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Project and Information Systems:
IS Strategy Triangle Model
Jason C. H. Chen, Ph.D.Professor of MIS
School of Business AdministrationGonzaga UniversitySpokane, WA 99258
Dr. Chen, Special Topic: Project Management2
PM (and any Business) should focus on:
Entrepreneur企 业 家
creativity
Dr. Chen, Special Topic: Project Management3
Dr. Chen, Special Topic: Project Management4
Learning Objectives
• Understand the concepts of Project and Information Systems
• Understand IS Triangle Strategy Model and how to employ it to improve competitive advantage for project management
• Understand Porter’s Competitive Advantage Strategy and how to apply it to create/improve organization competitive advantage
Dr. Chen, Special Topic: Project Management5
IS vs. IT
IS = IT?
Why?
Dr. Chen, Special Topic: Project Management6
MIS
M
I
S
Which component is more important?
Dr. Chen, Special Topic: Project Management7
Computers Impact
The good news:
Computers allow us to work 100% faster.
The bad news:
They generate 300% more work.
Dr. Chen, Special Topic: Project Management8
Question?
• What is the only entity remains unchanged in the business?
• Answer:
• “Change”
Dr. Chen, Special Topic: Project Management9
INTRODUCTION• Shouldn’t managers rely on experts when it comes
to making the decisions on IS for their organizations?– Managers today need to know about their
organization’s capabilities and uses of information as much as they need to understand how to obtain and budget financial resources.
– A manager who does not understand the basics of managing and using information cannot expect to be successful in today’s business environment.
Dr. Chen, Special Topic: Project Management10
Figure I.1 - Reasons why business managers should participate in information systems decisions
• IS must be managed as a critical resource• IS enables ________ in the way people work together.
• IS are part of (and integrate) almost every aspect of business.
• IS enable or inhibit business ___________ and new __________.
• IS can be used to combat ____________
Reasons:
change
business challenges from competitors
opportunities strategies
Dr. Chen, Special Topic: Project Management11
Technology vs. Technique• Technology
– is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function.
– It can also refer to the collection of such tools, machinery, and procedures.
• Technique– Personal habits– Work style
Dr. Chen, Special Topic: Project Management12
Failed IS Projects• Standish Group found that 67 percent of all
software projects are challenged – Late, over budget or fail to meet performance
criteria.
• Managing a business project means managing an information systems project. – Why?– Many systems use or integrate the Internet.
Dr. Chen, Special Topic: Project Management13
Successful IS Projects
• To succeed, “a” general manager must be a project manager and must learn how to manage this type of risk.
• Executive management no longer has an option but to consider skilled IT project management as fundamental to business success.
Dr. Chen, Special Topic: Project Management14
The Need for Project Management
• Critical for companies today: the ability to adapt existing business processes faster than the competition
• Typical adaptation projects include:– “Rightsizing” the organization (what is another
name?) – Reengineering business processes– Adopting more comprehensive, integrative
processes
Dr. Chen, Special Topic: Project Management15
• What are the three elements in the “Project Triangle”?
• What is the center in the triangle?
Dr. Chen, Special Topic: Project Management16
Project Triangle (Project Management Trade-offs)
Time Cost
Scope
The objective of the PM is to define project’s scope realistically and ultimately deliver quality of product/service on time, on budget and within scope.
The center of project triangle is
QUALITY
Dr. Chen, Special Topic: Project Management17
Typical Project Management trade-offs
• Scope– Product: quality, features, functions– Project: work required to deliver product/service
• Time – the time required to complete the project• Cost – all the resources required to carry out the
project.• Cost vs. Quality
– The quality of a system will normally impact its cost.• Figure above shows the three sides of the project
triangle.
Dr. Chen, Special Topic: Project Management18
Project Manager’s Role• The project manager will typically be involved in:
– Ensuring progress of the project according to defined metrics..
– _____________– Ensuring progress toward deliverables within _____ and
_________________ – Running coordination meetings.– Negotiating for resources on behalf of the project.
• Business projects are often initiated because of a successful business case. – A successful project begins with a well-written business case
(i.e., spells out components of the project.)
