Strategic grid, business development model.ppt

Title: Customer Service Representative

Primary Objectives:

* Provide excellent customer service to clients and customers through various channels, including phone, email, and chat.
* Resolve customer inquiries and concerns in a timely and efficient manner.
* Maintain a positive and professional attitude while representing the company.

Essential Functions:

* Answer incoming calls and respond to customer inquiries via email and chat.
* Resolve customer complaints and issues, including billing disputes, product defects, and service disruptions.
* Maintain accurate records of customer interactions and follow up as necessary.
* Collaborate with other departments, such as sales and technical support, to address customer needs.
* Stay up-to-date on company products, services, and policies to provide accurate and relevant information to customers.

Required Qualifications:

* High school diploma or equivalent.
* At least one year of customer service experience.
* Excellent communication and interpersonal skills.
* Strong problem-solving and decision-making abilities.
* Ability to work independently and as part of a team.
* Proficiency in Microsoft Office and CRM software.

Working Conditions:

* Full-time position, with occasional overtime as needed.
* Work in a fast-paced and dynamic environment.
* Occasional travel may be required.
* Must be able to work in a seated position for extended periods.

This is just an example of a job description for a Customer Service Representative. Real job descriptions may vary depending on the company, industry, and specific job requirements.

1. 1
EMBA 226 • College of Business Administration • California State University, Sacramento
Week 1Week 1
Friday, July 21Friday, July 21
•IntroductionIntroduction
•Strategic grid, business modelStrategic grid, business model
•Opportunities and Threats: Porter’s Five Forces ModelOpportunities and Threats: Porter’s Five Forces Model
•Strategy and strategic planningStrategy and strategic planning
•IT Doesn’t Matter ArticleIT Doesn’t Matter Article

2. 2
EMBA 226 • College of Business Administration • California State University, Sacramento
What This Class is About…What This Class is About…
•Information technology (IT) has become a major driving Information technology (IT) has become a major driving
force of today’s businesses. As an enabler (facilitator) and force of today’s businesses. As an enabler (facilitator) and
integrator, IT has opened many strategic opportunities and integrator, IT has opened many strategic opportunities and
provided the means to seize competitive advantages in provided the means to seize competitive advantages in
marketplaces. The topics covered throughout this course marketplaces. The topics covered throughout this course
will emphasize IT’s prominent role in business strategy. will emphasize IT’s prominent role in business strategy.

3. 3
EMBA 226 • College of Business Administration • California State University, Sacramento
IntroductionsIntroductions
•What is your view on IT in business?What is your view on IT in business?

4. 4
EMBA 226 • College of Business Administration • California State University, Sacramento
Which is the Most Versatile Hand Tool?Which is the Most Versatile Hand Tool?
ViseVise
HammerHammer
PliersPliers
SawSaw
Pipe wrenchPipe wrench
Flat bladed screwdriverFlat bladed screwdriver
Bubble levelBubble level
Tape measureTape measure

5. 5
EMBA 226 • College of Business Administration • California State University, Sacramento
Flat Bladed ScrewdriverFlat Bladed Screwdriver
•ScrewScrew
•HammerHammer
•ChiselChisel
•Pry barPry bar
•Punch holes Punch holes
•Set nailsSet nails
•Stir liquidsStir liquids
•Putty knifePutty knife
•Score and cutScore and cut
•And the list goes on…And the list goes on…

6. 6
EMBA 226 • College of Business Administration • California State University, Sacramento
IT is Similar to a Flat Bladed ScrewdriverIT is Similar to a Flat Bladed Screwdriver
•IT provides the means for businesses to do something better!IT provides the means for businesses to do something better!
–Leverages other resourcesLeverages other resources
–Enables and enhances business processes – Enables and enhances business processes – Facilitates Facilitates
efficiency and effectivenessefficiency and effectiveness
–Seizes competitive advantagesSeizes competitive advantages
–Levels the playing field – Levels the playing field – Small businesses can look and Small businesses can look and
behave like big businessesbehave like big businesses
–Extends the business beyond its boundaries – Extends the business beyond its boundaries – Strategic Strategic
alliances, strategic outsourcing, supply chain managementalliances, strategic outsourcing, supply chain management
–And the list goes on…And the list goes on…

