 | Management Information Systems 4/e - James A. O'Brien | |||||
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Chapter 12: Information Systems for Strategic Advantage
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Agile Competitor
Agile competitor is the ability of a company to profitably operate in a competitive environment of continual and unpredictable changes in customer opportunities. Breaking Business Barriers Several vital capabilities of information technology that break traditional barriers to strategic business success include breaking time barriers geographic barriers cost barriers and structural barriers. Breaking Business Barriers: Cost Barriers Telecommunications and computing technologies make it possible to break cost barriers by significantly increasing the efficiency of business operations. Breaking Business Barriers: Geographic Barriers Telecommunications and computing technologies make it possible to distribute key business activities to where they are needed where they are best performed or where they best support the competitive advantage of a business. Breaking Business Barriers: Structural Barriers Computers and telecommunications networks can help a business develop strategic relationships by establishing new electronic linkages with customers suppliers and other business entities. Breaking Business Barriers: Time Barriers Information technology is used to shorten the intervals between the various critical steps in a business process. Telecommunications is a lot faster than most other forms of communications thus it provides information to remote locations immediately after it is requested. Building a Strategic IT Platform Building strategic IT platforms enables a firm to take advantage of strategic opportunities. Typically this means acquiring hardware and software developing telecommunications networks hiring IS specialists and training end users. Business Process Reengineering Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost quality speed and service. Competitive Forces A firm must confront (1) rivalry of competitors within its industry (2) threats of new entrants (3) threats of substitutes (4) the bargaining power of customers and (5) the bargaining power of suppliers. Competitive Strategies A firm can develop cost leadership product differentiation and business innovation strategies to confront its competitive forces. Creating Switching Costs The cost in time money effort and inconvenience that it would take a customer or supplier to switch its business to a firm's competitors. Developing a Strategic Information Base A firms database is considered a strategic resource which is used to support strategic planning marketing and other strategic initiatives. Improving Business Processes By improving operational efficiency a firm may be able to: cut costs improve the quality and delivery of its products and services improve operational efficiency through reengineering adopt a lowcost leadership strategy and increase quality and service by choosing a product differentiation strategy. Interorganizational IS Information systems that interconnect an organization with other organizations such as a business and its customers and suppliers. Knowledge-Creating Company That means consistently creating new business knowledge disseminating it widely throughout the company and quickly building the new knowledge into their products and services. Knowledge Management System The goal of KMS's is to help knowledge workers create organize and make available important business knowledge wherever and whenever it's needed in an organization. Leveraging Investment in IT A firm can then leverage investment in information technology by developing new products and services. Locking in Customers & Suppliers Building valuable relationships with customers and suppliers which deter them from abandoning a firm for its competitors or intimidating it into accepting less profitable relationships. New Economics of Information The internetworking of businesses and consumers via the intranets and extranets is breaking the cost barriers raided by traditional economic trade-offs in information content and delivery. Promoting Business Innovation Investments in information systems technology can result in the development of new products services and processes. This can create new business opportunities allow a firm to enter new markets or to enter new market segments of existing markets. Raising Barriers to Entry Technological financial or legal requirements which deter firms from entering an industry. Strategic Business use of the Internet Technologies The Internet promises to be an attractive and cost-efficient way for many companies to develop strategic collaboration operations marketing and alliances needed to solve and succeed in today's fast-changing global markets. Strategic Information System Information systems that provide a firm with competitive products and services that give it a strategic advantage over its competitors in the marketplace. Strategic Roles of Information Systems Also information systems which promote business innovation improve operational efficiency and build strategic information resources for a firm. Sustaining Competitive Advantage Sustained success in using information technology strategically seems to depend on three sets of factors: The environment foundation factors and management actions and strategies. Total Quality Management Total quality management uses a variety of tools and methods to seek continuous improvement of quality productivity flexibility timeliness and customer responsiveness. Value Chain Viewing a firm as a series or chain of basic activities that add value to its products and services and thus add a margin of value to the firm. Virtual Company A virtual company is an organization that uses information technology to link people assets and ideas. |
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