Ehwlc Mba - Session 01

8/8/2019 Ehwlc Mba - Session 01

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Ealing, Hammersmith & West London CollegeEaling, Hammersmith & West London College MBA IT & e-Commerce for HospitalityMBA IT & e-Commerce for Hospitality

Session 01Session 01

IT strategy and the Business contextIT strategy and the Business context

Introduction to the moduleIntroduction to the module


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What are Organisations trying to achieve?What are Organisations trying to achieve?

to beat the competitionto beat the competition

to succeed & to surviveto succeed & to survive

SurvivalSurvival

ThreatThreat

ProsperityProsperity


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How do Organisations try to achieve this?How do Organisations try to achieve this?

What are Organisations trying to achieve?What are Organisations trying to achieve?

to beat the competitionto beat the competition

5 Performance Objectives5 Performance Objectives

speedspeed costcost dependabilitydependability

flexibilityflexibility qualityquality

to succeed & to surviveto succeed & to survive


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How do Organisations measure success inHow do Organisations measure success intheir market?their market?

income (revenues)income (revenues)

profitsprofits

costscosts

Brand awarenessBrand awareness

market sharemarket share


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What is Competitive Advantage?What is Competitive Advantage?

something which persuades a customer to buy yoursomething which persuades a customer to buy yourproduct or service when they have a choice - inproduct or service when they have a choice - in

preference to a competitorspreference to a competitors

How do you get it?How do you get it?

by providing something the Customer valuesby providing something the Customer values


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What do Organisations use to create ProductsWhat do Organisations use to create Products

or Services?or Services?

resourcesresources skills (competences)skills (competences)

SurvivalSurvival

ThreatThreat


R

esour ces

R

esour ces

CompetenciesCompetencies

HighHigh

HighHigh

LowLow

LowLow


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unique resources,unique resources,

unique skills,unique skills,

unique products,unique products,

unique services.unique services.

What is used to create Competitive Advantage?What is used to create Competitive Advantage?


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Resources and CompetencesResources and Competences

represent an Organisations strategic capabilityrepresent an Organisations strategic capability

tangible resources physical assets:tangible resources physical assets:plant, machinery,plant, machinery,information systems, informationinformation systems, information

technology,technology,staff / those employed incl. sub-staff / those employed incl. sub-

contractors,contractors,finance.finance.intangible resources non-physical assets:intangible resources non-physical assets:

reputation / Brand / image,reputation / Brand / image,information, knowledge,information, knowledge,competences / skills of those employed,competences / skills of those employed,management ,management ,efficiencies procedures andefficiencies procedures and

equipment.equipment.


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Unique Resources & Core CompetencesUnique Resources & Core Competences

threshold capabilities are essential for anthreshold capabilities are essential for anOrganisation to compete and to survive.Organisation to compete and to survive.

but of themselves they will not createbut of themselves they will not createa competitive advantage.a competitive advantage.

competitive advantage is created if the organisation hascompetitive advantage is created if the organisation hassomething unique and will be sustained if thatsomething unique and will be sustained if that uniqueness cannot be copied.uniqueness cannot be copied.


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SurvivalSurvival

ThreatThreat


Resources

Resources

CompetenciesCompetencies

HighHigh

HighHigh

LowLow

LowLow

thresholdthreshold

thresholdthreshold

competitivecompetitiveadvantageadvantage

competitivecompetitiveadvantageadvantage


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Value of TechnologyValue of Technology

concerned with the value added by MIS & ICTconcerned with the value added by MIS & ICT

easier to identify when technology was first introducedeasier to identify when technology was first introduced

moves away from the control of costs which aremoves away from the control of costs which arerelated to the ICT functionrelated to the ICT function

to the realisation of benefits obtained from itsto the realisation of benefits obtained from itsintroduction and useintroduction and use

technology spend replaced people spendtechnology spend replaced people spend

this became more difficult as ICT became more strategicthis became more difficult as ICT became more strategic


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How can ICT Value be measured or quantified?How can ICT Value be measured or quantified?

