Creating Business Value with Business Analytics and Information Technology Enablers Scenario: You recently inherited your grandfather’s coffee shop, which is conveniently located in downtown East Lansing. The cafe offers many different kinds of individual servings of coffee and tea, a full service bakery, and sandwiches, soups, and salads. Your grandfather first opened the coffee shop in 1952 and it was a local hotspot for many years. Although your grandfather’s coffee shop was a local hotspot for many years, business has been steadily declining over the last five years. Your grandfather was an expert at running the coffee shop, however, it is outdated. There are no computers in the store and all ordering takes place manually. Your grandfather had a terrific memory and knew all of his customers by name, but unfortunately, none of this information is located anywhere in the store. The family recipes for the baked goods and soups are also stored in your grandfather’s memory. Inventory is tracked in a note pad, along with employee payroll. The Cafe does not have a Web site, uses very little marketing or promotions, except word-of-mouth, and essentially still operates the same as it did in 1952. You will own and operate your grandfather’s coffee shop, taking advantage of business practices discussed in our ITM 209 class to keep the business running, increase profits, and bring the cafe into the 21st century. Your first decision is to define a new business strategy for your grandfather’s coffee shop. One of your business strategy ideas to grow revenue and improve profits is to work out a franchise deal whereby your coffee shop can sell coffee and teas in bulk packages. You will analyze this opportunity using your knowledge of business analytics. You will also introduce IT to enable the strategy and enhance operations. Example IT improvements may include automating inventory updating and payroll, keeping track of customer information, creating a coffee shop website for promotions, offers, and on-line bulk coffee and tea sales, offering mobile aps for your customers, recording the recipes in a database, and offering Wi-Fi. Your team has been challenged to be very creative and pursue innovative value creation ideas in the ITM 209 Team Project to create a competitive advantage for Page 1 of 9 your grandfather’s coffee shop. We have discussed in lecture how the IT Enablers associated with disruptive technology may be useful to open new markets and significantly gain market share. Example New Economy ideas, associated with these IT Enablers for disruptive technologies, include Airbnb, Uber, Amazon and Whole Foods, new home delivery opportunities, wearable technologies, and many other examples involving innovative and creative opportunities. Your team will need to include IT Enablers related to the New Economy that will result in creative and innovative value creation ideas for you to create a competitive advantage for your grandfather’s coffee shop. Please include your New Economy ideas within your Team Project report and presentation. Tasks: The goal of this team project is for you to learn how to apply the concepts of IT value creation to a realistic situation of your grandfather’s coffee shop. This project will be carried out in teams, and your TA will assign you to a team during your recitation. Your team will create a new business strategy, utilize business analytics to analyze creative options for your new business strategy, design the IT enablers to create value for the new business strategy, and preserve value for your customers with IT security procedures. Each team will utilize team collaboration tools to help them work together and help them create the team project deliverables. Each team will also utilize Tableau to perform the business analytics tasks associated with business strategy creation and valuation. Each team will produce a report and make a presentation discussing the business strategy and IT opportunities which your coffee shop will implement when engaging in its improvement plans. In addition, each team will integrate these opportunities and discuss their overall impact on your new coffee shop’s value creation opportunity. For team meetings, you may wish to consider the following remote team meeting tools: Zoom (zoom.msu.edu); Skype, or Google Hang Outs. Also, please use Google Docs (googleapps.msu.edu) to help your team work together to create the team project report. Remember: there are no wrong answers. You are expected to do additional research to complete the team project. Please list your references or citations for your additional research at the end of your report. Creativity, initiative, completeness, teamwork, and diligence will definitely lead to good scores! You and your team will work together and decide on the new and innovative business strategy that will create an immediate and long term competitive advantage for your coffee shop. Specific areas to focus on to assure your new business Page 2 of 9 strategy creates exceptional value are outlined in these team project instructions and include the following: • Fulfill grandpa’s dream of providing a vast offering of products and services to the international students; thereby increasing coffee shop revenues and profits • Grow revenue and improve profits via a franchise deal to sell coffee and teas in bulk packages on-site and also on-line • Utilize IT enablers to enhance your business strategy via implementing value creation activities which enhance productivity, improve marketing for enhanced revenue, maximize convenience and service, and improve communications • Include IT Enablers related to the New Economy that will result in creative and innovative value creation ideas for you to create a competitive advantage for your grandfather’s coffee shop • Any other innovative