ISM 158 Business Strategy and Information Systems Jack Callon Objective for Today For you to decide that you are in the right class at the right time. Right Class at the Right Time • Course objectives and content. • Assignments and grading. •Your opportunities. • My expectations. ISM Business Capstone Class This class was considered the most difficult of the MIS classes at SJSU. (10% non-pass rate) The only class that has both CS and Econ/Business prerequisites. A business class for those with IT knowledge. “Important to come to class.” ISM 158 - Business Strategy and IS Business Knowledge I/S Knowledge ISM Student • Systems A&D • Programming • Database • Telecom Understand how to use I/S to solve business problems “ I’m Ready to Graduate! • Accounting • Finance • Operations • Marketing • Human Resources Class Objectives • Learn practical, useable things. • Become savvy as to major business issues and trends in the high-tech world. • Help you look good in job interviews. • Help you make a difference when you get hired. . . . . For a price! Message from Miles Welter Make sure that students understand that this course is significantly more challenging than ISM 50. They also need to understand that the business analysis paper in ISM 50 was a relatively easy assignment compared to the analysis term paper in this class. Important Business Topics • Direct Business Model • E-Commerce • E-Business • Supply Chain Management (Customer Relationship Management) • Reengineering Core Business Processes • Outsourcing • Managing Change A Successful Business The right business model now and for the future. Provides value to customers. Is responsive, flexible, adaptable, innovative, resilient, talented and financially strong. Is anything else necessary to achieve and sustain business success? Underlying Theme of Course Your job as an IS professional is to help your company to do a better job of competing! Where Does an ISM Graduate Fit? Senior Management Company Users Information Systems Organization Effort ISM 158 - If in the Spring Quarter * Time Effort ISM 158 - If in the Spring Quarter * C or P Time Jack Callon • Third Year at UCSC • Director of New Program Development, SOE • 11 1/2 Years at SJSU College of Business • 28 years at IBM in Sales and Marketing (California, Tokyo and Munich) • 3 years in the U.S. Air Force • MBA from Indiana University • ISM major sponsor and ISM Club Advisor JDC Terminology • Information Technology (IT) • Information Systems (IS) • Computing • Telecommunications • Data Communications • Voice Communications • IS Organization Class Premises Every enterprise faces unprecedented competitive challenges. The source of this competition is becoming more global and the pace of change within the business environment is accelerating. A business enterprise needs to understand where it is going. The business vision and its supporting strategies should drive the role and use of information systems within the organization. The compression of time and events has significantly increased information needs for the growing number of people involved in making decisions within an enterprise. Class Premises For the above reasons the potential role of information systems as a competitive resource has increased. Innovative use of information technology needs (dictates) a systematic approach. To accomplish this, it is essential that there be an on-going working relationship between those that run the business and the people charged with a responsibility for information systems. Conclusion: It is necessary to establish and maintain three distinct perspectives. Three Perspectives 1. Business Environment (Industry) 2. Company 3. IT Role, Use, and Management [ Of With [ Management Information Systems Four Important C’s Competition Computers Complexity Change Competitive Enabler Of all the things that can change the rules of competition, technology change is among the most prominent. A Systematic Approach Vision Strategy Tactics Business Plan • Competitive Options • Roles, Roles and Relationships • Redefine and/or Define • Telecommunications as the Delivery Vehicle • Success Factor Profile A Satisfied Student 1. I never realized that Information Systems played such a significant role in so many very successful companies. 2. I really enjoyed doing a paper on Wal-Mart and learned a great deal from the experience. 3. I feel that I can personally do an objective assessment of a company as to their effective use of information systems to gain a competitive advantage. Class Decorum The classroom should be treated like a business environment. Class activities should be treated like a business meeting. What is New? • A revised list of companies for the analysis term papers. • A major focus on the Internet as it impacts business strategies and IT use. • Use of WebCT to supplement course material. • Will attempt to use guest lecturers with the help of IT. Grade Structure Class Contribution 10% Analysis Term Paper 45% (10, 10, 20, 5) Midterm Exam 15% Comprehensive Final Exam 30% Note: Exams will not be open book or open notes. Class Contribution • Positive participation in class • Introduction letter • Oral presentations (sign up today) • Overall professionalism Oral Presentations Introduce or summarize the textbook chapters. Five minute presentations. Part of class contribution grade. Oral Presentation Evaluation Established a presence before beginning. Good eye contact with audience. Good voice articulation. Organization and content. Focused on key factors. Professionalism of presentation. Used but did not exceed time allowed. Overall evaluation. Chapter Introduction • Introduce the chapter (does not mean that you explain its content.) • Address business issues, topics, significance. • Address IT issues, topics, significance. • Explain