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IT STRATEGY

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					                                                               All the ingredients
                                                            are necessary to solve
                                                                  the complex, ill-
                                                             structured problems
                                                                 in the real world

                                                  CIO
                                                 Cases


Ingredients of
success:
“Work hard,
  work right,
       work together!”
Use Strategies as templates /
blueprints for aligning IT systems   teams                      WSJ identified as
to transform enterprise so meet      Walmart (all about team)    one of the best
                                    P&G (team from day one)    Business Schools
MIS challenge (Dell )
Str-2.c


     adopts                                                                  adopts

External
  Everywhere                strategy                          strategy
                            supported by                      employs       Not Before
                                                                                  Internal
e-commerce
  All the Time                                                                e-commerce
                                                                             Not After
          “sells directly                        “electronic orders achieve    (P&G)
          from web site”    achieve
                                           TOB.5 alliance partners”
                                           VMM.                                      TOB.2
     “computer made         provides                                 “cut out the
    expressly for you”                     61-62            provides
                                                                     middleman”

           “just the way you want it”                      “in a few days”




                                              DD.1.A,1.3



TOB –examine concepts (transforming ideas TOB.1-2) that drove
Next,– Thinking Outside the Box (Bus. Week 22Nov04)                                   Dell’s
VMM     Vanishing Mass Market (Bus. Week 12Jul04)
strategyDriving Dell (Bus.framework for developing and integrated
DD – and present Week 7Feb05)
Str-3.a                                              Example

                     Rx for Learning
               Tufts University Medical School



  Michael Dell’s       “Number of
     Market-
  transforming       biomedical terms
      ideas
                     medical students
                       learn in their
                         first year
  Concepts are
  vital to guide          10,000”
  practice.
                                                   TOB: 1.1-2
                                                 CIO 1 Feb 01
Str-2.d                                                  Focus of this
                   Transforming Ideas (Dell)             presentation
           for Using ITS to Achieve Competitiveness

   Strategies and other concepts/ideas (Dell) are templates
    for decision making and action, as in Sports. Can’t build
    (do) it, if can’t think it.                   BroadVision Sep01
                                                      Purdue 22Sep04
         Organizational Horsepower (OHP) to meet MIS
          challenge and renew competitive advantage
         Quality- - the outcome of OHP and foundation of
          competitiveness
         OHP Strategies - - the plans for using IT systems to
          meet MIS challenge and create OHP.
         Total Quality Management- -a KPMG approach for
          finding the right IT – business mix
Str-4.a


                   Horse Power
    A unit for measuring the power of motors or
     engines, adopted by James Watt, from the power
     exerted by a horse in pulling.

    Equals the force required to raise 33,000 pounds at
     the rate (speed) of one foot per minute.

    It was force & speed that also resulted in power in
     the market.                        Webster’s Dictionary
                                              of the American
                                                     Language
Str-4.b
                    Organizational Horsepower
                      is an organization’s market power and source of its competitiveness




                           meet as many expectations as possible
    What is
    quality?
                                                                             IT strategies generate OHP that
                  TOB.5                                                      produces quality: 1. perfect
                                                                             service (force) 2. at the customer
                                                                             moment of value (speed)


                                                                             Dell’s strategies produce quality:
                                                                   QUALITY
                                                                             1. timeless / locationless (CIS)
   Descriptive                                                               yields force & 2. JIT (IOS) yields
   presentation                                                              speed so achieve perfect service
                                                                             @customer moment of value
    Normative                                                                (quality)
   Implications                                                       meet expectations quickly

                                                                                       TOB.2               Webster’s
                                                                                                           Dictionary
Str-7e

 Why identify & summarize IT - OHP Strategies?
 In order to help companies discuss and evaluate their
  needs, BroadVision has partnered with consulting firm
  Surgency to provide a more precise vocabulary for
  achieving transformations within an organization or
  extended enterprise.

