usages. Knowledge-creating companies achievement two skins of technology: 1.
Explicit Knowledge- axioms, instruments, things written down or stored on computers. 2. Tacit Knowledge- “how-tos” of recognition, which inhabit in workers. Fortunate apprehendlaspect government imagines techniques, technologies, and rewards for getting employees to divide what they apprehend and to reach reform use of accumulated workplace recognition. Knowlaspect Government Systems Knowlaspect government has befit one of the superior strategic uses of notice technology. Manifold companies are founding apprehendlaspect government classifications to administer formal group and vocation apprehend-how.
The end of KMS’s is to acceleration apprehendlaspect workers imagine, constitute, and reach availefficacious main vocation recognition, wherever and whenever it’s needed in an form. This grasps regularityes, procedures, pattens, regard works, formulas, “best practices,” forecasts, and fixes. Internet and intranet web poses, groupware, axioms mining, apprehendlaspect ignobles, sift-canvassion forums, and videoconferencing are some of the key notice technologies for group, storing, and distributing this recognition. Characteristics of KMS’s: 1. KMS’s are notice classifications that dispose formal group and apprehendlaspect myth. . KMS’s use a miscellany of notice technologies to sum and edit notice, assess its compute, propagate it incompact the form, and exercise it as apprehendlaspect to the regularityes of a vocation. 3. KMS’s are casually denominated adaptive group classifications. That’s accordingly they imagine cycles of formal group denominated group loops, wnear the myth, dissemination, and collision of apprehendlaspect remainders an adaptive group regularity incompact a union. 4. KMS’s can procure swift feedback to apprehendlaspect workers, promote behaviour shifts by employees, and significantly correct vocation deed. . As an formal group regularity continues and its apprehendlaspect ignoble spreads, the recognition-creating union integrates its apprehendlaspect into its vocation regularityes, results, and usages. This reachs it a excellently innovative and swift procurer of excellent sort results and customer usages, and a formidefficacious antagonist in the bargainplace. 12-10Using the Internet Strategically In the late the Internet has been used as a bargaining utensil for companies who deficiency to announce notice about themselves and their results. Recently, this has affordn way to further innovative uses of the Internet.
Organizations bear realized that the Internet can be used strategically for competitive usage. However, in dispose to optimize this strategic collision, a union must frequently assess the strategic pose of its Internet-based collisions. A strategic pose matrix can acceleration a union conestablished wnear to centralize its use of the Internet to fashion competitive usage. These strategies grasp: • Exact and Willingness Improvements - this quadrant represents a low sum of interior union, customer, and antagonist connectivity and use of IT via the Internet and other networks.
Strategy: Focus on beseeming willingness and inferioring exacts by using the Internet and the Cosmos-community Wide Web as a reckless, low exact way to impart succeeding a occasion customers, suppliers, and vocation partners. Example:The use of E-mail and a union Web pose. • Deed Increase in Vocation Effectiveness - near a union has a excellent range of interior connectivity and pressures to actually correct its vocation regularityes, but exterior connectivity by customers and antagonists is stagnant low. Strategy: Reach superior increases in vocation efficientness.
Example:Widespdiscaggravate interior use of Internet-based technologies affect intranets can actually correct notice sharing and collaboration incompact the vocation. • Global Barfind Insight - a union that penetrates this quadrant of the matrix must capitalize on a excellent range of customer and antagonist connectivity and use of IT. Strategy: Clear Internet-based collisions to optimize interaction succeeding a occasion customers and found barfind divide. Example:Outstanding Web poses succeeding a occasion compute-added notice usages and online customer livelihood. Result and Usage Transformation near a union and its customers, suppliers, and antagonists are indiscriminately networked. Internet-based technologies, including Web poses, intranets, and extranets, must now be instrumented throughout the union’s agencys and vocation relationships. Strategy:Develop strategic electronic traffic collisions to clear and deploy new Internet-based results and usages that strategically repose it in the bargainplace. Example:Use the Internet for online affair regularitying of sales of results and usages at union Web poses, and electronic instrument intershift (EDI) succeeding a occasion suppliers.
Internet Compute Chains: The compute tie concept accelerations a union evaluate how to use notice technology strategically. Compute ties can besides be used to strategically pose a union’s Internet-based collisions to fashion competitive usage. The compute tie standard can be used to plan various ways that a: 1. Company’s Internet connections succeeding a occasion its customers could procure vocation favors and opportunities for competitive usage. 2. Company’s Internet connections succeeding a occasion its suppliers could be used for competitive usage. 3.
Company’s interior agencys can favor strategically from Internet-based collisions. 12-11The Challenges of Strategic IS The IS duty can acceleration directors clear competitive weapons that use notice technology to instrument a miscellany of competitive strategies to coalesce the challenges of the competitive forces that face any form. Fortunate strategic notice classifications are not self-possessed to clear and instrument. They may exact superior shifts in the way a vocation operates, and in their relationships succeeding a occasion customers, suppliers, antagonists, interior and exterior stakeholders, and others. 2-12Sustaining Strategic Success: [Figure 12-34] Consummation and stay power continues on manifold environmental and primary vocation rudiments, and in-particular on the actions and strategies of a union’s government team. Sustained consummation in using notice technology strategically seems to continue on three sets of rudiments: • The Environment - a superior environmental rudiment is the foundion of an activity. • Base Factors - uncommon activity pose, cooperation, possessions, technological contrivances, and expertise are base rudiments that afford a union a competitive aspect in the bargain. Government Actions and Strategies - a union’s government must clear and arise consummationful actions and strategies that standard how notice technology is actually applied in the bargainplace. Examples grasp: a. Preempting the barfind by substance primary and way afront of antagonists in a strategic vocation use of IT. b. Creating switching exacts and barriers to entrance c. Developing strategies to tally to the catch-up moves of antagonists d. Managing the vocation imperils imminent in any strategic IT initiatives