ICT value associated with Organisations 5 POs:ICT value associated with Organisations 5 POs:

speedspeed costcost dependabilitydependability

flexibilityflexibility qualityquality

income (revenues)income (revenues) profitsprofits costscosts

Brand awarenessBrand awareness

market sharemarket share

also with how Organisations measure success:also with how Organisations measure success:

as well as by:as well as by:

completing strategiescompleting strategies corporate objectivescorporate objectives


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value therefore needs to be re-defined forvalue therefore needs to be re-defined for

each ICT initiativeeach ICT initiative

value is perceived differently at levels withinvalue is perceived differently at levels withinthe Organisationthe Organisation

value may have an external dimensionvalue may have an external dimension

value has a time dimension how long before thevalue has a time dimension how long before the

value (benefits) is realised?value (benefits) is realised?

Chatterjee & Seagars (2002) value is delivered overChatterjee & Seagars (2002) value is delivered overtime the W effecttime the W effect


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Chatterjee & Seagars(2002) W effectChatterjee & Seagars(2002) W effect

TimeTime

EVEV12 16 months12 16 months 16 22 months16 22 months 22 38 months22 38 months 3 5 years3 5 years

getting the Housegetting the House

in orderin order

harvestharvestlow-hanginglow-hanging

fruitfruit

makemakethe Businessthe Business

complexcomplex

makemakethe Businessthe Business

simplersimpler


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ICT Value is delivered through -ICT Value is delivered through -

the interaction of people, information andthe interaction of people, information andtechnologytechnology

(technology resources)(technology resources)

their integration into business activities, throughtheir integration into business activities, through

an Organisations Value Chainan Organisations Value Chain

the delivery of superior products or servicesthe delivery of superior products or services

through technology resourcesthrough technology resources

ICT value is realised (and released) over timeICT value is realised (and released) over time


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Strategic Capability and ValueStrategic Capability and Value

organisations deliver value to customersorganisations deliver value to customers

organisations must understand Where? and How?organisations must understand Where? and How?value is createdvalue is created

value is created through value activitiesvalue is created through value activities

each activity within an organisation must add valueeach activity within an organisation must add valueto its productto its product

using resources & competenciesusing resources & competencies


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The Value ChainThe Value Chain

Source: Porter (1985)Source: Porter (1985)

InboundInboundlogisticslogistics

OperationsOperations OutboundOutboundlogisticslogistics

MarketingMarketing& Sales& Sales

ServiceService

Firm infrastructureFirm infrastructure

Human Resource ManagementHuman Resource Management

Technology developmentTechnology development

ProcurementProcurement

SupportSupportactivitiesactivities

Primary activitiesPrimary activities

Margin

Margin

Margin

Margin


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Value Chain Primary activitiesValue Chain Primary activities

directly concerned with the creation or delivery ofdirectly concerned with the creation or delivery ofa product or servicea product or service

that product or service constitutes the core ofthat product or service constitutes the core ofthe organisations operational objectivesthe organisations operational objectives

Value Chain Support activitiesValue Chain Support activities

improve the effectiveness or efficiency ofimprove the effectiveness or efficiency ofprimary activitiesprimary activities

without these nothing works or works lesswithout these nothing works or works lesseffectively as role is absorbed back in toeffectively as role is absorbed back in to

primary activitiesprimary activities


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InboundInboundlogisticslogistics

Ops.Ops.OutboundOutbound

logisticslogisticsMarketingMarketing& Sales& Sales

ServiceService

Firm infrastructureFirm infrastructure

Human Resource ManagementHuman Resource Management

Technology developmentTechnology development

ProcurementProcurement

SupportSupportactivitiesactivities

Primary activitiesPrimary activities

Margin

Margin

Margin

Margin

competitive advantage is created if the organisationcompetitive advantage is created if the organisationhas something unique and will be sustained ifhas something unique and will be sustained ifthat uniqueness cannot be copied.that uniqueness cannot be copied.

improve production and delivery of products &improve production and delivery of products &services primary activitiesservices primary activities

improve the effectiveness of an Organisationsimprove the effectiveness of an Organisationssupport structure its support activitiessupport structure its support activities