7. 7
EMBA 226 • College of Business Administration • California State University, Sacramento
What You Should Take Away from This ClassWhat You Should Take Away from This Class
1.1.Place IT solutions in the strategic grid – Match the Place IT solutions in the strategic grid – Match the
solution to the businesssolution to the business
2.2.Businesses do not adopt technology for technology’s sakeBusinesses do not adopt technology for technology’s sake
3.3.Focus on the business and not the technologyFocus on the business and not the technology
4.4.IT leverages other resources and processesIT leverages other resources and processes
5.5.IT introduces organizational changeIT introduces organizational change
6.6.IT integrates the enterpriseIT integrates the enterprise
7.7.Knowledge is an organizational resourceKnowledge is an organizational resource

8. 8
EMBA 226 • College of Business Administration • California State University, Sacramento
IT Leverages Other ResourcesIT Leverages Other Resources
CRM CRM
leverages leverages
Relationship Relationship
MarketingMarketing

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EMBA 226 • College of Business Administration • California State University, Sacramento
IT Leverages Other ResourcesIT Leverages Other Resources
Business IntelligenceBusiness Intelligence

10. 10
EMBA 226 • College of Business Administration • California State University, Sacramento
IT, the Great IntegratorIT, the Great Integrator
Enables and enhances business processEnables and enhances business process

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EMBA 226 • College of Business Administration • California State University, Sacramento
IT Allows a Business to Seize Competitive IT Allows a Business to Seize Competitive
AdvantagesAdvantages
Price CompetitionPrice Competition

12. 12
EMBA 226 • College of Business Administration • California State University, Sacramento
IT Allows a Business to Seize Competitive IT Allows a Business to Seize Competitive
AdvantagesAdvantages
ConvenienceConvenience

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EMBA 226 • College of Business Administration • California State University, Sacramento
IT Allows a Business to Seize Competitive IT Allows a Business to Seize Competitive
AdvantagesAdvantages
CustomizationCustomization

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EMBA 226 • College of Business Administration • California State University, Sacramento
Which of these Which of these
businesses is larger?businesses is larger?
IT the Great Equalizer: IT the Great Equalizer:
IT Evens the Playing FieldIT Evens the Playing Field

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EMBA 226 • College of Business Administration • California State University, Sacramento
Extends the Business Beyond Its Extends the Business Beyond Its
BoundariesBoundaries
Horizontal integrationHorizontal integration

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EMBA 226 • College of Business Administration • California State University, Sacramento
Extends the Business Beyond Its Extends the Business Beyond Its
BoundariesBoundaries
Vertical integrationVertical integration

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EMBA 226 • College of Business Administration • California State University, Sacramento
Supply Chain ManagementSupply Chain Management
Inter-Organizational ITInter-Organizational IT
•Coordinating suppliersCoordinating suppliers
–From EDI (electronic data interchange) to the InternetFrom EDI (electronic data interchange) to the Internet
•Establishing close and tight relationshipsEstablishing close and tight relationships
–Loose integration – ad hoc and occasionalLoose integration – ad hoc and occasional
–Close integration – formal exchange of information between Close integration – formal exchange of information between
businessesbusinesses
–Tight integration – sharing a business processes (e.g., UPS)Tight integration – sharing a business processes (e.g., UPS)
•Becoming a customer-centric value chain (virtual enterprise)Becoming a customer-centric value chain (virtual enterprise)
–Risk sharingRisk sharing
–Supply chain (Supply chain (supplierssuppliers) vs. demand chain () vs. demand chain (distributors and retailersdistributors and retailers))

18. 18
EMBA 226 • College of Business Administration • California State University, Sacramento
Rules, Enabling, Business Models and Rules, Enabling, Business Models and
IT Adoption…IT Adoption…

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EMBA 226 • College of Business Administration • California State University, Sacramento
IT and Business: Two Golden RulesIT and Business: Two Golden Rules
•IT does not (directly) increase productivityIT does not (directly) increase productivity
•Businesses do not adopt new technology for technology’s Businesses do not adopt new technology for technology’s
sakesake
–What value does it add to the business?What value does it add to the business?
–How does it support the business’ strategy, goals and How does it support the business’ strategy, goals and
objectives?objectives?
–Can it be linked to competitive advantage?Can it be linked to competitive advantage?
–What’s the bottom line?What’s the bottom line?

