During week 5, we reviewed theory related to IT strategy and payoffs from IT investments. This week we will finish the discussion on IT strategy (chapter 3) and move to the discussion on competing with analytics (Chapter 4, which is an extension of the discussion on IT strategy). We will leverage the text mining capability of R (word cloud) to get an idea about the alignment between IT and business strategy of Whirlpool and learn how to synthesize material from the first three chapters to generate risk profiles and competitive payoffs for IT investments.
In the seminar, we previewed the Whirlpool case study payoffs from their technology investment. This week we are going to look more carefully at financial performance metrics that could best capture the expected payoffs from the firm’s IT investment. The results, especially those related to the firm’s days of inventory, are quite interesting. We will revisit the data from the wireless industry and relate this to hypercompetition.
Topics and Readings for Week 6
Theory: Re-read chapter 3 and this time focus on payoffs. While we have been using analytics from the beginning of the term, Chapter 4 provides a formal introduction to the topic, as well as historical presentation of what is perceived one of the most celebrated success stories of competing with data analytics, i.e., Harrah’s entertainment (the firm is now known as Caesars Entertainment Corporation).
Readings: Chapters 3 and 4 (no need to memorize details about Harrah’s from chapter, just make sure you get the big picture).
Seminar: We will review the script and discuss the results of the analysis of the payoffs from tech adoption in the case of Whirlpool. See script: WHR_TechAdoptionPayoffs
Hypercompetition is a term that has been introduced since the late nineties to reflect an increasing level of competition and to account for the growing percentage of firms reporting losses. Compare the US versus Canadian side of the market (percentage of firms reporting losses in the wireless market). See script: WirelessMarket_5010_Losses
Analyzing the Whirlpool case, we explored considered one performance metric that could capture the expected payoffs from their ERP investment. If you were to repeat this exercise with Harrah’s which variable would you select and why? Feel free to consider/suggest a new variable, i.e., a variable not listed in the Appendix.
Assignments for Week 6
The online quiz will be a based on chapters 3 and 4, and material from the seminar. The quiz will be available on Friday at 12:30 pm.
