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Using Information Technology for Strategic Advantage

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Nabila Suhaimi

on 12 March 2014

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Transcript of Using Information Technology for Strategic Advantage

Using Information Technology for Strategic Advantage
The Role of Information Technology
Summary
Information technologies can support many competitive strategies including cost leadership, differentiation, innovation, growth and alliance.


Reengineering Business Process
Business Process Reengineering
Fundamental rethinking and radical redesign
of business processes to achieve dramatic improvements in cost, quality, speed and service.
BPR combines a strategy of promoting business innovation with a strategy of making major improvements to business processes so that a company can become a much stronger and more successful competitor
to dramatically improve eficiency and effectiveness is not an easy task!
used cross functional ERP software to reengineer, automate and integrate their manufacturing, distribution, finance and human resource business processes
for example,
Another example,
Companies of all sizes can benefit from using smartphones to improve their business process
Organizational Redesign
important enabler of reengineering, along with use of information technology
Process teams
use of self-directed cross functional of multidisciplinary
Case management
who handle almost all tasks in a business process instead of splitting tasks among many different specialists
example,
Employees from several departments or specialties, including engineering, marketing, customer service, and manufacturing, may work as a team on the product development process
Figure 2.10
Level of Change
Process Change
Starting Point
Frequency of Change
Time Required
Typical Scope
Horizon
Participation
Path to Execution
Primary Enabler
Risk
Incremental
Improved new version
Existing process
one-time or continuous
short
narrow
past & present
bottom-up
cultural
statistical control
moderate
Radical
Brand new process
Clean slate
Periodic one time change
Long
Broad, cross-functional
Future
Top down
Cultural, structural
High
IT
Business
Improvement
BPR
Speed, information-processing capabilities, and connectivity of computers and Internet technologies can substantially increase the efficiency of business processes as well as communications and collaboration among the people
Example,
The order management process illustrated in this process with ERP software and Web-enabled e-business and e-commerce systems
Proposal
Commitment
Configuration
Credit
Checking
Delivery
Billing
The order management process
Collections
Sales
Manufacturing
Finance
Logistics
Reengineering Order Management
Customer relationship management systems using corporate intranets and The Internet
Supplier-managed inventory systems using the Internet and extranets
Cross-functional ERP software for integrating manufacturing, distribution. finance, and human resource processes
Customer accessible e-commerce Web sites for order entry, status checking, payment, and service
Customer, product, and order status databases accessed via intranets and extranets by employees and suppliers
Basic Strategies to Become an Agile Company
the business must ensure that customers perceive the products or services of an agile company as solutions to their individual problems
Second,
Third,
Fourth,
First,
cooperates with customers, suppliers and other companies and even with its competitors.
an agile company organizes so that it thrives on change and uncertainty
an agile company leverages the impact of its people and the knowledge its possess
Type of Agility
Customer
Description
Role of IT
Example
Ability to co-opt customers in
the exploitation
of innovation opportunities
Technologies for building and enhancing virtual customer communities for product design, feedback and testing

Type of Agility
Description
Role of IT
Example
e-Bay post 10,000 messages each week
Partnering
ability to leverage assets, knowledge, and competencies of suppliers, distributors, contract manufacturers and logistics providers in the exploration and exploitation of innovation opportunities
Technologies facilitating interfirm collaboration, such as collaborative platforms and portals, supply chain systems
Yahoo! - initiating numerous partnerships
Type of Agility
Description
Role of IT
Example
Operational
Ability to accomplish speed, accuracy, and cost economy in the exploitation of innovation opportunities
Technologies for modularization and integration of business processes
Ingram Micro - deployed integrated trading system
Virtual Company
Organization that uses information technology to link with people, organization, assets and idea by forming virtual work group, alliance, and business partner that interlinked by (Internet, Intranet and Extranet)
form interenterprise information system with suppliers, customers, subcontractors and competitors.

Virtual Company Strategies
Share infrastructure and risk with alliance partner
Link complementary core competencies
Reduce concept-to-cash time through sharing
Increase facilities and market coverage
Gain access to new markets and share market or customer loyalty
Migrate from selling product to selling solutions
Virtual Company Figure
Knowledge-Creating Companies
Consistently creating new business knowledge, disseminating it widely throughout the company, and quickly building the new knowledge into their products and services.
Explicit Knowledge
Knowledge earn from existing data, document, or any information stored in organization
Tacit Knowledge
Knowledge gained from experience - senior workers
Evolve in employee mind through their experience
Level of Knowledge Management
Knowledge Management Systems
To help knowledge workers to create, organize, and make available important business knowledge, wherever and whenever its needed in an organization
KMS used:
Internet/Extranet to Website
Groupware
Data Mining
Knowledge Bases
Online Discussion Group
Build customer-focused businesses
Reengineer business processes
Businesses become agile companies
Create virtual companies
Build knowledge-creating companies
IT can help to:
Full transcript