CSE 5360 Class 1 Overheads

Course Objectives Provide You Various Frameworks/Perspectives (Situation Analysis) -- Learn What to Look for - A Lot to Consider Provide You With Approaches/Solutions -- Learn Limits on What Applies Where How to Make Judgements/Develop New Approaches (Think) -- There are Few Formulas -- Learn to Recognize When There May Be No Approach Defined As Fast As Solutions/Methods/Tools are Developed to Solve a Specific Problem, New Problems are Encountered (Change) -- Need For Continuous Improvement/Learning Knowledge

Course Objectives How to Make a Business Successful How to Work With/Communicate With Business People (and Vice Versa) How to Make the IT Function Successful How to Make Your CIO Successful How to Become a CIO How to Be a Successful CIO

Types of Cases Can’t Make a Decision -- End Up Doing Nothing (Which May Be Good) Make a Decision to Proceed -- Bad Idea (At Least at This Time) Make a Decision to Proceed -- Good Idea But Poor Implementation Make a Decision to Proceed and Succeed (May Be Painful) Same as Above, But Extend to Another Area and Fail

Grading Criteria Analysis of Business/Industry/World Situation Analysis of IT Situation Application of Course Concepts Examples From Other Cases, Other Companies Written Up in Literature or Personal Experience Recommendations That Follow From/Are Supported by the Analysis Choice of Words (Don’t Overstate Unless You Mean It, Be Specific) Overall Quality of Report Was I Sold Don’t Restate Case

The Management Framework Company Senior Management CIO MIS Director D.P. Manager IT Staff Environment Users (Managers and Staff)

Resulting Role For “CIO” IT Depends: Impact of Information Technology on Business Company Management Style/Education User Culture Company Organization and Size Rate of Company Changes --In Market --For Productivity Thus CIO Can Be: Reactive -- What Can I Do For You? Proactive -- Salesperson/Entrepreneur, Here’s What I Can Do For You.

Other Key CIO Roles/Responsibilities Manager/Motivator Facilitator Manager of ChangeIntegrator Negotiator Manager of TechnologyEducator Businessperson Communicator

The Information Resource INTERNAL & EXTERNAL DATA COLLECTION & STORAGE DATA TRANSFORMATION PROCESS INFORMATION Plan Control Operate COMMUNICATION LINKS

Traditional System Development Lifecycle Primary Responsibility User Identify Need Technical Design Code System Implement (Alpha Test) Implement (Beta Test) Operate & Maintain System Analyst Programmer Note: The move toward rapid prototyping, joint application development, en-user computing, and graphical user interfaces has changed this traditional picture. Source: Cash, J. I., McFarlan, F. W., McKenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, Il., 1992

Five Forces Determine Industry Profitability New Entrants Industry Competitors Rivalry Among Existing Firms Substitutes Threat of New Entrants Suppliers Buyers Bargaining Power of Buyers Bargaining Power of Suppliers Threat of Substitute Products or Services Source: Porter, M., Competitive Advantage, NY: The Free Press, 1985

Impact on Competitive Forces FORCEIMPLICATIONPOTENTIAL TECHNOLOGY IMPACT New EntrantsNew capacityProvide entry barriers Substantial resources economies of scale Price Competition increase switching costs product differentiation access to distribution channels Buyer PowerForce prices downForce buyer selection Raise quality standardsIncrease switching costs Demand servicesDifferentiation Encourage competitionEntry barriers Supplier PowerRaise pricesForce supplier selection Reduce qualityMonitor/control quality Source: Cash, J. I., McFarland, F. W., McKenney, J.L., and Applegate, L. M., Corporate Information Systems Management Text and Cases, Homewood, Il., 1992:

Impact on Competitive Forces FORCEIMPLICATIONPOTENTIAL TECHNOLOGY IMPACT SubstituteLimit potential returnsImprove price/performance ProductsCeiling on PricesRedefine products and services TraditionalCompetitionCost effectiveness Rivals priceMarket access productDifferentiation distribution and service products services firm Source: Cash, J. I., McFarlan, F. W., Mckenney, J. L., and Applegate, L. M., Corporate Information Systems Management: Text and Cases, Homewood, Il., 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

Hairbrained Scheme or Strategic Coup? Fails to meet real, on-going, 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

Strategic Impact of Existing Applications Key Questions What is the effect of a 1 day shutdown? (e.g., lost revenue, customer visibility) How long does it take to recover after failure? Can you operate manually? How many operationally critical applications are in your portfolio? FACTORYSTRATEGIC SUPPORT TURNAROUND High Low High Strategic Impact of Applications Under Development Key Questions Will the application change barriers to entry? Will the application change buyer/supplier power or strengthen buyer/power relationships? 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? Source: Cash, McFarlan, McKenney, and Applegate, 1992.

Information Technology Management in the 1990s 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

IT Impact (on Organization) Internal Structure Emergence of Teams Disintegrating Borders System Integration Managing Interdependence

“The modern age has a false sense 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.”