how the material fits within the bigger picture. Will include Powerpoint slides that you will email to me 24 hours before the presentation. Chapter Summary • Key messages of the chapter. • Major business management issues. • IT issues (if any). • Why the above factors are significant/important. • Three or four possible exam questions that focus on important chapter content. Will include Powerpoint slides that you will email to me 24 hours before the presentation. Competitive Advantage Through Information Technology by Jack Callon This book is dedicated to those that must compete in an increasingly complex, dynamic and global business environment. I wish you the best of success in your competitive endeavors and hope that the contents of this book provide the help that is intended. Misleading advertisement from Amazon.com Textbook Status Structure and concepts are current and valid. Company examples and status are dated in some cases. Textbook Structure 1. Introduction Chapter 2. Business Environment 3. Company Assessment 4. Structured Analysis of IS Use 5. Management Issues Textbook Preface: Book Overview Chapter 1: Business and Information Systems Management Challenges Textbook Section I - The First of Three Perspectives: Business Environment Chapter 2: Business Competitive Environment Chapter 3: The Porter Competitive Model for Industry Structure Analysis Chapter 4: Airline Industry Analysis Chapter 5: Information Systems Can Redefine Competitive Boundaries Section II - The 2nd Perspective: Company Environment Chapter 6: Business Vision Chapter 7: Implementing a Vision: Strategy, Tactics and Business Plan Section III - The 3rd Perspective: Information Systems Use Chapter 8: Evaluating Business Strategies and the Use of Information Systems Chapter 9: The Roles, Roles and Relationship Concept Chapter 10: The Redefine and/or Define Concept and Change Management Chapter 11: Telecommunications as the Delivery Vehicle Chapter 12: A Success Factor Profile Section IV: Major Information Systems Management Issues Chapter 13: Information Systems Organization and Personnel Considerations Chapter 14: Information Systems Value and Financial Strategy Chapter 15: Integrating Information Systems into the Business Plan Chapter 16: Total Quality Management and the Role of Information Systems Chapter 17: Conclusions Exhibit I - Why Change When You Are Flying High? An Analysis of The Boeing Company Read the Boeing paper for background and understanding of the assignment. Don’t overdo the duplicating of how it was done. “Expert Profile” • Peter Drucker - Business Vision • Michael Porter - Structure and Analysis • Peter Keen - I/S and Telecom Trends • Tom Peters - Business Motivation Why Don’t All Companies Successfully Use I/S to Compete? 1. Business Reasons. 2. Information Technology Reasons. Importance of Analysis Term Paper Successful completion of the analysis term paper is mandatory to pass the course. You can do joint research and charts but the entire paper will be written individually. You must select a different company than the one you addressed in ISM 50. Important that you talk to me regarding your papers. Analysis Term Paper Grades 1. Analysis Grade - 50% Did you analyze the major important points in an effective manner? 2. Presentation Grade - 50% How well were the contents of the paper organized and presented. This includes spelling, grammar and whether the total paper “comes together.” ATP Companies Amazon.com - A winner or a leader of the losers? Cisco Systems - From boxes to end-to-end communication! Dell Computer - The direct business model king! Intel Corporation - Shifting major business strategies. IBM Storage Systems Division - A major shift in its business. Knight-Ridder (SJ Mercury News) - what business are they in? Charles Schwab - Keep changing their spots! UPS - Have they caught up to FedEx? Wal-Mart Stores - B&M versus Internet for toys and a lot more. ATP Companies All of these companies have major Internet implications as to their strategies and their ability to continue to be successful. Your papers should focus on these implications. Include this focus as part of the objective statement of your paper. Amazon.com • A major emphasis on brand strategy. • Was there very easy in the .com cycle. • Have never made a profit. • Can Jeff Bezos really run a successful company? • Will they be the exception to those that say that click and mortar will be the winners? If so, why? Cisco Systems • Claim that they built the Internet. • From routers to end-to-end communication. • Want to be their own best reference! • Cisco Connection is the basis for 82% of revenue. • Research and technology through acquisition. • Success is attracting major competitors. • John Chambers walks on water. Dell Computer • Fierce competition in the PC segment of the Computer Industry. • Questionable profit margins. • As prices get cheaper, clones are losing market share. • A global market that is US dominated. • Direct Business model is a very hot topic and Dell is the king! • The ultimate example of outsourcing. IBM Storage Systems Division • IBM made a major shift in the focus and priorities of its business to OEM products. • This required the creation of a significant number of new business processes. • These processes were by necessity computer-based. • This entire effort required managing multiple plants in different parts of the world as if they were a single entity. Intel • New leaders and a new business strategy. • Does it really make sense? • How important is it to continue to grow as a company? • What primary strengths has Intel had in the past? Knight-Ridder • Newspapers were a traditional source of information. • Industry is dominated by conglomerates. • San Jose Mercury News was one of the first to go online