it investment

7/27/2019 IT Investment

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Welcome to ourpresentation

IT Investment That Makes aCompetitive Difference


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Presented by

Name ID

Sobrata Halder ID# 05-005

S.M.Ashraful Alam ID#05-017

Md.Motasim Billah ID#05-075

Md.Tarikul Islam ID#05-076

Taqdir Hossain ID#05-077


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To be discussed

INVESTMENT IT INVESTMENT COMPETITIVE DIFFERENCES RELATIONSHIP BETWEEN IT INVESTMENT AND COMPETITIVE

DIFFERENCES KEY FEATURES OF COMPETITIVE DIFFERENCES WHEN IT INVESTMENT

IS MADE COMPETITIVE DYNAMICS HOW TECH IS CHANGING COMPETITION THE ELEMENTS OF SUCCESSFUL IT-ENABLED PROCESS PROPAGATION THE ROLE OF DECISION RIGHTS MAXIZING RETURN ON TALENTS SELECTION & MAINTAINANCE OF TALENTS COST & RETURN ON TALENTS IT SURVIVAL FOR THE FITTEST CONCLUSION


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Investment

In finance, the purchase of a financial product or other

item of value with an expectation of favorable future

returns. In general terms, investment means the use

money in the hope of making more money.

In business, the purchase by a producer of a physical

good, such as durable equipment or inventory, in the

hope of improving future business


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Investment

An investment is purchasing capital with the desired

outcome being profitable returns. Profits can come in

the form of income, appreciation in value, capital gain,

or interest.

Placing of money or capital in something that gives

returns, as interest or income, or appreciates in value

or an instance of this


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IT Investment

This term is total different from the definition ofInvestment. It does not mean to invest capital in IT

based farm in a desire for a handsome return.

It means to convert a traditional business process

into IT based process so that this new process can

yield much more productivity that will eventually

raise profit.

So, IT investment is the cost of infrastructure

development of a business farm that will return more

profit.


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Competitive Difference

It means the competitive advantages one business

farm has, the other business farms dont have.

The core item or element of business process that is

unknown or not copy able by the other business

farms.

In a word, In real world business competition which

element makes a difference in terms of productivity,

market gain, profit, etc. among the farms is called a

competitive difference.


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Relationship between

IT Investment and Competitive

Difference


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Business Benefits - The

"Returns" Decision-Makers NeedTo Know


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Key features of Competitive

Differences when IT Investment is

made.Greater gaps between the leader and the laggards in

industry.

More concentrated and winnertake all the market.

More churn among the rivals in a sector.

Sales leaders are frequently leapfrogging.

Overall performance of IT based farms is much more better.

Change in position/rank is dynamic


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Dont be confused

IT investment does not make digital product but

digital process.

IT Investment does not mean that all processes are

IT configured.

Overabundance of new technologies is not

fundamental concept of IT investment but to

digitalize only that process which will improve

traditional process more widely and increase

productivity.


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Competitive dynamics : several

ways to slice it

1.Industry concentration:

The organization those who use it are taking the market more easily. That is

it users are the winners and winner takes all.

Ex-iphone of apple

2.Turbulence:

when it is used the market becomes very competitive. So the position of

market leader changing all the time. There is no absolute market leader all

the time and if there is they are not for long time, it is the it which makes

the market unstable. Ex- Samsung vs apple, Altibase vs oracle


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Competitive dynamics : several

ways to slice it

3.Performance spread:

As winner takes all so the laggards are not participating the

feast. High it users are moving with high speed and otherscannot. So the gap between them are increasing since 1990.

Ex- IBM vs apple.


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How tech is changing competition

>What if, IT is not in charge!1. Quick innovative process is not possible to propagate.

2. Periodic change and train for the managers.

>Apply IT to all locations:

Suppose one company is adopting their ERP in their Dhaka HQ orbranch but not to the other locations. Then Dhaka branch will develop

but not the others. So IT should be applied to all of the places

simultaneously.


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How tech is changing competition

>Rivals game:

Then the company is not alone in that industry but other rivals are

also by getting idea of ERP or others tech or business process will

also adopt to sharpen their process also. Ultimately market will be

competitive. ex-iPhone vs Galaxy S series

>competitive market:

We know that firm with best process will win but not for the alltime. Others will come with their tech and will try to tolerate the

position of the market in a competitive way. Ex- cell phone market

leader NOKIA vs others.


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Adaptation: competing on a digital

process

>What we should do in this massive IT based environment?

>Role of CEO:

1. Deploy: to use sth effectively. Here not only the initiation of new tech is

enough but also the consistent tech should use effectively.

2. Innovate: introduce the new method of working procedure. Uniqueness ofyour process which will give competitive advantage.

3. Propagate: then the winning process should deliver throughout the entire

business.

>Role of IT:

1.Catalyst for innovative idea. It is a supportive tool of good ideas.

