The Information System as a Competitive Weapon

Long considered backoffice support tools, information systems have become strategic competitive weapons. In the airline, travel services financial services, and distribution industries, for example, information systems have become strategic competitive weapons. Information systems have been used to produce new productsorto substantiallymodifyold one. Frequently, these systems increase the customer\u27s switching costs, and thereby increase dependence on the supplier This phenomenon has been discussed by several researchers, and disparate descriptive models proposed. A new model the Customer Resource Life Cycle Model, provides a powerful descriptive capability and potential as a mechanism for generating strategic applications. The model assumes competitive advantages can be obtained by supporting a customer\u27s resource life cycle via information systems technologies. Numerous applications illustrate the descriptive power of the modeL The considerable attention recently paid to using information systems as competitive weapons can be attributed to several factors, includingthe unrelenting decline of the cost of information technologies; structural changes inthe economywroughtbythe recenteconomic decline and subsequent recovery; and perhaps most importantly, by the deregulation of many industries-particularly airlines and finaricial services. Companies, once shackled by regulatoly agencies, have moved quickly to replace limited, but well understood product lines with a varied, ever changing menu of new products and services Information systems have played a critical role in managing this diversity. Information systems are beginning to distinguish successful firms from their competitors And they are doing it where it counts-in the market place. Information systems are emerging from the back office and making their way to the corporate boardroom. Recentstudies(reviewedinthepaper) describe how informationsystems canbeexploitedt:o an organization\u27s competitive advantage and present descriptive models for classifying successful strategic applications or evaluating the potential of proposed applications. We presentanewmodelfordescribingstrategicinformationsystems,amodel withaprescriptive character. We expect that the model will foster and encourage the discovery of new opportunities for the successful application of information system technologies. We have populatedthemodelwithseveraldozenexamples ofsuchinformationsystemapplicationsto enhance the prescriptive capabilities. The Product/Resource Life Cycle It is well known that an organization\u27s products or services go through a fairly well-defined life cycle. Within IBM\u27s Business Systems Planning process, for instance, four stages are proposed for the life cycle of both products/services and supporting resources: The Customer\u27s Resource Life Cycle The products an organization provides its customers are, from the customers perspective, supporting resources. To acquire them the customer goes through a resource life cycle, a life cycle frequently requiring a considerable investment of time and effort to manage. If the suppliercan assistthe customerin managingthis life cycle, thenthe supplier, throughhigher quality customer service, may differentiate itself from its competitors. Simultaneously, the supplier has introduced customer switching costs. The customer\u27s resource life cycle (CRLC) can frequently be supported through the application of supplier-provided IST. Frequently, transactions with customers are sufficiently homogeneous to economicallyjustify the supplier developing support systems which the customer can\u27t afford. The four-stage IBM model is a helpful starting point, but provides a ratherrough cut at the CRLC. A more detailed breakdown significantly improves the model\u27s utility. Burnstine has proposed an eleven-stage resource life cycle model and we have extended it by two more stages(seeExhibit).Anyofthesethirteen-stagesmaybeamenabletosupportfromsupplierdeveloped strategic information systems. The CRLC model provides a tool forseeking outnew competitive applications. The 13 stages focus the search, while the dozens of examples included in the paper provide analogies that serve as a catalyst to creative thought Competitive information systems have already shown themselves to be of strategic importance in severalindustries and their influence is being felt in manyothers Theimportance of these systems has been well documented in the literature, and several authors have provided criteria usefulinevaluating the utilityof both existingandpotentialapplications. The CRLC model goes a step further by providing a tool to assist in identifying such systems Because it focuses on customer service, the model is of primary use for building in customer switching costs and differentiating a product or service. 1

Process Improvement Supported by the Selection of Case Tools: A Case Study

The identification and selection of Information Systems projects is an important activity in most organizations [Hoffer et al., 1999], together with the search for the tool that is best adapted to these requirements, based on the system development process efficiency and the expected effectiveness of its results [Rojas & Pérez, 1995]. Organizations also use Information Systems as a weapon against the competition, insofar as the timely implementation of an Information System could represent a strategy providing competitive advantages to said organizations [Laudon & Laudon, 1996]. Porter [Porter, 1985] stresses that there are specific activities in the company where competitive strategies could be best applied and where it is almost sure that Information Systems will have a strategic impact [Díaz et a., 1998]. According to Pressman [Pressman, 1998], in the context of software development much work has been carried out in an attempt to fulfill automation petitions for different types of software development contexts. Thus, for a long time no thought was given to the possibility of attending themselves, for instance creating supports that would automate software development work. For the purposes of enhancing productivity and software quality, it can therefore be concluded that it is increasingly necessary for analysts and developers to count on automated tools to carry out their job. This paper shows the results obtained of contrasting the analysis carried out for the selection of Case Tools

