Week 1 Lecture - 31245 - Part B PDF

Business Process and IT Strategy (31245) Lecture 1: Reviewing Basic Concepts and Introduction to IT Strategy Lecturer | Thomas Dolmark [email protected] Subject Coordinator |Dr Faezeh Karimi...

Business Process and IT Strategy (31245) Lecture 1: Reviewing Basic Concepts and Introduction to IT Strategy Lecturer | Thomas Dolmark [email protected] Subject Coordinator |Dr Faezeh Karimi [email protected]  This subject introduces the use of information technology (IT) as a strategic resource for business processes and business strategies. A business needs competitive advantage and the challenge is to leverage IT resources to gain a competitive advantage over its rivals (by aligning IT resources with business goals). Subject IT managers need to relate to the roles of IT and IT strategy Description in a complex business environment for enabling business processes and generating value to business. In this subject, theories and methods related to the value of IT are presented and explored. Topics in business processes, strategy and role of IT are discussed to achieve learning organisations with an ability to achieve sustainable competitive advantage. Business Process Business process – "a standardized set of activities that accomplish a specific task, such as processing a customer’s order." "A business process is a network of connected activities and buffers with well-defined boundaries and precedence relationships, which utilize resources to transform inputs into outputs with the purpose of satisfying customer requirements." What is a Business Processes? Business Process Sequence of activities for accomplishing a function/task. Activities Tasks within a business process Resources Items necessary to accomplish an activity Actors Resources that are either human or computers Role Subset of activities in a business process performed by a particular actor Examples of Processes What Are the Important Characteristics of Processes in Organizations? Activity: Identify processes below as structured or dynamic User Registration Fee Payment Parking – where everyone has an assigned parking space Determination of electives for a student’s major Offensive strategy for the school’s homecoming football game What Are Examples of Common Business Processes?  Business Process Model and Notation (BPMN): “A standard Business Process Model and Notation (BPMN) will provide businesses with the capability of understanding their internal Documenting business procedures in a graphical notation and will give organizations the ability to communicate these procedures in Business a standard manner”. [http://www.bpmn.org/] Processes are an abstraction of reality (Business Process Processes Model) Roles are listed in a Swimlane reserved for an Actor (usually based on a Function) An actor could be a human or a machine. Documenting Business Process? Information System Components The hardware and people do things, while the software tells the hardware what to do. The procedures tell the people what to do. Data is the bridge between the machine side (hardware and software) and the human side (procedures and people). These five components are common to all information systems, regardless of size. Activity: Specify an e-commerce site where you have purchased something (e.g., Amazon, etc.). Write down your Buying process, including the activities you perform to buy the product. Specify the five components of the IS that is supporting your e-commerce purchase. Software: Such as the Web browser. Hardware: Data: Procedure: People: How Do Business Processes and Information Systems Relate? An Information System can support several processes  Improve an Activity How Can Information Improve Data Flow Among Activities Systems Be Used to Improve Control of Activities Use Automation Improve Processes? Improve Procedures Example Identify some business processes and their activities that “Catch” (https://www.catch.com.au/) needs to run the business. For example: Transaction Customer Payment -> Process Payment -> Send Order Fulfillment Request -> Invoice Customer Shipping Collect Customer Details -> Receive Order -> Pack Order -> Update Inventory -> Ship Order User Registration ? Ordering ? Thinking Strategically: The Three Big Strategic Questions 1. What’s the company’s present situation? 2. Where does the company need to go from here? Business(es) to be in and market positions to stake out Buyer needs and groups to serve Direction to head 3. How should it get there? A company’s answer to “How will we get there?” is its strategy Information Systems support Business Processes to provide competitive advantage Information Systems Support business processes Business Processes Driven by competitive strategy What Is Competitive Strategy? The strategy by which an organization differentiates itself from its industry competitors. Such as Porter’s Competitive Strategies: Cost Leadership or Differentiation, Industry-wide or Focused approaches Strategy and Business Model Strategy... Deals with a company’s competitive initiatives and business approaches Business Model... Concerns whether revenues and costs flowing from the strategy demonstrate a business can be profitable and viable A Powerful Strategy Leads to a Sustainable Competitive Advantage A company achieves a sustainable competitive advantage when An attractive number of buyers prefer its products/services over those of rivals and The basis for this preference is durable Its nice when a strategy produces A temporary competitive edge but A sustainable edge over rivals greatly enhances a company’s prospects for above-average profitability and long-term survival What separates a powerful strategy from