ICT & IM effectively applied can:ICT & IM effectively applied can:

provide an advantage which competitors cannotprovide an advantage which competitors cannotsee and therefore cannot copy - sustainabilitysee and therefore cannot copy - sustainability


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ICT and Business strategy co-existenceICT and Business strategy co-existence

all employees at all levels must understand theall employees at all levels must understand theability of ICT to create competitive advantageability of ICT to create competitive advantage

business strategy should drive ICT solutionsbusiness strategy should drive ICT solutionsdevelopmentdevelopment

ICT strategy should implement BusinessICT strategy should implement Businessstrategiesstrategies

ICT strategy and solutions innovation shouldICT strategy and solutions innovation should

bebe

used to deliver unique resourcesused to deliver unique resources

ICT solutions should be integrated into BusinessICT solutions should be integrated into Businessoperations and strategy developmentoperations and strategy development


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Adapted from Wendy Robson (1997)Adapted from Wendy Robson (1997)

BoardBoard

TechnologyTechnologyUserUser

Objectives setting,Objectives setting,

Priority settingPriority setting

Service needs,Service needs,Identify benefitsIdentify benefits

Authority to commitAuthority to commit

resourcesresources

Budgets, solutionsBudgets, solutions& MIS needs& MIS needs

Design options, costsDesign options, costsand proposalsand proposals

Design choice,Design choice,Requirements definitionRequirements definition


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ICT and Business strategy co-alignmentICT and Business strategy co-alignment

previously ICT responded to Business demandspreviously ICT responded to Business demands

ICT had little or no strategic direction withinICT had little or no strategic direction withinOrganisationsOrganisations

ICT direction often driven by ICT solutionICT direction often driven by ICT solutionproviders (Suppliers)providers (Suppliers)

ICT in Organisations needed a strategy processICT in Organisations needed a strategy process

and strategic directionand strategic direction

the ICT strategy process and strategic direction needsthe ICT strategy process and strategic direction needsto be aligned with the Organisations strategyto be aligned with the Organisations strategy

processes and direction.processes and direction.


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CorporateCorporate

ManagementManagement

Strategic ManagementStrategic Management

Information Technology Service FunctionInformation Technology Service Function

HelpHelpDeskDesk

OperationsOperations&&

Tele-commsTele-comms

SystemsSystemsDevelopmentDevelopment

SystemsSystemsMaintenanceMaintenance

DatabaseDatabaseManagementManagement

Functional DepartmentsFunctional Departments

MarketingMarketing DistributionDistributionlogisticslogistics

LegalLegalHumanHuman

ResourcesResourcesSalesSales FinanceFinance

Strategic responseStrategic response& direction& direction

Strategic responseStrategic response& direction& direction

FunctionalFunctionalresponseresponse

FunctionalFunctionalresponseresponse

Service responseService response& direction& direction

Service responseService response& direction& direction

Objectives definitionObjectives definition

Strategic CapabilityStrategic Capability

Strategy definitionStrategy definition Strategy definitionStrategy definition

Objectives settingObjectives setting Objectives settingObjectives setting


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Problems with HistoryProblems with History

ICT infancy meant managers were notICT infancy meant managers were notprofessionalsprofessionals

organisations did not know what to do withorganisations did not know what to do with

the ICT function give it to Financethe ICT function give it to Finance

ICT infancy meant nothing to refer back to orICT infancy meant nothing to refer back to orto compare againstto compare against

organisations did not know what could beorganisations did not know what could bedone with ICT servicesdone with ICT services

organisations therefore competed on efficiency &organisations therefore competed on efficiency &costs savingscosts savings


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EfficiencyEfficiency EffectivenessEffectivenessStrategicStrategicadvantageadvantage

IntegratedIntegratedportfolioportfolio

GlobalisationGlobalisation

costcostsavingssavings

higherhigherROI / ROCEROI / ROCE

businessbusinessgrowthgrowth

obtainobtainselectedselectedbenefitsbenefits

19601960 19701970 19801980 19901990 20002000 20102010

Development of the use of ICTDevelopment of the use of ICT

adapted from Silk (1991)adapted from Silk (1991)

Value Chain,Value Chain,Supply Chain,Supply Chain,new channels,new channels,organisationalorganisationalintegration,integration,strategicstrategic

competitivecompetitiveadvantage.advantage.

