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44 Cards in this Set

  • Front
  • Back
strategy
broad approach to achieving a goal
- game plan

differentiation for competitive advantage
- better quality
- diff. features
operational effectiveness
performing similar activities better

tactics: procedures, available means to accomplish goals
strategic IT
support or shapes comp. position in business

changes the way a company competes
strategic aligment
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
6 key IS decisions
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
strategic IS planning
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
advantages of IS planning process
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
what is involved in strategic IT planning process
gathering info. about currency availability and performance of IS resources

road map for decision making about info. systems
strategic IS planning process
strategic business planning

IS assessment

IS vision

IS guidelines

strategic initiatives

-- an iterative process
knowing the business -- strategic business planning
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
where to start -- strategic business planning
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
info. systems planning -- know where to go
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"
info. systems vision
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
critical success factors
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
strategic impact grid
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
support quadrant -- impact grid
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
factory quadrant -- impact grid
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
turnaround quadrant -- impact grid
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.
strategic quadrant -- impact grid
IS critical to current ops.

new functions are critical

the firm: should be proactive with respect to IS and investments
info. systems guidelines -- knowing how you are getting there
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
purpose of IS guidelines
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
technical IS guidelines
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
org. IS guidelines
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
info. systems SWOT
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
strategic planning initiatives -- from planning to action
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
primary role of FM and GMs
creation and appropration of econ. value
key value creation questiosn
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?
value added analyis
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
value
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)
components of value
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
supplier opportunity cost
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
customer willingness to pay
max. amt. customer is willing to give up to acquire the service

based of subjective value perceived by customer
value created
difference b/t customer WTP and supplier opportunity cost

value created = CWP - SOC
total value created
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
appropriating value created
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
added value
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
price
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
comp. advantage
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
2 ways to create new value
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
value considerations
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
added value analysis
1. definite initiative and understand what it entails
2. identify comparison baselin
3. estimate CWP
4. estimate SOC
5. estimate added value
strategic info. systems
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
IT-dependent
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
do not focus on IT investments
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