Competing with Information Technology

Role of Strategic IT: Technology acts as a primary cause and driver of business strategies rather than an afterthought.
Strategic Information Architecture: The collection of strategic information systems that shape and support a firm's competitive position and strategies.
Porter's Five Competitive Forces:
- Rivalry of Competitors
- Threat of New Entrants
- Threat of Substitutes
- Bargaining Power of Customers
- Bargaining Power of Suppliers
Five Basic Competitive Strategies:
- Cost Leadership Strategy: Use IT to lower process costs or lower costs for customers and suppliers.
- Differentiation Strategy: Develop novel IT features to differentiate products and services or focus on niche markets.
- Innovation Strategy: Create new products and services containing IT components or enter unique market niches.
- Growth Strategy: Use IT to manage regional or global expansion and product diversification.
- Alliance Strategy: Establish virtual organizations and inter-enterprise information systems with business partners.

Creating Customer Switching Costs: Developing inter-enterprise information systems makes customers and suppliers dependent on the business relationship.
Building Barriers to Entry: Major investments in advanced IT discourage or delay competitors from entering the market.
Leveraging IT Investments: Converting operational IT investments into strategic applications that enable new products and services.
Customer-Focused Business:
- Prioritizes quality over price as the primary factor in customer value perception.
- Leverages Internet technologies to make customers the focal point of e-business applications.

Value Chain Framework: Views the business as a chain of basic activities that add value to products or services.
- Primary Business Processes: Direct activities including Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, and Customer Service.
- Support Processes: Indirect operations including Administrative Support, HR Management, Technology Development, and Procurement.
Business Process Reengineering (BPR):
- A radical, top-down redesign of core business processes aimed at achieving dramatic improvements.
- Carries high risk and long execution timelines, enabled primarily by information technology.
- Contrasts with incremental Business Improvement, which relies on continuous, bottom-up statistical control.

Agile Competitor Strategies:
- Shifts focus from standardized products to individualized, information-rich solutions in dynamic markets.
- Customer Agility: Uses technologies to build virtual customer communities for product design, feedback, and testing.
- Partnering Agility: Leverages assets and competencies of suppliers, distributors, and logistics providers via collaborative platforms.
- Operational Agility: Achieves speed and cost efficiency through process modularization and integration.
Virtual Company Characteristics:
- Uses networks (Internet, intranets, extranets) to link internal workgroups with external partners, suppliers, and customers.
- Shares infrastructure, risks, and complementary core competencies to reduce concept-to-cash time and enter new markets.

Knowledge-Creating Company: Relies on continuous innovation and effective management of organizational knowledge for competitive advantage.
Types of Knowledge:
- Explicit Knowledge: Written down or stored electronically in documents and databases.
- Tacit Knowledge: Unwritten, experiential "how-to" knowledge residing within workers.
Levels of Knowledge Management:
- Enterprise Intelligence: Leveraging organizational know-how, performance support, operational databases, and expert networks.
- Information Creation, Sharing, and Management: Real-time information management, storytelling, and collaboration.
- Document Management: Accessing and retrieving online documents.
Goal of Knowledge Management Systems (KMS): To create, organize, and disseminate critical business knowledge throughout the enterprise to boost business performance.