20. 20
EMBA 226 • College of Business Administration • California State University, Sacramento
IT and BusinessIT and Business
Briefly…Briefly…
•IT enables fundamental changes in the way work is doneIT enables fundamental changes in the way work is done
•IT enables the integration of business functions at all levels IT enables the integration of business functions at all levels
within and between organizationswithin and between organizations
•IT causes shifts in the competitive climate of many IT causes shifts in the competitive climate of many
industries (i.e., industries (i.e., breakthrough technologybreakthrough technology))
•IT presents new strategic opportunities for organizations IT presents new strategic opportunities for organizations
that reassess their mission and goalsthat reassess their mission and goals
•Successful application of IT requires changes in Successful application of IT requires changes in
management and organization structuremanagement and organization structure

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EMBA 226 • College of Business Administration • California State University, Sacramento
IT and Business IT and Business (cont.)(cont.)
•A major challenge exists for management to lead their A major challenge exists for management to lead their
organizations through the transformation necessary to organizations through the transformation necessary to
prosper in the globally competitive environmentprosper in the globally competitive environment

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EMBA 226 • College of Business Administration • California State University, Sacramento
Business ModelBusiness Model
•Defines how an enterprise interacts with its environment to Defines how an enterprise interacts with its environment to
define a unique strategy, attract the resources and build the define a unique strategy, attract the resources and build the
capabilities to execute itcapabilities to execute it
•Creates values for all stakeholdersCreates values for all stakeholders
InputsProcessesOutputs
Simply put, the business model defines how inputs are
converted to outputs

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EMBA 226 • College of Business Administration • California State University, Sacramento
IT and the BusinessIT and the Business
•Adoption of IT must be within the capabilities of the Adoption of IT must be within the capabilities of the
businessbusiness
•There must be a clear vision of how technology will be There must be a clear vision of how technology will be
used for a clear used for a clear profitableprofitable gain gain
•A proposed IT solution must take into account A proposed IT solution must take into account
organizational factors organizational factors
–Strategic gridStrategic grid

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EMBA 226 • College of Business Administration • California State University, Sacramento
Business Models and IT AdoptionBusiness Models and IT Adoption
For example…For example… Two successful grocers taking two Two successful grocers taking two
different approaches to businessdifferent approaches to business

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EMBA 226 • College of Business Administration • California State University, Sacramento
PeapodPeapod

26. 26
EMBA 226 • College of Business Administration • California State University, Sacramento
PeapodPeapod

27. 27
EMBA 226 • College of Business Administration • California State University, Sacramento
Virtual storeVirtual store
PeapodPeapod

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EMBA 226 • College of Business Administration • California State University, Sacramento

29. 29
EMBA 226 • College of Business Administration • California State University, Sacramento
Select by flavorSelect by flavor
Select by brandSelect by brand

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EMBA 226 • College of Business Administration • California State University, Sacramento

31. 31
EMBA 226 • College of Business Administration • California State University, Sacramento
Shopping basketShopping basket
Running totalRunning total

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EMBA 226 • College of Business Administration • California State University, Sacramento
Check Out: Pick a Delivery DateCheck Out: Pick a Delivery Date

33. 33
EMBA 226 • College of Business Administration • California State University, Sacramento
Enter Account Enter Account

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EMBA 226 • College of Business Administration • California State University, Sacramento
Due to the nature Due to the nature
of the merchandise of the merchandise
(i.e., highly (i.e., highly
perishable, low perishable, low
profit margin), profit margin),
customer customer
expectations and expectations and
the high cost of the high cost of
fuel, logistics fuel, logistics
becomes an major becomes an major
concernconcern
PeapodPeapod

35. 35
EMBA 226 • College of Business Administration • California State University, Sacramento
PeapodPeapod
Customer sends order via WebCustomer sends order via Web
Peapod receives the orderPeapod receives the order
Peapod Peapod
assembles assembles
the orderthe order
Peapod delivers Peapod delivers
the orderthe order
Customer receives orderCustomer receives order
Suppliers maintain Peapod’s inventory Suppliers maintain Peapod’s inventory
Peapod bills the Peapod bills the
customer’s credit customer’s credit
cardcard