Identifying risks.time
resource constraints
But, not to determining the best fit of the project in the organizations vision
Dr. Chen, Special Topic: Project Management19
The GreatDividing Line Between
SUCCESSand
FAILURECan be Expressed
In Five Words
“I Did Not Have ______”TIME
Dr. Chen, Special Topic: Project Management20
Planning is everything ...What are Two Major Outputs for an organization?
Products,Services
Vision
guide
Strategy
create
develop
Tactic
N
MissionCustomers,market,
competition
Dr. Chen, Special Topic: Project Management21
What is “Strategy”?• A strategy is a plan of action designed to
achieve a vision.– The science or art of combining and employing the
means of war in planning and directing large military movements and operations.
– "Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations".
Dr. Chen, Special Topic: Project Management22
Strategy vs. Tactics
• Strategy versus Tactics– Long range versus day-to-day– Dreaming versus doing– Doing the right thing versus doing things right
• The fundamental principles of strategy are the same for all, all times, and all situations. Only tactics change, and tactics are modified to the times.
• In warfare, battlefield tactics is how to handle one’s army when it is face-to-face with the enemy.
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” Sun Tzu
Dr. Chen, Special Topic: Project Management23
Strategy vs. Tactics
• Name an example of Strategy vs. Tactics
“All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” Sun Tzu
Dr. Chen, Special Topic: Project Management24
Information System Strategy Triangle
Business (Firm)Strategy
Organizational Strategy IS/IT Strategy
Where is the business going and why?
What is required? How it can be delivered?
Directi
on for b
usiness
Needs and priorities
Infrastructure and services
Supports busin
ess
IT impact and potential
1. Architecture/Infrastructure2. MIS organization (Sourcing, Governance etc.)3. Funding
Dr. Chen, Special Topic: Project Management25
Information System Strategy Triangle
Business (Firm)Strategy
Organizational Strategy IS/IT Strategy
Where is the business going and why?
What is required? How it can be delivered?
Directi
on for b
usiness
Needs and priorities
Infrastructure and services
Supports busin
ess
IT impact and potential
1. Architecture/Infrastructure2. MIS organization 3. Funding
PROJECT MANAGEMENT
Information Resources can be used efficiently and effectively.
Dr. Chen, Special Topic: Project Management26
Information System Strategy Triangle
• A business strategy is a well-articulated vision of where the business seeks to go and how it expects to get there.
• An organizational strategy is the organization’s design, as well as the choices it makes to define, set up, coordinate, and control its work processes.
• IS strategy is the plan the organization uses in providing information systems and services.
Dr. Chen, Special Topic: Project Management27
WHY STRATEGY?
• Why is it important for business strategy to drive organizational strategy and IT strategy? What might happen if business strategy were not the driver?
Dr. Chen, Special Topic: Project Management28
Why is it important for business strategy to drive organizational strategy and IT strategy? What might happen if
business strategy were not the driver?
Typically, managers seem to think that changing or upgrading an information system (or even a component of an information system) will only positively impact a business. Quite the opposite, in fact, is true. By making changes in organizational strategy or IT strategy first, the triangle is "out of balance" and there will be consequences in the affected areas. For example, building a virtual organization, but not changing the business strategy to something like …
"insuring our people are productive and have the widest possible work place opportunities" can lead to significant disconnects between workers, their managers, and their customers. And, worse, without supplying the virtual worker with the appropriate information system (a computer at home, a laptop, etc) will lead to a decrease in productivity by the virtual worker, and a major disruption of business operations.
Dr. Chen, Special Topic: Project Management29
Example• Give an example in which a company fails to
perform well because it does not align its three strategies.
• Any?– too much focus on IT– used to be considered as a “hardware” company
(Mainframe, Mini-computers, PC, DOS etc.)– new division established in early 1990: GLOBAL
SERVICIE DIVISION– it now becomes a “Service” corp. – “TOTAL solution”
Dr. Chen, Special Topic: Project Management30
Louis V. Gerstner, Jr. IBM former CEO and president (1992-2002)
Prior to joining IBM, Mr. Gerstner served for four years as chairman and chief executive officer of RJR Nabisco, Inc. This was preceded by an 11-year career at American Express Company, where he was president of the parent company and chairman and CEO of its largest subsidiary, American Express Travel Related Services Company. Prior to that, Mr. Gerstner was a director of the management consulting firm of McKinsey & Co., Inc., which he joined in 1965.