value creation ideas which you and your team believe will enhance the competitive advantage of your coffee shop A. Team Project Requirements - Business Strategy and Business Analytics Part 1. Introduction and Business Strategy Your grandfather had an excellent relationship with the International Center at MSU and one of his dreams was to provide a vast offering of products and services to the international students. Your grandfather did not know how to get started with his “globalization dreams” and has left it to you to implement his dreams. Please consider how you would address the growing market of products and services for the international student sector (and also for the domestic student sector) as you design your business strategy. Your grandfather’s coffee shop is a small player as a single coffee shop in a competitive market of coffee chain franchises. Your first task as a team is to determine the future business strategy for your grandfather’s coffee shop. Background: To survive and thrive, an organization must create a competitive advantage. A competitive advantage is a product or service that an organization’s customers place a greater value on than similar offerings from a competitor. Unfortunately, competitive advantages are typically temporary because competitors often seek ways to duplicate the competitive advantage. In turn, organizations must develop a Page 3 of 9 strategy based on a new competitive advantage. When an organization is the first to market with a competitive advantage, it gains a first-mover advantage. The firstmover advantage occurs when an organization can significantly impact its market share by being first to market with a competitive advantage. Task: Determine what competitive business strategy that you will implement at your new coffee shop. Several tasks you may perform and document could be: • Perform a detailed Porter's Five Forces analysis for your new coffee shop. • Be sure to highlight entry barriers, competitive analysis, bargaining power(s), and substitute products. • Determine which of Porter's Generic strategies you will use as you rebuild your grandfather’s coffee shop for the 21st century. • Explain why your chosen business strategy will create competitive advantage. • Explain how your chosen business strategy addresses your grandfather’s dream of selling special products and services to international students at MSU. • Explain your IT Enablers related to the New Economy that will result in creative and innovative value creation ideas for you to create a competitive advantage for your grandfather’s coffee shop. • Utilize Business Analytics to explore your ideas to grow revenue and improve profits is to work out a franchise deal whereby your coffee shop can sell coffee and teas in bulk packages on-site and on-line (noted in Part 2 below). Part 2: Business Analytics Opportunity Business analytics is a broad, general term describing information that people use to support their decision-making efforts. To execute your business strategy you should have full knowledge of your coffee shop strengths and weaknesses and full knowledge of the competitor strengths and weaknesses. Background: You understand that business analytics can dramatically improve your ability to analyze information and assist you in creating and analyzing your strategic plans for your coffee shop. You will utilize the Tableau business analytics software to assess your ideas to grow revenue and improve profits. Your Tableau dashboard will be used to analyze a potential franchise deal for you to sell coffee and teas in bulk packages on-site and also on-line. Task: Page 4 of 9 The tasks associated with the business analytics opportunity outline your approach to the revenue growth opportunity to enhance your business strategy: • Go to D2L and locate the CoffeChain.xls within the Team Project folder, download and open the file, and save it on your Desktop and P Drive. • Review the product types and products within the data set; these products are under consideration by you to put together a franchise deal whereby your coffee shop can sell coffee and teas in bulk packages, both on-site and for on-line sales • Use Tableau to analyze the correlation between marketing expenses and projected sales for each product, and incorporate your business analytics findings within your business strategy • Here is an initial Business Question that you need to explore to get started with your analysis: What Product type has 10 area codes that cost over $100 in marketing expenses while yielding below $500 in sales? Hint and Directions for your initial Tableau analysis: o Hint: Create a scatter plot like question 6 from In-Class Practice II. 1. Create a scatter plot that compares Marketing expenses with Sales values. 2. Add Area Code to the worksheet’s level of Detail 3. Use Color to show the Product Type • Create a dashboard that consists of three visualizations or Tableau worksheets. Generate a filter that will apply to all three sheets. Your analysis will need to include all three Tableau worksheets working within your Tableau Dashboard. • Document your franchise deal findings within your team project presentation and report. Be sure to describe the context of your analysis and your Tableau solutions, your interpretation and evaluation of solution results, and your corresponding conclusions and recommendations based on your evaluation. Include graphics of your Tableau dashboard within both documents. B. Team Project Requirements – IT Enablers and Security Parts 3-4. IT strategy which complements your business strategy As you have learned in ITM 209, IT investment alone does not make a strategy. Rather, IT investments can enable and create value for your Business Strategy; value that could not be accomplished without IT or would be prohibitively expensive