ISM 158

1
ISM 158

• Business Strategy
• and
• Information Systems

Jack Callon
2
Jack Callon

• Eighth year at UCSC.
• Original Sponsor of the ISM major.
• 11 1/2 years at San Jose State (MIS program).
• A careerist and not an academic.
• A business person that understands IT and IS.
• 28 years with IBM in sales and marketing.
• International experience (fairly early in the
  game).
• Spent July in Sapporo at HIU after visiting
  China.
• An attorney wife and three sons No. 1 - Trying
  to do
• an Internet application company startup in
  Brazil No. 2 -
• Managing Director of Morgan Stanley, Japan
  No. 3 - Wilson,
• Sonsini corporate attorney.

3
Objective for Today
For you to decide that you are in the right class
at the right time.
4
The Job of an ISM Professional

• To help run the business better.

Through the effective, successful use of
Information Systems.
5
A Satisfied Student
1. I never realized that Information Systems
played such a significant role in so many
very successful companies. 2. I really enjoyed
doing a paper on Wal-Mart and learned a
great deal from the experience. 3. I feel that
I can personally do an objective assessment
of a company as to their effective use of
information systems to gain a competitive
advantage.
6
Karl Brandt Quote

• I recently started a job at Broadcom as a
  software
• engineer and I wanted to tell you that my ISM
• classes are coming in more handy than I would
  have
• guessed.

7
Whats Happening?!
Start every class with some comments on
newsworthy events in the business world.
8
BusinessWeek Industry Projections
Energy A 4.3
Aerospace A 1.7
Hardware A 7.6
Basic Industry (Manufacturing) A- 2.2
Healthcare B 3.3
Media B 2.3
Transport B 3.9
Retail B 5.3
Professional Services B 4.3
Education B 3.2
Insurance B- 1.1
9
BusinessWeek Industry Projections

• Automobile C 4.4
• Pharmaceutical C 2.9
• Travel C 6.2
• Construction C 1.1
• Telecom C 3.3
• Software C 3.2
• Chips C 2.4
• Banking C 5.8

10
Sarbanes-Oxley

• Requirements for sharper audits, better informed
  and more
• responsible board of directors and tighter
  internal financial
• controls.
• The cost of a typical audit has increased by 60
  since the
• laws passage in 2002.
• Provisions that apply to the largest 4,000
  companies will
• apply to 10,000 more in 2005.
• Companies with over 5 billion in revenue spent
  8 million
• more to comply with the provisions of the act.
• None of them saw any value for the added
  expense.
• Is an absolute boon for accounting and law
  firms.
• Deloitte Touche CEO has called for a
  reassessment of
• laws costs and benefits.

11
Right Class at the Right Time?

• Course objectives and content.
• Assignments and grading.
• Your opportunities.
• My expectations.

• Your priorities.

12
ISM 158 - Business Strategy and IS
Business Knowledge
Information Systems Knowledge
ISM Student Understands how to use information
systems to solve business problems Im
ready to graduate!

• Accounting
• Finance
• Operations
• Marketing
• Business
• Management

• Systems AD
• Programming
• Database
• Networks

Because Im ready to help to run a business
better.
13
IT Doesnt Matter

• May 2003 Edition of HBR
• By Nicholas G. Carr
• Editor-at-Large
• Harvard Business Review

14
IT Doesnt Matter

• When a resource becomes essential to competition
• but inconsequential to strategy, the risks it
  creates
• become more important than the advantage it
• provides.

As information technologys power and ubiquity
have grown, its strategic importance has
diminished. The way you approach IT investment
and management will need to change dramatically.
15
IT Doesnt Matter

• What makes a resource truly strategic and gives
  it the
• capacity to be the basis for a sustained
  competitive
• advantage is not ubiquity but scarcity.

You only gain an advantage over a rival by having
or doing something that they cant have or do.
16
IT Implications

• The core functions of ITdata storage, data
  processing and data transporthave become
  available and affordable to all.
• A distinction needs to be made between
  proprietary technologies and infrastructure
  technologies.
• Infrastructure technologies offer far more value
  when not
• treated as proprietary but shared.