 …to give business a starting point for exploring which
  strategic direction would most effectively address their
  particular challenges and open up new opportunities
  for reducing costs, increasing productivity and boosting
  growth.
                                      Creating Value through
                                  Business Transformation 1.1
Str-6.b                                                OHP Strategies
    Creating Value through Business Transformation:
              Transformational Strategies

    Templates, models based on                                   2.2

    Best Practices, observed in direct experiences with hundreds
     of clients                                                  2.5

    Benchmarking, concepts for developing IT strategy            2.4

    Complementary, support complementary business processes
     as in the Dell Case                                   2.1

    Evolutionary, expand use over time as gain experience as in
     Drayer’s description of P&G relationship with Wal-Mart 2.1

                                                   BroadVision Sep01
Str-6.a
               IT-ENABLED OHP STRATEGIES
          All strategies
          have potential
          to contribute to
          both force and
          speed when
          supported by
                             Organizational FORCE
          IT systems (e.g.
          teams : WSS)




            Strategies
           transform
          organizations
          BroadVision
           real-world
            results 1.1
                                                    Organizational SPEED
Str-7.a
                  The MIS Challenge:
           Finding the Right IT - Business Mix

   IT creates opportunities for:
      improving OHP by increasing force as well as speed (input) that
      provides quality by meeting customer expectations at the
       customer moment of value (output)

   Organizations create OHP (competitiveness) using different
    combinations of strategies, depending on environment & its
    mission.
      No single strategy fits all circumstances        BroadVision.1.1

   The MIS challenge is to find right IT business mix (alignment)

                                              Read: Companies fail to find
                                                    right IT, business mix
Str-7.b
Companies fail to find right IT - business mix

   The challenge is integrating the technology and business
    objectives                                        (par. 1, 8)
      MIS Challenge
      alignment

   The former CIO “kept talking technology, he wasn’t
    focused on how the technology could serve the business.”
                                                           (par. 2)

   IT people need to understand the business, not just the
    technology; and executives need to become more
    technically aware                                 (par. 9-10)

                            Computerworld @ITworld.com 1Sep00
Str-7c
                      What is needed
            to find the right IT-business mix?

 Total Quality Management is a comprehensive & structured
   approach to continuous improvement in meeting customer
   expectations.                                          Word-of-day


      can be adapted for use in every type of organization
         including manufacturing (Indian), hotel management
         (Harrah’s), churches to achieve the right IT-business mix
                                               CSS : KPMG Flowchart
KPMG.1
                                                            Final Report February 4, 2001
         Process for Finding the Right IT - Business Mix




             
             
                     
             




             




 Environment (Information Age)   Vision (MIS Challenge)   Understanding IT
Systems   Choice OHP Strategies & Models (integrate IT Systems) 
 Feedback (current IT review)                                                KPMG
Str-7d

                                                                    Putting IT All
                                                                         Together
                                                                     Innovations
                                                                          Aug 07
                                                        
                                          

                                                 Dell
                                  VF &
             Stonyfield           Levi’s




                                                            Framework for
                                                              BUS205 &
                                                               CIO.1

 Information Age
  Idea Economy
                                                                            
 Bus.Week Sep08                     Driving Dell Information Week Feb05
            Assignment:
read carefully & take detailed notes:
    “It All Began with Drayer”


                          in handout pack
                                 Day 1: IT Strategies




      “Putting IT All Together” *
             with KPMG

structured, comprehensive framework
for finding the right IT-business mix (CIO cases)

                                        * Innovations
                                     2007 supplement to:
                          Baseline, CIO Insight & eWeek
Str-7d

                                                                    Putting IT All
                                                                         Together
                                                                     Innovations
                                                                          Aug 07
                                                        
                                  align   

                                                 Dell
                                  VF &
             Stonyfield           Levi’s




                                                            Framework for
                                                              BUS205 &
                                                               CIO.1
 Information Age
  Idea Economy
                                                                            
 Bus.Week Sep08                     Driving Dell Information Week Feb05
Str-7e

   Why identify & summarize IT Strategies?

 In order to help companies discuss and evaluate their
  needs, BroadVision has partnered with consulting firm
  Surgency to provide a more precise vocabulary for the
  types of transformations e-business can effect within an
  organization or extended enterprise.      CIO cases

 Through identifying and summarizing nine different
  transformational e-business strategies, this paper aims
  to give business a starting point for exploring which
  strategic direction would most effectively address their
  particular challenges and open up new opportunities.
                                             BroadVision 1.1
                                           Day 2: IT Strategies



Identifying & Summarizing IT Strategies
      “IT All Began with Drayer”
                at P&G