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EMBA 226 • College of Business Administration • California State University, Sacramento
"Bricks and mortar" "Bricks and mortar"
retailerretailer
Raley's FoodsRaley's Foods

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EMBA 226 • College of Business Administration • California State University, Sacramento
Limited web shoppingLimited web shopping
Raley's FoodsRaley's Foods

38. 38
EMBA 226 • College of Business Administration • California State University, Sacramento
Business ModelBusiness Model
Discussion…Discussion…
•Define the business modelDefine the business model
•Identify the market segments, opportunities and threatsIdentify the market segments, opportunities and threats
•What role does IT play in the business model?What role does IT play in the business model?
•What is the effect of IT in the business model?What is the effect of IT in the business model?
•How does IT impact the business?How does IT impact the business?

39. 39
EMBA 226 • College of Business Administration • California State University, Sacramento
Opportunities and ThreatsOpportunities and Threats
““Crisis” (weiji)Crisis” (weiji)
““Opportunity” (jihui)Opportunity” (jihui)
Opportunities grow out of crisesOpportunities grow out of crises
(Necessity is the mother of invention -- Plato)(Necessity is the mother of invention -- Plato)
How does the business capitalize on its threats?How does the business capitalize on its threats?

40. 40
EMBA 226 • College of Business Administration • California State University, Sacramento
Strategy and Strategy and
Four Models and FrameworksFour Models and Frameworks
•Strategic GridStrategic Grid
•Porter’s Five Forces ModelPorter’s Five Forces Model
•Richard Nolan’s Stages TheoryRichard Nolan’s Stages Theory
•Strategic AlignmentStrategic Alignment

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EMBA 226 • College of Business Administration • California State University, Sacramento
1. Strategic Grid1. Strategic Grid

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EMBA 226 • College of Business Administration • California State University, Sacramento
Strategic GridStrategic Grid
HighHigh
LowLow
HighHighLowLow
Impact on Impact on
Existing Existing
Business Business
OperationsOperations
Impact on Strategy (future Impact on Strategy (future
competitive environment)competitive environment)
FactoryFactory
Operational ITOperational IT
SupportSupport
Basic elementsBasic elements
TurnaroundTurnaround
Gradual adoptionGradual adoption
StrategicStrategic
Strategic IT plan, Strategic IT plan,
initiativesinitiatives
Management of IT depends on how the business views ITManagement of IT depends on how the business views IT
IT has little relevance to existing or IT has little relevance to existing or
future successfuture success
Current IT important but future IT Current IT important but future IT
developments are unlikely to developments are unlikely to
improve competitive advantageimprove competitive advantage
Existing and future IT developments Existing and future IT developments
critical to successcritical to success
Existing IT is unimportant but future Existing IT is unimportant but future
developments are crucial to survivaldevelopments are crucial to survival
McFarlan and McKinney (1983)McFarlan and McKinney (1983)

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EMBA 226 • College of Business Administration • California State University, Sacramento
Placing a Business in a QuadrantPlacing a Business in a Quadrant
•How important does management feel the How important does management feel the currentcurrent IT IT
systems are to the business?systems are to the business?
•How important does the business think How important does the business think futurefuture
developments in IT will be for the business?developments in IT will be for the business?
Planning a future for ITPlanning a future for IT

44. 44
EMBA 226 • College of Business Administration • California State University, Sacramento
Strategic GridStrategic Grid
Quadrants:Quadrants:
•Support – goals target local improvements and incremental Support – goals target local improvements and incremental
cost savings (e.g., office automation)cost savings (e.g., office automation)
•Factory – designed to reduce costs and improve performance Factory – designed to reduce costs and improve performance
of the core operationsof the core operations
–Automation and computerize functionsAutomation and computerize functions
•Turnaround – designed to exploit emerging strategic Turnaround – designed to exploit emerging strategic
opportunities opportunities
–Integration of the organizationIntegration of the organization
•Strategic – commitment to use IT to enable both core Strategic – commitment to use IT to enable both core
operations and core strategyoperations and core strategy
–IT an integral part of strategyIT an integral part of strategy

