• ow can businesses use informationow can businesses use
information
systems for competitive advantage?systems for competitive
advantage?
• Why is it so difficult to build successfulWhy is it so difficult
to build successful
information systems* including systemsinformation systems*
including systems
that promote competitive advantage?that promote competitive
advantage?
!"#$%&'($)
1.1. )ustainability of competitive advantage)ustainability of
competitive advantage
2. ,itting technology to the organization -or2. ,itting technology
to the organization -or
viceversa/viceversa/
0$0$& %44$$)
!rganization:!rganization:
• &akes resources from environment and&akes resources from
environment and
processes them to produce outputsprocesses them to produce
outputs
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
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&echnical 0icroeconomic 8efinition of the !rganization
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Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
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,igure 32
"ehavioral definition of !rganization:"ehavioral definition of
!rganization:
• %ollection of rights* privileges* obligations*%ollection of
rights* privileges* obligations*
responsibilitiesresponsibilities
• %onflict resolution%onflict resolution
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
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$conomic theories$conomic theories
• 'nformation technology is a factor of'nformation technology is a
factor of production* like capital and labor production* like
capital and labor
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
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ow 'nformation )ystems ffect !rganizations
&ransaction cost theory:&ransaction cost theory:
,irms can,irms can
conduct marketplace transactionsconduct marketplace
transactions
internally more cheaply to grow larger internally more cheaply
to grow larger
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
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ow 'nformation )ystems ffect !rganizations
"ehavioral theories:"ehavioral theories:
• 4ower cost of information acDuisition4ower cost of information
acDuisition
• "roadens the distribution of information"roadens the distribution
of information
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
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ow 'nformation )ystems ffect !rganizations
(irtual organization:(irtual organization:
• &ask force networked organizations&ask force networked
organizations
• @ses networks to link people* assets* and ideas to@ses networks
to link people* assets* and ideas to create and distribute products
and services withoutcreate and distribute products and services
without being limited to physical locationsbeing limited to
physical locations
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
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ow 'nformation )ystems ffect !rganizations
8igital firms8igital firms
• 0anage the supply chain by building0anage the supply chain by
building
efficient customer Isense and responseJefficient customer Isense
and responseJ
systemssystems
• ;articipate in Ivalue websJ to deliver new;articipate in Ivalue
websJ to deliver new
products and servicesproducts and services
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!
"usiness 4evel )trategy and the (alue %hain 0odel
• ighlights the primary or supportighlights the primary or
support
activities adding a margin of value toactivities adding a margin of
value to
products or servicesproducts or services
• elps achieve a competitive advantageelps achieve a competitive
advantage
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!
"usiness 4evel )trategy and the (alue %hain 0odel
;rimary ctivities:;rimary ctivities: • 8irectly related to
the production and8irectly related to the production and
distribution of a firmHs products or servicesdistribution of a
firmHs products or services
)upport ctivities:)upport ctivities: • 0ake the delivery of primary
activities possible0ake the delivery of primary activities
possible
• %onsist of the organizationHs infrastructure*%onsist of the
organizationHs infrastructure* human resources* technology* and
procurementhuman resources* technology* and procurement
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!
"usiness 4evel )trategy and the (alue %hain 0odel
,ocused 8ifferentiation:,ocused 8ifferentiation:
• %ompetitive strategy%ompetitive strategy
• $nables development of new market niches$nables development of
new market niches for specialized products or servicesfor
specialized products or services
• elps businesses compete better thanelps businesses compete better
than competitors in the target areascompetitors in the target
areas
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!
"usiness 4evel )trategy and the (alue %hain 0odel
$fficient %ustomer 6esponse )ystem:$fficient %ustomer 6esponse
)ystem:
• 8irectly links consumer behavior back to8irectly links consumer
behavior back to
distribution* production* and supplydistribution* production* and
supply
chainschains
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!
)upply %hain 0anagement and $fficient %ustomer 6esponse
)ystem
)witching costs:)witching costs:
• $Bpense incurred by a customer or$Bpense incurred by a customer
or
company in terms of time and eBpenditurecompany in terms of time
and eBpenditure
of resources when changing from oneof resources when changing from
one
supplier or system to another supplier or system to
another
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!
)upply %hain 0anagement and $fficient %ustomer 6esponse
)ystem
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'nformation partnership:'nformation partnership:
• %ooperative alliance formed between two%ooperative alliance
formed between two or more corporations for sharingor more
corporations for sharing information to gain strategic
advantageinformation to gain strategic advantage
• elp firms gain access to new customers*elp firms gain access to
new customers* creating new opportunities for crosscreating new
opportunities for cross selling and targeting productsselling and
targeting products
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!
'ndustry4evel )trategy and 'nformation )ystems
&he competitive forces model:&he competitive forces
model:
• 8escribes the interaction of eBternal8escribes the interaction of
eBternal
influences* specifically threats andinfluences* specifically
threats and
opportunities* affecting an organizationHsopportunities* affecting
an organizationHs
strategy and ability to competestrategy and ability to
compete
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!
'ndustry4evel )trategy and 'nformation )ystems
• 0ovement from one level of0ovement from one level of
sociotechnical system to another sociotechnical system to
another
• 6eDuired when adopting strategic systems6eDuired when adopting
strategic systems
demanding changes in the social anddemanding changes in the social
and
technical elements of an organizationtechnical elements of an
organization
Essentials of Manageent Inforation S!stesEssentials of Manageent
Inforation S!stes Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!Chapter 3 Inforation S!stes , Organi"ations,
Manageent, an# Strateg!
@sing )ystems for %ompetitive dvantage: 0anagement 'ssues