Chapter 2
Using Information Technology for Competitive Advantage
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Copyright 2001, Prentice-Hall, Inc.
What is a Firm?
Physical System
Closed-loop Controlled by management Uses feedback to ensure objectives met Open because of environmental interaction
Importance of Environment
Very reason for a firms existence Firm takes resources from environment, transforms them, and returns goods and services to environment
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Financial Community
Government
Global Community
Suppliers
The Firm
Stockholders or owners
Customers
Labor unions
Competitors
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Competitive Advantage
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A Value Chain
Firm Infrastructure Support Activities Human resource management Technology development Procurement
Inbound Operations Outbound Marketing and logistics logistics sales Service
Primary Activities
Source : Michael E. Porter
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A Value System
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Software
Hardware
Database
Information Specialists
Users
Information
Facilities
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Solves information resources problems Solves problems in other areas of firms operations
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Strategic Planning
Long-range planning
Intends to give firm most favorable position in its environment Specifies strategies for achieving objectives
Need for each business area to create its own strategic plan
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Objectives
Strategy
Business areas do not always have the resources to ensure accomplishment of strategic objectives
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SPIR
Strategy set transformation; support the firms objectives Strategic planning for information resources (SPIR) develops firm and IS strategic plans concurrently
Business strategy
Influence on Business Strategy
AIS Objectives
MIS Objectives
DSS Objectives
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EUC Risks
Poorly aimed systems Poorly designed/ documented systems Inefficient use of information resources Loss of data integrity Loss of security Loss of control
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Other executives
Firms strategic plan
Manufacturing
FUNCTIONAL AREAS
Marketing
INFORMATION RESOURCES
Central computing resources Disbursed computing resources
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Summary
Environment of a firm consists of eight elements Firms attempt to achieve competitive advantage
Information resources
Hardware, software, facilities, database, information specialists, information, and users
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Summary [cont.]
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