Pertemuan 25
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Materi :
– Understanding e-Business Strategic and
Tactical
•
Buku Wajib & Sumber Materi :
– Turban, Efraim, R. Kelly Rainer and Richard
E. Potter (2003). Introduction to
Information Technology. Second Edition.
John Wiley & Sons, Inc. Bab 13
Strategic Information Systems
• Strategic Information Systems :
systems that support or shape an
organization’s competitive strategy
• May significantly change the way the
business operates
• Makes substantial contribution toward
achieving strategic goals
• May increase performance and
productivity significantly
Strategic Information Systems
• Outward focus: aimed at direct competition
in an industry
• Inward focus: enhance the competitive
position of the firm through…
– Increasing employee productivity
– Improving teamwork
– Enhancing communication
• Strategic Alliances : two or more companies
share an inter-organizational system for
mutual benefit
Competitive Strategy & IT
• Strategy is the creation of a unique and
valuable position, involving a set of
activities different than what rivals do
• IT creates competitive advantage by
giving companies new ways to
outperform their rivals
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Create new applications
Enable reengineering of business processes
Enable innovation
Provide competitive intelligence
Competitive Intelligence on the
Internet
Intelligence Search Strategy
Review competitor’s Web sites
Analyse related newsgroups
Examine publicly available
financial documents
Description
Reveal information about
marketing information
Find out what people think about a
company and its products
By entering a number of databases
and analyse findings
Do market research at your
own Web site
Pose questions to Web site visitors
Use an information delivery service
to gather news on competitors
Find what is published on the
Internet about competitors
Use corporate research companies
Provide information ranging from
risk analysis to stock market
analysts’ reports about competitors
Porter’s Competitive Forces
Model and IT
• Porter’s Competitive Forces Model
– Competition - at the core of a firm’s success or
failure
– Used to develop strategies for companies to
increase their competitive edge
– Demonstrates how IT can enhance the
competitiveness of corporations
– 5 major forces:
Threat of entry of new competitors
Threat of substitute products or services
Bargaining power of suppliers
Bargaining power of customers (buyers)
Rivalry among existing firms in the industry
Porter’s Five Forces Model
Porter’s Competitive Forces
Model and IT
• Response Strategies (Per Porter and Others) –
may be supported in part by IT
– Cost leadership strategy - producing at lowest cost
– Differentiation strategy - being unique
– Focus strategy - selecting a narrow-scope segment
– Growth strategy - increasing market share
– Alliances strategy - working with business partners
– Innovation strategy - developing new products
– Internal efficiency strategy - improving the manner
in which business processes are executed
– Customer-oriented strategy - concentrating on
making customers happy
Impact of IT on Competitive Forces
Key Forces Affecting
Business
the Industry
Implications
Threat of new
• Additional capacity
entrants
• Reduced prices
• New basis for
competition
High power
suppliers
High power
buyers
• Raise prices/costs
• Reduce quality of
supply
• Reduce availability
• Forces prices down
• Higher quality
demanded
• Service flexibility
required
• Encourage competition
Potential IT
Responses
• Exploit existing economies
of scale
• Differentiate products /
services,
• Control distribution channels
• Segment markets
• Implement sourcing systems
• Extend quality control into
suppliers’ operations
• Use forward planning with
suppliers
• Differentiate and improve
products/ services
• Increase switching costs of
buyers
• Facilitate buyers product
selection
Impact of IT on Competitive Forces
Key Forces Affecting
the Industry
Business
Implications
Substitute products
threatened
• Limits potential and
profit
• Imposes price ceilings
Intense competition
from rivals
• Price competition
• Need to develop new
products and services
• Distribution and
service become
critical
• Customer loyalty
required
Potential IT
Responses
• Use differentiation strategy
• Incorporate IT into product,
service, or method of
provision
• Improve price/performance
• Redefine products and
services to increase value
• Redefine market segments
• Differentiate products and
services in distribution
channels and to consumers
• Get closer to the end
consumer - understand the
user requirements
The Need for Organizational Change
• Organizational structures and processes
established in the Industrial Revolution are no
longer effective, due to…
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Globalization
Pressure for rapid change
Increasingly demanding customers
Opportunities afforded by IT
• Focus on vertical, functional organization is
inappropriate
• Need integration that spans departmental and
organizational boundaries
Business Process Reengineering
• Solution based on fundamental rethinking and
radical redesign of business processes to
achieve dramatic improvements in measures
of performance
• Elements:
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Job Enrichment
Employee Empowerment
Process Simplification
Mass Customization
Reduced Cycle Time
Changes in Work Rules Brought by IT
Old Rule
Intervening Technology
New Rule
Information appears in
only one place at one
time
Shared databases,
client/server architecture,
electronic mail
Information appears
simultaneously
wherever needed
Only an expert can perform
complex work.
Expert systems, neural computing
Novices can perform
complex work.
Managers make all
decisions.
Decision support systems,
enterprise support systems, expert
systems
Decision making is part
of everyone’s job
Field personnel need offices
to receive, send, store, and
process information.
Wireless communication and
portable computers, information
highways, electronic mail
You have to locate items
manually.
Tracking technology, groupware,
workflow software, client/server
Items are located
automatically
Plans get revised
periodically.
High-performance computing
systems
Plans get revised
instantaneously
whenever needed.
Field personnel can
manage information
from any location.
Changes in Work Rules Brought by IT
Old Rule
Intervening Technology
New Rule
People must come to
one place to work
together.
Groupware and group
support systems,
telecommunication,
electronic mail, client/server
People can work
together from different
locations.
Customized products and
services are expensive and
take a long time to develop.
CAD-CAM, CASE tools, online
systems for JIT decision making,
expert systems
Customized products
can be made fast and
inexpensively (mass
customization).
A long period of time is
spanned between the
inception of an idea and its
implementation (time to
market)
CAD-CAM, electronic data
interchange, groupware, imaging
(document) processing
Time-to-market can
be reduced by 90
percent
Work should be moved to
countries where labor is
inexpensive (off-shore
production).
Robots, imaging technologies,
object-oriented programming,
expert systems
Work can be also done
in countries with high
wages and salaries.
Networked Organization
• Resemble computer networks and are supported by
computerized systems
• Shift toward the networked organization due to the movement
toward an information-based economy
Hierarchical Organization
Formal
Highly structured
Manage
Control
Direct
Employees a cost
Information
management-owned
Hierarchical organizations
Risk avoidance
Individual contributions
Networked Organization
Informal
Loosely structured
Delegate/lead
Ownership/participation
Empower
Employees an asset
Information
shared ownership
Flatter/ manageable
organizations
Risk management
Team contributions
Virtual Corporations
• Characteristics of Virtual Corporations (VC)
– Excellence - each partner brings its core competence so an
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all-star winning team is created. No single company can
match what the virtual corporation can achieve.
Full utilization of resources - some resources of the
business partners may be underutilized when not in a VC.
Opportunism - the partnership is opportunistic. A VC is
organized to seize market opportunities.
Lack of borders - it redefines traditional boundaries.
Trust - business partners in a VC are far more reliant on each
other and more trusting than ever before.
Adaptability to change - the VC can quickly adapt to
environmental changes because its structure is relatively
simple.
Technology - IT makes the VC effective and efficient.