45. 45
EMBA 226 • College of Business Administration • California State University, Sacramento
2. Porter’s Five Forces Model2. Porter’s Five Forces Model

46. 46
EMBA 226 • College of Business Administration • California State University, Sacramento
Porter’s Five Forces ModelPorter’s Five Forces Model
Forces that Shape StrategyForces that Shape Strategy
Industry Industry
CompetitorsCompetitors
Rivalry among Rivalry among
existing firmsexisting firms
SuppliersSuppliers
Customers and Customers and
BuyersBuyers
Potential Potential
EntrantsEntrants
SubstitutesSubstitutes
Bargaining power of buyersBargaining power of buyers
Threat of substitute products or Threat of substitute products or
servicesservices
Bargaining power of Bargaining power of
supplierssuppliers
Threat of new entrantsThreat of new entrants




How will the business How will the business
react to threats (and react to threats (and
opportunities)?opportunities)?

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EMBA 226 • College of Business Administration • California State University, Sacramento
Contending ForcesContending Forces
•The state of competition depends on the five forcesThe state of competition depends on the five forces
•The collective strength of these forces determines the The collective strength of these forces determines the
ultimate profit potential of an industryultimate profit potential of an industry
–Strongest force or forces determine the profitability of Strongest force or forces determine the profitability of
an industry and are of greatest importance in strategy an industry and are of greatest importance in strategy
formulationformulation

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EMBA 226 • College of Business Administration • California State University, Sacramento
1. Threat of Entry1. Threat of Entry
•New entrants bring new capacity, desire to gain market New entrants bring new capacity, desire to gain market
share, and often substantial resourcesshare, and often substantial resources
•Barriers:Barriers:
–Economies of scaleEconomies of scale
–Product differentiationProduct differentiation
–Capital requirementsCapital requirements
–Cost disadvantages independent Cost disadvantages independent
of sizeof size
–Access to distribution channelsAccess to distribution channels
–Government policyGovernment policy
Seriousness of the Seriousness of the
threat depends on the threat depends on the
barriers and the barriers and the
reaction of the reaction of the
incumbentsincumbents

49. 49
EMBA 226 • College of Business Administration • California State University, Sacramento
Power of Buyers and SellersPower of Buyers and Sellers
•Suppliers – Can exert bargaining power on participants by Suppliers – Can exert bargaining power on participants by
raising prices or reducing the quality of the goods and raising prices or reducing the quality of the goods and
servicesservices
•Buyers – Can force down prices, demand higher quality or Buyers – Can force down prices, demand higher quality or
more service, and play competitors against each othermore service, and play competitors against each other

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EMBA 226 • College of Business Administration • California State University, Sacramento
2. Suppliers are powerful if…2. Suppliers are powerful if…
•Dominated by a few companiesDominated by a few companies
•Products is unique or well differentiated, or has built-up Products is unique or well differentiated, or has built-up
switching costsswitching costs
•Not obligated to content with other products for sale to the Not obligated to content with other products for sale to the
industryindustry
•Poses a credible threat of integrating forward into the Poses a credible threat of integrating forward into the
industry’s businessindustry’s business
•Industry is not an important customer (of the supplier Industry is not an important customer (of the supplier
group)group)

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EMBA 226 • College of Business Administration • California State University, Sacramento
3. Buyers are powerful if…3. Buyers are powerful if…
•Concentrated or purchases in large volumesConcentrated or purchases in large volumes
•Products/services are standard or undifferentiatedProducts/services are standard or undifferentiated
•Products form a component of its product and represent a Products form a component of its product and represent a
significant fraction of its costsignificant fraction of its cost
•Earns low profits, which create great incentive to lower its Earns low profits, which create great incentive to lower its
purchasing costspurchasing costs
•Industry’s product is unimportant to the quality of the buyer’s Industry’s product is unimportant to the quality of the buyer’s
products or servicesproducts or services
•Industry’s product does not save the buyer moneyIndustry’s product does not save the buyer money
•Pose a credible threat of integrating backward to make the Pose a credible threat of integrating backward to make the
industry’s productindustry’s product

