CMPS 158

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CMPS 158

• Business Strategy and Information Systems

Jack Callon
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Moving Classroom

• Will be in Crown 203 on Thursday!

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Objective for Today
For you to decide that you are in the right
class at the right time.
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Right Class at Right Time

• Your expectations.
• My expectations.
• Your priorities.

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Where Does an ISM Graduate Fit?
Senior Management
Company
Information Systems Organization
Users
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CS 158 - Business Strategy and IS
Business Knowledge
I/S Knowledge

• Accounting
• Finance
• Operations
• Marketing
• Human
• Resources

ISM Student I/S Use to Solve Business
Problems Im Ready to Graduate!

• Systems AD
• Programming
• Database
• Telecom

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Class Objectives

• Learn practical, useable things.
• Help you look good in job interviews.
• Help you make a difference when you get hired.

. . . . For a price!
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Underlying Theme of Course
My job as an IS professional is to help my
company to compete!
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CS158 - Spring Semester

Effort
Time
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CS 158 - Spring Quarter

Effort
C
Time
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ISM Business Capstone Class
This class was considered the most difficult of
the MIS classes at SJSU. (10 non-pass rate)
The only class that has both CS and Econ/Business
prerequisites.
A business class for those with IT knowledge.
Important to come to class.
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Jack Callon

• Third Year at UCSC
• Director of New Program Development, SOE
• 11 1/2 Years at SJSU College of Business
• 28 years at IBM in Sales and Marketing
• (California, Tokyo and Munich)
• 3 years in the U.S. Air Force
• MBA from Indiana University
• ISM major sponsor and ISM Club Advisor

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JDC Terminology

• Information Technology (IT)
• Information Systems (IS)
• Computing
• Telecommunications
• Data Communications
• Voice Communications
• IS Organization

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What is New?

• A short list of companies for the analysis term
  papers.
• Will allow two students to submit a joint paper
  for Section I and II of the analysis term paper.
  Sec. III and IV will be done individually.
• On-line services continue to improve as a
  research source for papers but should not be the
  only source.
• All models must be done professionally using
  appropriate desktop tools.
• Mandatory that you meet with me regarding your
  papers.

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Importance of Analysis Term Paper

• Successful completion of the analysis term
• paper is mandatory to pass the course.

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Business Strategy and Information Systems

• Concepts
• Relative To (Bigger Picture)
• Company Examples

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Of With
Management
Information Systems
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IS Management Strategies?

• Executive Partnership
• Strategic Architectures
• Technology Experimentation
• External Resource Leverage
• Technology Assimilation
• Functional Horizontal Integration

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Balanced Business Scorecard

• Financial Measures
• Customer Measures
• Internal Business Measures
• Culture

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Financial Measures

• Operating Income
• Operating Profit
• Cash Flow
• Sales Growth
• Return of Assets (Equity)

This is not a financial analysis class!
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Customer Measures

• Ranking by Important Customers
• Share of Important Customer Purchases
• On Time Delivery
• Percent of Sales from New Products

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Internal Business Measures

• Focus on Core Processes.
• Quality.
• Time to Market.
• Time to Customer.
• Time to Decision.
• Personnel Retention.

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Culture
The way we do things around here.

• Strength of Culture.
• Relevance of Culture.
• Value of Culture.

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The Four Important Cs
Competition
Computers

Complexity
Change
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Why Dont All Companies Successfully Use I/S to
Compete?
1. Business Reasons. 2. Information Technology
Reasons.
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Competitive Enabler
Of all the things that can change the rules of
competition, technology change is among the most
prominent.
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Competing with Information Technology (IT)
through people.
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A Complication
There has never been a time in history when
there was a better Information Technology
price/performance.
And so many choices of equipment, vendors and
approaches.
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Worth Remembering
Innovative uses of Information Systems requires a
systematic approach.
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A Systematic Approach
Vision Strategy Tactics Business Plan

• Competitive Options
• Roles, Roles and Relationships
• Redefine and/or Define
• Telecommunications
• as the Delivery Vehicle
• Success Factor Profile

Figure 1-4
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Business Strategy and Information Systems

• What business is Federal Express in?
• Significant industry structure considerations.
• National versus international market.
• Strengths and weaknesses of Federal Express.
• Significance of Information Systems to business
  
• success.

