Business
Advantage with
IT
CORPORATE INFORMATION
STRATEGY
& MANAGEMENT
IT as a Competitive Weapon
Definition:
Information Technology
Information Technology (IT) is the
amalgamation of hardware,
software, data, people and
procedures that enables or inhibits
business objectives depending on
managements involvement in IT.
Source: Why General Managers Need to Understand Information
Technology, lecture notes, Lacity, 2002
Competitive advantage
comes
from critical
differentiators
Critical
Critical
Commodities
Critical
Differentiators
Useful
Useful
Commodities
Eliminate/Migrate
Commodity
Differentiator
IT Resources-Easily Duplicated
Capital for investment
Proprietary technology
Technical Skills
IT Resources-NOT Easily
Duplicated
Managerial IT Skills
Understanding business needs
Collaborating with colleagues
Managing market & technical risk of
innovation
IT as a Basis for Sustainable Competitive Advantage, Feeny & Ives
Competitor
Analysis
Project Lifecycle
Analysis
1.
2.
3.
Lead Time
Supply
System
Analysis
Preemption
Potential
CASE STUDY:
ELECTRIC
GENERAL
Formed in 1892
Only company part of the Dow Jones's
Industrial Index since the Indexs debut
67,588 patents, 2 Nobel Prizes and
numerous other honors
Operates in more than 100 countries and
employs 313,000 people worldwide
GE is considered to be one of the largest
and most diversified industrial corporations
in the world
e-business Is Business Just Simpler, Faster, and Better
General Electric:
Company Overview
Short-cycle businesses contributed approximately 20% of GE's net
earnings in 2001
Consumer Products (Lighting & Appliances)
Plastics
Industrial Systems
NBC
Specialty Materials
GE Digitization Strategy
Before 1999 - IT at GE was non existent
1999 - Jack Welch orders each business to
Destroy your business/ Grow your business
Use information technology to create a leaner,
faster, more customer focused company,
accelerate high margin, capital efficient
growth., Jeff Immelt, CEO
2001- GE Top e-business innovator (eweek)
www.ge.com
GE Digitization Strategy
IT Spending
2000 - $2.5 billion
2001 - $3.0 billion
2002 - $3.5 billion
GE Digitization Strategy
Buy
Make
Productivity (Workflow)
Sell
More Share/
Higher
Margin
Negotiate
Eliminate
Make the Customer More
eIntermediari
Productive
Auctions
es
Comparative
Deflation
Speed
Performance Data
Unit Cost
Customized Service
Transact
(Availability/Order
Productivity
Reduction
Service)
Transaction Productivity
eTransactions
Streamline
GE Internal Presentation
Control
processes
e-Business Value
Customer Value
GE Value
Buy smarter
Process more efficiently
Sell more
Buy smarter
Process more efficiently
Sell more
e@GE
Digitization provides ways to improve our customer interface
and work on our own internal productivity at the same time.
It is just beginning. Our investments in information
technology will grow about 15% this year. It is really going to
help us transform the cost base of GE. Its going to help us
buy better. Its going to help us interface with customers
better. But primarily its going to help us in terms of the inner
workings of GE make us more efficient, leaner, and closer to
the customer."
-- Jeff Immelt, Chairman and CEO
Customer City Swings, April 2001
E-BUSINESS ORGANIZATIONAL
APPROACH
CEO
Marketing
Leader
Buy Side
e-Commerce
Leader
e-Business
Leader
BD
Leader
Other
e-Business
Functional
Leaders
DYB.com/GYB.com Leader
Focus: Destroy Your
Business/ Grow Your
Business
External Hire
External or Internal
Internet Generation
Creative,
Entrepreneurial
Start Up Experience
Marketing/IT
Background
CWC.com Leader
e-Commerce Industry
Focus: Enhance & Build
Experience
Your Customer Web Center Business Savvy
Technical Expertise
Chief Architect
.Com Technical Team
Technical
Functionality
CIO
Back End
Infrastructure
GE Internal Presentation
Sales
Operations
Web Business
Staying Power
Simplicity
Applying traditional business thinking to a
new channel
Use web to improve business and create
valuable services
Awareness of customer needs
e-Business is a constantly moving target
Need for sound relationships
http://www.cio.com/archive/120101/power_content.html
Davidson, Stephen, B2B Exchaanges:Lessons from the Trading Pit, Journal of Internet Law,
4/2002, v5 i10 p1(10)
e-Business is a constantly
moving target
Future of IT
Competitive Advantage?
or
Competitive Necessity?