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MIS_Virendra Slides

MIS Presentation

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© © All Rights Reserved
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Persuasion Principles

in Action
Launch of a Premium Fitness Tracker

Presenter
Varun Gupta, Gopala Gupta, Virendra
Pawar
IIFT PT Batch 2024-27
IT Portfolio Management
Overview
Aligning IT Investments with Strategic
Objectives

•Purpose: Help management teams align IT investments with strategic goals.


•Investment Classifications:
• Transactional: Streamline business operations.
• Informational: Provide data for decision-making.
• Strategic: Enable competitive advantage.
• Infrastructure: Support foundational IT capabilities.

2
Different IT Assets Deliver Different Value
How IT Investments Impact Business Performance

•Transactional IT
• Reduces costs by streamlining operations.
• Example: 7-Eleven Japan achieves higher quality and larger margins through superior
use of transactional IT.
•Informational IT
• Enhances decision-making with better insights.
• Example: Vanguard.com offers tools for personalized portfolio analysis, driving
customer value and innovation.
•Strategic IT
• Fuels innovation and growth opportunities.
• Example: Enables customized tools and better alignment with long-term goals.
•Infrastructure IT
• Standardizes and consolidates IT systems to reduce costs.
• Provides platforms for new initiatives like shared databases.
• Example: Carlson Companies’ Shared IT Services reduced costs and achieved synergy
across its diverse businesses. 3
IT Portfolio Patterns Among Top
Performers
Key Observations from High-Performing
Companies

1.Higher IT Spending: Top performers spend 4% more on IT than the average


company.
2.Strategic Allocations by Industry:
1. Financial Services:
1. Spend 10% less on IT but focus heavily on infrastructure for mature
systems and efficiency.
2. Wholesale, Retail, & Transport:
1. Spend 11% more on IT, prioritizing informational assets for
competitive advantage.
3.Shared Infrastructure:
1. Carlson’s award-winning shared IT services:
1. Offers cost savings.
2. Operates like a business, benchmarking against external vendors.
3. Facilitates efficiency and collaboration across units.

4
The IT Savvy Premium
Linking IT Investments to Business Strategies for
Superior Performance

•Key Insights:
• IT-savvy companies outperform competitors across profitability,
innovation, and market value.
• IT Savvy = Financial Premium:
• High IT-savvy companies earn $247 higher net profits per IT
infrastructure dollar invested within one year.
• Low IT-savvy companies experience $909 lower net profits per dollar
invested.
•What is IT Savvy?
• Practices, processes, and capabilities that maximize the value of IT
investments.
• Faster time-to-value:
• High IT-savvy: Leverage IT infrastructure in 1 year.
• Low IT-savvy: Take 3+ years to realize returns.

5
Turning IT Infrastructure into Competitive
Advantage
Raytheon Company

•IT Infrastructure Transformation:


•Standardized systems after mergers (e.g., 150 payroll systems reduced to 1, 28 email systems
consolidated).
•Achieved 40% reduction in IT spend.
•Key Practices for IT Savvy Success:
•Digitization: Streamline and digitize business processes.
•Agility: Rapidly implement changes to business processes.
•Governance Evolution: Adapt governance models to match growth and evolving needs.

6
Companywide IT Savvy Affects
Performance
High IT Savvy = Greater Returns Across All IT Asset
Classes
•Key Insights:
•High-IT-savvy companies achieve:
•Higher profits from transactional IT investments (automation, cost-cutting, and
throughput).
•More sales from new and modified products due to process digitization enabling
innovation.
•Superior returns from strategic IT, mitigating risks and driving growth.
•Improved profitability through informational IT, leveraging common sets of
information.
•Case Example:
•Amazon.com:
•Uses digitized processes to launch new services (e.g., tailored recommendations) with
minimal additional investment.
•Low-IT-Savvy Companies:
•Suffer lower returns across all IT asset classes.
•Leak value, especially from higher-risk investments like strategic IT.
•Recommended: Shift focus to low-risk transactional IT until overall IT savvy improves.
7
Characteristics That Create IT
Savvy
The Five Key Traits of IT-Savvy Companies
1.IT for Communication
1. Extensive use of electronic channels (e.g., email, intranets).
2. Example: 7-Eleven Japan connects 70,000 computers across its value chain, providing
real-time insights for better collaboration.
2.Process Digitization
1. Standardized and streamlined processes that enable agility and innovation.
3.Data Discipline
1. Effective use of common information sets drives better decision-making and
profitability.
4.Management Involvement
1. Active business leadership in IT planning and execution.
5.IT-Embedded Culture
1. IT seamlessly integrated into business processes, fostering innovation and
adaptability.

8
Background

Presentation title 9
Reciprocati Actions

on • Free trial periods and free fitness


consultations for early adopters.
• Customers feel obligated to reciprocate by
purchasing the tracker.

Goal
• Pursue scalable customer mobile application download
through sustainable strategies

Callout Box: “50% of trial users purchased the


tracker.”

10
Meet our team

Rajesh
Mirjam Nilsson Santoshi
Chief Executive VP Marketing
Takuma Officer
Flora
Hayashi Berggren
President Chief Operations
Officer

Presentation title 11
Result of the Campaign

Presentation title 12
Thank you
Virendra Pawar, Arushi
Chug
IIFT PT 2024-27

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