IT Strategy Dog Eat Dog, and IVK-5 - Zara, IT Doesn t Matter, Week 7
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IT Strategy
Zara, IT Doesn t Matter,
Dog Eat Dog, and IVK-5
Week 7
2013-09-11 Copyright © 2011 Robert D. Austin and Stefan Henningsson. 1
Adminstrivia and Next Week
• Next week: Jens on stage
• Cisco ERP
• IVK-6 and 7
• Danske Bank lecture Nov 4: 12-14.
2013-09-11 Copyright © 2009 Robert D. Austin 2Discussion Questions
Left Side Center Right Side
Should Zara upgrade it s How does the Zara business Summarize Carr s
POS systems? If so, should model work? Does it depend argument in his article IT
it upgrade only technology or on IT? How much value does Doesn t Matter ; what is he
also functionality? Zara get from IT? How much saying? Do you agree?
do they spend? What is his advice? Do you
agree with it?
How does IT create or How should IVK judge the What do you think of the
enable the creation of value value it gets from its Compete vs Qualifiers
within a company? investments in IT? Is positive framework as a way of
ROI indicator of value? assessing value? The
McFarlan grid?
Copyright © 2009 Robert D. Austin 32013-09-11 Copyright © 2009 Robert D. Austin 4
SIT in the 20th Century When all hardware and software can be bought, how do we create competitive advantage from IT? http://www.ted.com/talks/ erik_brynjolfsson_the_key_to_growth_race_em_with_em_the_machines.ht ml
SIT in the 20th Century
IT doesn’t matter!
(Carr, 2003)
It’s not IT in itself, but how you
combine it with other
organizational resources that
matters, stupid!
(Brynjolfsson, 2007)SIT in the 20th Century
The resource-based view of the firm:
• Addresses why some firms achieve better economic performance than others?
• Assumes that the source of superior economic performance is found in the
internal of the company
• Companies can be understood as bundles of resources
• Tangible/Intangible
• Financial/Physical/Human/Organizational
• Resources gives a company sustained competitive advantage (=ability to
make money) if they are
• Create value
• Cannot be copied/imitatedSIT in the 20th Century Classifications of IT resources: Ross et al. (1996) divided IS into three IT assets (human skills, technology assets, relationship assets) which together with IT processes would contribute to business value. Bharadwaj (2000): IT infrastructure, human IT resources, and IT-enabled intangibles. IT resources vs IS resources IS resources are system-based resource bundles of tangible (hardware and software) and other resources for IT use and management, eg. the skills to use a system.
SIT in the 20th Century
• Many companies gets sustained competitive advantage from their IT
investments…
• But very few resources creates SCA by themselves
• Instead, IT resources create SCA in bundles with other resources
• A CRM system is only good if you can use it for superior customer
relations
• A supply chain system has to be tailored to your delivery model
• The knowledge management system must be used
• A standardized architecture is only good if it matches your business
strategy
• You can have the greatest social media analytics tool, but what if your
customers are not on Facebook?Wade & Hulland/Review:
SIT in the 20th Century
Resource-Based View of IS Research
Table 1. A Typology of IS Resources
Outside-ln Spanning Inside-Out
External relationship IS-business partnerships IS infrastructure
management IS planning and change IS technical skills
Market responsiveness management IS development
Cost effective IS operations
|
Outside-In: Resources that helps the organization to reach out to customers,
suppliers and partners
Table Inside-Out: ResourcesofthatInformation
2. A Categorization helps to run and develop
Systems the internal
Resources processes
from Previous Studies
Resource Source
Spanning: Resources
Manage external that helps
Manage combine inside-out and outside-in
external linkages (Bharadwaj et al. 1998)
stakeholder and
resources.
relationships Manage relationships (Benjamin Levinson 1993)
Strong community networks (Jarvenpaa and Leidner 1998)
Contract facilitation (Feeny and Willcocks 1998)
Informed buying (Feeny and Willcocks 1998)Table 2. A Categorization of Information Systems Resources from Previous Studies
Resource Source
Manage external Manage external linkages (Bharadwaj et al. 1998)
relationships Manage stakeholder relationships (Benjamin and Levinson 1993)
Strong community networks (Jarvenpaa and Leidner 1998)
Contract facilitation (Feeny and Willcocks 1998)
Informed buying (Feeny and Willcocks 1998)
Vendor development (Feeny and Willcocks 1998)
Contract monitoring (Feeny and Willcocks 1998)
Coordination of buyers and suppliers (Bharadwaj 2000)
Customer service (Bharadwaj 2000)
Fast delivery (Ross et al. 1996)
|Market responsiveness
Ability to act quickly (Bharadwaj 2000)
Increased market responsiveness (Bharadwaj 2000)
|
Responsiveness (Zaheer and Zaheer 1997)
Fast product life cycle (Feeny and Ives 1990)
Capacity to frequently update information (Lopes and Galletta 1997)
Strategic flexibility (Jarvenpaa and Leidner 1998)
Flexible ITsystems (Bharadwaj 2000)
Organizational flexibility (Powell and Dent-Micallef 1997)
