Strategic Initiatives for Implementing
Competitive Advantage
Great products—Innovative products
Doesn’t matter---Bad processes—no perceived value
1) You want customers to buy your product
2) You have to be able to produce at a price customers are willing to pay
Using IT to gain a competitive advantage
• Businesses use IT to give themselves a
competitive advantage
– Customers value their product or service more than
the competition’s product or service.
• How can we do things better and more
efficiently? Is there a better way of doing things?
– Businesses have to understand the process by which
they do things
• Find bottlenecks
• Remove redundant tasks
• Recognize smooth running processes
Business Processes Drive IT choices
• Business strategies and goals drive processes
– Figure out business needs and goals first—then select IT to
get the job done
• Managers often find themselves in the difficult position of changing
a business process because the system can’t support the ideal
solution.
• Typically fail when IT selected first
• When considering change, alternative business
processes should be:
– 1) Effective: deliver the intended results
– 2) Efficient: consume the least amount of resources for the
intended value.
– 3) Adaptable/flexible and support change
• Technology and market forces constantly change
Changes to Improve
Business Processes
• Automation: Operational process
– Manual tasks become computerized
• Streamlining: Managerial process
– Simplify steps
– Eliminate unnecessary steps and/or redundancies
– Eliminate bottlenecks
• Reengineer business processes: strategic process change
– Find a completely different approach
– Flat world has more competition than ever before as there are
more companies and customers in the global marketplace.
– Focus on core processes that are critical to performance rather
than on margin processes that have little impact
Finding Opportunity Using Business
Process Improvement (Reengineering)
• A company can improve the
way it travels the road by
moving from foot to horse
and then horse to car
– Follow the same path as
before, but just do it faster
• Business Process
Improvement looks at taking
a different path, such as an
airplane which ignores the
road completely
Businesses can also improve their
competitiveness by changing what they do
• Focusing on business intelligence and data analytics
– Putting together all of the pieces so that you can better
understand your business, the environment that it
operates in, and the factors that influence it.
– Set of methodologies, processes, architectures and
technologies that transform raw data into meaningful
information (business intelligence) to enable more
effective decision making and better insights into the
business (strategical, tactical and operational).
– Goal: to make better business decisions
• Moving to the “cloud” may also help improve an
organization’s ability to be competitive.
• Major business initiatives where improving the process
can result in a competitive advantage
– Managing the flows of information between all of the parties
directly and indirectly involved in the procurement of a
product or raw material.
• Supply Chain Management (SCM)
– Managing all aspects of a customer’s relationship with an
organization with the goal of increasing customer loyalty and
retention and an organization's profitability
• Customer Relationship Management (CRM)
– While SCM and CRM sound like IT systems, they are actually
business processes and business goals that are enhanced by
technology
Enterprise Resource Planning
• Enterprise resource planning (ERP) – integrates all
departments and functions throughout an
organization into a single IT system so that
employees can make decisions by viewing
enterprise wide information on all business
operations (consistent enterprise wide information)
• Keyword in ERP is “enterprise”
– SCM systems focus specifically on suppliers
– CRM systems focus specifically on customers
– ERP systems focus on integrating all processes,
departments and operations for the entire enterprise
We don’t need this ERP stuff. We
already have enterprise wide
software that we are all using. It is
called a SPREADSHEET.
S
a
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e
s
A
c
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g
Enterprise Resource Planning
• ERP systems collect data from across an organization
and correlates the data generating an enterprise wide
view that is consistent and real-time.
•
Common
database
•
Complete
Data entry
required
•
Real time
•
Consistent
•
One true
picture
In Summary
• Information Technology can be an important
enabler of business success and innovation.
• Information Technology is most useful when it
leverages the talents of people.
• In order for this to happen, you must have an
enterprise wide view of the entire business
operation.