17
The Future of the American Programmer
InformationWeek, Nov. 17, 2003
Programmers have the highest unemployment rate of
all IT job categories.
Distributed computing, packaged applications and
low cost offshore alternatives have reduced the
demand for programming.
Well-trained, highly productive programmers may
still be needed, though in much smaller numbers
than in the past.
18
The Future of the American Programmer
Business analysts have replaced programmers as
the IT people with the most influence in
companies.
19
Where Does an ISM Graduate Fit?
Senior Management
Company
Information Systems Organization
Users
20
Student Weaknesses
1. Lack ability to put pieces and things
into a logical bigger perspective. 2.
Communication skills, particularly oral
presentations.
21
ISM Toastmasters VI
If ten students are interested. Will meet seven
times for one hour during the quarter. Each
student will give an impromptu talk at each
meeting. There are no preparation assignments but
a person needs to think about how they are doing
and what needs to be done to improve. Will meet
on Thursday at either 400 to 500 or 500 to
600 PM starting next week.
22
Introduce Yourself
Stand up as if you were making a
presentation. Name Something interesting about
yourself. (In 3 sentences or less)
23
JDC Terminology

• Information Technology (IT)
• Information Systems (IS)
• Computing
• Telecommunications
• Data Communications
• Voice Communications
• IS Organization

24
ISM Business Capstone Class
This course is the alternative to a comprehensive
exam along with CS115.
This class was considered the most difficult of
the MIS classes at SJSU. (10 non-pass rate)
A business class for those with IT knowledge.
The only class that has both CS and Econ/Business
prerequisites.
Important to come to class.
25
Class Objectives

• Learn practical, useable things.
• Become more savvy as to major business issues
  
• and trends in the high-tech world.
• Help you look good in job interviews.
• Help you make a difference when you get hired.

. . . . For a price!
26
Unstated Objective
To not duplicate the performance of the Winter 02
class.
12 of 42 students did not earn passing grades.
27
An Appropriate Message
This course is significantly more challenging
than ISM 50.
The business analysis paper in ISM 50 was a
relatively easy assignment compared to the
analysis term paper in this class.
28
Course Assistance

• Will run sessions on both the analysis term paper
  and
• pre-exam clinics.

29
A Successful Business?
The right business model now and for the future.
Provides value to customers. Is responsive,
flexible, adaptable, innovative, resilient,
talented and financially strong.
Is anything else necessary to achieve and sustain
business success?
30
A Challenging Business Environment

• Global Economy.
• Knowledge and information-based service
  economies.
• Transformation of business enterprises.
• Dramatic increase in the use of IT and a
  significant
• shortening of IT product cycles.

31
Important Business Topics

• Direct Business Model
• E-Commerce
• E-Business
• Supply Chain Management (Customer
• Relationship Management)
• Outsourcing
• Reengineering Core Business Processes
• Managing Change

32
Internet Significance

• How it will
• Provide value to customers.
• Change business processes.
• Change the way people work.

33
Business Strategy and Information Systems

• Concepts
• Relative To (Bigger Picture)
• Company Examples

34
Specific Class Premises
Every enterprise faces unprecedented competitive
challenges.
The source of this competition is becoming more
global and the pace of change within the business
environment is accelerating.
A business enterprise needs to understand where
it is going.
The business vision and its supporting strategies
should drive the role and use of information
systems within the organization.
The compression of time and events has
significantly increased information needs for the
growing number of people involved in making
decisions within an enterprise.
35
Class Premises
For the above reasons the potential role of
information systems as a competitive resource has
increased.
Innovative use of information technology needs
(dictates) a systematic approach. To accomplish
this, it is essential that there be an on-going
working relationship between those that run the
business and the people charged with a
responsibility for information systems.
Conclusion It is necessary to establish and
maintain three distinct perspectives.
36
Three Perspectives
1. Business Environment (Industry) 2. Company 3.
IT Role, Use, and Management
37


Management
Of With
Information Systems
This course is about managing a business with the
support of information systems.
38
Competitive Enabler
Of all the things that can change the rules of
competition, technology change is among the most
prominent.
IT/IS are enablers.
39
Why Arent All Companies Equally Good in Using IS
to Compete?
1. Business Reasons. 2. Information Technology
Reasons.
40
Four Important Cs
Competition
Computers

Complexity
Change
41
Necessary Leadership Skills

• Able to deal with the relentless, discontinuous
  change influenced by IT.
• Global in outlook and practice.
• Able to balance the instinct for cultural
  preservation and the promise for regional,
  national and/or global cooperation.
• Willing to accept and support the move to a
  business model that emphasizes openness and
  integration and not isolation.

42
A Systematic Approach
Vision Strategy Tactics Business Plan
Class Road Map

• Competitive Options
• Roles, Roles and Relationships
• Redefine and/or Define
• Telecommunications
• as the Delivery Vehicle
• Success Factor Profile

43
Emphasis

• A revised list of companies for the analysis term
  papers.
• Business management content.
• The implications of globalization and the
  significance of the Internet.

