information technology test 2 part 1

IT is not infrastructure of business - like electricity and railroads

available cheaply and no longer adds to comp. advantage

big risk: overspending and expecting too much

reproducing IT does NOT equal reproducing IT dependent strategic initiative

when firm is able to protect its comp. advantage in the face of competition

do not focus on theoretical replication

sustainabiilty is a continuum: how much time and money to erode advantage

the higher the advantage, the more resilient it is to imitation

time it takes competitors to act agressively enough to erode firm's comp. advantage

measure of delay in competitive response

technology, firm, competitors, etc. that makes replication hard and costly

these factors work in combination to form barriers to erosion

IT-resources barriers

complementary resource barriers

IT-project barrier

preemption barrier

rely on access to IT assets and capabilities necessary to produce and use tech. at the core

IT assets and capabilities

more reliance on preexisting resources = harder to replicate

IT assets: available resources, what the firm has (IT infrastructure, info. repositories)

IT capabilities: skills and capabilities of workforce; what firm CAN do (IT tech. skills, mgt. skills, relationship assets)

components managed by specialists to provide std. serves to org.

tech. skils: ability to design and develop effective comp. apps.

mgt. skillls: provide leadership and create more a response lag

respect and rapport between IS function and business managers

CWP - SOC

opp. to make profit, gain advantage

measure of comp. advantage

value lost if firm leaves mkt.

max. amt. of value firm can appropriate

function of uniqueness

sustainable comp. advantage

as initiative becomes more reliant on comp. resources, barrier to imitation gets stronger, and replication becomes slower, costlier, and harder

structural resources: used to enact IT dep. start. initiative (tangible, intangible)

capabilities: how firm carries out its productive activities (activity system, business processes)

ext. resources: assets that do not reside with the firm but accumulate with other firms and clients (brand, dist. channels)

how firm carries out prod. activities

activity system: interlocking and mutually reinforcing econ. activities that show int. consistency and are appropriately configured

business processes: steps that a firm performs in order to complete and economic activity

used to enact IT-dep. strat. initiatives

tangible: comp. scope, phys. assets, scale of ops. and mkt. share, org. structure, governance, slack resources

intangible: corp. culture, top mgt. commitment, risk management

relies on essential enabling IT core

cannot be implemented until necessary tech. has been correctly introduced

IT characterisitics: IT complexity and uniqueness, visibility

implementation process: complexity, degree of process change

complexity: function of bundle of skills and knowledge to to effectively IT project barrier

uniqueness: degree of tailoring IT to the core, off shelf vs. custom developed

visibility: extent to which comp. can easily observe tech.

implementation process complexity: function of process size and scope, # of units involved, complexity of user reqs.

degree of process change: function of IT breadth and scope, change is harder and riskier when more depts. are involved and boundaries are crossed

even if competitor is able to replicate IT dependent strat. initiative, response may be unsuccessful if:
- leader created pref. relationship with customers or other members of the value system
- leader introduced substantial switching costs

when this occurs..
- compensate customer for cost of switching
- provide additional value to justify switching costs

switching costs: total amt. of costs borne by a person when they leave exchange they are involved in
- C/S tangible investments: total capital outlay is necessary to obtain phys. assets
- C/S intangible investments: firm's customers or channel partners to invest time and money to partake in initiative

opps. for preemptive strategies and for exploitation of response lag drivers
- relationship exclusivity: electing to do business with only one firm
- concentrated value systems link: few org. or clients to work with

1. acquire rich repos. of customer info.
2. slice and dice data to develop marketing marketing strategies
3. identify core customers by predicting their lifetime value
4. gather and respond to spec. info. on customer pref.
5. reward employees who prioritize customer service

tell employees daily:
- if you can persuade one more customer to visit once more this year you have had a professional youve had a good shift; if you get 3+, you've had a great shift

focus on CLV
link and integrate wide range of info. about customer: touch points, acitivies, customer behaviors

use info. to develop and evaluate mkt. strategies

capability development: org. improves performance over time by developing ability to use resources for max. competitiveness -- learning by using

asset stock accumulation: firms accrue resources over time; assets are usually developing over time and cannot be accelerated (ex: getting data over time)

MANAGER'S ROLE: plan to stay ahead of comp., look for opps. to reinforce barriers to erosion

determine when to pursue IT stat. initiative

ask to types of questions: prereq. and sustainability

for leaders trying to say ahead or laggers trying to catch up

is the initiative aligned with our strategy?

are we focused on cost reduction, increased CWP, or both?

what IS design is needed for initiative?

which comp. can replicate initiative?

how long before comp. can offer same value prop.?

will replication even help competitors?

what paths does innovation create?

very

tech. development: process of creating core IT; can be acquired and integrated into existing infrastructure; IT can be custom built for or by org.