In January 2003 he assumed the position of chairman of The Carlyle Group, a global private equity firm located in Washington, DC.
Dr. Chen, Special Topic: Project Management31
HW
• Each Group finds out another example (not limited to the high-tech industry) and analyze it using the IS/IT Triangle Strategy model.
Dr. Chen, Special Topic: Project Management32
Another Example?• Give another example (not in the high tech
industry) in which a company fails to perform well because it does not align its three strategies.
• Any?– too much focus other than IT– inefficient organization structure– Inefficient IT usage
Dr. Chen, Special Topic: Project Management33
FORD IS Strategy Triangle: Old Strategy
Business (Firm)Strategy
Organizational Strategy IS/IT Strategy
TOO MANY BRANDS/FOCUSES
COMPLICATED and Inefficient
structure
N
Inefficient and ineffective IT usage
Dr. Chen, Special Topic: Project Management34
FORD IS Strategy Triangle:New Strategy (ONE FORD)
Business (Firm)Strategy
Organizational Strategy IS/IT Strategy
ONE FORD STRATEGY:
One Team,One Plan,One Goal
SIMPLE and Efficient Structure
N
Efficient and Effective IT Usage and Support
A simple-sounding plan with big consequences
Dr. Chen, Special Topic: Project Management35
Dr. Chen, Special Topic: Project Management36
Alan Mulally: President and CEO, Ford Motor Company
In September 2006
Prior to joining Ford in September 2006, Mulally served as executive vice president of The Boeing Company, and president and chief executive officer of Boeing Commercial Airplanes. In that role, he was responsible for all of the company’s commercial airplane programs and related services. Mulally also was a member of the Boeing Executive Council and served as Boeing’s senior executive in the Pacific Northwest.
Management styleMulally negotiated four new agreements with United Auto Workers, which has brought down labor costs from $76/hour to $55/hour.
Dr. Chen, Special Topic: Project Management37
BRIEF OVERVIEW OF BUSINESS STRATEGY
FRAMEWORKS
Dr. Chen, Special Topic: Project Management38
Striving for Competitive Advantage
• Firm level: Industry & Competitive Analysis
• Business level
Competitive Forces Model (more details will be discussed next class)
Competitive StrategyD’Aveni’s Hypercompetition Model (7s)
Value-Chain Analysis
Dr. Chen, Special Topic: Project Management39
Business Strategy Frameworks• Porter’s Generic Strategies Framework
(and its variants)• Hypercompetition and the New 7-Ss
framework (D’Aveni)
N
Dr. Chen, Special Topic: Project Management40
Figure 1.2: Porter’s Generic Strategy Framework – 3 Strategies for achieving Competitive Advantage
Dr. Chen, The Trends of the Information Systems Technology TM -40
Competitive Mechanism
Overall Cost Leadership
Focus
DifferentiationIndustrywide (Broad Target)
Particular Segment only
(Narrow Target)
Co
mp
etit
ive
Sco
pe
Lower CostPosition
Uniqueness Perceived by
Customer
Competitive Advantage
N
Dr. Chen, Special Topic: Project Management41
Porter’s Competitive Advantage Strategies
• Cost leadership: be the cheapest• Differentiation: focus on making
your product and/or service stand out for non-cost reasons
• Focus: occupy narrow market niche where the products/services can stand out by virtue of their cost leadership or differentiation.
Dr. Chen, Special Topic: Project Management42
Cost Leadership
Business Strategies and its Competitive Advantage
Dr. Chen, The Trends of the Information Systems Technology TM -42
Cost Focus
Differentiation
Differentiation Focus
Industrywide
(Broad Target)
Particular Segment
only (Narrow Target)
Co
mp
etit
ive
Sco
pe
Competitive Mechanism
Lower CostPosition
Uniqueness Perceived by
Customer
N
Industrial economy Knowledge-based economy
Inn
ovat
ion
All
ian
ce
Gro
wth
Dr. Chen, Special Topic: Project Management43
BRIEF OVERVIEW OF ORGANIZATIONAL
STRATEGIES
Dr. Chen, Special Topic: Project Management44
Summary of Key Strategy Frameworks
• Generic Strategies: Competitive Advantage (CA) through low cost, differentiation or focus
• Hypercompetition: CA is temporary, created through speed and aggression in the market – to be introduced next class
Dr. Chen, Special Topic: Project Management45
Industries Competitive Advantage
(Characteristics)
Competitive Advantage(How to)
Porter’s Model
Relatively stable Establish a strong, long-term position and defend it.