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EMBA 226 • College of Business Administration • California State University, Sacramento
4. Threat of Substitutes4. Threat of Substitutes
•Substitutes limit the potential of an industry, particularly Substitutes limit the potential of an industry, particularly
profitsprofits
•Industry must upgrade the quality or differentiate the Industry must upgrade the quality or differentiate the
product/serviceproduct/service
•Substitutes that deserve the most attention are those that:Substitutes that deserve the most attention are those that:
–Subject to trends improving their price-performance Subject to trends improving their price-performance
trade-offtrade-off
–Produced by industries earning high profitsProduced by industries earning high profits

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EMBA 226 • College of Business Administration • California State University, Sacramento
5. Rivalry Among Competitors5. Rivalry Among Competitors
Jockeying for PositionJockeying for Position
Intensity depends on…Intensity depends on…
•Competitors are numerous or roughly equal in size and Competitors are numerous or roughly equal in size and
powerpower
•Industry growth is slow, precipitating fights for market Industry growth is slow, precipitating fights for market
share share
•Product/service lacks differentiation or switch costsProduct/service lacks differentiation or switch costs
•Fixed cost are high or the product is perishable Fixed cost are high or the product is perishable
•Capacity normally augments in large incrementsCapacity normally augments in large increments
•Exit barriers are high Exit barriers are high
•Rivals are diverse in strategies, origins and “personalities”Rivals are diverse in strategies, origins and “personalities”

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EMBA 226 • College of Business Administration • California State University, Sacramento
Strategy FormulationStrategy Formulation
•Strategy depends on the company’s strengths and Strategy depends on the company’s strengths and
weakness relative to the threatsweakness relative to the threats
•Strategic plan may…Strategic plan may…
–Position the company so its capabilities provide the Position the company so its capabilities provide the
best defense against competitive forcesbest defense against competitive forces
–Influence the balance of forces through strategic movesInfluence the balance of forces through strategic moves
–Anticipate and respond to shifts in factors underlying Anticipate and respond to shifts in factors underlying
forces to exploit changeforces to exploit change

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EMBA 226 • College of Business Administration • California State University, Sacramento
Approaches to StrategyApproaches to Strategy
•Positioning the company so it is the least vulnerable to its Positioning the company so it is the least vulnerable to its
competitive forcescompetitive forces
•Taking the offensive and alter the marketTaking the offensive and alter the market
•Exploiting industry evolution (change)Exploiting industry evolution (change)
How can IT make a difference?How can IT make a difference?

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EMBA 226 • College of Business Administration • California State University, Sacramento
•““How Competitive Forces Shape Strategy,” Michael E. How Competitive Forces Shape Strategy,” Michael E.
Porter, Harvard Business Review, March-April 1979.Porter, Harvard Business Review, March-April 1979.

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EMBA 226 • College of Business Administration • California State University, Sacramento
3. Nolan’s Stages Theory3. Nolan’s Stages Theory

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EMBA 226 • College of Business Administration • California State University, Sacramento
Nolan's Stage TheoryNolan's Stage Theory
•All organizations go through four stages for IT adoptionAll organizations go through four stages for IT adoption
–IntroductionIntroduction
–ContagionContagion
–ControlControl
–IntegrationIntegration
IT is recognized as a resourceIT is recognized as a resource

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EMBA 226 • College of Business Administration • California State University, Sacramento
IT ResourceIT Resource
Nolan's Stages TheoryNolan's Stages Theory
IntroductionIntroduction
ContagionContagion
ControlControl
IntegrationIntegration
TimeTime
Investment Investment
in ITin IT
Stage 1Stage 1 Stage 2Stage 2 Stage 3Stage 3 Stage 4Stage 4
An organization’s experience with adopting ITAn organization’s experience with adopting IT
DiffusionDiffusion

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EMBA 226 • College of Business Administration • California State University, Sacramento
4. Strategic Alignment4. Strategic Alignment

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EMBA 226 • College of Business Administration • California State University, Sacramento
IT’s Role In Business: IT’s Role In Business:
Strategic Alignment ModelStrategic Alignment Model
S
t
r
a
t
e
g
i
c

