chapter 5 : ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES.

ORGANIZATIONAL STRUCTURES

→Organizational employees must work closely together to develop strategic initiatives that create competitive advantages.
→Ethics and security are two fundamental building blocks that organization must base their businesses upon

IT ROLES & RESPONSIBILITIES

→Information technology is a relatively new functional area, having only been around formally for around 40 years

→Recent IT-related strategic positions:

💖Chief Information Officer (CIO)

↠ Oversees all uses of IT ensures the strategic alignment of IT with business goals and objectives

↠Broad CIO functions includes:

→manager - ensuring the delivery of all IT projects, on time and within budget

→leader - ensuring the strategic vision of IT is in line with the strategic vision of the organization

→communicator - building and maintaining strong executives relationships

💖Chief Technology Officer (CTO)

↠ responsible for ensuring the throughput , speed,accuracy,availability and reliability of IT

💖Chief Security Officer (CSO)

↠ responsible for ensuring the security of IT systems

💖Chief Privacy Officer (CPO)

↠  responsible for ensuring the ethical and legal use of information

💖Chief Knowledge Office (CKO)

↠ responsible for collecting ,maintaining and distributing the organization's knowledge

THE GAP BETWEEN BUSINESS PERSONNEL AND IT PERSONNEL

→ Business personnel process expertise in functional areas such marketing, accounting and sales

→ IT personnel have the technological expertise

→ This typically causes a communications gap between the business personnel and IT personnel

IMPROVING COMMUNICATIONS

→ Business personnel must seek to increase their understanding of IT

→ IT personnel must seek to increase their understanding of the business

→ It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel.

ORGANIZATIONAL FUNDAMENTAL-ETHICS AND SECURITY

→Ethics and security are two fundamental building blocks that organization must base their businesses on to be successful

→In recent years such events as the Entron and Martha Stewart along with 9/11 have shed new light on the meaning of ethics and security

ETHICS

- The principles and standards that guide our behaviour toward other people

-Privacy is a major ethical issue

↝privacy - the right to be left alone when you want to be , to have control over your own personal possessions and no to be observed without your consent.

-Issues affected by technology advances

↣ INTELLECTUAL PROPERTY

-Intangible creative work that is embodied in physical form

↣COPYRIGHT

-The legal protection afforded an expression of an idea such as a song , video game and some types o proprietary documents

↣FAIR USE DOCTRINE

-In certain situations it is legal to use copyrighted material

↣ PIRATED SOFTWARE

-The authorized use , duplication, distribution or sale of copyrighted software

↣COUNTERFEIT SOFTWARE

-Software that is manufactured to look like look like the real thing and sold as such

-One of  the main ingredient in trust is privacy

-primary reasons privacy issues lost trust for e-business

SECURITY

-Organizational information in intellectual capital - it must be protected

-INFORMATION SECURITY - The protection of information from accidental or intentional misuse by persons inside out or outside an organization

-E-business automatically creates tremendous information security risks for organizations.

Chapter 4 : Measuring the Success of Strategic Initiatives

Chapter 4 : Measuring the Success of Strategic Initiatives

1. Measuring Information Technology's Success - key performance indicators (KPIs) are the measures that are tied to business drivers. Metrics are the detailed measures that feed those KPIs. Performance metrics fall into a nebulous area of business intelligence that is neither technology-nor business-centred, this area requires input from both IT and business professionals to find success

• Effectiveness IT metrics - measure the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases
• Efficiency IT metrics - measure the performance of the IT system itself including throughput, speed, and availability
• Benchmarking - a process continuously measuring systems results, comparing those results to optimal system performance, and identifying steps and procedures to improve systems performance

     2. The Interrelationship of Efficiency and Effectiveness IT Metrics

• Common types of efficiency IT metrics

• Common types of effectiveness IT metrics

     

     3. Metrics for Strategic Initiatives

• Website metrics

• Supply Chain Management (SCM) Metrics

• Customer Relationship Management (CRM) Metrics

• Business Process Re engineering (BPR) and Enterprise Resource Planning (ERP) Metrics
• Balanced scorecard  is a management system, in addition to a measurement system, that enables organizations to clarify their vision and strategy and translate them into action
• The balanced scorecard views the organizations from four perspectives :
• The learning and growth perspective
• The internal business process perspective
• The customer perspective
• The financial perspective

chapter 3 : strategic initiatives for implementing competitive advantages

STRATEGIC INITIATIVES

↠Organizations can undertake high-profile strategic initiatives including:

➽SUPPLY CHAIN MANAGEMENT (SCM)

⤷involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

⤔ 4 basic component of supply chain management include :
i)supply chain strategy-strategy for managing all resources to meet customer demand
ii)supply chain partner- partners throughout the supply chain that deliver finished products,raw             materials and services.
iii)supply chain operation-schedule for production activities
iv)suppy chain logistics-product delivery process

⤔Wal-Mart Procter & Gamble (P&G) SCM

⤔Effective and efficient SCM  systems can enable an organization to:

-decrease the power of its buyers

-increase its own supplier power

-increase switching costs to reduce the threat of substitute products or services

-create entry barriers thereby reducing the three of new entrants

-increase effciencies while seeking a competition advantage through cost leadership 

⤔Effective and efficient SCM systems effect on Porter's Five Forces

➽CUSTOMER RELATIONSHIP MANAGEMENT(CRM)

↪ managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitbility.