IS-business partnerships Integrate ITand business processes (Benjamin and Levinson 1993;
(manage internal Bharadwaj 2000; Bharadwaj et al. 1998)
relationships) Capacity to understand the effect of ITon other business areas j
(Benjamin and Levinson 1993)
IT/business partnerships (Bharadwaj et al. 1998; Ross et al. 1996)
Aligned ITplanning (Ross et al. 1996)
Business/IT strategic thinking (Bharadwaj et al. 1998)
IT/business synergy (Bharawdaj 2000; Jarvenpaa and Leidner 1998)
ITassimilation (Armstrong and Sambamurthy 1999)
j
Relationship building (Feeny and Willcocks 1998)
_ IT/strategy integration (Powell and Dent-Micallef(Continued)
IS planning and change ITmanagement skills (Bharadwaj 2000; Bharadwaj et al. 1998; Mata et
management al. 1995)
Business understanding (Feeny and Willcocks 1998; Ross et al. 1996)
Problem solving orientation (Ross et al. 1996)
Business systems thinking (Feeny and Willcocks 1998)
Capacity to manage ITchange (Benjamin and Levinson 1993)
Information management practices (Marchand et al. 2000)
Manage architectures/standards (Ross et al. 1996)
Architecture planning (Feeny and Willcocks 1998)
IS infrastructure IT infrastructure (Armstrong and Sambamurthy 1999; Bharadwaj 2000;
Bharadwaj et al. 1998)
Proprietary technology (Mata et al. 1995)
Hard infrastructure (Benjamin and Levinson 1993)
Soft infrastructure (Benjamin and Levinson 1993)
Storage and transmission assets (Lopes and Galletta 1997)
Information processing capacity (Lopes and Galletta 1997)
Technology asset (Ross et al. 1996)
Information technology practices (Marchand et al. 2000)
IS technical skills Technical ITskills (Bharawdaj 2000; Feeny and Willcocks 1998; Mata et
al. 1995; Ross etal. 1996)
Knowledge assets (Bharadwaj 2000)
Using knowledge assets (Bharadwaj 2000)
IS development Technical innovation (Bharadwaj 2000)
Experimentation with new technology (Jarvenpaa and Leidner 1998)
Capacity to develop services that utilize interactive multimedia (Lopes
and Galletta 1997)
Alertness (Zaheer and Zaheer 1997)
Cost effective IS Cost effective operations and support (Ross et al. 1996)
operations Getting IT to function (Feeny and Willcocks 1998)
Enhanced product quality (Bharadwaj 2000)SIT in the 20th Century
• Can IT (hardware and software) give:
• Advantage creation
• Value
• Rare
• Appropriability
• Advantage Sustainability
• Imitability
• Substitutability
• MobilityTable 4. IS Resources, by Attribute
Advantage Creation Advantage Sustainability
Value Rarity Appropriability Instability Substitutability Mobility
Outside-ln
External
relationship H M-H L-M L-ML L
management
Mafket
. H M-H L-M L L L-M
responsiveness
Spanning
IS-business ... ...
^ ,. H M-H L-M L L-M L
partnerships
ISmanagement/
planning H M-H L-M L-M L-M M
Inside-Out
| M-H | L-M |
IJTinfrastructure H | H | L-M | H
IS technical skills M-HL-M M M-H
M M-H
IS development M-HM MM-H
M M
Cost efficient IS
M-HL-M M L-M M-H M
operations
= =SIT in the 20th Century
IT doesn’t matter!
(Carr, 2003)
It’s not IT in itself, but how
you combine it with other
organizational resources
that matters, stupid!
(Brynjolfsson, 2007)Copyright © 2009 Robert D. Austin 16
A Contrasting Example -- Prada
December 2001, Prada opens $40 mil NYC store
• http://www.youtube.com/watch?v=3pXNYciHCLc
• Wireless network to link every item in store to an Oracle inventory
database using Radio Frequency ID tags (RFID)
• Store employees equipped with custom designed PDAs to give
instant inventory readouts ( do you have this in size 8? )
• Touchscreens in dressing rooms tell customers inventory in other
sizes of item (triggered by RFIDs), provide supplementary info
• Dressing rooms clear glass, turn opaque when customer uses
foot pedal
Copyright © 2009 Robert D. Austin 17What Happened
• Time lag between POS system and inventory system
meant PDA inventory numbers were wrong
• PDAs:
• Sales person: We don t really use them anymore…
• It s just faster to go look
• We put them away so customers don t play with them
• Touchscreens blank or running random video loops
• Customers didn t understand pedals in dressing rooms
• Some undress in full view, thinking glass is one-way
Copyright © 2009 Robert D. Austin 18Business Implications
• Despite overwhelming crowds (Prada s highest
grossing store), current annual sales amount to less
than a third of what would be necessary to offset the
massive building and technology price tag by 2007
• According to Prada head of corporate communications:
Technology is evolving
• According to Business 2.0: technology spend is
starting to look like tech for tech s sake…
Copyright © 2009 Robert D. Austin 19Excercise
• In groups, identify ITU s IT systems and try to place
them into the qualifier/compete framework
• Think about:
• How do an university compete?
• With whom?
• About what?
Copyright © 2009 Robert D. Austin 20Copyright © 2009 Robert D. Austin 21
Mini-Project Work
• Todays objectives:
• Form groups
• Explore organisations of interest
• Explore challenges of interest
• Make a draft plan
• Progression sheet:
• https://docs.google.com/spreadsheet/ccc?
key=0AkyO9935yQbHdDczYnUxYmVDclQtVVNfZVZ2Sk9yb2c#gid
=0
2013-09-11 22You can also read
