MBA Essentials

Information Technology for

Strategic, Competitive Advantage
Virginia Franke Kleist, Ph.D.
Assistant Professor
Division of MIS/Management
 Welcome to the Technology
Part of the Program
• How are you using information technology
(IT) today in your firms and businesses?
• How successful has this been for your firm?
• Do you have problems that are still
unresolved with Information Technology?
• Can IT give competitive advantage, anyway?
• How can one identify which technologies will
best give strategic advantage?

MBA Essentials Session X Information Resources Management 2

 Contact Information
• Virginia Franke Kleist, Ph.D.
• Virginia.kleist@mail.wvu.edu
• www.be.wvu.edu/divmim/mgmt/kleist
• 304-293-7939
• I welcome your comments and contacts!
• Several drawings are adapted from Laudon and Laudon,
(2005), Management Information Systems: Managing
the Digital Firm, New Jersey: Prentice Hall (8th ed.).
• Some material adapted from Burgelman, Christensen
and Wheelwright, (2004), Strategic Management of
Technology and Innovation, Boston: McGraw-Hill Irwin
(4th ed.).
MBA Essentials Session X Information Resources Management 3
MBA Essentials Session X Information Resources Management 4
MBA Essentials Session X Information Resources Management 5
 What will we learn?
• Strategic advantage from
information technology
• Latest information technologies
• How do you successfully select,
implement and manage a new IT?
• How can your firm benefit from IT?

MBA Essentials Session X Information Resources Management 6

MBA Essentials Session X Information Resources Management 7
Strategic Information
Systems
 Strategic Information System
• Technology used to gain an edge over an
organization’s competition
• Can be used at all levels of an
organization or just a few
• Makes a difference
• Profoundly alters the way an organization
does business
• Sustained strategic, competitive
advantage
MBA Essentials Session X Information Resources Management 9
 Examples of Strategic Information
Systems
• American Airlines • USA Today
• Fed Ex • Benetton
• Citibank • Sheetz
• Wal-Mart • PNC Corporation
• Abitibi Consolidated • PriceWaterhouse
• Simonton Windows Coopers
(SBR) • Baxter Healthcare

MBA Essentials Session X Information Resources Management 10

MBA Essentials Session X Information Resources Management 11
 Four types of Information Systems
• Operational
• Decision Support
• Managerial
• Executive
• Decision-making becomes more complex
the more executive the level
• Operational systems have been around a
long time and tend to have good ROI’s
MBA Essentials Session X Information Resources Management 12
MBA Essentials Session X Information Resources Management 13
Current Technologies for
Strategic Information
Systems
 What are the latest
technologies of interest?
• CPU’s and software, open source code
• Client server computing
• Interactive multimedia
• Developments in Electronic Commerce
• TCP/IP and the Internet
• Databases and Datamining
• Handhelds, M-commerce
• Knowledge Management tools and Artificial
Intelligence
MBA Essentials Session X Information Resources Management 15
MBA Essentials Session X Information Resources Management 16
MBA Essentials Session X Information Resources Management 17
 Technologies: CPU’s and
Software
• Hardware components of a computer system
• Buses, CPUs, MHz, RAM, Gigs and cache
• Bits and Bytes, storage
• Moore’s Law and price points per MIPs
• Mainframes, RISC computers, Parallel
processing
• Open source movement in operating systems
• Enterprise Resource Planning software
• Object oriented programming
MBA Essentials Session X Information Resources Management 18
MBA Essentials Session X Information Resources Management 19
 Technologies: Client Server
Computing
• Distributed processing vs. centralized
processing
• Network computing
• Servers
• Bridges and routers, gateways
• Network management
• Ethernet and Token Ring

MBA Essentials Session X Information Resources Management 20

 Technologies: Interactive
Multimedia
• Groupware
• Voice over IP
• Streaming technology
• Flash
• MP3
• Seeing corporate uses in training
applications

MBA Essentials Session X Information Resources Management 21

 History of Technology
• 1960s: Mainframe computers, MIS not
superb at meeting budgets or deadlines
• 1980s: First PCs emerge, beginning of
schism between departments and
centralized MIS
• 1990s: MIS and departments work
together well, networks key techno
• 2000: Enterprise networks
• Next: Vice Presidents of Electricity?
MBA Essentials Session X Information Resources Management 22
 Technologies: Electronic
Commerce
• The client/server/database three tier
model
• HTML, JavaScript
• XML vs. EDI, ASP and ActiveX, PHP, CGI
• Web Services
• Interdev and development tools
• Security and encryption issues
• Intranets and Extranets
MBA Essentials Session X Information Resources Management 23
 Technologies: TCP/IP and the
Internet
• Codes, bits and bytes
• Analog vs. Digital transmission
• Packet switching and circuit switching
• The IP address, TCP/IP layers
• The world is becoming digital
• VoIP

MBA Essentials Session X Information Resources Management 24

MBA Essentials Session X Information Resources Management 25
MBA Essentials Session X Information Resources Management 26
MBA Essentials Session X Information Resources Management 27
MBA Essentials Session X Information Resources Management 28
 Technologies: Databases,
Datamining
• Data is the company’s strategic asset
• Data warehouses, multidimensional
databases and data marts
• Informix, Oracle and Red Brick
• The database management system
• Data mining is a type of software
application that finds patterns in data that
can guide decision-making
• Data mining allows focused differentiation
and the ability to narrow target markets
MBA Essentials Session X Information Resources Management 29
MBA Essentials Session X Information Resources Management 30
MBA Essentials Session X Information Resources Management 31
 Technologies: Handhelds and
M- Commerce
• Cellular technology
• WAP technology
• Handheld market and applications
• The Win CE platform
• Linux in the small devices
• What is M-commerce and what does it
mean to me?

