CHAPTER 2PowerPoint PresentationCHAPTER OUTLINELearning ObjectivesLearning Objectives (continued)Chapter Opening CaseBP HadWhat Happened at BPBefore the Stores (IT’s About Business 2.1)Competitive AdvantagePorter’s Value Chain2.1 Business ProcessesExample of Business Process (Figure 2.1)Slide 152.2 Business Process Reengineering and Business Process Management2.3 Business Pressures, Organizational Responses, and IT SupportBusiness Pressures, Organizational Responses, and IT SupportMarket PressuresThe Stages of Globalization (From Thomas Friedman in The World is Flat)Slide 22Globalization 2.0 (second half)Slide 24Thomas Friedman’s Ten FlattenersFriedman’s Ten Flatteners (continued)Slide 27Slide 28The Steroids (continued)Slide 30Technology PressuresTechnological Innovation and Obsolescence (continued)Slide 33Information OverloadSocietal/Political/Legal PressuresSocial ResponsibilityOrganizational Responses2.4 Competitive Advantage and Strategic Information SystemsPorter’s Competitive Forces ModelSlide 40Slide 41Slide 42Slide 43Slide 44Porter’s Value Chain ModelPorter’s Value Chain ModelStrategies for Competitive AdvantageSlide 482.5 Business – Information Technology AlignmentChapter Closing CaseCHAPTER 2Organizational Strategy, Competitive Advantage, and Information SystemsCHAPTER OUTLINE2.1 Business Processes2.2 Business Process Reengineering and Business Process Management2.3 Business Pressures, Organizational Responses, and Information Technology Support2.4 Competitive Advantage and Strategic Information Systems2.5 Business – Information Technology AlignmentLearning Objectives1. Understand the concept of business processes, and provide examples of business processes in the functional areas of an organization.2. Differentiate between the terms business process reengineering and business process management.3. List and provide examples of the three types of business pressures, and describe one IT response to each.Learning Objectives (continued)4. Identify the five competitive forces described by Porter, and explain how the Web impacts each one.5. Describe the strategies that organizations typically adopt to counter the five competitive forces and achieve competitive advantage.6. Define business – information technology alignment, and describe the characteristics of effective alignment.Chapter Opening CaseMedia BakeryBP Had$3 billion budget (targeted to be reduced by $800 million4,200 IT employees8,500 software applicationsWhat Happened at BP1,000 of 1,900 contract workers were eliminatedThe business unit CIOs had to double report – to the BP CIO and also to the business unit leaderSince much of the IT applications were contracted, they were re-bid and BP ended up with 5 major vendors80% of the top IT leadership was replacedThe BP case demonstrates the need to have the right person lead an IT organizationBefore the Stores (IT’s About Business 2.1)© pocorex/iStockphotoWhat is the product?What did Amar Kahbuni provide that was not already available?Competitive Advantagean advantage over competitors in some measure such as cost, quality, or speed; leads to control of a market and to larger-than-average profits.Porter’s Value Chain1. Rivalry among existing firms in the industry2. Threat of entry by new competitors3. Bargaining power of customers4. Bargaining power of suppliers5. Threat of substitute products2.1 Business ProcessesBusiness Processa collection of related activities that produce a product or a service of value to the organization, its business partners, and/or its customersCross-Functional Business Processesone in which no single functional area is responsible for its executionExample of Business Process (Figure 2.1)The next slide shows an example of a business process: Ordering an E-ticket from an airline Web siteTable 2.1 on page 36 depicts many common business processesNotify TravelerNotify TravelerReceive Ticket OrderReceive Ticket OrderReserve SeatsReserve SeatsCharge Credit CardCharge Credit CardConfirm Flight(s)Confirm Flight(s)Issue e-TicketIssue e-TicketPlan TripPlan TripCheck FlightsCheck FlightsSubmit Ticket OrderSubmit Ticket OrderReceive e-TicketReceive e-TicketSeats AvailableSeats AvailableUse Credit Card?Use Credit Card?Charge OK?Charge OK?Seats Available?Seats Available?Notify TravelerNotify TravelerFrequent Flyer Mileage Sufficient?Frequent Flyer Mileage Sufficient?Subtract MileageSubtract MileageNOYESNOYESNOYESNOYESTravelerAirline Web Site YESNO2.2 Business Process Reengineering and Business Process ManagementBusiness Process Reengineeringa radical redesign of a business process that improves its efficiency and effectiveness, often by beginning with a “clean sheet”Business Process Managementa management technique that includes methods and tools to support the design, analysis, implementation, management, and optimization of business processes2.3 Business Pressures, Organizational Responses, and IT Support Business Pressures Market/CompetitionTechnologySocietalEconomicLegalPoliticalBusiness Pressures, Organizational Responses, and IT SupportIn this class we focus on IT issuesMarket PressuresThe Global Economy and Strong CompetitionThe Changing Nature of the WorkforcePowerful Customers© WAVEBREAKMEDIA LTD/Age Fotostock America, Inc.© Mike Flippo/Shutterstock(Source: Studio Frank/Image Source Limited)The Stages of Globalization (From Thomas Friedman in The World is Flat)Globalization 1.0 (from 1492 to 1800)Globalization 2.0 (from 1800 to 2000)Globalization 3.0 (from 2000 to the present)© Stockbroker xtra/Age Fotostock America, Inc.Christopher ColumbusGlobalization 1.0 * 1492 to 1800 * World went from large to medium-size * All about countries and muscles * Key agents of change: brawn and horsepowerSteam engineRailroadsGlobalization 2.0 * 1800 to 2000 * World has shrunk from medium to small-size * Key agent of change: multinational companies * First half: global integration powered by falling transportation costs (steam engine and railroad) * Second half: global integration powered by falling telecomm costs (telephone, PC, satellites, fiber-optic cable)Globalization 2.0 (second half)Smart phonesTablet computersFiber optics© PhotoEdit/Alamy© Oleksiy Makymenko/AlamyPhilip Hatson/Photo Researchers, Inc © ecco/Shutterstock1.0 2.0 3.0© WAVEBREAKMEDIA/Age Fotostock America, Inc. Globalization 3.0 * 2000 – now * World is now tiny (everyone is everyone