44
What Isnt New
There should definitely be times when you say,
thats obvious or it certainly isnt new to me.
My reaction will be, good, the message of using
information systems to support major business
strategies and core business processes has
previously gotten through.
45
Course Syllabus is on my web page
http//www.cse.ucsc.edu/callon/
46
Grade Structure
Analysis Term Paper 49 (10, 10,
25, 4) Introduction Letter 2
Midterm Exam 15 Oral
Presentations (2) 4 Comprehensive Final
Exam 30 Note Exams will not be open
book or open notes.
47
TextbookCompetitive AdvantageThrough
Information Technologyby Jack Callon
This book is dedicated to those that must compete
in an increasingly complex, dynamic and global
business environment. I wish you the best of
success in your competitive endeavors and hope
that the contents of this book provide the help
that is intended.
48
Textbook Status

1. Structure and concepts are current and valid.
2. Company examples and status are dated in some
   cases.

49
Textbook Structure
1. Introduction Chapter 2. Business
Environment 3. Company Assessment 4. Structured
Analysis of IS Use 5. Management Issues
50
Textbook
Preface Book Overview
Chapter 1 Business and Information Systems
Management Challenges
51
Textbook
Section I - The First of Three Perspectives
Business Environment
Chapter 2 Business Competitive Environment
Chapter 3 The Porter Competitive Model
for Industry Structure
Analysis
Chapter 4 Airline Industry Analysis (will get a
revision of this chapter)
Chapter 5 Information Systems Can Redefine
Competitive Boundaries
52
Section II - The 2nd Perspective
Company Environment
Chapter 6 Business Vision
Chapter 7 Implementing a Vision
Strategy, Tactics and Business Plan
53
Section III - The 3rd Perspective
Information Systems Use
Chapter 8 Evaluating Business Strategies and
the Use of Information Systems
Chapter 9 The Roles, Roles and Relationship
Concept
Chapter 10 The Redefine and/or Define Concept
and Change Management
Chapter 11 Telecommunications as the Delivery
Vehicle
Chapter 12 A Success Factor Profile
54
Section IV Major Information Systems
Management Issues
Chapter 13 Information Systems Organization
and Personnel Considerations
Chapter 14 Information Systems Value
and Financial Strategy
Chapter 15 Integrating Information Systems
into the Business Plan
Chapter 16 Total Quality Management
and the Role of Information
Systems (Will probably get a revision of this
chapter)
55
Chapter 17 Conclusions
Exhibit I - Why Change When You Are Flying
High? An Analysis of The Boeing Company
Read the Boeing and Wal-Mart papers for
background and understanding of the assignment.
Dont overdo duplicating how they were done.
56
My Personal Expert Profile
Peter Drucker - Business Visionary Michael Porter
- Business Competition Peter Keen - IS Management
and Trends Jim Collins - Successful
Businesses Jack Welch - Business Management
57
Oral Presentations
Introduce or summarize the textbook chapters.
Five minute presentations. Details regarding the
presentations are addressed on the course web
page.
58
Presentation Evaluation
1. Established a presence before beginning
presentation. 2. Good eye contact with audience
during presentation. 3. Voice articulation
during presentation. 4. Professionalism of the
presentation 5. Organization and content of
presentation. 6. Presentation style (how well
actually presented) 7. Timing of
presentation. 8. Enthusiasm for topic 9.
Overall evaluation
Excellent Good Fair Poor
59
Content Tip
In making an oral presentation, always ask the
following question Who is my audience and what
is my major message?
60
Presentation Mistakes
Tried to do too much in a five minute
presentation.
Lacked organization introduction, content,
summary (close).
Read slide content or information from notes.
Lacked any sign of interest in the topic and/or
poor voice articulation.
Didnt establish an initial presence or eye
contact with audience during the presentation.
Major message was not clear.
Very negative body language.
61
Chapter Introduction

• Objective of the chapter.
• Major topics.
• Importance of the chapter.
• How material fits within a bigger perspective.
• How the material will be used in the
• Analysis Term Papers.

62
Chapter Summary

• Key messages of the chapter.
• Major business management issues.
• Major IT issues (if any).
• Why the above factors are significant/important.
• Two or three possible exam questions that focus
• on important chapter content.