IS development: integrating tech. with other components to get a working system

1. custom design

2. system selection and acquisition

3. end use development

unique tailoring: molded to fit firms; does not require customization of custom development

flex. and control: building from scratch allows SF to be built in any form and modified whenever

faster roll-out

knowledge infusion: seeking out best practices to code applications

econ. attractive: gain from econ. of scale from vendor

high quality: heavily tested

blending custom development and selection approaches:
- buying off shelf and modifying
- they becoming larger and more complex and require modifiction to fit firm's needs

SDLC approach is predicted on notion that detailed justification and planning will reduce risk and uncertainty in systems development

- involvement from FM and end users is important
- time to analyze reqs.
- requires change be kept to min. after project starts

definition: investigation, feasibility an systems analysis

build: system design, programming, testing

implementation: installation, operations, matinence

identify features and functions of proposed system

involve end users and FMs

INVESTIGATE: business issues system will address

FORMULATE: goals of system, scope of design, value prop. of new system

INFORMAL STAGE

feasilibility anaysis and systems analysis

systems analysts: articulate system reqs., act as liason with tech. staff

used to ensure resources are put to best use

tech, operational, economic

provide cost/benefit analysis

identifying and articulating system reqs.

seeking out and value of end-users and other stakeholders

SYSTEMS REQ. DOC: details inputs system will accept and outputs it will introduce; once approved reqs. are unchangable;

systems design: creates overall design using system reqs. doc. from defintion phase; output = precise set of docs. programmers use to write code

programming: translating abstract software design into directions that can be executed by hardware; doc. is essential for support, matienence, and upgrades

testing: constant during development; formal testing is essential; release application when flawless

process of ensuring that tech. is properly integrated with other components of info. system -- critical component

end user training

change management: smoothing transition

operations: becomes a permanent asset

matinence:

requires project mgt. and exec. involvement

installation: software is loaded on hardware and databases are populated; occurs during slow periods or org. -- (4 approaches: parallel, direct, phased, pilot)

old and new systems run together in parallel
- offers insurance against failure of new
- more costly
- redundant
- overlapping

old system is discont. and firm cuts over with new one
- most radical
- can be unavoidable -- y2k

new system progressively replaces old one
- best suited for componentized or modular apps. that can be rolled out in steps

allows firm to run system in one dept before rolling it out completely
- good for multi-unit companies

systematic approach of software development

identifies roles and expectations of team members

best suited for large scale projects

designed for cost control

enforces means of communication between project team and stakeholders

impossible to clearly estimate and plan complex info. systems

allows for flexibility and iteration in design process

enabled by tools that speed up development process

can be used within SLDC as a way to seek out user input

alternative SDLC
1. requirement defs.: figuring out basic reqs.; less precise than SLDC bc reqs. are not frozen
2. initial protyping: first iteration; going forward could go in many directions
3. evaluation: reviewing prototype and providing FB
4. revision: design and coding of req. changes; new p/t is submitted for review
5. completion: occurs after multiple iterations; revision stops and system is finalized; doc. and and testing occur prior to final release

speedier

closer to user expectations: more user involvement; multiple iterations structure feedback

enables experimentation

best suited for small scale projects

software more likely to be lacking in security, robustness, and reliability

usually less thoroughly tested and documented

can lead to unreasonable expectations and scope creep

acquisition process: identifiy, purchase, implement

usually initiated by mgt. interest

implementation: similar to SDLC; change reqs. are usually greater for off the shelf products; users are trained to operate; may cause sub. change mgt.; org. should plan to invest a lot of resources

ways in which knowledge workers, NOT IT PEOPLE, create software to meet their own needs

ex: spreadsheets, personal databases (access), software programs with user friendly comp. language

increased speed of development

end-user satisfaction -- when someone creates they are more likely to be satisfied with results

reduced pressure of IS function

unreliable quality due to limited skills and knowledge of end users

high change of errors due to rapid development

continuity risk: hard for others to use and understand