 “P&G’s Ralph Drayer sat down with
                                         e
  Walmart’s Sam Walton in 1987”            v
                                            o
 “The IT Inside the World’s Biggest          l       as in
  Company” CIO 1Jul02                          u
                                                t CIO cases
 “IT All Began with Drayer” CIO 1Aug02          i
                                                  o
 “IT Builds a Better Idea: P&G Finds New          n
                                                    a
  Ways to Innovate” CIO 1Feb07                       r
                                                      y
                   IT all began
                       with
                   Drayer
                   CIO 1Aug02


February 1, 2007
Str-8.a                                                             IT Strategies

      What is JUST-IN-TIME (JIT)?
   producing or delivering a             product or
   service when it is wanted,            including either
   input to operations /                 departments or     To
   output to customer:                                      speed
                                                            construction,
     Empire State Building (telephone)                     the Empire State
     Dell Computer JIT based         on IOS (input) Building’s posts, and
                                                            beams, windows
      with online ordering CIS (output), increases window frames were
      force & speed                                         made in factories
                                                            and put together on
     automotive      industry           including          the site. Because of
      Indian motorcycle                                     this JIT approach,
                                                            the ESB was
                                                            completed ahead of
                                                            schedule and under
                                                            budget.
                              10 Quick Wins, Supply Chain Mgmt Review 1May01
                                 GM saves in procurement, microsoft.com 31Jan02
Str-8.c                                                Strategies- JIT

              How Does JIT Affect OHP?

   JIT “is a powerful tool to meet emerging customer needs
    and wants”, and therefore to increase organizational force
    as well as speed by:                                VF & Dell

         preventing overproducing and reducing unsold
          inventory
         reduces inventory carrying costs
         increases flexibility to produce what a customer wants

         increases knowledge of customer                  HCD 93.3
Str-8.e                                                Strategies- JIT
             Evolutionary & Complementary

   “What was the first collaborative process ... with Wal-Mart?”
    “Continuous replenishment (JIT). We (P&G) used it to build
     trust and demonstrate the value of information sharing and
     focusing on the ultimate consumer…, and it built the
     foundation for a bigger sharing.”                   Drayer.2.3

   “What were the major impediments…?”
    “The major impediments had little to do with the
     technology…. Nearly half (46%) of respondents said they
     had difficulty changing processes and people behavior....”
                                                     Why
                                                  Greasing the Gears
                                                    Teams!
                                                  Darwiwmag.com
                                                  6Feb03
Str-9.b




          strong leadership
           & best practices
              (strategies) to
           structure efforts
                   D.6.1-7.2
Str-9.d                                             Strategies-Teams


            How Do TEAMS Affect OHP?

   generate organizational force (better meet more customer
    expectations) by enhancing the capacity to innovate and
    approach perfect service:

         diverse perspectives on problems           (CIO Teams)

         increases knowledge of customer (KPMG Vision Sessions)

         create synergy of ideas for new ways to reach markets
                                (What makes a Winner, CIO 1Feb01)
                                                        Strategies-Teams
Str-9.e
            How TEAMS Enabled?
   Potential to reduce organizational speed requires WSS (networks
    & groupware) to facilitate group dynamics

                                      End-user devices
                               WSS (MS Office) & TPS (Access)
                                capture, cradle, create, convey

                                                          MIS & EIS
                                          Networks      convey & create
                                            IOS
                                        communicate


                                                DBMS (Access) cradle
                                                       &      convey
                                                DSS (SPSS)    create
Str-10.b
                    Information partnerships:
            Evolutionary Expansion of JIT & TEAMS

   “What was the first collaborative process ... with Wal-Mart?”
     “Continuous replenishment (JIT). We (P&G) used it to build trust
      (teams) and demonstrate the value of information sharing and
      focusing on the ultimate consumer…, and it built the foundation
      (trust) for a bigger sharing.”
      Drayer.2.1-3; 3.2

   “Whatother processes did this lead to?”
    “…The most exciting is Collaborative Planning, Forecasting and
     Replenishment (Information Partnership). It starts with joint
     business planning between the trading partners. That follows into
     promotion planning and various tactics leading to a sales
     forecast, leading to an order forecast…”             Drayer.5.2-5

   “A company doing best practices today should be able to share and
    exchange forecasts and sales plans….”
                                          Global Logistics & Supply Chain
Str-10.c                                        Strategies-Partnerships

