Organizational Structures that Support Strategic Initiatives

Organizational Structures

•Organizational employees must work closely together to develop strategic initiatives that create competitive advantages

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•Ethics and security are two fundamental building blocks that organizations must base their businesses upon

IT Roles and Responsibilities 

•Information technology is a relatively new functional area, having only been around formally for around 40 years

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•Recent IT-related strategic positions:

–Chief Information Officer (CIO)

–Chief Technology Officer (CTO)

–Chief Security Officer (CSO)

–Chief Privacy Officer (CPO)

–Chief Knowledge Office (CKO)

•Chief Information Officer (CIO) – oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives

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•Broad CIO functions include:

–Manager – ensuring the delivery of all IT projects, on time and within budget

–Leader – ensuring the strategic vision of IT is in line with the strategic vision of the organization

–Communicator – building and maintaining strong executive relationships

 

Measuring the Success of Strategic Initiatives

Measuring Information Technology’s Success

•Key performance indicator – measures that are tied to business drivers

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•Metrics are detailed measures that feed KPIs

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•Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionals

•Efficiency IT metric – measures the performance of the IT system itself including throughput, speed, and availability

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•Effectiveness IT metric – measures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases

  

•Regardless of what is measured, how it is measured, and whether it is for the sake of efficiency or effectiveness, there must be benchmarks – baseline values the system seeks to attain

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•Benchmarking – a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance

Identifying Competitive Advantages

•To survive and thrive an organization must create a competitive advantage

–Competitive advantage – a product or service that an organization’s customers place a greater value on than similar offerings from a competitor

–First-mover advantage – occurs when an organization can significantly impact its market share by being first to market with a competitive advantage

•Organizations watch their competition through environmental scanning

–Environmental scanning – the acquisition and analysis of events and trends in the environment external to an organization

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•Three common tools used in industry to analyze and develop competitive advantages include:

–Porter’s Five Forces Model

–Porter’s three generic strategies

–Value chains

 Buyer Power

•Buyer power – high when buyers have many choices of whom to buy from and low when their choices are few

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•One way to reduce buyer power is through loyalty programs

–Loyalty program – rewards customers based on the amount of business they do with a particular organization

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Strategic Initiatives for Implementing Competitive Advantages

Strategic Initiatives

•Organizations can undertake high-profile strategic initiatives including:

–Supply chain management (SCM)

–Customer relationship management (CRM)

–Business process reengineering (BPR)

–Enterprise resource planning (ERP)

Supply Chain Management

•Supply Chain Management (SCM) – involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability

Business Process Reengineering  

•Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order

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•Business process reengineering (BPR) – the analysis and redesign of workflow within and between enterprises

–The purpose of BPR is to make all business processes best-in-class