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Grade Structure
Class Contribution 15 (A
combination of factors
that will be
explained in class) Analysis Term Paper
45 (10, 10, 20, 5) Midterm Exam
15 Comprehensive Final Exam
25 Note Exams will not be open book or
open notes.
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Class Contribution

• Positive participation in class
• Introduction letter
• Oral presentations
• Overall professionalism

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Competitive Advantage Through Information
Technology
This book is dedicated to those that must compete
in an increasingly complex, dynamic and global
business environment. I wish you the best of
success in your competitive endeavors and hope
that the contents of this book provide the help
that is intended.
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Textbook Status
Structure and concepts are current and
valid. Company examples and status are dated in
some cases.
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Textbook Structure
1. Introduction Chapter 2. Business
Environment 3. Company Assessment 4. Structured
Analysis of IS Use 5. Management Issues
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Textbook
Preface Book Overview
Chapter 1 Business and Information Systems
Management Challenges
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Textbook
Section I - The First of Three Perspectives
Business Environment
Chapter 2 Business Competitive Advantage
Chapter 3 The Porter Competitive Model
for Industry Structure
Analysis
Chapter 4 Airline Industry Analysis
Chapter 5 Information Systems Can Redefine
Competitive Boundaries
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Section II - The 2nd Perspective
Company Environment
Chapter 6 Business Vision
Chapter 7 Implementing a Vision
Strategy, Tactics and Business Plan
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Section III - The 3rd Perspective
Information Systems Use
Chapter 8 Evaluating Business Strategies and
the Use of Information Systems
Chapter 9 The Roles, Roles and Relationship
Concept
Chapter 10 The Redefine and/or Define Concept
and Change Management
Chapter 11 Telecommunications as the Delivery
Vehicle
Chapter 12 A Success Factor Profile
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Section IV Major Information Systems
Management Issues
Chapter 13 Information Systems Organization
and Personnel Considerations
Chapter 14 Information Systems Value
and Financial Strategy
Chapter 15 Integrating Information Systems
into the Business Plan
Chapter 16 Total Quality Management
and the Role of Information
Systems
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Chapter 17 Conclusions
Exhibit I - Why Change When You Are Flying
High? An Analysis of The Boeing Company
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Analysis Term Paper Grades
1. Analysis Grade - 50 Did you analyze the
major important points in an effective
manner? 2. Presentation Grade - 50 How well
were the contents of the paper organized and
presented. This includes spelling, grammar
and whether the total paper comes together.
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ATP Companies
Cisco Systems - from boxes to end-to-end
communication! Dell Computer - the Direct
Business Model king! Knight-Ridder (San Jose
Mercury News) - what business are they
in? American Airlines - no CRS? Threat of the
Internet and open skies! Charles Schwab - keep
changing their spots! Visa International - threat
of smart cards and e-cash! Wal-Mart Stores - BM
versus Internet for toys and a lot more.
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Dell Computer

• Fierce competition in the PC segment of the
  Computer Industry.
• Questionable profit margins.
• As prices get cheaper, clones are losing market
  share.
• A global market that is US dominated.
• Direct Business model is a very hot topic and
  Dell is the king!
• The ultimate example of outsourcing.

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Cisco Systems

• Say they built the Internet.
• From routers to end-to-end communication.
• Want to be their own best reference!
• Cisco Connection is the basis for 82 of
  revenue.
• Research and technology through acquisition.
• Success is attracting major competitors.
• John Chambers walks on water.

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Knight-Ridder

• Newspapers were a traditional source of
  information.
• Industry is dominated by conglomerates.
• San Jose Mercury News was one of the first to go
  online
• first with AOL and then via the Internet.
• Mercury Center has lost its differentiation
  advantage.

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American Airlines

• New CEO, new era!
• Recently spun off ownership of SABRE.
• Threat of Priceline.com, etc.
• Premium service versus discounter airlines.
• Open Skies implications.
• Global position is not as strong as United.

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Charles Schwab

• Is in third phase of company redefinition.
• Determining best way to compete.
• Threat of Internet-based brokers.
• Gain versus preservation strategies of clients.

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Visa International

• Wants to be your favorite (only) means of
  payment.
• An interesting organizational philosophy.
• New CEO is shaking up the place.
• Threat of smart cards (Mondex).
• Threat of E-cash.

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Wal-Mart Stores

• Worlds largest retailer.
• Sam is gone!
• Took some major hits for poor initial efforts on
  the Internet.
• Can it succeed as both a BM and Internet
  channel?
• At what point does a company like have major
  problems
• simply because of size?