2. Act as a tool of delivering that innovative idea.


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Adaptation: competing on a

digital process

>Case study : deployment of IT in CISCO

It is a very hard and challenging task for the management to deploy a new

IT based system easily. After mid 90S CISCO when it deployed new

enterprise software then there was no integration or uniform distribution of

same software rather each manager introduced IT modules at their own

will. Then a situation arose where a single process( say, order) was running

with 09 different software's. Data distortion and conflicting info was

presented by those software with different features.

Then in 2001, the new expert saw this jam-packed situation and for the

uniform deployment he invested $200M and integrated the whole situation.


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The Elements of a Successful IT-

Enabled Process

There are some cost & risks in implementing IT but it also bring somepositive changes.

Hypothetical example of a company is given below

The furniture maker company sells standard & custom pieces through

100 showrooms nationwide. Many salespeople are not willing to sell

the customized product. To solve this problem company develops a

software to integrate the activities of customized order receiving &

accurate delivery date. The software also manage customer

satisfaction. As the software response were positive the company

applied it in other 99 showrooms.


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Successful IT-enabled business process has some important

characteristics those are given below

1) Cover wide span : Large swath of company. In this case It covers all

stores factories & delivery teams.2) Produce results immediately : Response to change is immediate.

3) Precise : Highly scripted instructions for business activities.

4) Consistent : Execution method like lead time, delivery period is same

in every showroom.5) Easy monitoring : Activities& feedbackcan be observed & tracked

in real time.


Enabled Process


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6. Build enforceability : Process are being executed as intended, use the collected data

properly, determine if all team were calling properly.

They updated Ciscos original ERP system & other key applications to support

standardized data & process. This software updates & the strategy discussions the

technology eventually resulted in greater consistency throughout the organization &

contributed to Ciscos strong performance.

Like Cisco Otis developed new enterprise technology platform called E-Logistics,which was designed to connect sales, factory & field operations worldwide through

internet which brought significantly shorter sales-cycle times but higher revenues &

operating profit.

7.Innovation: IT-enabled opportunities :- IT applications with collective intelligence

& other web technologies can be important to propagating ideas but also ingenerating them.

8.Propagation top down & bottom up : ERP system is an obvious tool for

propagation .They show that innovations do not necessarily emanate from

headquarters or central management also from lower level in organization.


Enabled Process


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Propagation :

Top down & bottom up

ERP is an obvious tool for propagation . Enterprise systems

help manager to impose best practices and standardized

procedures universally. It also eliminate the chaos of

inconsistent homegrown practices. Now a days, the bottomline managers need not to take help or complain to the top

management to solve any problem while using a software.

They can solve the problem by sharing information, files,

links , tips and tricks without central management direction.


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The Role of Decision Rights

With the advance of IT, the decision making poweris being decentralized. Although the core decisions

are taken by the top management, rest of the

decisions are taken by frontline managers. They

make the decision as the representative of the

organization.

As an example, when e- Logistic was put in place at

Otis, The field installation supervisors became

responsible for the first time for certifying that a site

is ready to install an elevator before it would be

shipped.


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The Role of Decision Rights

Zara, a Spanish clothing company has 1000 stores all over

the world. They all use the same digital format, rigid weekly

timetable to place the orders. Here the store managers are

playing the vital role for Zara. Because they know the

customers choice better than the headquarter. There are nocentralized forecasting for Zara. While the traditional

companies are driven by centralized computerized

forecasting.

So now a days companies try to understand who has themost relevant knowledge to make decision and where,

ultimately, to site decision rights.


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Maximizing Return On Talent

As the value of inventing better methods willrise for IT facilities, organizations need

employees talented in IT management &

process innovations.

Leaders of an organization requires to have

careful supervisions on selection &

maintenance of such talented employees


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Selection & Maintenance Talents

Consideration of more applicants

Intensive scrutinizing in vetting new hires

Support of HRM policies & corporate culture

Top level managers involvement

Investing huge time & money on internal & external

training & education.

Discretion in how to perform jobs Detailed suite of metrics containing reward,

performance, compensations & promotion.


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Costs & Returns On Talent

Cost of managing talents is very high.

The payoff will increase exponentially by

leveraging the talents of a high performing

manager.

Talents must be accumulated at one location

but their influence will result in maximizing

returns in 1000s of sites worldwide


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IT & Survival For The Fittest

Configurations & testing of IT is complex but changingpeoples attitudes towards IT is much more complex.

IT changes jobs in terms of speed, spread, concentration,

performance indicator etc.

Management has become less comfortable.

Neither good nor better but only the best can survive the

inevitable turbulence created by IT.

The best executives thus expect outsize rewards


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Three Conclusions Regarding

ITIM

Differences among companies in their ability to select,

adopt & exploit innovations that technology has

accelerated.

Highly Qualified vendors, consultants & IT departmentsare essential for IT platform implementation but success

in IT invest depends on line executives who innovate

processes.

Competitive shakeup brought on by IT isnt nearly

complete, even in IT intensive economies.


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Thank You

it investment

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