              How do Information Partnerships
                       affect OHP?
 Agreementsbetween organizations for sharing information
 beyond JIT to enhance each partner’s OHP:
     Speed - doing what they already do faster by automating
      information flows
        Vanity Fair & Walmart (then Levi’s)
        Dock of a Bay (Navipact)
        Building on IT (Buzzsaw)

     Force - sharing strategic (market/product) information
        P&G & Wal-Mart
        Jackpot (Harrah’s)
        DHS (CIA, FBI, ATF, INS, IRS….)
                                                              Drayrer
                                                           4.2-4 & 3.4
                                                         Strategies-Teams
Str-9.e
           How Information Partnerships Enabled?

Information partnerships are an evolutionary expansion of JIT–Teams
built on same IT components with differences in content & knowledge
worker access
                                       End-user devices
                                WSS (MS Office) & TPS (Access)
                                 capture, cradle, create, convey

                                                           MIS & EIS
                                           Networks      convey & create
                                             IOS
                                         communicate


                                                 DBMS (Access) cradle
                                                        &      convey
                                                 DSS (SPSS)    create
Str-13.a                                                     Strategies-Virtual

    What is a VIRTUAL ORGANIZATION?
   Most advanced collaboration between organizations in which they
    integrate their people and processes so well that organizational lines
    begin to blur.                                           what is.com 1-2

       Organizations share responsibility for moving information and
        product with process owned by partner does it best Wins-1,Level-3

       “ The integration at Level Three may be likened to a husband and
        wife who are planning their financial future. ”       Wins-3, Level-3

       “Principles applied in virtually any business sector”:
        retail (JC Penny & TAL), manufacturing (Dell, Indian), homeland
        security (CIA, FBI, ATF, INS), social services (CSS),
        entertainment (Harrah’s casinos), Building (Buzzsaw, BuildPoint)
                                                           10 Quick Wins 1.1
                                             Supply Chain ManagementReview.
Str-13.b                                     Strategies-Virtual

 How Virtual Organizations Affect OHP?

   Magnifies both organizational speed and force:

       provides relatively quick access to resources
        that provide opportunities to provide better
        service at the customer moment of value

       accumulates a portfolio of knowledge and skills
        that help develop tactics to penetrate markets
        more quickly and deeply
                                           Whatis.com 3-4
                                            Quick Wins.2.2-3
                                                          Strategies-Teams
Str-9.e
              How Virtual Organizations Enabled?
built on same IT components as JIT-Teams & Partnerships with
organizations increasingly sharing responsibility for moving
information and product by partner that does it best       Wins-1,Level-3

                                        End-user devices
                                 WSS (MS Office) & TPS (Access)
                                  capture, cradle, create, convey

                                                            MIS & EIS
                                            Networks      convey & create
                                              IOS
                                          communicate


                                                  DBMS (Access) cradle
                                                         &      convey
                                                  DSS (SPSS)    create
Str-14.a                                            Strategies-Learning

      What is a LEARNING ORGANIZATION ?

   people are continually discovering how to learn together and
    changing organization as a result of what they learn
      to serve its customers better and faster         Haag 109.1.3
            offering more perfect service (force)
            at the customer moment of value (speed).

   Resembles an information partnership (husband & wife) that
    has evolved to a strategy of total / continuous quality
    improvement                                             Wins 2.1

   Examples:
      Casinos (Casino Technology, Jackpot: Harrah’s)
      Healthcare Institutions
      Intelligence Community
Str-14.b                                           Strategies-Learning

        How are Learning Organizations Enabled?

   IT systems to support the vision that “Success is never
    final. Failure is never fatal.”            Winston Churchill

       Intra/inter organizational networks that overcome
        barriers of organizational structures to information flow
        and creativity including:


                                
            TPS, CIS & IOS            capture, communicate
            MIS & EIS                 & convey

