Advantage vs. NecessityAdvantage vs. NecessityAdvantage vs. NecessityAdvantage vs. Necessity

• Competitive AdvantageCompetitive Advantage – – developing products, services, developing products, services, processes, or capabilities that give a processes, or capabilities that give a company a superior business position company a superior business position relative to its competitors and other relative to its competitors and other competitive forcescompetitive forces

• Competitive NecessityCompetitive Necessity – products, – products, services, processes, or capabilities services, processes, or capabilities that are necessary simply to compete that are necessary simply to compete and do business in an industryand do business in an industry

Customer-Focused BusinessCustomer-Focused BusinessCustomer-Focused BusinessCustomer-Focused Business

A business that:A business that:

• can anticipate customers’ future can anticipate customers’ future needs.needs.

• responds to customer concerns.responds to customer concerns.

• provides top-quality customer provides top-quality customer service.service.

Business Process ReengineeringBusiness Process ReengineeringBusiness Process ReengineeringBusiness Process Reengineering

Definition:Definition:• Fundamental rethinking and Fundamental rethinking and

radical redesign of business radical redesign of business processes to achieve dramatic processes to achieve dramatic improvements in cost, quality, improvements in cost, quality, speed, and service.speed, and service.

AgilityAgilityAgilityAgility

• The ability of a company to The ability of a company to prosper in rapidly changing prosper in rapidly changing marketmarket– continually fragmenting global continually fragmenting global

marketsmarkets– market demands high-quality, high market demands high-quality, high

performance, customer-configured performance, customer-configured products and services.products and services.

Agile CompanyAgile CompanyAgile CompanyAgile Company

Definition:Definition:• A company that can make a A company that can make a

profit in markets with profit in markets with – broad product rangesbroad product ranges– short model lifetimesshort model lifetimes

• can produce orders individually can produce orders individually and in arbitrary lot sizes.and in arbitrary lot sizes.

Mass CustomizationMass CustomizationMass CustomizationMass Customization

Definition:Definition:• Providing individualized products Providing individualized products

while maintaining high volumes while maintaining high volumes of productionof production

Value ChainValue ChainValue ChainValue Chain

Definition:Definition:• View of a firm as a series, chain, View of a firm as a series, chain,

or network of basic activities that or network of basic activities that add value to its products and add value to its products and services, services,

• and thus add a margin of value and thus add a margin of value both to the firm and its both to the firm and its customers.customers.

Enterprise Information SystemsEnterprise Information SystemsEnterprise Information SystemsEnterprise Information Systems

Definition:Definition:• Information systems implemented on Information systems implemented on

an extranet among a company and its an extranet among a company and its – suppliers, suppliers, – customers, customers, – subcontractors, and subcontractors, and – competitors competitors

• with whom it has formed alliances.with whom it has formed alliances.

Virtual CompanyVirtual CompanyVirtual CompanyVirtual Company

Definition:Definition:• An organization that uses An organization that uses

information technology to link information technology to link people, organizations, assets, people, organizations, assets, and ideas.and ideas.

Virtual CompanyVirtual CompanyVirtual CompanyVirtual Company

Virtual Company StrategiesVirtual Company StrategiesVirtual Company StrategiesVirtual Company Strategies

• Share infrastructure and risk with Share infrastructure and risk with alliance partners.alliance partners.

• Reduce concept-to-cash time through Reduce concept-to-cash time through sharing. sharing.

• Increase facilities and market Increase facilities and market coverage.coverage.

• Gain access to new markets and Gain access to new markets and share market or customer loyalty.share market or customer loyalty.

• Migrate from selling products to Migrate from selling products to selling solutions.selling solutions.

Knowledge-Creating CompaniesKnowledge-Creating CompaniesKnowledge-Creating CompaniesKnowledge-Creating Companies

Definition:Definition:• Consistently creating new Consistently creating new

business knowledge, business knowledge, disseminating it widely disseminating it widely throughout the company, and throughout the company, and quickly building the new quickly building the new knowledge into their products knowledge into their products and services.and services.