The Outsourcing-to-Insourcing Relocation Shift: A Response of U.S. Manufacturers to the Outsourcing Paradigm

Outsourcing has been utilized as a corporate strategy by U.S. manufacturers for over three decades to minimize manufacturing and production costs, focus on core competencies and achieve sustained competitive advantages in the global market. In recent years, manufacturers have begun evaluating nearshoring, reshoring and insourcing strategies as near-term responses to trigger events such as increased labor costs and decreased product quality. The United States Air Force also established outsourcing as its primary strategy for achieving cost-saving objectives associated with the design, engineering, manufacturing, production and sustainment of its fourth, fifth and sixth generation weapon systems. In order to decrease weapon system costs and consistently achieve congressionally mandated core and 50/50 requirements, the United States Air Force is evaluating opportunities to bring outsourced workload into the depot infrastructure. This research applies grounded theory and case study methodologies to examine the antecedents and barriers of the U.S. manufacturing outsourcing-to-insourcing relocation shift. A structured framework is presented to assist the United States Air Force as a guide for evaluating insourcing opportunities. The framework addresses contract duration, access to critical information, and the factors influencing the insourcing decision

USING INFORMATION TECHNOLOGY AS A STRATEGIC WEAPON: LESSONS FROM THE RED BARON

Organizations investing in information technology (IT) over the past decades have categorically seen the uses of IT change. At one point, IT was considered a key strategic tool to gain competitive advantage; however, today, acquiring basic IT functions is a necessity in order not to be at a competitive disadvantage. It takes advanced IT systems, coupled with good strategy to develop an IT competitive advantage. With good strategy and advanced IT systems, some organizations can use IT as a weapon to secure market share and/or eliminate the competition. We suggest in this article that there are strategic points of which organizations should be aware during the implementation and use of information technology. These lessons come from the strategic lesson plans of the ace aviation fighter pilot, the Red Baron.IT Strategy, Competitive advantage, Change, Aviation, Technology.

Analysis of Competition in the Defense Industrial Base: An F/A-22 Case Study

Consolidation of the defense industrial base has led to concerns about whether enough competition exists between remaining firms to maintain needed cost reduction and innovation. We examine competition in the U.S. defense industrial base by performing an in-depth case study of Lockheed Martin and the F-22 program that considers multiple tiers of the industrial base. We find that defense firm specialization has led to outsourcing practices and arguably a more robust U.S. defense industrial base. Implications for government policy are identified

Operationally-relevant test lengths : a decision-analysis approach.

This thesis approaches the question of How much testing is enough? by formulating a model for the combat situation in which the weapon (e.g., missile) will be used. Methods of Bayesian statistics are employed to allow the decision maker to benefit from prior information gained in the testing of similar systems by forecasting the operational gain from acceptance. A Microsoft Excel V7.0 spreadsheet serves as the user interface, and Visual Basic for Applications, Excel's built in macro-language, is the language used to produce the source code. The methodology accommodates two different tactical usages for the missile: a single shot, or a salvo of two shots. The missile might be acceptable if used in the two-shot salvo mode, but not in the single shot mode, and this would imply a greater cost per mission. In the end the missile might not be judged cost effective as compared to a competitive system. If the model proposed is (or can become) adequate much can be calculated/estimated before any operational tests are made. This could assist in economizing on operational testinghttp://archive.org/details/operationallyrel00gormApproved for public release; distribution is unlimited

An Initial Look at Technology and Institutions on Defense Industry Consolidation

Conventional wisdom holds that defense industry consolidation resulted from decreased defense spending. However, we maintain that understanding dynamic changes in key defense institutions helps provide a more complete explanation for observed consolidation. Specifically, we examine the interaction of evolving technology and changing institutions. Institutions reviewed include procurement policies, weapons requirements process and the procurement organizations. We take an initial look at the industry and highlight how these changes influenced transaction costs in the defense industry more fully explain the forces driving consolidation and provide greater insight to policy makers seeking to improve the performance of the defense industry. Further research is needed to build a robust institutional framework of the defense industry and the related government agencies to allow better policy prescriptions

Capable companies or changing markets? Explaining the export performance of firms in the defence industry

The paper carries out an empirical analysis of the factors explaining the export performance of firms in the defence sector. We focus on the case of Norway, and make use of two complementary methodologies: the first is based on quantitative firm-level data analysis for the whole population of defence companies, and the second is based on qualitative case study research on the three most important defence export products (weapon stations, ammunition, electronics). Our empirical results highlight the importance of four major success factors for exporting firms: (1) the participation in offset agreements; (2) the ability to focus on their set of core competencies; (3) their R&D activities and interactions with the public S&T system; (4) demand opportunities and, relatedly, user-producer interactions.Defence industry; liberalization; export; R&D and innovation