       WSS, DSS (AI) including DBMS that enhance capacity
        to cradle & create information and knowledge
            AHP and Access projects                 N-Site
     DIVINE
  DISCONTENT:
  Never be satisfied
where you are, you can
   always improve.
          Core Belief, Kevin Turner, CIO Walmart
          “Inside the World’s Biggest Company”
       DICSCIPLINE &
        EXECUTION :
    As a company, we’re big on
 execution. You can’t name a great
team that wasn’t good at discipline.
  Execution and discipline are not
    the enemies of enthusiasm.
                Core Belief, Kevin Turner, CIO Walmart
                “Inside the World’s Biggest Company”
              WSS            future plans         boundaries blur W.1.2
             TEAMS                                 husband-wife W.1.3-4
                             & forecasts
                                                       two act as one
work together                   CPFR            share decision making W.1.5
   to build,                   D.5.3-5
 builds trust
                      Grease              10 Wins
 D.2.1-3, 3.2          Gears    INFO. whatis.com VIRTUAL
              P&G
                      GG.1.4    PART.                 ORGAN.
   historical
 transactions             BroadVision : IT Strategies
    D.3.1,4                transforming best practices D.1.5, 1.0
               JIT         benchmark D.1.3-4                        LEARNING
         TPS (CIS), IOS,
                           begin simply D.1.2                        ORGAN.
             MIS, EIS
                           complementary D.1.1                         continually
                           evolutionary D.4.2-3, 5.2                    learning &
                                                                       changing the
                                             TRANS-                    organization
             DELL
                          every where       NATIONAL
 anywhere
                            all time       globally with
 any time                             coordinated cooperation
             T&L                      Evolutionary strategies use same systems with
            CIS (TPS)                   different information content & KW access
              WSS                                     husband-wife
              TEAMS            future plans           two act as one
work together                  & forecasts           boundaries blur
    to build,                     CPFR            share decision making
  builds trust         Grease               10 Wins
                        Gears     INFO. whqtis.com VIRTUAL
               P&G
                       Indian     PART.      Build     ORGAN.
   historical
 transactions                BroadVision : IT Strategies
                              transforming best practices
                JIT           benchmark                             LEARNING
          TPS (CIS), IOS,
                              complementary                          ORGAN.
              MIS, EIS
                              evolutionary                             continually
                                                                          learning &
                                                                        changing the
                                             TRANS-                     organization
             DELL
                                           NATIONAL
 anywhere
                                            globally with
 any time                              coordinated cooperation
             T&L                       Evolutionary strategies use same systems with
            CIS (TPS)                    different information content & KW access
Str-11.b                                         Strategies-T&L

 What are Timeless / Locationless operations?


   Timeless organizations operate without regard to time
    and serve                           customers,
    whenever (24 * 7 )                 customers want.
   Locationless                         organizations
    operate                              without regard to
    location                         and serve customers
    wherever                           the customers want.

          Sears Catalogue Order     University Faculty &
           (old technology)            distance learning
          Dell
Str-11.d
Str-12.a
What is a TRANSNATIONAL FIRM?
   What is a TRANSNATIONAL FIRM?
       Can you give examples?
          from your work experience?
          in your major?
          in your CIO case?

   How do TRANSNATIONAL FIRMS affect OHP?
       How does JIT contribute to providing perfect service at the
        customer moment of value (quality)?
       Does it contribute to organizational speed?
       Does JIT contribute to organizational force?
   How are TRANSNATIONAL FIRMS IT-enabled?
       What IT systems are needed to implement a transnational firm?
Str-12.c                                             Strategies-Transnational

                 reacted to the Second Wave of Globalization


   In the 1990s, governments and societies were becoming more
    protective of their cultures
                 responded by realigning its organization to think
    locally and act locally                                     Slide7.5.a

   In addition to the transnational strategy, Atlanta developed the ITS
    that provided the global infrastructure to coordinate global activities,
    for example:
            virtual innovation centers were supported to give people
            around the world the power to be innovative & creative
            (achieving force & speed) generating competitive advantage

                                               Beta Gamma Sigma, 3 May00
Str-15.a
      How organizations create an environment
            supporting IT innovation?
 CEO attitude toward IT
     It is essential that CEO and strategic management team
      understand MIS challenge and view IT as a critical resource
     A CIO in the strategic management team is a sign

 Bridging the gap between business and technical people
     designing information systems requires fusion of the
      business problem and IT systems (ITS)
     the CEO’s attitude, the CIO and the SDLC (system
      development life cycle) with its project teams are critical
      piers in bridging the gap
Str-15.a
                Supporting IT Innovation


 Taking a user focus
    building a useful information system begins with a user
     focus as the basis for identifying what is relevant
                                                    slides 1.191.20


