Part 2: IT-enabled Business Change 2A Overview – IT can be a driver because there are opportunities for businesses that can trigger change in which IT can serve as an enabler Triggers of Business Change External Internal Survival Changes in government policies Management Change Failure to or keep pace stay Competition heats up Internal problems ahead will result in loss of New technology emerged New products or services competitive edge Change to Stay Ahead Resource VS Capability Resource-based View Considers the firm as a bundle of resources (asset, competence, process, skill or knowledge) Capabilities required to exploit resources for competitive advantage Firm needs to evaluate its internal strengths and weaknesses by asking VRIO: Do the resources/capabilities/ add value? Are they rare? Are they difficult to imitate? Is the firm organized to exploit the potential of the resource/capability? Dynamic Capabilities An extension of traditional RBV – VRIO resources do not persist over time and, hence, cannot be a source of sustainable competitive advantage Hence, firms change constantly to integrate, reconfigure, renew, and recreate its resources/capabilities Change to Keep Pace Institutional Theory Focuses on legitimacy than efficiency as it is believed that gaining legitimacy allows organizations to be rewarded in terms of public acceptance, external support and easier access to resources Isomorphism (Constraining process that forces one unit to resemble others in the same circumstances): Coercive force: Legal environment, e.g. government regulations Mimetic Industry best practices Normative force: Professionalism, e.g. IEEE Role of IS in Organizations: Operational excellence Technology can achieve greater efficiency and productivity Improved efficiency higher profitability New Products, Services, IT/IS are enabling tools for new products, services, and business models and Business Models Customer and Supplier Serving customer well leads to returning customers revenue and profits ↑ intimacy Supplier intimacy lowers costs Improved decision Better allocation of resources making Better response times Better estimations for productions and procurement Note: See Notes for Benefits of Change
Part 2: IT-enabled Business Change 2A – Overview IT can be a driver because there are opportunities for businesses that can trigger change in which IT can serve as an enabler Triggers of Business Change External Internal Survival Changes in government policies Competition heats up New technology emerged Management Change Internal problems New products or services Failure to keep pace or stay ahead will result in loss of competitive edge Change to Stay Ahead Resource VS Capability Resource-based View Considers the firm as a bundle of resources (asset, competence, process, skill or knowledge) Capabilities required to exploit resources for competitive advantage Firm needs to evaluate its internal strengths and weaknesses by asking VRIO: Do the resources/capabilities/ add value? Are they rare? Are they difficult to imitate? Is the firm organized to exploit the potential of the resource/capability? Dynamic Capabilities – An extension of traditional RBV VRIO resources do not persist over time and, hence, cannot be a source of sustainable competitive advantage Hence, firms change constantly to integrate, reconfigure, renew, and recreate its resources/capabilities Change to Keep Pace Institutional Theory Focuses on legitimacy than efficiency as it is believed that gaining legitimacy allows organizations to be rewarded in terms of public acceptance, external support and easier access to resources Isomorphism (Constraining process that forces one unit to resemble others in the same circumstances): Coercive force: Legal environment, e.g. government regulations Mimetic Industry best practices Normative force: Professionalism, e.g. IEEE Role of IS in Organizations: Operational excellence Technology can achieve greater efficiency and productivity Improved efficiency higher profitability New Products, Services, and Business Models IT/IS are enabling tools for new products, services, and business models Customer and Supplier intimacy Serving customer well leads to returning customers ↑ revenue and profits Supplier intimacy lowers costs Improved decision making Better allocation of resources Better response times Better estimations for productions and procurement Note: See Notes for Benefits of Change
IS4203%20-%20Revision.docx