Will use Powerpoint slides that you will email to
me 24 hours before the presentation.
63
Presentation Assignments

1. Introduce Chapter 1 on Thursday
2. Summarize Chapter 1 on Tuesday
3. Introduce Chapter 2 on Tuesday
4. Summarize Chapter 2 on Thursday
5. Introduce Chapter 3
6. Summarize Chapter 3
7. Introduce Chapter 4
8. Summarize Chapter 4

64
Oral Presentations
9. Introduce Chapter 5 10. Summarize Chapter 5
11. Introduce Chapter 6 12. Summarize
Chapter 6
65
Analysis Term Paper Significance

• Successful completion of the analysis term paper
  is
• mandatory to pass the course. Qualifies course
  for a W.
• You can do joint research and chart preparation
  but the entire
• paper will be written individually.
• You must select a different company than the one
  you
• addressed in ISM 50.
• Important that you talk to me regarding your
  paper.

66
ATP Companies
Apple Computer Many niche battles that can
still be won. Cisco Systems - From boxes to
end-to-end communication! Dell Computer - The
direct business model king! IBM The new IBM
Services versus traditional businesses. Intel
Corporation - Shifting major business
strategies!? Knight-Ridder (SJ Mercury News) -
What business are they in? Oracle - Database and
enterprise software company. Plantronics
Communication headset leader taking on the big
boys. Sun Microsystems A big deal or fading
into the hi-tech atmosphere?
67
ATP Companies
All of these companies have Internet implications
as to their strategies and their ability to
continue to be successful. All but one of these
companies have global issues that must be
addressed for them to be successful. Your papers
should focus on these implications. Include
this focus as part of the objective statement of
your paper.
68
IT Industry

• Truly unique.
• A number of outspoken company leaders.
• Ferocious competition.
• Occupation with underlying technology.
• Battle for standards.
• No trade association.

69
Apple Computer

• What is the correct industry designation?
• Significance of Steve Jobs leadership?
• Significance of Internet to drive product
  development and improve business processes?

70
Cisco Systems

• Claim that they built the Internet.
• From routers to end-to-end communication.
• Want to be their own best reference!
• Cisco Connection is the basis for 82 of
  revenue.
• Research and technology through acquisition.
• Success is attracting major competitors.
• John Chambers walked on water. (until he got
  fairly wet in recent years)

71
Dell Computer

• Fierce competition in the PC segment of the
  Computer
• Industry.
• Questionable industry profit margins.
• As prices get cheaper, clones are losing market
  share.
• A major factor in the global market that is US
  dominated.
• The direct business model continues to be a hot
  topic and Dell is the king!
• The ultimate example of outsourcing?

72
IBM Corp.

• Has regained its position as the industry leader?
• Still the worlds largest IT company.
• Getting out of the PC manufacturing business.
• Services versus hardware and software!
• A challenge to evaluate since it is still so big!

73
Intel

• New leaders and a new business strategy.
• Does the new business strategy really make
  sense?
• How important is it to continue to grow as a
  company?
• What primary strengths has Intel had in the
  past?
• How significant is its global position?
• In what business functions has Intel emphasized
  the use of IT/IS?

74
Knight-Ridder

• Newspapers were a traditional source of
  information.
• Industry is dominated by conglomerates.
• San Jose Mercury News was one of the first to go
  online first with AOL and then via the Internet.
• Mercury Center has lost its differentiation
  advantage.
• How would you define Knight-Ridders business in
  the current business environment?

75
Oracle Corp.

• A dominant company in database software with
  much less of a position in integrated enterprise
  software.
• Founded and led by Larry Ellison.
• Historically have had an outstanding growth
  record with impressive financial performance.
• Recent acquisition of PeopleSoft.

Seem determined to try to beat Microsoft any way
that they can.
76
Plantronics

• Local company.
• A small company trying to compete with some
  industry giants.
• Want to convince the world that voice is the best
  and correct PC input/output device.

77
Sun Microsystems

• Wants to be your Internet company.
• A good early business success story.
• A good IT story.
• Struggling in terms of financial performance.
• Unix foundation.

78
ATP Companies
Apple Computer A successful niche player. Cisco
Systems - From boxes to end-to-end
communication! Dell Computer - The direct
business model king! IBM Corporation The new
IBM! Intel Corporation - Shifting major business
strategies. Knight-Ridder (SJ Mercury News) -
What business are they in? Oracle - Database and
enterprise software company. Plantronics PC
headsets in your future? Sun Microsystems-Your
Internet company?
79
Boeing Commercial Aircraft Company
Analysis
Paper Paper Objective I Commercial Aircraft
Industry Summary A. Industry Profile B.
Typical Industry Competitive Strategy C.
Porter Competitive Model Analysis D.
Globalization of the Industry E. Importance of
Information Technology to the Industry II
Boeing Company A. Boeing Company Profile B.
Market and Financial Performance C.
Competitive Strategy Statement D. Significance
of Information Systems E. Strengths and
Weaknesses of Boeing as a Company
80
III Information Systems at Boeing Commercial
Aircraft Company A. Structured Analysis 1.
Strategic Option Generator 2. Roles, Roles and
Relationships 3. Redefine and/or Define 4.
Significance of Telecommunications 5. Success
Factor Profile IV A Final Analysis The
Success of the Boeing Commercial
Aircraft Company A. Success of Business
Strategy and IT Use to Date B. Is the Company
Effectively Postured for the Future? Bibliography