without IT. Once you determine your business strategy, you need to develop an integrated IT plan utilizing the project components of IT Enablers and Customer Security. Each of these components will assist you in the Page 5 of 9 IT enablement of your chosen business strategy; thereby creating value to justify your IT investments. Use the following sections to guide your development of your integrated IT plan for your chosen business strategy. Part 3: IT Enablers Opportunity You are interested in introducing several information technology solutions as enablers to deal with some of your new coffee shop issues. Background: Given your new strategic focus for your grandfather’s coffee shop, what specific IT Enablers will help you with your business strategy implementation and thereby realize your value proposition for the future? Example IT Enabler opportunities may include, but are not limited to, the areas of order management, inventory management, marketing and customer outreach, web site implementation, customer mobile apps, and wi-fi. Be certain that you are creative in choosing your IT Enablers so your IT Enabler Opportunity is a very strong value proposition for your new coffee shop and customers. Your value proposition should include value creation activities to enhance productivity, maximize convenience, and improve communications. You will also need to include IT Enablers related to the New Economy that will result in creative and innovative value creation ideas. Task: Document the IT Enablers investment which your grandfather’s coffee shop could use to increase revenue, reduce costs, and thereby create value. A few questions you might want to address in your documentation for your team report include: • What IT Enablers would you deploy at your coffee shop and how will your business strategy benefit from the implementation of key IT Enablers? • How does your implementation plan for IT Enablers translate into value creation activities for your new coffee shop? • How does your IT Enablers investment help increase revenue or reduce costs? • How could you use IT Enablers to partner with suppliers and/or customers? • What IT Enablers related to the New Economy will result in creative and innovative value creation ideas for you to create a competitive advantage for your grandfather’s coffee shop? Part 4. Customer Security Opportunity Page 6 of 9 Your grandfather’s coffee shop must assure that customer security procedures are in place. Since your employees have access to customers’ information, it is important to make sure the information is properly used and that customer information is treated with security. Customers need to feel secure in using the innovative technology you choose to deploy at your coffee shop. Background: Information security is a broad term encompassing the protection of information from accidental or intentional misuse by persons inside or outside an organization. Companies may become liable for any costs associated with a breach of their IT systems and for security issues related to customer information. In response, organizations are implementing innovative IT security programs and you are thinking of doing the same. Task: Document your proposed IT security approach to protect your customers. Questions you might want to address in your documentation for your team report include: • What is your chosen IT security approach and how would your IT security system help protect your grandfather’s coffee shop and its customers? What are the advantages and disadvantages? • What can you do to protect your data while still building a sense of trust among your employees? • What can you do to assure your customers that your security approach will protect their data? • How can you provide security to protect the customer’s data if the customers utilize innovative technology such as wearable technology devices? C. Team Project Requirements - Conclusion Part 5: Integrated Solution and Conclusion After analyzing and deciding how you will utilize the IT opportunities in the sections above, write a compelling concluding argument as to how the IT enablement strategy is consistent with the business strategy you have outlined. Explain how the IT implementation decisions work together as a single, integrated IT enablement approach for your new business strategy. Be sure to include your assessment of business value obtained by completing a costs/benefits analysis. Page 7 of 9 Also, be sure to include the IT Enablers related to the New Economy that will result in creative and innovative value creation ideas for you to create a competitive advantage for your grandfather’s coffee shop. Task: Document how the opportunities of IT Enablers and Customer Security inter-relate and integrate together to help you achieve your goal of improving your new coffee shop. Provide a compelling argument on the value created to cover your IT investments required to achieve value for the café. You MUST include a table which lists the benefits and costs of your project and complements your value proposition. Also, you MUST include a Tableau dashboard, which explains your business analytics conclusions, within the report. Focus on: • How the opportunities can be integrated as a larger comprehensive IT project. • Their combined benefits and costs (estimates are okay). • The total value or profit they will collectively add to your coffee shop. • Include a table listing project benefits and costs for your value proposition. • Be sure to summarize your overall integrated approach in such a way as if you were to seek investments from a lending institution to fund your approach. • Be sure to specify how your coffee shop will appeal to the international student community; thereby helping you fulfill your “grandfather’s dream”. • Be sure to include your IT Enablers related