I
n
f
o
r
m
a
t
i
o
n
S
t
r
a
t
e
g
i
c

I
n
f
o
r
m
a
t
i
o
n
Functional IntegrationFunctional Integration
Business domainBusiness domain IT domainIT domain
ExternalExternal
InternalInternal
Business Business
strategystrategy
Organizational Organizational
infrastructureinfrastructure
IT IT
strategystrategy
IS IS
infrastructureinfrastructure
Administrative infrastructure, Administrative infrastructure,
processes, skillsprocesses, skills
Applications infrastructure, Applications infrastructure,
processes, skillsprocesses, skills
CoalignmentCoalignment
Business scope, competencies, Business scope, competencies,
business governancebusiness governance
Technology scope, Technology scope,
competencies, IT governancecompetencies, IT governance

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EMBA 226 • College of Business Administration • California State University, Sacramento
In a Nutshell…In a Nutshell…
BusinessBusiness ITIT
StrategyStrategy StrategyStrategy
CapabilitiesCapabilities CapabilitiesCapabilities
AlignmentAlignment
AlignmentAlignment
IT infrastructureIT infrastructure
Process ReengineeringProcess Reengineering
(Control, enhancing, leveraging)(Control, enhancing, leveraging)
Business networksBusiness networks
(Competitive Advantage)(Competitive Advantage)
ValueValue
VisionVision

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EMBA 226 • College of Business Administration • California State University, Sacramento
A Few More Factors to ConsiderA Few More Factors to Consider
IT Planning DilemmaIT Planning Dilemma
Investments in ITInvestments in IT

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EMBA 226 • College of Business Administration • California State University, Sacramento
What Does It Take to Become Strategic?What Does It Take to Become Strategic?
Basic IT for operationsBasic IT for operations
IT to competeIT to compete
IT for competitive IT for competitive
advantageadvantage

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EMBA 226 • College of Business Administration • California State University, Sacramento
IT Planning Dilemma IT Planning Dilemma
Organization Strategic Organization Strategic
PlanPlan
Information Technology Information Technology
Strategic PlanStrategic Plan
Should the strategic plan Should the strategic plan
specify the technologies to specify the technologies to
adopt?adopt?
Should an IT strategic plan Should an IT strategic plan
precede an organizational precede an organizational
strategy?strategy?
??
DirectionDirection
Enabling Enabling
technologiestechnologies
Which should come first?Which should come first?

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EMBA 226 • College of Business Administration • California State University, Sacramento
Introducing IT into the OrganizationIntroducing IT into the Organization
Operational PlanOperational Plan
Tactical PlanTactical Plan
Strategic PlanStrategic Plan
Mission StatementMission Statement
StrategyStrategy
PolicyPolicy
ImplementationImplementation
& Adoption& Adoption
Top-DownTop-Down Bottom-UpBottom-Up
Mission StatementMission Statement
ContextContext
InitiativesInitiatives
Inductive ChangeInductive Change Deductive ChangeDeductive Change
How does an organization introduce changes in IT?How does an organization introduce changes in IT?

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EMBA 226 • College of Business Administration • California State University, Sacramento
Strategy and ThreatsStrategy and Threats
ThreatsThreats OpportunitiesOpportunities StrategyStrategy
How does the business capitalize on its threats?How does the business capitalize on its threats?

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EMBA 226 • College of Business Administration • California State University, Sacramento
What are strategy and strategic planning?What are strategy and strategic planning?

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EMBA 226 • College of Business Administration • California State University, Sacramento
StrategyStrategy
•““The essence of strategy formulation is coping with The essence of strategy formulation is coping with
competition.”competition.”
Michael Porter, 1979Michael Porter, 1979

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EMBA 226 • College of Business Administration • California State University, Sacramento
What is Strategy?What is Strategy?
•Strategy is the pattern of missions, objectives, policies, and Strategy is the pattern of missions, objectives, policies, and
significant resource utilization plans stated in such a way significant resource utilization plans stated in such a way
as to as to define what business the company is indefine what business the company is in (or is to be in)(or is to be in)
and and the kind of company it is or is to bethe kind of company it is or is to be. It defines:. It defines:
–The product line, markets and market segments for The product line, markets and market segments for
which products are to be designedwhich products are to be designed
–The channels through which these markets will be The channels through which these markets will be
reachedreached
–The means by which the operation is to be financedThe means by which the operation is to be financed
–The profit objectivesThe profit objectives

