the five waves of innovation from Primozic and colleagues.
1: Reducing costs – began in the 1960s when the use
of IT focused on increasing the productivity of individuals and business areas.
The goal was to achieve clerical and administrative savings.
2: Leveraging investments – which began in the
1970s, concentrated on making more effective use of corporate assets to
3: Enhancing products and services – began in the
1980s and was the first time that attention shifted to using IT to produce
revenue by gaining strategic advantage or creating entirely new businesses.
4: Enhancing executive decision making – began later
in the 1980s and focused on changing the fundamental structure of the
organization as well as creating real-time business management systems.
5: Reaching the consumer – began in the 1990s.
It uses IT directly with consumers, leading to new marketing, distribution, and
service strategies. In essence, it changes the rules of competition, which is
precisely the focus of leading edge firms—to restructure their industry by focusing
on creating new businesses using the Internet, Web technology, and e-commerce.
2. According to Farrell,
what three conditions of IT investments yielded the greatest productivity
increases in industries dependent on IT and that faced growing competition?
greatest productivity increases came only
under three conditions:
The IT investments
targeted the main “levers” of productivity. Because productivity equals outputs
divided by inputs, a lever either increases outputs (such as offering new higher-value
services) or decreases inputs (such as reducing inventory or working capital).
IT investments were made in the “right” sequence and at the “right” time. New
IT investments build upon existing ones. On timing, companies should rush into
a new technology only when it
advances company goals, builds on company strengths, and cannot be easily
replicated by competitors.
IT investments were complemented with innovations in management practices. One
example is simplifying logistics practices as the flow of products to and from
distribution centers is automated, while at the same time redefining
relationships with suppliers.
Describe the three kinds of people involved in change management,
as described by ODR. Compare the ODR approach with other approaches that you
are aware of.
sponsor is the person or group that legitimizes the change
(someone in top management who is highly respected by the business unit).
change agent is the person or group who causes the change to happen (the IS
staff, which introduces the change but does not enforce its use).
target is the person or group who is being expected to change, and at whom
the change is aimed.
According to Carr, why does use of IT no longer matter
strategically? How should the management of IT change?
According to Carr IT is
an infrastructure technology, like railroads, electricity and the telephone.
Such a technology can create a strategic advantage for an individual firm only
at the beginning of its life cycle when its technology is expensive and risky.
He contends once an infrastructure technology reaches the end of its buildout
when its neither propriety nor expensive it becomes a commodity available to
everyone and therefore does not yield competitive advantage.
IT has become part of
the business infrastructure therefore its management needs to change states
Carr. Success hinges on defense not offense. Management of IT should become
boring and focus on three areas which are (i) Manage the risk (ii) Keep cost
down (iii) Stay behind the technology leaders.
According to Cairncross, what is the challenge for corporate
management of widely dispersed enterprises?
He believes that the
challenge for corporate management of widely dispersed enterprise today is
maintaining cohesion which takes a lot more effort that when employees are
co-located. With so many employees working out of their homes, cars, hotel
rooms, airports, or customer sites, she believes it is important to create a
sense of belonging. Whether enterprises use intranets to help employees feel
part of the culture is up to them. Whether they are successful is yet another
issue. He believes this goal should be a
major use of intranets because of care of employees is one of the most
important things enterprises do.
What is an experience curve? Give examples.
An experience curve is
that the cost of using a new technology decreases as the firm gains more
experience with it. Each curve represents a different technology or a new
combination of technologies in a product or service as well as in the product.
Moving to a new curve
requires substantial investment in a new technology and the company often must
choose from among competing technologies, none of which is yet the clear
winner. A firm that correctly identifies a new market and the technologies to
exploit it can shift to the new experience curve and successfully open up to a
new industry segment.
Identify and describe several reasons why strategic systems
planning is so difficult.
Business goals and
systems plans need to align – Strategic systems plans need to align with
business goals and support them. If top management believes the firm business
goals are extremely sensitive. The CIO is often excluded in major strategic
meetings by top management. The IS department can be left out of the inner
circle that develops these plans.
Technology are rapidly
changing – Continuous monitoring and planning the changes of technologies and
how the industry would adopt this technology, the planning process needs to be
monitored to see whether that future visions needs alteration. Sometimes an
emerging and inexpensive technology emerges and swiftly displaces incumbent
technologies. The planning issue here is for management to foresee the upcoming
of innovation with superior technology potential and viable business applications.
Portfolios Rather Than Projects – A portfolio approach requires a more sophisticated
form of planning because projects must be evaluated on more than their
individual merits. How they fit with other projects and they balance the portfolio
of projects become important.
Development is Difficult to Fund – It is extremely difficult to determine how
much funding is needed to develop or improve infrastructure. The challenge then
is to develop improved applications over time so that the infrastructure
improves over time.
2. Describe Porter’s
five competitive forces.
One force is the threat of new entrants
into ones industry. The internet has opened up a new channel of marketing and
distribution has allowed all kinds of unexpected new entrants into numerous
The second force is the bargaining power
of powers. Buyers seek lower prices and bargain for higher quality Web-based
auction sites shopping bots and intelligent agents are all giving buyers more
shopping options. Much of the power of the internet has to do with the force.
A third force is the bargaining power of
supplies. The internet enables small companies to compete against large ones in
uncovering request for bids and bidding on them.
Email is a substitute for paper mail,
music downloads are substitutes for CDs Book and music web sites are
substitutes for book and music stores.
The intensity of rivalry among
competitors. It based alliances can change rivalries buy for instance,
extending them into value chain versus value chain competition rather than just
company verses company competition.