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Systems and Strategy
By
Shamira Dias
Introduction
• Begins with ‘system planning activity’ that determines
which projects are started according to the needs of the
enterprise
• Enables business plan to be translated into developed
computer system to meet business goals
• Business goal
– Relate to profit , or growth, or market share but also focus on
customer services and safety or staff development.
– Identify of key results areas which specify in turn the need for new
systems
• Necessary to explore the wider context of how information
systems fit into business strategy
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Introduction
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Cost / Benefit Analysis
The Cost/Benefit analysis part of the business case presents a description and
where possible a quantification of the costs of carrying out the project and of
the benefit that are expected to flow from it
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Basic Types of Project Selection
Model
• Numeric
• Nonnumeric
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Types of Project Selection Models:
Nonnumeric
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Sacred Cow
Operating Necessity
Competitive Necessity
Product Line
Extension
• Comparative Benefit
Model
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Nonnumeric Model
• The Sacred cow
In this case the project is suggested by a senior and
powerful official in the organization
• The operation necessity
if the flood is threatening the plant a project to build a
protective dike does not require much formal evaluation
• The competitive necessity
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Nonnumeric Model
• The production line extension
• The Comparative benefit model
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Numeric Project Selection Models:
Profit / Profitability
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•
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Payback Period (PB)
Average Rate of Return
Discounted Cash Flow (NPV)
Internal Rate of Return
Profitability Index
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What is strategy all about
• Strategy is no about “where do you want to go” and “how
do you get there”
• Strategy is not standing of an organization nor is it about
the steps it should take
• Strategy is about stand
Key questions “who are you” and “what do you stand for”
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What is strategy all about
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What is strategy all about
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Developing a
Strategy
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Stakeholders
Who are they
• …
What do they do?
• …
What do they value?
• …
Speaker
Description
•Experienced
•New speaker
•Passionate
Duties
•Register talk
•Upload slide
•Give talk
Stakeholders
Who are they
•…
What do they do?
•…
What do they value?
•…
Values
•Constructive
feedback on talk
•Fast answer
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Group Work
Currently there are 5 Cargill’s super markets in
Colombo.
Project: They are going to start another 15 in other parts
of Sri Lanka.
Analyze the stakeholder of the project
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SWOT Analysis
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Group Work
Currently there are 5 Cargill’s super markets in
Colombo.
Project: They are going to start another 15 in other parts
of Sri Lanka.
Analyze the project using SWOT
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PESTEL Analysis
• PEST stands for political, economic, social and
technological. Two more factors, the
environmental and legal factors, are defined within
the PESTEL analysis
• PEST analysis describes a framework of macroenvironmental factors used in the environmental
scanning component of strategic management
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PESTEL Analysis
• Political factors consider how and to what degree
a government intervenes in the economy.
• Economic factors include economic growth,
interest rates, exchange rates and the inflation
rate. These factors have major impacts on how
businesses operate and make decisions.
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PESTEL Analysis
• Social factors include the cultural aspects and
include health consciousness, population growth
rate, age distribution, career attitudes and
emphasis on safety. Trends in social factors affect
the demand for a company's products and how
that company operates.
• Technological factors include technological
aspects such as R&D activity, automation,
technology incentives and the rate of technological
change.
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PESTEL Analysis
• Environmental factors include ecological and
environmental aspects such as weather, climate,
and climate change, which may especially affect
industries such as tourism, farming, and insurance.
• Legal factors include discrimination law, consumer
law, antitrust law, employment law, and health and
safety law. These factors can affect how a
company operates, its costs, and the demand for
its products.
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Group Work
Currently there are 5 Cargill’s super markets in
Colombo.
Project: They are going to start another 15 in other
parts of Sri Lanka.
Analyze the project using PESTEL
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Competition and Strategy
Porter’s view is that the essence of strategy
formulation is dealing with competition. He sees the
competitive world as a violent environment within
which the business position of an organization is
determined by five forces acting on it. Porter’s five
forces model
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Porter’s Competitive Forces Model
The model recognizes five major forces that could
endanger a company’s position in a given industry.
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•
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The threat of entry of new competitors
The bargaining power of suppliers
The bargaining power of customers (buyers)
The threat of substitute products or services
The rivalry among existing firms in the industry
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Porter’s Competitive Forces Model
New
entrants
Threat of new
entrants
Suppliers
Bargaining
power of
suppliers
Industry
competitors
Bargaining
power of
buyers
Buyers
Intensity of
rivals
Threat of
substitutes
Substitutes
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Porter’s Competitive Forces Model
Entry Barriers
Rivalry Determinants
Economies of Scale
Proprietary product differences
Brand identity
Switching Costs
Capital Requirements
Access to distribution
Absolute cost advantages
Proprietary learning curve
Access to necessary inputs
Proprietary low-cost product design
Government policy
Expected retaliation
New
entrants
Industry
competitors
Industry Growth
Fixed (or storage) costs/value added
Product differences
Brand identity
Switching costs
Concentration and balance
Informal complexity
Diversity of competitors
Corporate stakes
Exit barriers
Suppliers
Buyers
Intensity of
rivals
Determinants of Supplier Power
Differentiation of inputs
Switching costs of suppliers and firms in
the industry
Presence of substitute inputs
Supplier concentration
Importance of volume to supplier
Cost relative to total purchases in the
industry
Impact of inputs on cost or differentiation
Threat of forward integration relative to
threat of backward integration by firms in
the industry
Substitutes
Determinants of Substitution Threats
Relative price/performance of substitutes
Switching costs
Buyer propensity to substitute
Determinants of Buyer Power
Buying Leverage
Price Sensitivity
Buyer concentration
versus firm concentration
Buyer volume
Buyer switching costs
relative to firm switching
costs
Buyer information
Abilty to backward
integrate
Substitute products
Pull-through
Price total purchases
Product differences
Brand identity
Impact on
quality/performance
Buyer profits
Decision makers’
incentives
Group exercise -Analyse the competitive
forces of Cargills
New
entrants
Suppliers
Bargaining
power of
suppliers
Threat of new
entrants
Bargaining
Industry
power of
competitors
buyers
Buyers
Intensity of
rivals
Threat of
substitutes
Substitutes
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Porter’s Competitive Forces Model
- Cargills
Potential New Entrants
Foreign General
Merchandisers
Established Retailers shifting
strategy to supermarkets
Internet Vendors?
Bargaining Power of Suppliers
Stassens
Nestle, Unilever ,etc,
FMCG Companies (Hemas,
P&G etc.)
Importers
Food Producers
Intra-Industry Rivalry
Arpico
Keells Super
Premasiri
Laugfs
Kings, CWE, Other retailers
Bargaining Power of Buyers
Consumers (Rural)
Consumers (Metropolitan)
Substitute Products or Services
Food Producers
Kade / Pola
Mobile produce Sellers
…
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Systems
Sequential relationship
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Project Management Frameworks
Overlapping relationship
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Lets Take Scrum
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Scrum Elements and Artifacts
Time box Elements
- Release Plan meeting
- Sprint Plan Meeting
- Sprint
- Daily Scrum Meeting
- Retrospective
- Sprit Review
Principle Artifacts
-Product Backlog
-Sprint Backlog
-Release burndown
-Sprint burndown
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Project Kick-off
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Sprint
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Sprint Planning
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Daily Scrum
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Sprint Review
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Sprint Retrospective
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Maslow's hierarchy of needs
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