CLASS 1 MY OVERVIEW EMIS 7360

THE INFORMATION RESOURCE INTERNAL & EXTERNAL DATA COLLECTION & STORAGE DATA TRANSFORMATION PROCESS INFORMATION Plan Control Operate COMMUNICATION LINKS

The IT Environment Adapted from: Cash, McFarlan, McKenney, and Applegate, Corporate Information Systems: Text and Cases, 1992.

STRATEGIC QUESTIONS  Can IT build barriers to entry?  Can IT build in switching costs?  Can IT strengthen customer relationships?  Can IT change the balance of power in supplier relationships?  Can IT change intra-industry competitive balance?  Can IT change the basis of competition?  Can IT generate new products? Source: Cash, J. I., McFarlan, F. W., McKenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, IL, 1992.

FACTORY SUPPORT STRATEGIC TURNAROUND HIGH LOW LOWHIGH Strategic Impact of Existing Applications Key Questions What is the effect of a 1 day shutdown? (e.g., lost revenue, customer visibility)What is the effect of a 1 day shutdown? (e.g., lost revenue, customer visibility) How long does it take to recover after failure?How long does it take to recover after failure? Can you operate manually?Can you operate manually? How many operationally critical applications are in your portfolio?How many operationally critical applications are in your portfolio? Strategic Impact of Applications Under Development Key Questions Will the application change barriers to entry?Will the application change barriers to entry? Will the application change buyer/supplier power or strengthen buyer/power relationships?Will the application change buyer/supplier power or strengthen buyer/power relationships? Will the application change the basis of competition in the industry?Will the application change the basis of competition in the industry? Does the application represent a new, information-based product or will it add value to an existing product?Does the application represent a new, information-based product or will it add value to an existing product? Source: Cash, McFarlan, McKenney, and Applegate, 1992.

General Implications of Location on Strategic Grid Source: Cash, J. I., McFarlan, F. W., McKenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, IL, 1992.

Information Technology Management in the 1990’s Questions from Senior Management  Is my firm competitively positioned in the use of IT?  Is my IT application portfolio effective?  Is my IT spending efficient?  Am I insulated against the risks of an operational disaster?  Do I have the right IT leadership in place?  Do I have the right IT organization in place? Source: Cash, J. I., McFarlan, F. W., McKenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, IL, 1992.

HAIRBRAINED SCHEME OR STRATEGIC COUP?  Fails to meet real, ongoing, customer need (e.g., product, service, cost)  Fails to be defensible —Not ingrained in user behavior —Too easy to replicate —Incapable of evolution  Awakens a sleeping giant  Triggers litigation  Rejected by customer or organization culture Source: Cash, J. I., McFarlan, F. W., McKenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, IL, 1992.

INFORMATION TECHNOLOGY IN THE 1990’S MANAGEMENT CHALLENGES  Strategic Relevance of IT  Corporate Culture  Contingency Management  Technology Transfer  Technology Evolution  Specialization Source: Cash, J. I., McFarlan, F. W., McKenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, IL, 1992.

MANAGEABLE TRENDS  Strategic Impact of IT  Changing Technologies  Organization Learning  IT Sourcing Policies  Application Development Process  Partnership of the Three Major Constituencies  Other Source: Cash, J. I., McFarlan, F. W., McKenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, IL, 1992.

A Framework for Analyzing IT Impact on Organizations CONTEXT External Environment Industry Structure Rate of Change Competitive Intensity Organization History Current State Industry Position Competitive Benchmarks Resources People/ Leadership Technology Capital Culture Stimulus for Change Type Urgency Clarity Shared Understanding Strategy EXECUTION Organization Structure People Culture Management Control Processes ORGANIZATION EFFECTIVENESS MEASURES Competitive Benchmarks Source: Applegate, L.M., IT-Enabled Business Transformation, Boston: HBS Publishing, 1992 Work Technology Process Time Quality Cost Innovation Stakeholder Customer/ Supplier Employee Satisfaction Shareholder Satisfaction Results Market Share Financial ROE P/E

IT-Enabled Business Transformation Module Scope of Change Anticipatory Crisis StimulusforChange Source: Applegate, L.M., IT-Enabled Business Transformation, Boston: HBS Publishing, 1992 Function Organization Inter- Organization

Guiding Principles for Managing Information Technology 1.There are and will be opportunities, but they won’t come easy and risk of failure may be higher than value of success. However, failure to act may mean failure. 2.Innovation in both the business and within IS are important. 3.The “users” will continue to be able to do more for themselves but they will need help as the complexity of their problems increase.

4.Doing things faster (reduced cycle time), at lower cost, with better service, being first to market, … has “always” been a business objective -- the intensity is dependent on the threats, either perceived or real, and the incentive for continued success. 5.Someone is “always” trying to sell you something regarding IT -- be a smart buyer. 6.Remember who your audience is -- “sell” them in terms they’ll understand.

7.Learn to determine “fads” from “trends”. 8.IT trends which depend on other IT trends usually happen more slowly than projected. 9.Watch out for replacement/competitive technologies/trends.

10.Be lucky if all else fails.

“The modern age has a false send of superiority because of the great mass of data at its disposal. The valid criterion of distinction is (not the quantity of data available but) rather the extent to which man knows how to form and master the materials at his command.”