81
ATP Grades
1. Section I and II will be written and submitted
individually. 2. A revised Section I and II will
be resubmitted with Section III and IV as a final
complete paper. 3. Each section is given a
specific grade. 4. The Section III grade is based
on 1/3 for the revised Section I and II and 2/3
on Section III. 5. Section IV has its own grade.
82
Analysis Term Paper Grades
1. Analysis Grade - 50 Did you analyze the
major important points in an effective manner? 2.
Presentation Grade - 50 How well were the
contents of the paper organized and presented.
This includes spelling, grammar and whether the
total paper comes together.
83
Analysis Term Paper
1. Information Given Today. 2. Web Page
Guidelines.
84
Analysis Term Paper Challenges
3. Analyze, Write and Edit Paper
Company
1. Content and Organization
2. Researching Content
85
Citing Sources
Plagiarism is illegal and cheating and will not
be tolerated. More than thirty words verbatim
must be cited.
Semiconductors have found a place in virtually
every electronic device in existence. This helps
explain why the industry was able to reach 200
billion in sales before a slump brought the
figure back down in 2001.1 1Semiconductor
Trends, Silicon Valley Tech Week, August 9,
1999, page 81.
86
ATP Discussion Points
1. A definition of the analysis company industry
in writing. 2. A draft of the Porter Competitive
Model. 3. A draft of the Business Strategy
Model. 4. A list of the key people within the
company that will serve as the basis of the
company analysis. 5. A draft of the strengths and
weaknesses of the analysis company.
87
Due on Thursday
1. Request for three possible companies on
which to base your business analysis paper.
2. An introduction letter and personal resume.
See my web page for details on creating a resume.
88
Introduction Letter
A page, not a paragraph.
Personal Introduction Work Experience Computer
Related Experience Career Objective Personal
Interests
A business professional format addressed to
me. Should not start with, Hi, my name is! The
last paragraph should explain the intent of your
resume.
89
Introduction Letter Mistakes
1. Did not use a business letter format. Block
address and not a , Single paragraph Very
truly yours, (not used) 2. Lacked
content. Didnt really introduce yourself
personally Didnt explain the objective of the
resume
90
Personal Resume Criteria
1. Looks good. (fonts, format, margins) 2.
Brutally clear what you have done and what you
want to do ( job objective). 3. Perfect! (no
spelling or grammar mistakes) Additional
information plus an example is on my web page.
91
Resume Purpose

• Focus
• Knowledge, Experience, Skills and Abilities
• What can YOU do for the employer?
• Ultimate Objective?
• To get an interview!
• It should SELL you!

92
Written Assignment Grades
Two grades on all written assignments An
analysis grade (50) A presentation grade
(50) Resumes will also receive a yes, maybe or
no comment.
93
My Job is to Steer You Through the Course

• Cant do this if you dont come to class!
• Dont intend to read the textbook to you.
• Class time will be spent on clarifying,
  expanding
• on and discussing the material in the
  textbook.
• Need to familiarize yourself with assigned
  material
• before you come to class.
• Course syllabus and lectures on the School of
• Engineering web page. (JDC or course web
  pages)
• I am only on campus on Tuesday and Thursday!

94
Academic Honesty
If I cant trust you, there is no other question!
Plagiarism from web pages. Thirty words or most
must be cited with a source.
95
Class Decorum
The classroom should be treated like a business
environment. Class activities should be treated
like a business meeting.
96
Meaning

• People come to business meetings on time.
• They dont wonder in and out during a meeting.
• In a large meeting, people that want to talk get
  recognized in order to do so.
• Meeting participants dont hold sub-meetings
  while the main meeting is going on.
• Meeting participants demonstrate mutual respect
  for each other.
• Presenters dont wear baseball hats while
  presenting.

97
Class Schedule
Final Paper Sec. I, II, III and IV 3/03/05
Final Exam 3/18/05
Start 1/04/05
Sec. I and II of Paper Due 2/01/05
Midterm Exam 2/08/05
10 Weeks
98
Conclusion
If you feel you are in the right class at the
right time and are prepared to make the necessary
time commitment, see you on Thursday.