1. MI 720 Session #5: IT for Competitive Advantage Agenda –Business Analytics Intro –Harrah’s Entertainment Inc. –Readings revisited: IT strategy, Building Analytic Capabilities Robert G. Fichman – MI 720 IT for Management Slide 1

2. Analytics at PhoneCo Robert G. Fichman – MI 720 IT for Management Slide 2

3. Business Analytics Business Analytics: –Using detailed transaction level data on some entity (customers, suppliers, products, processes) to build sophisticated mathematical models that categorize and/or predict things about that entity Why is analytics becoming so hot? What are the drivers and enablers? Robert G. Fichman – MI 720 IT for Management Slide 3

4. Harrah’s Robert G. Fichman – MI 720 IT for Management Slide 4

5. Building Analytic Capabilities Robert G. Fichman – MI 720 IT for Management Slide 5

6. Data and Technology Robert G. Fichman – MI 720 IT for Management Slide 6

7. What else do we need to build analytic capabilities? Robert G. Fichman – MI 720 IT for Management Slide 7

8. Robert G. Fichman – MI 720 IT for Management Slide 8 1. New Business Upside

9. Robert G. Fichman – MI 720 IT for Management Slide 9 3. Retention Program

10. Sustainable Competitive Advantage? Robert G. Fichman – MI 720 IT for Management Slide 10

11. IT & Sustainable Competitive Advantage (Gallaugher, Chp 2 Strategy & Techology) What is sustainable competitive advantage? Determinants of sustainability: V.R.I.N. –“Resources” that are valuable, rare, inimitable, non- substitutable How can IT provide competitive advantage? Use IT: … to help build an imitation resistant value chain … to build/reinforce a brand … to create/reinforce scale economies … to impose switching costs on buyer/suppliers … to differentiate your product … to create positive network externalities (network effects) …to create new distribution channels Robert G. Fichman – MI 720 IT for Management Slide 11

12. From Data to Knowledge to Results – Building an Analytic Capability [Davenport et al 2003] Robert G. Fichman – MI 720 IT for Management Slide 12 Context Strategy Skills & ExperienceOrganization & Culture Technology & Data Transformation Outcome Analysis DecisionMaking Financial - - - - - - - - Process & Program - - - - - - - - - - - - - Behavioral