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CIO Hall of Fame
Most influential IS execs of the past decade
Katherine Hudson, Kodak Charles Feld,
Frito-Lay Patricia Wallington, Xerox John Cross,
British Petroleum Bob Martin, Wal-Mart Stores Don
Lasher, USAA

• Paul Strassman, Xerox
• DuWayne Peterson, Merrill Lynch
• Cinda Hallman, DuPont
• David Evans, J.C. Penney
• Max Hopper, American Airlines
• Ron Ponder, Federal Express

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Hall of Fame Technologies

• Wintel de facto desktop standards
• Networking
• E-mail and Fax
• Open Systems
• Client-Server Architecture
• Electronic Data Interchange (EDI)
• Mobile Computing
• Groupware
• High Bandwidth Networking
• Data Warehousing/Data Mining
• Enterprise Software Suites
• World Wide Web/Browsers

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Hall of Fame Applications

• Wal-Marts Replenishment System
• Allegiances (AHS) Value Link
• American Airlines SABRE
• FedExs Tracking System
• Citibanks Cash Management Account
• Boeings 777 Design System
• Amazon.coms Web Book Store
• Sun Mircosystems Intranet
• Frito-Lays Sales Automation System
• Schwabs Street Smart and eSchwab
• Otis Elevators Remote Monitoring System
• Kash n Karrys Returns Process System

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Hall of Fame Management Trends

• Globalization
• Standardization
• Coopetition
• Strategic Alignment
• Remote Workers
• The Next Ten Years

• Reengineering
• Outsourcing
• Quality
• Benchmarking
• Customer Service
• Mass Customization

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ATP Selection Process
1. Section I and II will be researched, written
and submitted by two person teams. 2.
Section III and IV can be researched on a team
basis but will be written and submitted on
an individual basis. 3. Appointments will be made
with the instructor by each team early in
the process to position the best possible
approach.
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Analysis Term Paper
1. Information Given Today. 2. Narrative
regarding the assignment on an on-going
basis in class. 3. Discuss planned approach
through an appointment with me.
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ATP Meeting with Instructor
1. A definition of the analysis company industry
in writing. 2. A draft of the Porter Competitive
Model. 3. A draft of the Business Strategy
Model. 4. A list of the key people within the
company that will serve as the basis of the
company analysis. 5. A draft of the strengths and
weaknesses of the analysis company.
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Analysis Term Paper Challenges
3. Analyze, Write and Edit Paper
Company
1. Content and Organization
2. Researching Content
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Boeing Commercial Aircraft Company
Analysis
Paper Paper Objective I Commercial Aircraft
Industry Summary A. Industry Profile B.
Typical Industry Competitive Strategy C.
Porter Competitive Model Analysis D.
Globalization of the Industry E. Importance of
Information Technology to the Industry II
Boeing Company A. Boeing Company Profile B.
Market and Financial Performance C.
Competitive Strategy Statement D. Significance
of Information Systems E. Strengths and
Weaknesses of Boeing as a Company
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III Information Systems at Boeing Commercial
Aircraft Company A. Structured Analysis 1.
Strategic Option Generator 2. Roles, Roles and
Relationships 3. Redefine and/or Define 4.
Significance of Telecommunications 5. Success
Factor Profile IV A Final Analysis The
Success of the Boeing Commercial
Aircraft Company A. Success of Business
Strategy and IT Use to Date B. Is the Company
Effectively Postured for the Future? Bibliography

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Class Schedule
Sec. I and II of Paper Due 2/03/00
Final Paper Due 3/07/00 Sec. I, II, III and IV
Final Exam 3/16/00
Start 1/04/00
Midterm Exam 2/01/00
10 Weeks
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Expert Profile

• Peter Drucker - Business Vision
• Michael Porter - Structure and Analysis
• Peter Keen - I/S and Telecom Trends
• Tom Peters - Business Motivation

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Class Premises
Every enterprise faces unprecedented competitive
challenges.
The source of this competition is becoming more
global and the pace of change within the business
environment is accelerating.
A business enterprise needs to understand where
it is going.
The business vision and its supporting strategies
should drive the role and use of information
systems within the organization.
The compression of time and events has
significantly increased information needs for the
growing number of people involved in making
decisions within an enterprise.
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Class Premises
For the above reasons the potential role of
information systems as a competitive resource has
increased.
Innovative use of information technology needs
(dictates) a systematic approach. To accomplish
this, it is essential that there be an on-going
working relationship between those that run the
business and the people charged with a
responsibility for information systems.
Conclusion It is necessary to establish and
maintain three distinct perspectives.
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Conclusion
If you feel you are in the right class at the
right time and are prepared to make the necessary
time commitment, see you on Thursday.