1. This presentation was developed by Dr. Steven C
This presentation was developed by Dr. Steven C. Ross for use in MIS 320 classes at Western Washington University. Some of the material contained herein is © 2007, John Wiley & Sons, Inc. and other sources, as noted. All rights reserved.

2. Using IT for Competitive Advantage
MIS 320
Using IT for
Competitive Advantage
“Man in Motion” – St. Elmo’s Fire

3. Most Important Thought for Today …
“It’s not the technology that gives a company a competitive advantage; it’s the way that people use the technology that makes the difference.” [quoted from an earlier version of Haag et al.]
Why is this so?

4. Toronto International Airport
What did they do?
“Common-use airport” model
Airport authority manages networks, counters, gates, security, baggage facilities
Internet protocol (IP) used for communications
How well did it work?
15% increase in passengers
Save $3M/gate (33 gates)
Cost
$1B

5. Using Technology to Achieve a Competitive Advantage
Might have to change business models and strategies
Might require large investment over time
Will require extensive networked infrastructure
Often uses internet protocol
Focus on customer service

6. The Digital Economy “Digitizable” products Digital transactions
Digital components in physical products
Examples in the text
Class registration
Photography
Paying for gasoline
Paying for transportation
Paying for goods

7. Advantages of the New Economy
Cost
Quality
Speed
Innovation
Customer service

8. Impact on Business Market pressures
Global economy + stronger competition
Changing work force
Powerful customers

9. Impact on Business Technology pressures Innovation and obsolescence
Information overload

10. Impact on Business Societal pressures Social responsibility
Government regulations and deregulation
Protection against terrorists
Ethical issues

11. Five Forces Model Originally published in 1985
Great framework for analyzing any strategic decision
Helps managers understand how IT initiatives contribute to business success

12. * Figure 2.2 from Rainer, et al.

13. Strategies to Counter the Five Forces
Cost leadership
Differentiation
Innovation
Operational effectiveness
Customer-orientation

14. Organizational Responses*
Supply chain management (SCM)
Customer relationship management (CRM)
* See Haag, et al. for detailed discussion and more examples

15. Supply Chain Management
Optimizes processes:
Fulfillment
Logistics
Production
Revenue and profit
Spend (purchasing)

16. Dell Computer What did they do? How did it work? Did it last forever?
What is an alliance partner?
What did they do?
Change the process of computer manufacture and purchase.
How did it work?
Very well – frees up money normally held in inventory, provides customer with his or her exact product.
Did it last forever?
No – other companies also do this.
What is an alliance partner?
A company you do business with on a regular basis in a cooperative fashion, usually facilitated by IT systems.

17. Buy-Hold-Sell vs. Sell-Source-Ship
* Graphic from Haag, et al.

18. Supply Chain Management
Key issues
High level executives recognize importance
Work closely with customers and suppliers
Integrates company IT with IT of customers and suppliers
Continuous adaptation

19. SCM Infrastructure
* Graphic from Haag, et al.

20. Customer Relationship Management
Typical CRM system functions:
Sales force automation
Customer service and support
Marketing campaign management and analysis

21. Wells Fargo Bank What did they do? How did it work?
Did it last forever?

22. General Motors What did they do?
All Fender guitar shipments routed through UPS hub in the Netherlands. While there, they are tuned.
How well did it work?
Very well – Fender saves 9%, UPS gets the business.
Did it last forever?
This partnership may last, but other shippers will emulate the process.
* Graphic from Haag, et al.

23. Customer Relationship Management
Key results
More effective marketing campaigns based on customer needs and wants
Efficient management of the sales process
Superior after-sale service and support

24. Customer Relationship Management
Reasons for failure
Goals are too broad
Strategies are too generic
Implementations are too software-centric

25. CRM Infrastructure
* Graphic from Haag, et al.

26. Getting a Competitive Advantage from Information Technology
CEO Attitude
Bridge the gap between business people and technical people
View the business problem from another perspective
Demand a creative design
Look beyond the four walls of the company

27. Getting a Competitive Advantage: CEO Attitude
What is his or her background?
What do you do if he or she doesn’t understand technology?

28. Getting a Competitive Advantage: Bridging the Gap
Understand the business problem that you are trying to solve.
Understand the available technologies.
Use a project team.

29. Getting a Competitive Advantage: Another Perspective
View the problem from the perspective of the people the system is designed to serve.

30. Getting a Competitive Advantage: A Creative Design
Solve the business problem in a new and highly effective way.

31. Getting a Competitive Advantage: Beyond the Company
Involve suppliers and customers.
JIT – just in time delivery
CPFR – collaborative planning, forecasting, and replenishment – through the whole supply chain

32. The Most Difficult Question
Where can we make the biggest difference with information technology?

33. References
Haag, Cummings, and McCubbrey, Management Information Systems for the Information Age (5th Edition), McGraw-Hill Irwin, 2005.
Rainer, Turban, and Potter, Introduction to Information Systems: Supporting and Transforming Business, Wiley, 2007.