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EMBA 226 • College of Business Administration • California State University, Sacramento
What is Strategy?What is Strategy?
Cont.Cont.
–The size of the organizationThe size of the organization
–The image which it will project to employees, suppliers The image which it will project to employees, suppliers
and customersand customers
Bullen and Rockart, Bullen and Rockart,
19811981

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What is Strategy?What is Strategy?
•Defines the revenue and growth potential of the Defines the revenue and growth potential of the
organizationorganization
•Focuses attention and resources on a specific set of goals Focuses attention and resources on a specific set of goals
and the projects required to achieve themand the projects required to achieve them
Applegate, Austin and McFarlanApplegate, Austin and McFarlan

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StrategyStrategy
StrategyStrategy
MissionMission
VisionVision
A strategy incorporates the vision and mission of the businessA strategy incorporates the vision and mission of the business
PurposePurpose
IntrospectIntrospect
AchievementAchievement

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•Vision statement reflects the organization’s future aspirations Vision statement reflects the organization’s future aspirations
and directionand direction
•Mission statement represents the “intents” or “purpose” of the Mission statement represents the “intents” or “purpose” of the
organizationorganization
•Strategy embodies the “image,” customers (markets), business Strategy embodies the “image,” customers (markets), business
model and measure of achievementmodel and measure of achievement
–IT as an enabler to proactively implement change (i.e., IT as an enabler to proactively implement change (i.e.,
innovate innovate  competitive pull) or reactively adapt to change competitive pull) or reactively adapt to change
(i.e., Porter’s 5 force model, (i.e., Porter’s 5 force model,
technology technology  push) push)
StrategyStrategy

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Strategic ManagementStrategic Management
Management Management
ControlControl
Operational ControlOperational Control
Strategic PlanningStrategic Planning

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Strategic PlanningStrategic Planning
Should…Should…
•Be forward lookingBe forward looking
•Focus on external factors and opportunities, and their Focus on external factors and opportunities, and their
impact on the businessimpact on the business
•Specify the direction the business should takeSpecify the direction the business should take
–Markets to pursue, image to project, business modelMarkets to pursue, image to project, business model
•Be long-termBe long-term
–Depending on the industry, 2 to 5 yearsDepending on the industry, 2 to 5 years
•Formal vs. informalFormal vs. informal
–Extent to which is documented and the frequency of Extent to which is documented and the frequency of
planningplanning

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Levels of ManagementLevels of Management
•Strategic PlanningStrategic Planning
–"Strategic planning is the process of deciding on objectives "Strategic planning is the process of deciding on objectives
of the organization, on changes in these objectives, on the of the organization, on changes in these objectives, on the
resources used to attain these objectives, and on the policies resources used to attain these objectives, and on the policies
that are to govern the acquisition, use, and disposition of that are to govern the acquisition, use, and disposition of
these resources."these resources."
•Management controlManagement control
–"Management control is the process by which managers "Management control is the process by which managers
assure that resources are obtained and used effectively and assure that resources are obtained and used effectively and
efficiently in the accomplishment of the organization's efficiently in the accomplishment of the organization's
objectives."objectives."

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Levels of Management (Cont.)Levels of Management (Cont.)
•Operational controlOperational control
–"Operation control is the process of assuring that "Operation control is the process of assuring that
specific tasks are carried out effectively and specific tasks are carried out effectively and
efficiently."efficiently."
Anthony, 1965Anthony, 1965

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Gaining a Competitive Advantage with ITGaining a Competitive Advantage with IT
•IT alone is not a strategic differentiatorIT alone is not a strategic differentiator
–Enables the business to do thingsEnables the business to do things
–Does not have a direct effect on productivityDoes not have a direct effect on productivity
•Must be coupled with other innovative processesMust be coupled with other innovative processes
Lessons from IT practice…Lessons from IT practice…
•Value from IT comes only when it is paired with concurrent Value from IT comes only when it is paired with concurrent
innovations in business practiceinnovations in business practice
•IT's economic impact comes from incremental IT's economic impact comes from incremental
improvementsimprovements
•Strategic differentiation emerges over timeStrategic differentiation emerges over time
–Short-termShort-term