- not just technology,but a strategy,process and business goal.

- an organization to : 

• Identify types of customers.
• Design invidual customers marketing campaigns.
• Treat each customer as an individual.
• Understand customer buying behaviors.

➽BUSINESS PROCESS REENGINEERING(BPR)

- Business process : a standardized set of activities that accomplish a specific task,such as processing a customer's order.
- Business process reengineering (BPR) : the analysis and redesign workflow within and between enterprise.

• he purpose of BPR is to make all business processes best-in-class.

- Reengineering the Corporation : book written by Micheal Hammer and James Champy that recommends 7 pprinciples.

1. Organize around outcomes,not tasks.
2. Identify all the organization's processes and prioritize them in order of redesign urgency.
3. Integrate information processing work into real work that produces the information.
4. Treat geographically dispersed resources as though thy were centralized.
5. Link parallel activities in the workflow instead of just integrating their results.
6. Put the decision point where the work is performed and build control into the process.
7. Capture information once and at the source.

Finding Opportunity Using BPR

Company can improve the way travels the road by moving from foot to horse and then horse to car.

- BPR looks at taking a different path, such as an airplane which ignore the road completely.

- Progressive Insurance mobile claims process.

- Types of change an organization can achieve,along with the magnitudes of change and the potential business benefit.

Enterprise Resource Planning(ERP)

- Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing  enterprisewide information on all business operations.

- ENTERPRISE

- ERP systems collect data from across an organization and correlates the data generating and enterprisewide view.

Chapter 2 :IDENTIFYING COMPETITIVE ADVANTAGES

CHAPTER 2

September 29, 2017

IDENTIFYING COMPETITIVE ADVANTAGE

What is competitive advantage?

-          A product or services that an organization’s customers place a greater value on than similar offerings from a competitor
-          Unfortunately, CA is temporary because competitors keep duplicate the strategy.
-          Then, the company should start the new competitive advantage

Michael Porter’s Five Forces Model is useful tool to aid organization in challenging decision whether to join a new industry or industry segment

1.       Buyer Power
·         High – when buyers have many choices of whom to buy
·         Low – when their choices are few
·         To reduce buyer power (and create competitive advantage), an organization must make it more attractive to buy from the company not from the competitors
·         Best practices of IT based
 -  Loyalty program in travel industry, for example rewards on free airline tickets or hotel stays

The Competitive Environment

Bargaining Power of Customers/Buyer Power
Customers can grow large and powerful as a result of their market share
Many choices of whom to buy from
 Low when comes to limited items
Example, used loyalty programs (Jusco card, Tesco card, being a members to get the discount)

2.       Supplier Power

·         High – when buyers have few choices of whom to buy from
·         Low – when their choices are many
-    Best practices of IT to create competitive advantage
-    Example, B2B marketplace – private exchange allow a single buyer to posts it needs and then open the bidding to any supplier who would care to bid. Reverse auction is an auction format in which increasingly lower bids

An organization within the Supply Chain
-          Supplier power is the converse of buyer power

1.       Threat of Substitute products and services

·         High – when there are many alternatives to a product or service
·         Low – when there are few alternatives from which to choose
·         Ideally, an organization would like to be on a market in which there are few substitutes of their product or services
- Best practices of IT
- Example, Electronic product – same functions different brands

The Competitive Environment

Threat of Substitutes
-          To the extent that customers can use different products to fulfill the same need, the threat of substitutes exists
-          Example, electrical product – same function different brands
-          Switching cost – costs can make customer reluctant to switch to another product or service

2.       Threat of new entrants

·         High – when it is easy for new competitors to enter a market
·         Low – when there are significant entry barriers to entering a market
·         Entry barriers is a product or service feature that customers have come to except from organizations and must be offered by entering organization to complete and survive
·         Best practices of IT
-     Example, new bank must offers online paying bills, acc. monitoring to compete

The Competitive Environment

Threat of New Entrants
-          Many threats come from companies that do not yet exist or have a presence in a given industry or market
-          The threat of new entrants forces top management to monitor the trends, especially in technology, that might give rise to new competitors
-          Example, new bank (online paying bills, acc. monitoring)

3.       Rivalry among existence competitors

·         High – when competition is fierce in a market
·         Low – when competition is more complacent
·         Best practices of IT
-    Wal-Mart and its suppliers using IT – enabled system for communication and track product at aisles by effective tagging system
-    Reduce cost by using effective supply chain

The Competitive Environment

Rivalry Among Existing Firms
-          Existing competitors are not much of the threat: typically each firm has found its “niche”.
-          However, changes in management, ownership, or “the rules of the game” can give rise to serious threats to long term survival from existing firms
-          Example, the airline industry faces serious threats from airlines operating in bankruptcy, who do not the debts while slashing fares against those healthy airlines who do pay on debt. (MAS & AIR ASIA)

The Value Chains – Targeting Business Processes
Supply Chain – a chain or series of processes that adds value to product and service for customer
 Add value to its products and services that support a profit margin for the firm