 Demanding creative solutions
   begins with user needs focusing a process (SDLC) that
    brings business and IT people together in planning,
    developing & implementing ITS                   H.54.4  55.2
Str-15.c
                     Supporting IT Innovation

 Thinking beyond boundaries of the organization’s (outside the
  box)
    Strategies that provide prefect service at the customer
     moment of value (MIS challenge) achieve efficiencies and
     innovation by bringing knowledge workers and
     organizations together in new ways
              JIT (Dell)
              Teams (Information Sciences Institute @ LSU)
              Timeless & locationless (CHS)
              Information Partnerships (Dock of Bay, Jackpot)
              Virtual organizations (Building On IT)

                                                    Flowchart IT Strategies
Str-7.a
                  The MIS Challenge:
           Finding the Right IT - Business Mix

   IT creates opportunities for:
      improving OHP by increasing force as well as speed (input) that
      provides quality by meeting customer expectations at the
       customer moment of value (output)

   Organizations create OHP (competitiveness) using different
    combinations of strategies, depending on environment & its
    mission.
      No single strategy fits all circumstances        BroadVision.1.1

   The MIS challenge is to find the right IT business mix (alignment)

                                              Read: Companies fail to find
                                                    right IT, business mix
Str-7.b
    Companies fail to find right IT - business mix

   The challenge is integrating the technology and business
    objectives                                          (par. 1, 8)
      MIS Challenge
      alignment

   The former CIO “kept talking technology, he wasn’t
    focused on how the technology could serve the business.”
                                                            (par. 2)

   IT people need to understand the business, not just the
    technology; and executives need to become more
    technically aware                                 (par. 9-10)

                             Computerworld @ITworld.com 1Sep00
Str-7c
                      What is needed
            to find the right IT-business mix?

 Total Quality Management is a comprehensive & structured
   approach to continuous improvement in meeting customer
   expectations.                                         Word-of-day

      Can be applied for use in every type of organization
         including manufacturing (Indian), hotel management
         (Harrahs), churches (CSS)

 IT creates opportunities for improving both force & speed in
   meeting customer expectations                     BroadVision (1.1)
                                                    KPMG, Flowchart
KPMG.1
                                                            Final Report February 4, 2001
         Process for Finding the Right IT - Business Mix




             
             
                   
             




             




 Environment (Information Age)   Vision (MIS Challenge)   Understanding IT
Systems   Choice OHP Strategies & Models (integrate IT Systems) 
 Feedback (current IT review)                                                KPMG
Str-7d

                                         framework
                                          for course

                               
                        




                                   framework
                                       for
                                      CIO.1
 Information Age
  Idea Economy
                                               
 Bus.Week Sep08
Str-6.a
              7 IT-ENABLED OHP STRATEGIES
          All strategies
          have potential
          to contribute to
          both force and
          speed when
          supported by
          IT systems (e.g.   Organizational FORCE
          teams : WSS)




          Read:
          BroadVision
          Sep01
                                                    Organizational SPEED
28.a
         Processes for Adopting OHP Strategy:
           Business Process Reengineering (BPR)

 BPR is a radical approach to adopting OHP strategies that involves
  creating entirely new business processes (sequences of activities to
  provide outcomes to customers)                          Word-of-day 6Febo2
    CHS implement MIS plan across entire organization so that
      dramatically alters how clients enter, treated and followed-up
    HealthSouth building a digital hospital involves new processes for
      creating, capturing, storing & communicating medical records
 Views existing processes as broken so new processes are needed
    Dana Farber Cancer Center’s processes for authorizing, filling
     and administering prescriptions (Rx Files)
    Homeland Security reorganization of the federal government’s
     approach to intelligence Integrating America
28.b
            Processes for Adopting OHP Strategy:
               Total Quality Management (TQM)

 TQM involves improvements in the quality delivered to the customer
  through ongoing refinements in response to continuous feedback with
  implementation occurring incrementally in stages
    Transition from TPS using toll-free telephone to an online CIS
    P&G evolution with Wal-Mart from JIT to expanded information
      partnership
    Harrrah’s information sharing between sites enhance opportunities
      to provide customer satisfaction
 Essential difference is degree of change
        “Ultimately, BPR means changing more than you keep. TQM means
         keeping more than you change.”
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