Types of KnowledgeTypes of KnowledgeTypes of KnowledgeTypes of Knowledge

• Explicit KnowledgeExplicit Knowledge – – data, documents, things written data, documents, things written down or stored on computersdown or stored on computers

• Tacit KnowledgeTacit Knowledge – – the “how-to’s” of knowledge, the “how-to’s” of knowledge, which reside in workerswhich reside in workers

Knowledge ManagementKnowledge ManagementKnowledge ManagementKnowledge Management

DefinitionDefinition::• Techniques, technologies, systems, Techniques, technologies, systems,

and rewards for getting employees to and rewards for getting employees to share what they know and to make share what they know and to make better use of accumulated workplace better use of accumulated workplace and enterprise knowledge.and enterprise knowledge.

• Knowledge Management SystemsKnowledge Management Systems – manage organizational learning and – manage organizational learning and business know-howbusiness know-how

Levels of Knowledge ManagementLevels of Knowledge ManagementLevels of Knowledge ManagementLevels of Knowledge Management

Enterprise SystemsEnterprise SystemsEnterprise SystemsEnterprise Systems

• Integrate/”Bring together” the Integrate/”Bring together” the value chain in multiple value chain in multiple CompaniesCompanies

Mattel Toys Amazon.com

GE Plastics

Enterprise SystemsEnterprise SystemsEnterprise SystemsEnterprise Systems

• The Umbrella the covers a virtual The Umbrella the covers a virtual company.company.

ERP System monitors the integrated value-chains of all these connected firms

A Small companycan have theinformation andpower of a largeconglomerate

Customer Relationship Management (CRM)Customer Relationship Management (CRM)Customer Relationship Management (CRM)Customer Relationship Management (CRM)

Definition:Definition:• enterprise system that integrates enterprise system that integrates

and automates many of the and automates many of the customer-serving processes in customer-serving processes in – sales, sales, – marketing, and marketing, and – customer services customer services

• that interact with a company’s that interact with a company’s customerscustomers

CRM Application ClustersCRM Application ClustersCRM Application ClustersCRM Application Clusters

CRM to ERPCRM to ERPCRM to ERPCRM to ERP

• Firms themselves are customers Firms themselves are customers of other firms.of other firms.

• Shared interests leads to...Shared interests leads to...– Shared informationShared information

• which leads towhich leads to– Shared information systemsShared information systems

Enterprise Resource Planning (ERP)Enterprise Resource Planning (ERP)Enterprise Resource Planning (ERP)Enterprise Resource Planning (ERP)

Definition:Definition:• A cross-functional enterprise A cross-functional enterprise

system driven by an integrated system driven by an integrated suite of software modules that suite of software modules that supports the basic internal supports the basic internal business processes of a companybusiness processes of a company

• Company may be virtualCompany may be virtual• Value chain may cross-over to Value chain may cross-over to

multiple partner firmsmultiple partner firms

ERP BenefitsERP BenefitsERP BenefitsERP Benefits

• Quality and EfficiencyQuality and Efficiency – ERP creates – ERP creates a framework for integrating and a framework for integrating and improving a company’s internal improving a company’s internal business processes that results in business processes that results in significant improvements in the significant improvements in the quality and efficiency of customer quality and efficiency of customer service, production, and distributionservice, production, and distribution

• Decreased CostsDecreased Costs – Significant – Significant reductions in transaction processing reductions in transaction processing costs and hardware, software, and IT costs and hardware, software, and IT support staffsupport staff

ERP BenefitsERP BenefitsERP BenefitsERP Benefits

• Decision SupportDecision Support – Provides vital – Provides vital cross-functional information on cross-functional information on business performance quickly to business performance quickly to managers to significantly improve managers to significantly improve their ability to make better decisions their ability to make better decisions in a timely mannerin a timely manner

• Enterprise AgilityEnterprise Agility – ERP breaks – ERP breaks down many former departmental and down many former departmental and functional walls of business functional walls of business processes, information systems, and processes, information systems, and information resourcesinformation resources