MBA Essentials Session X Information Resources Management 32

MBA Essentials Session X Information Resources Management 33
 Technologies: Knowledge
Management Tools and Artificial
Intelligence
• Examples of Knowledge Management
systems
• Expert systems: the earthenware dam
• Neural Networks
• Fuzzy logic
• Intelligent agents

MBA Essentials Session X Information Resources Management 34

 Technologies: Wireless
• 802.11b, a and g
• Weaknesses in security in wireless
• Access points
• Use firewalls behind access point
• Netstumbler and war driving

MBA Essentials Session X Information Resources Management 35

 Managing for
Information Systems
Strategic Advantage
 Management: Information
Systems Planning
• IS plan maps to the corporate strategic
plan
• Variety of IS planning styles: CSF,
Enterprise Planning
• Components of Information Systems
Strategic Plan
• Organizational change from systems:
TQM, BPR, paradigm shifts or simple
automation
MBA Essentials Session X Information Resources Management 37
 Management: the Systems
Development Life Cycle
• Systems analysis
• Systems design
• Programming
• Testing
• Conversion
• Production mode and ongoing
maintenance
MBA Essentials Session X Information Resources Management 38
MBA Essentials Session X Information Resources Management 39
Management: IS Strategic Plan
• Purpose linked to strategy
• Current situation
• Systems: What do you have, what will
you need to meet future
• New developments in corporation
• Management strategies with techno:
Bleeding edge, leading edge, lagging
edge, single vendor strategy, outsource
MBA Essentials Session X Information Resources Management 40
MBA Essentials Session X Information Resources Management 41
 Management: Implementation
• The RFP document
• Financial issues for IS planning
• The payback concerns
• Programming: the mythical man/month
• Construction issues
• Testing and maintenance
• End users
• Prototypes and pilots
• Outsourcing
MBA Essentials Session X Information Resources Management 42
 Management: Security Issues
• System quality, reliability, accuracy
• Threats: hackers, viruses, Trojan horses,
denial of service attacks, identity theft
• Controls
• The firewall and internet issues
Encryption, DES, SSL, SET
• Biometrics

MBA Essentials Session X Information Resources Management 43

MBA Essentials Session X Information Resources Management 44
 Management: Legal Issues with
Information
• HIPAA. Health Insurance Portability and
Accountability Act, 1996
• Gramm-Leach-Bliley Act, 1999
• Sarbanes-Oxley Act of 2002

MBA Essentials Session X Information Resources Management 45

Strategic Advantage: IT at work
• IT and changes in the organization of
business: flatter, leaner, teams, JIT,
global
• Datamining and Walmart
• E-commerce and the supply chain at Dell
• M-commerce and Progressive Auto
• Internet and Egghead
• American Airlines, Baxter, Citibank
MBA Essentials Session X Information Resources Management 46
 Strategic Advantage: How does
one come up with this idea,
anyway? (Laudon and Laudon, 2000)

• Porter’s Value Chain: primary and

support activities
• The competitive forces model: Threats
from new market entrants, suppliers,
substitute products and customers
• Core competencies
• Network economics
MBA Essentials Session X Information Resources Management 47
MBA Essentials Session X Information Resources Management 48
MBA Essentials Session X Information Resources Management 49
 Some Problems from IT for
Competitive Advantage
• The productivity paradox
• Tangible vs. intangible benefits from IT
• Future cash flows analysis
• Unique vs. staying even with competition
• Value from simple automation projects
• Value from highly risky, but strategic IT
projects
• Risk vs. return issues

MBA Essentials Session X Information Resources Management 50

 Technology Life Cycle (Little, 1981)

• Emerging techno- Not demonstrated

potential
• Packing techno- Has demonstrated
potential
• Key techno- Embedded, major impact,
proprietary
• Base techno- Minor impact
• Can a technology cause innovation?
Leadership?
MBA Essentials Session X Information Resources Management 51
MBA Essentials Session X Information Resources Management 52
MBA Essentials Session X Information Resources Management 53
MBA Essentials Session X Information Resources Management 54
 How can your firm benefit from
IT?
• In supply chain management through
inventory management
• In the customer interface via ecommerce
• In logistics through GPS/GIS
• In client management through groupware
• In marketing through datamining
• In internal management through Intranets

MBA Essentials Session X Information Resources Management 55

MBA Essentials Session X Information Resources Management 56
MBA Essentials Session X Information Resources Management 57
 Class Discussion: The Dell
Case
• How did Dell achieve success?
• What IT technologies did Dell use?
• How does Dell use ecommerce successfully?
• What are the ways that Dell uses IT for strategic,
competitive advantage?
• What is Dell’s business model?
• Will Dell be able to keep this success going,
given the recent troubles?

MBA Essentials Session X Information Resources Management 58

 What have we learned?
• Strategic advantage from information
technology
• Latest information technologies
• How do you successfully select,
implement and manage a new IT?
• How can your firm benefit from IT?

MBA Essentials Session X Information Resources Management 59