first with AOL and then via the Internet. • Mercury Center has lost its differentiation advantage. Charles Schwab • Is in third phase of company redefinition. • Determining best way to compete. • Threat of Internet-based brokers. • Gain versus preservation strategies of clients. UPS • Had some good indications that FedEx wouldn’t make it. • They did! • Had ten years of catching up to do. • Senior management’s new vision. • HR guy headed IS with IS pros reporting to him. • Have they actually caught up to FedEx and was it worth it? Wal-Mart Stores • World’s largest retailer. • Sam is gone! • Took some major hits for poor initial efforts on the Internet. • Can it succeed as both a B&M and Internet channel? • Did it make sense to split the B&M and Internet effort? • At what point does a company have major problems simply because of size? Hall of Fame Applications • • • • • • • • • • • • Wal-Mart’s Replenishment System Allegiance’s (AHS) Value Link American Airline’s SABRE FedEx’s Tracking System Citibank’s Cash Management Account Boeing’s 777 Design System Amazon.com’s Web Book Store Sun Mircosystem’s Intranet Frito-Lay’s Sales Automation System Schwab’s Street Smart and eSchwab Otis Elevator’s Remote Monitoring System Kash n’ Karry’s Returns Process System CIO Hall of Fame Most influential IS execs of the past decade Paul Strassman, Xerox Katherine Hudson, Kodak DuWayne Peterson, Merrill Lynch Charles Feld, Frito-Lay Cinda Hallman, DuPont Patricia Wallington, Xerox David Evans, J.C. Penney John Cross, British Petroleum Max Hopper, American Airlines Bob Martin, Wal-Mart Stores Ron Ponder, Federal Express Don Lasher, USAA Hall of Fame Technologies • • • • • • • • • • • • Wintel de facto desktop standards Networking E-mail and Fax Open Systems Client-Server Architecture Electronic Data Interchange (EDI) Mobile Computing Groupware High Bandwidth Networking Data Warehousing/Data Mining Enterprise Software Suites World Wide Web/Browsers Hall of Fame Management Trends • Reengineering • Globalization • Outsourcing • Standardization • Quality • Coopetition • Benchmarking • Strategic Alignment • Customer Service • Remote Workers • Mass Customization • The Next Ten Years Boeing Commercial Aircraft Company Analysis Paper Paper Objective I Commercial Aircraft Industry Summary A. Industry Profile B. Typical Industry Competitive Strategy C. Porter Competitive Model Analysis D. Globalization of the Industry E. Importance of Information Technology to the Industry II Boeing Company A. Boeing Company Profile B. Market and Financial Performance C. Competitive Strategy Statement D. Significance of Information Systems E. Strengths and Weaknesses of Boeing as a Company III Information Systems at Boeing Commercial Aircraft Company A. Structured Analysis 1. Strategic Option Generator 2. Roles, Roles and Relationships 3. Redefine and/or Define 4. Significance of Telecommunications 5. Success Factor Profile IV A Final Analysis: The Success of the Boeing Commercial Aircraft Company A. Success of Business Strategy and IT Use to Date B. Is the Company Effectively Postured for the Future? Bibliography ATP Grades 1. Section I and II will be written and submitted individually. 2. A revised Section I and II will be resubmitted with Section III and IV as a final complete paper. 3. Each section is given a specific grade. 4. The Section III grade is based on 1/3 for the revised Section I and II and 2/3 on Section III. 5. Section IV has its own grade. Analysis Term Paper 1. Information Given Today. 2. WebCT (web page) guidelines. Analysis Term Paper Challenges 3. Analyze, Write and Edit Paper Company 1. Content and Organization 2. Researching Content ATP Quiz Sign onto WebCT and take the ATP Quiz before midnight of January 8 . You have thirty minutes to take the quiz and two chances to earn a passing grade. ATP Discussion Points 1. A definition of the analysis company industry in writing. 2. A draft of the Porter Competitive Model. 3. A draft of the Business Strategy Model. 4. A list of the key people within the company that will serve as the basis of the company analysis. 5. A draft of the strengths and weaknesses of the analysis company. A Complication There has never been a time in history when there was a better Information Technology price/performance. And so many choices of equipment, vendors and approaches. Business Strategy and Information Systems • Concepts • Relative To (Bigger Picture) • Company Examples IS Management Strategies? • Executive Partnership • Strategic Architectures • Technology Experimentation • External Resource Leverage • Technology Assimilation • Functional Horizontal Integration Balanced Business Scorecard • Customer Measures • Internal Business Measures • Culture • Financial Measures Business Strategy and Information Systems • What business is Federal Express in? • Significant industry structure considerations. • National versus international market. • Strengths and weaknesses of Federal Express. • Significance of Information Systems to business success. WebCT http://ic.ucsc.edu:8000/webct/public/home.pl Log on ID is CATS account or existing email address with the password based on the first four letters of last name and the last four digits of social security number. How to login document is at: http://ic.ucsc.edu/Help/WebCT/how-to-login.htm WebCT Includes: • Course calendar • Boeing Analysis Paper • Syllabus • ATP Guidelines • Bulletin Board • ATP Research • Lecture Notes • ATP Checklist • ATP Companies • ATP Quiz Class Schedule Start 1/04/00 Midterm Exam 2/01/00 Sec. I and II of Paper Due 2/03/00 Final Paper Due 3/07/00 Sec. I, II, III and IV 10 Weeks Final Exam 3/16/00 Conclusion If you feel you are in the right class at the right time and are prepared to make the necessary time commitment, see you on Tuesday.