Attain a fit with the environment as in traditional markets
Hyper-competition Model
Dynamic1) Ever-increasing competition2) Changing power between players
Short-lived, take advantage of any small window of opportunity that arises (thru speed and aggression)
1) change rules of competition2) create disruptions (during which temporary advantages can be exploited)
Porter’s Model vs. Hypercompetition Model
Dr. Chen, Special Topic: Project Management46
Com
petitive
Adv
anta
ge
(Value)
N
Figure - Business Level: The Value Chain
Dr. Chen, Special Topic: Project Management47
Manufacturing Industry Value Chain Product and Service Flow
Research and Development
EngineeringProduction
and Manufacturing
Marketing Sales and
DistributionService
Primary Activities
Dr. Chen, The Trends of the Information Systems Technology
Administrative and Other Indirect Value Added
Administrative and Other Indirect Value Added
Support Activities
N
Dr. Chen, Special Topic: Project Management48
48
Four Important Entities for a Successful Enterprise
• Capital (资本)• Technical (技术)• Human (人才)• _________ (信息)Information
Dr. Chen, Special Topic: Project Management4949
Essential Value Propositions for a Successful Company
• __________ Model• __________ Competency
– outsourcing– offshoring
• __________ – Set corporate goals and get executive
sponsorship for the initiative
Business
Core
Execution
Dr. Chen, Special Topic: Project Management50
Major Issues for the Next Society
1. Internationalization
2. Technology
3. Population
4I + 1K
InternationalizationIntegrationInnovationInformation andKnowledge
Dr. Chen, Special Topic: Project Management51
HWs
• Research and study the following– “Porter’s Five Competitive Force” Model– Google mini-case (group)
Dr. Chen, Special Topic: Project Management52
Mini Case Study
• Case Study : Google• Questions #1 thru # 4
Dr. Chen, Special Topic: Project Management53
Information System Strategy Triangle
Business (Firm)Strategy
Organizational Strategy IS/IT Strategy
N
Dr. Chen, Special Topic: Project Management54
Information System Strategy Triangle for GOOGLE
Business (Firm)Strategy
Organizational Strategy IS/IT Strategy
N
1. Innovation and Openness2. Differentiation
New concept of Organization (organize the world’s information and make it universally accessible and useful)
1. Internet (Web-based Applications)
2. Cloud computing
Dr. Chen, Special Topic: Project Management55
Q#1. How is Google’s mission statement related to its business strategy?
• Ans: Google’s primary goal is to “organize the world’s information and make it universally accessible and useful” (mission statement).
• Google continues to take risks and expand into new markets to further its reach into the information world. It takes advantage of new avenues to expand its market share by making information freely available on its Intranet, and by willing to take risks by investing in speculative and strange projects if they see a large potential payoff.
Dr. Chen, Special Topic: Project Management56
2. How does Google’s information systems strategy support its business strategy?
• Ans: Through openness and innovation. It permits users to download their own software, maintain official and unofficial blogs, and buys and makes software to suit the needs of the business.
• IT encourages innovation by allowing employees to spend 20% of their time on a project of their own choosing. This “flexible” IT structure supports the innovation and creativity that its business strategy espouses.
Dr. Chen, Special Topic: Project Management57
3. How does Google’s organizational strategy supports its business strategy?
• Ans: Google has a culture of innovation and creativity. However, it still provides a level of structure when making decisions. Specifically, Google’s mission statement relates to its business strategy by making data on all ongoing projects and systems available to all of its employees through its corporate Intranet.
• Any employee can see what is transpiring in other areas and can lend a hand through Google’s “free day” policy and other open work-environment strategies.
Dr. Chen, Special Topic: Project Management58
4. Which of Porter’s three generic strategies does Google appear to be using based upon this case? Provide a rationale for your response.
• Ans: Differentiation, though one may argue that cost leadership is also utilized with its very reasonable ad costs. However, though the use of its innovative processes, and unique business model, Google has differentiated itself from its competitors by keeping a clean and simple interface (which most of the other search engines have emulated), and by continuing to invest in its employees, to provide innovation on a large scale.