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44 Cards in this Set
- Front
- Back
strategy
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broad approach to achieving a goal
- game plan differentiation for competitive advantage - better quality - diff. features |
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operational effectiveness
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performing similar activities better
tactics: procedures, available means to accomplish goals |
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strategic IT
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support or shapes comp. position in business
changes the way a company competes |
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strategic aligment
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high degree of fit and consistency between the priorities and activities of the IS function and strategic direction of firm
careful planning is critical for strategic alignment, esp. for firms in highly comp. environment |
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6 key IS decisions
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how much to spend on IT
business processes that should receive IT money IT capabilities that need to be company how good IT services need to be security and privacy that we would accept who to blame if IT fails |
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strategic IS planning
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partnership b/t: those with tech. skills, the info. systems group, gen. and functional managers
objective: define how the firm to use and manage IS resources |
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advantages of IS planning process
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plans enable communication: intra-org. communication and shared mental image
plans enable unity of purpose: spec. objective of IT employment, responsibilities are agreed upon simplify decision making over time: creates context for it |
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what is involved in strategic IT planning process
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gathering info. about currency availability and performance of IS resources
road map for decision making about info. systems |
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strategic IS planning process
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strategic business planning
IS assessment IS vision IS guidelines strategic initiatives -- an iterative process |
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knowing the business -- strategic business planning
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knowing company's mission, future direction, performance targets, strategy
can only occur effectively when there is a clear understanding of what makes the firm successful, their business strategy, and their future goals and objectives |
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where to start -- strategic business planning
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process: taking stock of current IS resources and how well they meet org. needs
output: snapshot of current IS resources in org. IS and IT resources: tech. (hard/software and networking components), data and info. sources (databases and other info. stores), HR |
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info. systems planning -- know where to go
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based on the role info. systems should play in company
defines firm's ideal state for use and mgt. of resources - more IT intensive firms: plays strategic role - less IT intenstive firms: "necessary evil" |
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info. systems vision
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info. systems vision and firm's strategy are supposed to reflect one another
IS vision is specific and unique to given firm analytical tools for deciding role of IS and developing vision - critical success factors (CSF) methodology - strategic impact grid |
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critical success factors
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limited # of areas managers must control to ensure that firm will survive and thrive
ensures that planning team is able to prioritize focuses on business objectives, not info. systems |
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strategic impact grid
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enables simul. evaluation of firm's current and future info. system needs
two axis: - current need for reliable info. systems: focuses on current day to day ops. of existing systems - future need for info. system functionalities: focuses on strat. role that new IT capabilities play for org. defines the role of info. systems going forward |
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support quadrant -- impact grid
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IS are not mission critical for current ops.
new systems promise little differntiation the firm: views IS as a tool to suport and enable ops., considers IS to offer little potential for benefitting org., generally conserve IS investments |
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factory quadrant -- impact grid
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every small disruption to IT can endanger firm
limited potential for new system to make large change the firm: closely monitors current systems, needs to willing to fund matinence and upgrades, take a conservative stance of future investment |
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turnaround quadrant -- impact grid
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IS is not mission critical for current ops.
new IS or existing func. will be important for future viability and success of business the firm: is prepping to change info. systems posture, needs reorg. |
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strategic quadrant -- impact grid
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IS critical to current ops.
new functions are critical the firm: should be proactive with respect to IS and investments |
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info. systems guidelines -- knowing how you are getting there
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info. systems architecture
set of statements specifying how firm should use tech. and org. IS resources to acheive IS vision purposes: - enable communication - est. responsibility - guide future decision making |
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purpose of IS guidelines
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communication: spec. tactical and operational decision making, ensure future decisions are aligned with IS vision
identify responsibilities: set expectiations for behavior long range decision support: must be general enough to provide for a number of yrs., must be actionable |
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technical IS guidelines
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address future decisions pertaining to:
- hard/software infrastructure - networking services - storage and protection of org. data and info. do not specify vendor, particular or applications guidelines are general |
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org. IS guidelines
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address decisions that pertain to:
- HR - org. of the IS function - reporting and hierachial structure focus on: - IT governance issue - outsourcing and vendors relationships - HR decisions |
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info. systems SWOT
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know how well equipped you are to get there:
- SWOT = strengths, weakness, opportunities, threats focuses on the firm's current IS resources and capabilities iterative: may need to be revised based on SWOT clear direction for current planning cycle: based on SWOT analysis, given the proposed vision and guidelines |
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strategic planning initiatives -- from planning to action
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L/T (3-5 yr.) proposals that indentify new sytems and new projects or directions for IS
initiatives must: identify set of avenues for exploitation of IS resources, be aligned with IS vision and role of IS in company |
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primary role of FM and GMs
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creation and appropration of econ. value
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key value creation questiosn
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what does it mean to create value?
