Innovation as a Response to Change in Market and Technology Innovation as a Response to Change in Market and Technology INNOVATION Socio-political Changes Technological Opportunities Advances in Technology New Products and Services Market Needs EFFICINCY EFFECTIVENESS INNOVATION Time Market

Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) Before Purchasing Vendor Receiving Accounts Payable Goods Payment Invoice Receiving Document Copy of Purchase Order Purchase Order 

Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) After Purchasing Vendor Receiving Accounts Payable Goods Purchase Order Payment Database  

The Information Age vs. the Computer Age The Computer Age Time-sharing Computer 1960’s Interactive Computing Mini/Micro provide user with computer power (as of Mainframe) but with little cost Advances in telecommunications(link terminals/PC  mainframe) End of the computer age Beginning of the information age PC as DSS tool to access information stored in the center computer files to support management decision- making process. Software advances in application packages (e.g., DBMS, spreadsheet

THE GENERIC VALUE CHAIN Firm Infrastructure (general management, accounting, finance, strategic planning Human Resource Management (recruiting, training, development) Technology Development (R&D, product and process improvement) Procurement (purchasing of raw materials, machines, supplies) Inbound Logistics (raw materials handling and warehous ing) Operations (machining, assembling, testing) Outbound Logistics (warehousin g and distribution of finished product) Marketing and Sales (advertising, promotion, pricing, channel relations) Service (installation, repair, parts) Profit Margin Primary Activities Support Activities

CONSTRUCTION DESIGN ANALYSIS PLANNING Information Engineering

What is Information Engineering The application of an interlocking set of formal techniques for the planning, analysis, design and construction of IS, applied ton an enterprise-wide basis or across a major sector of an enterprise. An enterprise-wide set of automated disciplines for getting the right information to the right people with the right form at the right time.

ENVISION DESIGN BUILD OPERATE SDLC ANALYAIS DESIGN IMPLEMENTATION MAINTENANCE MANAGMENT IS DEVELOPMENT REENGINEERING INFLUENCE CAPABILITY LEADERSHIP CONTROL MANAGERS IS PROFESSIONALS BUSINESS ENVIRONMENT IS CHANGING RAPIDLY RADICALLY AND PERPLEXINGLY BUSINESS ENVIRONMENT

SDLC ANALYAIS DESIGN IMPLEMENTATION MAINTENANCE ENVISION DESIGN BUILD OPERATE MANAGMENTIS DEVELOPMENT REENGINEERING INFLUENCE CAPABILITY LEADERSHIP CONTROL MANAGERS IS PROFESSIONALS BUSINESS ENVIRONMENT IS CHANGING RAPIDLY RADICALLY AND PERPLEXINGLY

Supports Business PlanStrategic Factors System Project  Decrease direct labor and overhead by 20%  Increase our customer order-filing rate to 95%  Produce timely tracking and sales information for inventory  managers  Increase labor productivity  Improve service differentiation  Provide managers with better information  A standard cost accounting system that provides online labor rate and efficiency variances  An inventory management system that provides recorder points, EOQ’s, quantity on hand, and sales by item and salesperson. Figure: Relationship and linkage of proposed system projects with strategic factors and the business plan ObjectiveProposal

Internal Integration: Enablers and Inhibitors IT-induced reconfiguration: Level Two Enablers Technological  Increase connectivity capabilities  Favorable cost-per- formance trends  Vendor push-system solutions Organizational  Strategic vision for integration through an IT platform  Centrality of IT to the strategic context Inhibitors Technological  Uncertainty  Cost of integration  Organizational  Lack of strategic vision for integration  Organizational inertia  Centralization - decentralization conflict

IT-industry business reconfiguration in level 2: Enables and Inhibitors in the tax return preparation business IT-induced reconfiguration:tax return preparation business Enablers  Electronic filing initiative by IRS  IT-based value- added services  Perceived benefits of an integrated platform  IT-based strategic advantages Inhibitors  Inability to view IT in strategic terms  Low economies of scale for integration  Inexperience with IT and IT-based applications  Mismatch with market needs

Business network redesign: Enablers and inhibitors IT-induced reconfiguration: Level Four Enablers  Ability to specify and/or create standards for integration  Identification of value-added services  Recognition of mutual benefits Inhibitors  Lack of standards  Lack of vision and understanding  Lack of commitment to integration  Possible erosion of market positions

Strategic options for business network redesign Collaborative advantage Business Network redesign Electric infrastructure Competitive advantage Information Technology Governance Tightly coupled Loosely coupled Common role Unique role Business Governance

Business Scope Redefinition: Shifting the business domain using IT Technology BeforeAfter Technology Markets Traditional business scope Increased role for information technology in operations Traditional operating technology Products

Most likely quadrant-to-quadrant movement Interrelatedness LOwLOw LOWHIGH Chaotic Proliferation Preemptive Penetration Barroom BrawlClash of the Titans HIGHHIGH Exploitability