Information Systems and the Modern
Organization
nBusiness Process: a collection of related activities that produce a product or a service of value to the organization, its business partners, and/or its customers.
nOne functional area
nCross-functional
Business Process Reengineering (BPR):
a radical redesign of a business process that improves Its efficiency and effectiveness, often by beginning with a “clean sheet.”
Business Process Management (BPM)
A management technique that includes
methods and tools to support the design, analysis, implementation, management,
and optimization of business processes.
üCustomer satisfaction
üCost reduction
üQuality
üDifferentiation
Business Pressures:
n The
business environment is the combination of social, legal, economic, physical,
and political factors that affect business activities.
n Significant changes in any of these
factor are likely to create business pressure on the organization.
nMarket
Pressures
nTechnology
Pressures
nSocietal
Pressures
see the video
Organizational Responses
nStrategic Systems
nincrease market share and/or profits
nbetter negotiate with suppliers
nprevent competitors from entering their markets.
nCustomer Focus
nRetaining current customers and attracting new ones
nMake-to-Order and mass customization
nproducing customized products and services
nReebok
nDell
nE-business and E-commerce
nBuying and selling products and services electronically.
n E-business is a broader concept than e-commerce.
nB2C , C2C, B2B
Competitive Advantage and Strategic Information Systems
nCompetitive Advantage
An advantage over competitors in some
measure such as cost, quality, or speed, leads to control of a market and to
larger-than average profits.
nStrategic Information Systems
provide a competitive advantage by
helping an organization to implement its strategic goals and to increase its
performance and productivity
þCost Strategy
Example: Using
computer-aided manufacturing systems to lower production costs
creating web sites for
electronic commerce to lower marketing costs
þDifferentiation Strategy
Example: Providing
fast and complete customer support services via the Internet
þInnovation Strategy
Example :Introduce unique product/service that
include IS compo net
þCustomer- orientation Strategy : concentrate on making customers happy
Porter’s
Competitive Forces Model
The best-known framework for analyzing
competitiveness is Michael Porter’s competitive forces model (Porter, 1985).
nThreat
of entry of new competitors is high
when it is easy to enter a market and low when significant barriers to entry
exist.
nA barrier to entry is a product or
service feature that customers expect from organizations in a certain
industry.
nFor most organizations, the Internet increases the threat that new competitors will
enter a market.
nThe bargaining power of suppliers is high when buyers have few choices and low
when buyers have many choices.
nInternet impact is mixed.
Buyers can find alternative suppliers and compare prices more easily,
reducing power of suppliers.
nOn the other hand, as companies use the
Internet to integrate their supply chains, suppliers can lock in customers.
nThe bargaining power of buyers is high when buyers have many choices and low
when buyers have few choices.
nInternet increases buyers’ access to
information, increasing buyer power.
nInternet reduces switching
costs, which are the costs, in money and time,
to buy elsewhere. This also increases
buyer power.
nThe threat of substitute products or
services is high when there are many substitutes for an
organization’s products or services and low where there are few substitutes.
nInformation-based industries are in the
greatest danger from this threat (e.g., music, books, software). The Internet can convey digital information
quickly and efficiently.
The rivalry among firms in an industry is high when there is fierce competition and low
when there is not
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