e-Commercee-Commercee-Businesse-Business

Global:Global:benefitsbenefitscompetitioncompetitionresourcesresources

BorderlessBorderlesseconomieseconomies


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Overcoming HistoryOvercoming History

industry maturity allows ICT managers theindustry maturity allows ICT managers theopportunity to become professionalsopportunity to become professionals

organisations often still do not know what to doorganisations often still do not know what to do withwith

the ICT function give it to Financethe ICT function give it to Finance

ICT has many project examples now to compareICT has many project examples now to compareagainstagainst

CEOs and managers now know what can beCEOs and managers now know what can bedone with ICT servicesdone with ICT services

piecemeal projects are now presented aspiecemeal projects are now presented asconsolidated programmesconsolidated programmes


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Overcoming abdication of responsibilityOvercoming abdication of responsibility

functional areas now work together with ICT tofunctional areas now work together with ICT todevelop solutionsdevelop solutions

globalisation has forced organisations to takeglobalisation has forced organisations to take

responsibility for ICT and develop cohesiveresponsibility for ICT and develop cohesivestrategiesstrategies

ICT is being used to generate new business andICT is being used to generate new business andnew products and new selling channelsnew products and new selling channels

CIO now has a seat on the Board or seniorCIO now has a seat on the Board or seniormanagement groupmanagement group


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Extending ICT outside the OrganisationExtending ICT outside the Organisation

ICT integration internally was essentialICT integration internally was essential

ICT integration externally is now essentialICT integration externally is now essential

improving the Value Chain has createdimproving the Value Chain has created

sustainable competitive advantagesustainable competitive advantage

improving the Supply Chain has the potential toimproving the Supply Chain has the potential tocreate a sustainable competitive advantagecreate a sustainable competitive advantage


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Strategic Capability and ICTStrategic Capability and ICT

the effectiveness of an organisation depends uponthe effectiveness of an organisation depends uponhow well it manages, commits and deploys itshow well it manages, commits and deploys its

resources.resources.

effective IM & ICT management is essential toeffective IM & ICT management is essential tomaximise an Organisations strategic capability.maximise an Organisations strategic capability.

information management and ICT managementinformation management and ICT managementpromotes co-operation, flexibility, innovation,promotes co-operation, flexibility, innovation,

customer relationships, supplier relationships,customer relationships, supplier relationships,knowledge sharing, knowledge management,knowledge sharing, knowledge management,

communication and quality.communication and quality.


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BibliographyBibliography

Silk, D.J. (1991).Silk, D.J. (1991). Planning IT: Creating an Information Management Strategy.Planning IT: Creating an Information Management Strategy.London: Butterworth-Heinemann.London: Butterworth-Heinemann.

Robson, W. (1997).Robson, W. (1997). Strategic Management and Information Systems.Strategic Management and Information Systems.An integrated approach.An integrated approach. 22ndnd . Edition.. Edition.Harlow: FT Prentice Hall.Harlow: FT Prentice Hall.

Johnson, G. Scholes, K. and Whittington, R. (2005).Johnson, G. Scholes, K. and Whittington, R. (2005).

Exploring Corporate Strategy.Exploring Corporate Strategy. 77thth . Edition. Harlow: FT Prentice Hall.. Edition. Harlow: FT Prentice Hall.

McKeen, J. D. and Smith, H. A. (2009).McKeen, J. D. and Smith, H. A. (2009).IT Strategy in Action.IT Strategy in Action. New Jersey: Pearson Education.New Jersey: Pearson Education.

Porter, M. E. (1985).Porter, M. E. (1985). Competitive Advantage.Competitive Advantage. New York: Free PressNew York: Free Press..

Chatterjee, D. & Seagars, A. (2002).Chatterjee, D. & Seagars, A. (2002).Presentation to the SIM Advanced Practices Council.Presentation to the SIM Advanced Practices Council. Chicago.Chicago.


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Session 01Session 01

IT strategy and the Business contextIT strategy and the Business context

Introduction to the moduleIntroduction to the module

Ehwlc Mba - Session 01

Documents