Lesson Information systems for competitive advantage

Lesson Information systems for competitive advantage present the content: enable organizational through information systems; organization can use is to achieve competitive advantage; from organizational strategy to information systems structure, to competitive advantage.

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Chapter 2: Information

Systems for Competitive

advantage

nga.lethiquynh@ueh.edu.vn

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► From Organizational Strategy to

Information Systems Structure, to

Competitive Advantage

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BUSINESS INFORMATION TECHNOLOGY

Q1 How to enable

Organizational through

Information Systems?

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Operational level

► Routine, day-to-day business process

► Decision: structured decisions

► Procedures are specified in advance

► Can be programed

► IS: are used to increase Efficiency

(faster, lower cost)

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Managerial level

► Functional managers (e.g marketing, finance,

manufacturing managers) focus on:

► monitoring operational-level activities and

providing info to higher levels

► Utilizing organizational resources to increase

Effectiveness (goals/tasks to accomplished well)

► Decision: semi-structured decisions

► Solutions/problems are not clear-cut, require

judgment.

► Procedures can be specified in advance, but not to

the extent where a specific recommendation can

be made

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Executive level

► Focus on long-term strategic questions

► Which products to produce, which

countries to compete in, what

organizational strategy for follow.

► Decision: unstructured decisions

► Complex and non-routine.

► Few or no Procedures can be specified in

advance

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Systems For Different Levels of

Management

• Transaction processing systems:

• Keep track of basic activities and transactions of

organization (e.g., sales, receipts, cash deposits, payroll, credit decisions, flow of materials in a factory).

• Management information systems and

decision-support systems:

• Help with monitoring, controlling, decision making,

and administrative activities.

• Executive support systems:

• Help address strategic issues and long-term trends,

both in firm and in external environment.

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► Product purchasing, receiving, and shipping

► Accounts payable and receivable

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Architecture of a TPS

Source: Textbook [2]

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Architecture of a TPS: Inputs

► Source documents

► Different data entry methods

8-11 Source: Textbook [2]

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Architecture of a TPS: Outputs

► Counts, summary reports

► Inputs to other systems

► Feedback to systems operator

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Summary of TPS Characteristics

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Management Information Systems

► Financial management and forecasting

► Manufacturing, planning and scheduling

► Inventory management and planning

► Advertising and product pricing

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Architecture of an MIS

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Summary of MIS Characteristics

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Decision Support Systems (DSS)

► Decision-making support for recurring

► Analyze results for hypothetical changes

► Example: Microsoft Excel

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Architecture of a DSS

8-19

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Common DSS Models

Source:

Textbook [2]

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Executive Support System (ESS)

► Executive Information system (EIS)

► Executive level

► Purpose:

► Examples:

resources

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Architecture of an ESS

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Summary of ESS Characteristics

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Organizational Functions and Representative Information Systems

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Major IS Tasks: Business Value

Added

► Automating: Doing Things Faster

► Organizational Learning: Doing Things Better

► Supporting Strategy: Doing Things Smarter

Source: Textbook [2], page 83

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Q2 How organization can use

IS to achieve competitive

advantage?

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Achieving Competitive Advantage

1 How does organizational strategy determine information

systems structure?

2 What five forces determine industry structure?

3 How does analysis of industry structure determine

competitive strategy?

4 How does competitive strategy determine value chain

structure?

5 How do business processes generate value?

6 How does competitive strategy determine business

processes and the structure of information systems?

7 How do information systems provide competitive

advantages?

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1 How Does Organizational Strategy

Determine Information Systems

Structure?

Source: textbook [1], pg 68

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2 What Five Forces Determine

Industry Structure?

Competitive Forces

• Competition from vendors of substitutes

• Competition from new competitors

• Competition from existing rivals

Bargaining Power Forces

• Bargaining power of suppliers

• Bargaining power of customers

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Use 5-forces Model to Identify Sources

of Strong Competition

Source: textbook[1], pg 69

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3 How Does Analysis of Industry

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Business – IS alignment

► To be effective goals, objectives,

culture, and activities must be

consistent with strategy

► In MIS, this means all information

systems must reflect and facilitate the

organization's competitive strategy

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4 How Does Competitive Strategy

Determine Value Chain Structure?

Linkag es

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Task Descriptions for Primary

Activities of the Value Chain

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5 How Do Business Processes

Generate Value?

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Improved Material Ordering Process

Source: textbook[1], pg 75

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Business Processes and the Structure of

IS?

Low-Cost Rental Value Chain

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High-Service Rental Value

Chain

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7 How Does IS Provide

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► From Organizational Strategy to

Information Systems Structure, to

Competitive Advantage

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