Lec03 Strategic Use of IT
Lec03 Strategic Use of IT
Lec03 Strategic Use of IT
Learning Objectives
Introduction Working Inward: Business-To-Employee
Building an Intranet Fostering A Sense of Belonging
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Introduction
The Internet provides a better technological platform than previous generations of IT
Questions that remain:
Has the Internet or more generally, the IT revolution ended? Does IT still matter? Is there an even larger revolution looming? What sorts of strategic uses of IT are companies making?
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Introduction
Use of the Internet by businesses in mid/late 1990s set off a revolution in the use of IT No successful modern organization can separate IT from its business strategy? After dot com bust, Moores Law, declining price of computing
Does IT still matter? (Yes. Wikis, Blogs, FB) If yes, what are the strategic uses of IT (particularly Internet) today?
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1990s: Re-engineering
Working inward (business process reengineering) to remove inefficient processes
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2005 onwards:
Working inwards, outwards and across to achieve competitive advantage 2008: Putting IT in the forefront of business strategy
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Earlier Internet
Is rapid growth strategy of dot coms during 1993-2000 period necessarily a bad one?
First-mover advantage crucial since IT innovation is short-lived to achieve other sources of competitive advantage
Knowledge Economy information drives reputation & allows niche cultures to blossom
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Building an Intranet
Intranets are private company networks that use Internet technologies and protocols to reach employees Benefits of Intranet
More efficient and cost-effective way to provide access to company information
24/7 availability, browser interface, easier development and less maintenance ($), faster updates, information integrity
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Intranet Architecture
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Intranets can provide the foundation for creating corporate culture and climate by giving a means for communication and creating communities
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Competitors must do the same or find themselves at a disadvantage Two Business-to-Customer strategic IT uses:
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Cont
UPS had package delivery. But did not guarantee delivery time and did not track packages FedEX capitalized on these 2 missing functions. Created a Webpage. Overnight Delivery. Advanced Logistics outsourced distribution to DHL, FedEx. Clients were computer manufacturers, health-care labs Supply Chain provides services to get products from the docks to the clients premises
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The Emergence of Electronic Tenders An electronic tender is the capability to monitor a product or service using computers.
e.g. car diagnostics, package tracking, customer interactions
The options for electronic tenders are endless, but the main objective is to get closer to the customer.
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Establishing Close and Tight Relationships Building relationships with various players in ones business ecosystem is the current strategic objective for use of IT and the Internet
Banks, advertising agencies, suppliers, distributors, retailers, competitors Relationships as a function of linking information systems e.g CISCO and UPS Supply Chain Solutions
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Push (supply) and pull (demand) marketing strategies Demand-pull model favored todayvalue chain starts from the customer
Benefits and drawbacks Efficiency, customer satisfaction, trust, infrastructure
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Extranet Goal Extend companys back systems to re-engineer business processes external to the company
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Conclusion
Many best practices evolved over the years, with respect to strategic use of IT
Each required right resources and skills
Intranets and Web portals are ways to bring cohesion within flatter organizations Customer-centric business strategy leads to use of IT across organizational boundaries (supply chain) As IT continues to evolve, so does its strategic uses
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Q&A