an ordinary strategy is management’s ability to forge a series of moves, both in the marketplace and internally, that produces sustainable competitive advantage! Strategic Vision vs. Mission A strategic vision concerns a firm’s future A company’s mission statement typically focuses business path - “where we are going” on its present business purpose - “who we Markets to be pursued are and what we do” Future product/market/ Current product and service offerings customer/technology focus Customer needs and customer groups Kind of company management is trying to being served create Geographic coverage Strategy starts with a Mission A mission is a clear and compelling A strategy is a coordinated set of statement that unifies an actions to fulfill objectives, purposes organization’s effort and describes and goals. what the organization is all about. A business strategy is a plan Example: articulating where a business seeks to Google: To organize the world’s go and how it expects to get there. information and make it universally Strategies are not made public accessible and useful. readily. They may be disclosed at a later date when the competitive advantage is realized.  Company Mission Statement Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term Amazon thinking. Amazon strives to be Earth’s most customer-centric company, Earth’s best employer, and Earth’s safest place to work. Our mission is to give our customers the most in-demand products and services and Kogan make them affordable and accessible for all. Facebook Give people the power to share and make the world more open and connected. Strategy sets limits on what the organization seeks to accomplish The starting point of a Strategy is definition of a Mission Statement A good mission statement describes a company’s business makeup and purpose in language specific enough to give the company its own identity and distinguish it from other enterprises in the same or other industries! Strategy starts with a Mission Characteristics of a Mission Statement Identifies boundaries of a company’s current business and says something about Present products and services Types of customers served Geographic coverage Conveys Who they are, What they do, and Why there are in the market A good mission statement describes a company’s business makeup and purpose in language specific enough to give the company its own identity and distinguish it from other enterprises in the same or other industries! We want to Company Mission: “We want to be the best service be the best! provider in the world” Is it really a strategy ? Is it a good https://youtu.be/TD7WSLeQtVw strategy? Activity: Mission Statement You are planning to develop an online store for a product of your choice (i.e. books, electronics, bikes, shoes, clothes, etc.) that you would like to sell online. Choose one business and write a mission statement of your business (3 mins!) The Importance of IT New technologies co-evolve with new business strategies and change the business environment IT and business strategies must be complimentary Co-Creating IT and Business Strategy IT strategy and business strategy cannot be created separately Not just alignment, but partnership will generate more benefits Example: Australia Post Are you paying only for the delivery? Or are you also paying for information about the delivery? Australia Post has a partnership with StarTrack Parcel deliveries cannot accomplish without the IS McKeen, J. D. and Smith, H. A. (2015). IT Strategy: components and inter-organisational sharing of Issues and Practices, Global Edition (3e). Pearson data  New business opportunities are constantly arising Opportunities Managers must: Frame the opportunities in an understandable way for and New business leaders Evaluate them against business needs and choices Strategies Pursue those that fit into an articulated business from IT strategy. The quality of available information will impact on the quality of decisions and their implementation Managers will therefore lead the changes driven by information systems IT and Business Change IT can enable or impede business change. The right design coupled with the right technology can result in changes that make it possible to do business in a new way, better than before and be more competitive. The wrong business process design or the wrong technology, however, can force a company into oblivion. To a manager in the Information Age, an understanding of how IT enables business change is essential. IT Strategy (Information Technology Strategy) IT Strategy (Information Technology Strategy or Technology Strategy or ICT Strategy or IS Strategy) is a plan of action to create an information technology capability for maximum, and sustainable value for an organization. IT Strategy helps create shareholder value. In other words, it helps maximize the return on IT investments. IT Strategy objective is value. Often, the term competitive advantage is used instead of value. IT Strategy is an iterative process to align IT capability with business requirements. It is a process not a point in time event. More Information on IT capability and IT strategy in next lecture. Information Technology Strategy: A Definition An IT strategy articulates clear vision and objectives and sets a roadmap to attain and maintain the business strategy. The IT strategy should: Support existing business/operational priorities and enable achievement of new priorities. Be anchored in core values and principles and balance visionary thinking with pragmatic operational realities. Provide an initial statement of direction to guide activity in all aspects of IT. Be an on-going process that needs continual refinement. Questions?