237-L03-2up - BUS 237 1 Lecture 3: Strategy, Information...

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Unformatted text preview: BUS 237 1 Lecture 3: Strategy, Information Systems and Competitive Advantage BUS 237 Information Systems in Business BUS 237 BUS 237 Agenda Questions? The Productivity Paradox Business Processes and Value Chains Organizational Strategy and Industry Structure Information Systems and Competitive Advantage BUS 237 2 BUS 237 2 BUS 237 2 BUS 237 3 This Could Happen to You Madison has graduated and working as a manager in the human resources department of a medium- sized high-technology company. How could Madison use the web to her advantage? What information can she find on the web that cannot be found elsewhere? Will she have a better idea of future employees than if she did not use the web? What does this mean when you are looking for a job? Questions to Consider Q1. What is the Productivity Paradox? Q2. Can IS improve productivity? Q3. How are strategy and industry structure related? Q4. Can IS change industry structure? Q5. How do IS provide competitive advantage? Q6. Can competitive advantage through IS be sustained? BUS 237 4 BUS 237 3 BUS 237 5 Q1. What is the Productivity Paradox? In 1989, economist Stephen Roach found no evidence of an increase in worker productivity associated with the massive increase in investment in information technology " We see computers everywhere except in the productivity statistics . Robert Solow The increase in investment in information technology combined with small changes in worker productivity is referred to as the Productivity Paradox BUS 237 6 The Productivity Paradox Small Group Discussion Question (2 min) : Do computers really make us more productive? For example, think about your assignments... Would your assignments still be done on time if you only used typewriters? Would the quality of the writing be higher or lower? Would it take a longer time or a shorter time with a computer? Provide examples and be ready to share your ideas with the class BUS 237 6 BUS 237 4 Productivity and Business Value Is there really a paradox? Companies have heavily invested in information technology. They must be getting productivity from these investments. Why else would they invest? So what is productivity? One way to think about productivity is to relate it to business value How do information systems create business value? BUS 237 7 BUS 237 7 How can IT create business value (1) Three ways to create value: 1. Productivity IT allows a company to make either more output from the same inputs, and/or to make better output and/or to make the output faster than before the technology e.g. Accounting firm buys tax software application so the firm can prepare tax returns more quickly BUS 237 8 BUS 237 5 How can IT create business value (2) 2. Structure of competition IT can alter the way corporations compete e.g. Accounting firm buys tax software application. Rival firms have to compete. How might they respond?...
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237-L03-2up - BUS 237 1 Lecture 3: Strategy, Information...

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