how does company engage in value creation/ how do you ensure that company benefits from value creation strategies and initiatives? |
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value added analyis
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mechanism to evaluate how much of the value created an initiative of the firm
benefits: deciding whether or not you should go ahead with the initiative, evaluating how to respond to a competitor who took a leadership position |
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value
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when something novel is done and it is deemed worthwhile by someone else
economic value is created thru transformation process resource: value $x (input) >> customer willingness to pay: $x + $v (output) |
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components of value
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supplier opportunity cost (SOC): min. amt. of money that suppliers will accept to provide firms with resources
firm cost (fc): actual amt. firm pays to suppliers for resource customer willingness to pay (CWP): max. amt. of money customers are willing to pay for firm's product total value created: difference between CWP and supplier opportunity cost TVC = CWP - SOC |
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supplier opportunity cost
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rational supplier will only provide firm's services if it receives at least:
- same amt. they could get from any other buyer - same amt. they could earn in the best alternative employment of resources NOT necessarily the amt. suppliers will be paid (firm cost) theoretical min. that suppliers will accept |
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customer willingness to pay
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max. amt. customer is willing to give up to acquire the service
based of subjective value perceived by customer |
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value created
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difference b/t customer WTP and supplier opportunity cost
value created = CWP - SOC |
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total value created
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value is created when resources (valued in their best alternative of use) are transformed into something that the client is willing to pay more for
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appropriating value created
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TVC only tells us if there is OPP to make profit
value approp: process by which TVC in the transaction is allocated amongst entities who contributed to create it |
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added value
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portion of total value created that would be lost if the firm did not take part in the exchange
- unique portion of value created by the firm itself - depends of the effects of existing competition added value is 0 when you face competitors with the same cost structure and perfect substitutes |
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price
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determines the portion of value created by each entity in the transaction
value created will go to the customers unless firm is unique in value creation |
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comp. advantage
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max. amt. of value that a firm can appropriate = its added value
added value is the measure of firm's competitive advantage - measure the extent to which the firm created something unique and valuable |
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2 ways to create new value
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increase CWP -- add something of value to clients; invest in incremental resources to increase CWP by an amt. greater than investment
decrease SOC -- creating incentives to supple needed resources for less money; enhancing supplier comp. - finding new sources |
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value considerations
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subjective -- in the eye of the client
CWP is not the same as price value can be tangible or intangible creation of value is not the same as appropriation comp. adv. and added value are closely related |
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added value analysis
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1. definite initiative and understand what it entails
2. identify comparison baselin 3. estimate CWP 4. estimate SOC 5. estimate added value |
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strategic info. systems
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firm acheives competitive adv. when: it can generate added value, by creating a unique and pos. difference bt SOC and CWP
strategic info. systems: used to support or shape comp. strategy; designed and implemented for the creation and appropriate of value defined by their purpose and objective for which they are created no need for prop. IT: tech. alone does not determine added value; its the initiative and the total IS tactical systems are: critical to business but do not generate added value |
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IT-dependent
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consist of identifiable competitive moves (IT dependent) designed to lead sustained improvements in the firm's competitive position (strategic) -- that depend on the use of IT (initiative) to be enacted
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do not focus on IT investments
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IT investments: only pay off if they are part of the larger and cohesive info. system design
IT-dep. strategic initiative: consist of the config. of an activity system dependent on IT at its core that fosters the creation and appropriation of econ. value |