Information Systems in Organizations "Come, Watson, come! The game is afoot." - Sherlock Holmes Topics Apple Stumbles • Apple Maps • Watson on Jeopardy! • Chapter 11 - Developing Business • iOS 6 replaced Google Maps • Now uses Apple Maps • "the most beautiful, powerful mapping service ever." • Based on TomTom • But was it tested? 1-1 1-2 1-1 Excellent Article 1-8 1-2 IBM's Watson 1-8 Men vs. Machine on Jeopardy • Google Maps announces a 400 year advantage over Apple Maps • Really covers a lot of details for any big database application • I expect you to read it for next class • Watson was a computer designed to play the game Jeopardy • The process of developing the computer gave us greater thought into our own decision making process. • Tonight – the Games 1-31 1-33 1-31 Learning Objectives Chapter 11 Developing Business/IT Strategies 1-34 1-33 1-34 Planning Fundamentals • Discuss the role of planning in the business use of information technology, using the scenario approach and planning for competitive advantage as examples • IT created a seismic shift – Just knowing the importance and structure of e-business is not enough – Must be able to transform an old business design to a new e-business design • Discuss the role of planning and business models in the development of business/IT strategies, architectures, and applications • Identify several change management solutions for end user resistance to the implementation of new IT-based business strategies and applications McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. 11-48 11-49 RWC 1: IT/Business Alignment Components of Organizational Planning Scenario Approach • Gaining popularity • One Goal – Winning Customers – Every executive – Every manager – Every employee • Less formal • Virtual world (microworld) exercises • Business scenarios are created and evaluated • Critical Skills – Meeting or beating goals – External customer focus – Identifying and seizing commercial opportunities • Alternative scenarios are then created • Differentiating component – IT Capability – More than providing systems – Be part of the system 11-50 Strategic Visioning Questions 11-51 Trends that Affect Strategic Planning 11-53 SWOT Analysis Strategic Opportunities Matrix 11-54 Business Models and Planning • Strengths 11-52 11-55 Questions for Business Models • Vital questions – Core competencies and resources – Who are our customers? • Weaknesses – What do our customers value? – Areas of substandard business performance – How much will it cost to deliver that value? • Opportunities – How do we make money in this business? – Potential for new business markets or innovative breakthroughs • Threats – Potential for business and market losses 11-56 11-57 11-58 The Business/IT Planning Process Information Technology Architecture Balanced Scorecard • Measures activities in terms of vision and strategies • Conceptual design components – Technology platform – Financial performance – Data resources – Impact on customers – Application architecture – Performance of key business processes – IT organization – Company’s learning curve and growth • Four processes – Translate vision into operational goals – Communicate vision and link to performance – Business planning – Feedback/learning and strategy adjustment 11-59 Balanced Scorecard Example 11-60 11-61 Identifying Business/IT Strategies Strategic Positioning Matrix • Valuable Internet applications – Transcend communication barriers – Establish connections that enhance productivity – Stimulate innovative development – Improve customer relations www.steelwedge.com 11-62 Strategic Matrix 11-63 11-64 Strategic Strategies • Cost and Efficiency Improvements E-Business Strategy Examples • Global Market Penetration – Low internal and low external connectivity – Recommend – Use the Internet as a fast, low-cost way to communicate and interact with others • Performance Improvement in Effectiveness • • • • • • • – High external but low internal connectivity – Capitalize with e-commerce websites using value-added information services and extensive online customer support • Product and Service Transformation – High internal but low external connectivity – Recommend – Increase use intranets and extranets – High external and high internal connectivity – Develop and deploy new Internet-based products and services to create a new strategic position in the marketplace 11-65 11-66 Market Creator Channel Reconfiguration Transaction Intermediary Infomediary: Self-Service Innovator Supply Chain Innovator Channel Mastery 11-67 Business Application Planning Process Comparing Planning Approaches 11-68 Implementation Challenges E-Business Architecture Planning 11-69 RWC 2: Project Success Implementing Information Technology • People skills critical to project success • Implementation • Developments that have generated organizational change – Teamwork – Support during tough times – Do what you planned to do – Critical skill for managers • Many companies are good at planning • Few are good at executing the plan – Even if senior management consistently identifies e-business as an area of great opportunity and critical need 11-70 – – – – – – – – • Bad relationships leading cause of failure • Managers tend to go to software instead of building relations • Showing progress at short intervals helps Business process reengineering ERP systems Y2K compliance Shared service centers Just-in-time manufacturing Sales force automation Contract manufacturing Introduction of Euro currency • E-business is the latest catalyst 11-71 Impact and Scope of Implementing IT 11-72 Impact and Scope of Implementing IT 11-73 End User Resistance and Involvement • Change generates resistance • Examples: – Customer Relationship Management (CRM) – Knowledge Management Systems (KM) • CRM failures – CRM failure rate up to 75 percent – Causes for failure • Sales force automation problems • Unaddressed cultural issues 11-74 11-75 • Sales staffs fearful and thus resistant 11-76 Obstacles to KM Systems Keys to Solving End User Resistance Key Dimensions of Change Management • Create relationships – Understand the end-user’s situation • Provide education and training • Require involvement and commitment – End-users – Top management – All stakeholders • Eliminate frustration and inconvenience 11-77 Change Management Programs 11-78 Change Management Tactics • Develop a change action plan 11-79 A Change Management Process • Involve as many people as possible in ebusiness planning and application development • Assign managers as change sponsors • Develop employee change teams • Make constant change an expected part of the culture • Encourage open communications and feedback about organizational changes • Tell everyone as much as possible about everything, as often as possible, in person • Make liberal use of financial incentives and recognition • Work within company culture, not around it 11-80 11-81 RWC 3: Crucial Strategic Planning Elements Avnet Marshall’s Transformation RWC 4: The Science behind Change • Implementing changes is very challenging • Employees resist change • Understanding can lead to smoother transitions • Not everyone is motivated by ambition • Education and training aid with acceptance • Alignment between business and IT – IT strategic plan to improve the business-IT relationship – Articulate how IT fits into business and overall business strategy. • Apply clear strategy to business activities 11-83 11-82 11-84 11-85