Chapter 5 : Organizational Structure that Support Strategic Initiative

ORGANIZATIONAL STRUCTURES

· Organizational employees must work closely together to develop strategic initiatives that create competitive advantages.
· Ethics and security are two fundamental building blocks that organizations must base their businesses upon.

INFORMATION TECHNOLOGY ROLES AND RESPONSIBILITIES

Information technology is a relatively new functional area, having only been around formally for around 40 years.

Recent IT – related strategic positions:

Chief Information Officer (CIO)

oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives.

Broad CIO functions include:

Manager – ensuring the delivery of all IT projects, on time and within budget.

Leader – ensuring the strategic vision of IT is in line with the strategic vision of the organization.

Communicator – building and maintaining strong executive relationships.

Chief Technology Officer (CTO)

Responsible for ensuring the throughput , speed, accuracy, availability and reliability of IT

Chief Security Officer (CSO)
Responsible for ensuring the security of IT systems

Chief Privacy Officer (CPO)
Responsible for ensuring the ethical and legal use of information

Chief Knowledge Officer (CKO)

Responsible for collecting, maintaining and distributing the organization's knowledge

THE GAP BETWEEN BUSINESS PERSONNEL AND IT PRSONNEL

Business personnel possess expertise in functional areas such as marketing, accounting and sales

IT personnel have the technological expertise

This typically causes a communications gap between the business personnel and IT personnel

IMPROVING COMMUNICATIONS

Business personnel must seek to increase their understanding of IT

IT personnel must seek to increase their understanding of the business

It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel

ORGANIZATIONAL FUNDAMENTALS – ETHICS AND SECURITY

Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful

In recent years, such event as the 9/11 have shed new light on the meaning of ethics and security

ETHICS

Ethics – the principles and standards that guide our behavior toward other people

Privacy is a major ethical issues;

Privacy – the right to be left alone when you want to be to have control ever your own personnel possessions and not to be observed without your consent

Issues affected by technology advances

PROTECTING INTELLECTUAL ASSETS

· Organizational information is intellectual capital – it must be protected

· Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization

· E-business automatically crates tremendous information security risks for organization

Chapter 4 : Measuring The Success of Measuring Initiative

DEFINITION OF METRICS

Metrics is a measurement by which is efficiency, performance, progress or quality of a plan, process or product can be assessed.

KEY PERFORMANCE INDICATOR (KPIs)

KPIs are the measure that are tied to business drivers. Performance metrics fall into a nebulous area of business intelligence that is neither technology nor business-centered, but this area requires input from form both IT and business professionals to find success.


In order to have a success in measuring the strategic initiatives, the organization should have the efficiency and effectiveness. Efficiency and effectiveness metrics are two primary types of IT metrics.

EFFICIENCY IT

metrics measure the performance of It system itself including throughput, speed, availability.

EFFECTIVENESS IT

metrics measure the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases.
Benchmarking - Baseline metrics

Benchmarking is the process of continuously measuring system results, comparing those results to optimal systems performance, and identifying steps and procedures to improve system performance.

The Interrelationships of Efficiency and Effectiveness IT Metrics

What is a metric? A metric is nothing more than a standard measure to assess performance in a particular area.
More business professionals are familiar with financial metrics. Different financial ratios are used to evaluate a company performance.
Most common financial ratios include:
- Internal rate of return (IRR)
- Return on investment (ROI)
- Payback method
- Break - even analysis
 

Chapter 3 : Strategic Initiative for Implementing Competitive Advantages

STRATEGIC INITIATIVE

organization can undertake high profile strategic initiative including:

• Supply Chain Management (SCM)
• Customer relationship management(CRM)
• Business process reengineering (BPR)
• Enterprise resources planning (ERP)

SUPPLY CHAIN MANAGEMENT

Involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

4 basic components of supply chain management

• supply chain strategy
• supply chain partner
• supply chain operation
• supply chain logistics

Effectiveness and efficiency SCM:

• decrease the power of its buyer
• increase its own supplier power
• increase switching cost to reduce the threat of substitute product or services

CUSTOMER RELATIONSHIP MANAGEMENT 

Involves managing all aspects of a customers relationship with an organization to increase customer loyalty. CRM is not just technology but a strategy process and business goal that an organization must embrace on an enterprise wide level.

CRM can enable an organization to:

• Identify types of customer
• design individual customer as an individual
• treat each customer as an individual
• understand customer buying behavior

BUSINESS PROCESS REENGINEERING

Business process : a standardized set of activities that accomplish a specific task, such as processing a customers order

Business process reengineering : the analysis and redesign of work flow within and between enterprises.

ENTERPRISE RESOURCES PLANNING

Integrates all department and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise wide information on all business operation.

sample data sales

chapter 2 : Identifying Competitive Advantage

MICHAEL PORTER'S five forces model is useful tool to aid organization in challenging decision whether to join a new industry segment.

Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are:

Supplier Power 

This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are.

Buyer Power 

Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you.

Competitive Rivalry

What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength. 

Threat of Substitution 

This is affected by the ability of your customers to find a different way of doing what you do – for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power.

Threat of New Entry 

Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it

THE THREE GENERIC STRATEGIES

chapter 1 : Business DrivenTechnology

Information technology is the technology involving the development, maintenance, and use of computer systems, software, and networks for the processing and distribution of data. It is very essential in business in order to see process advancements in the business environment to increase the effectiveness of an organization while Management Information System (MIS) is a general name for business function which is similar to accounting, finance, operation and human resources

 

information technologies is everywhere in business

Information technologies also give greatest benefit to business in term of customer service (70%), finance (51%), sales marketing (42%), IT operators (39%), operation management (31%), human resources (17%) and lastly security (17%). 

Most important things that we need to know in Information Technologies is about data, information and business intelligence. Data is a raw facts that describe the characteristic of event while information is a data that converted into useful context and business intelligence is an application and technologies that are used to support decision making efforts.

Example of data

An organizational information culture include :

• Information Functional Culture when employees used information as means of exercising influence or power over others. For example, sales manager refuse to share information with marketing manager.
• Information Sharing Culture happen when employee across department trust each other to used information.
• Information Inquiring Culture when employee across department search information for better understanding
• Information Discovery Culture when employee across department are open to new insights about crisis and radical changes.