to the New Economy that will result in creative and innovative value creation ideas. • Your argument on either why you believe your new coffee shop will succeed as a single site café or why you believe you will need to expand to multiple locations for the café (your business strategic approach). Project Deliverables: Team Presentation (25 Points) Each team will present their Business Strategy, New Economy ideas, Business Analytics approach, IT Enablers to support the business strategy, Customer Security, and the total Integration opportunity in class during Recitation. Your TA will inform you of the date your team will be presenting. Presentations will use ten (10) PowerPoint slides, and will be graded on the clarity and quality of information presented and its flow. Professionalism during the presentation is important and the dress code for presenters will be business casual. PPT Presentation Instructions - Slides should follow this presentation outline: Page 8 of 9 Slide 1: Slides 2-4: Slide 5-6: Slide 7-8: Slides 9-10: Title Slide Team Number & Names Competitive Landscape and Business Strategy Discuss why you chose your specific strategy with IT Enablers including your New Economy ideas Business Analytics Opportunity Explain how you used Tableau to analyze the business strategy opportunity and include your Tableau dashboard as one slide IT Enablers and Customer Security Opportunity Discuss how your IT Enablers will support your strategy and include your New Economy ideas Total Integration You should present, at a high level, the decisions you made regarding the three opportunities, why you implemented or did not, what the implementation looks like, and how the three decisions together to support your chosen strategy. Also include the final project benefits and costs table. - Each team will be given exactly 8 minutes to present - Each person in the team must present a part of the materials in front of the class. - Your goal is to “tell your story” in the slides and for team members to refer to their notes to embellish upon any points made. D. Team Project Grading Plan Team Presentation (25 Points) • Professionalism and Quality • Shared Responsibilities Across Team • Slide Content and Presented Within Allocated Time • You must be in attendance for your team presentation • You must be in attendance at both recitations and hear all of the presentations as a requirement to earn team presentation points. Page 9 of 9 Part 2: Business Analytics Opportunity The primary focus of our business analysis was how effective marketing could increase overall sales and profitability. By utilizing the business analytics software Tableau, we were able to generate visual aids that allow recognition of several potential marketing strategies. An in depth analysis of our findings as well as a visual representation or dashboard can be found below. We began by analyzing which product types have ten or more area codes that cost over $100 in marketing, but have generated less than $500 in sales. We consider any product type that meets the aforementioned criteria to have been marketed inefficiently. Upon completion of our analysis we learned that espresso has been marketed inefficiently in seventeen different area codes. Furthermore, we are spending more on marketing than we are generating in sales in eight of those area codes (as well as two area codes for tea). Identification of these area codes led us to the conclusion that we need to either employ more effective marketing strategies, or allocate our financial resources to area codes where marketing is more profitable. Following our previous analysis, we decided to analyze if there were any domestic markets we weren’t doing much business in. We began by placing dots on an American map, whose size are indicative of the amount of sales we have done in that area code. This visual allowed us to recognize that there are many states which we do absolutely zero business in. The Central Northern portion of the United States is virtually untapped with eight different states having zero sales. The historically affluent East Coast as well as many Southern states are also problematic with fourteen states having zero sales. Together this equates to nearly half of the United States being what we consider untapped domestic markets. By efficiently marketing our profitable products and selling in bulk online to these areas, we could dramatically increase overall sales. Finally we decided to analyze which products have been marketed heavily but are not profitable. We did so by creating a bar graph that shows how much money we spent marketing each product versus how profitable that product is. We found that we are spending too much money marketing products that don’t bring in any money. For example, money is literally being thrown away when we market Green Tea; $7,126 was spent on marketing in order to literally lose money with -$231 profit. More money was spent marketing Green Tea than was spent marketing four other products that were more profitable. Profitability and marketing expense should move vicariously with each product in order to sell the most of our profitable products and the least of those we are losing money on. In conclusion, sales and profitability can be drastically improved with the employment of these marketing strategies. A franchise deal that would assist us in employing the aforementioned strategies and driving down cost by shipping in bulk could be mutually beneficial. Our Tableau worksheets and dashboard are included below, we encourage experimentation and further analysis. Part 3: IT Enablers Opportunity Now that we have established our business strategy, we need IT Enablers that will help with the implementation. These IT Enablers will enhance productivity, maximize convenience and improve communication within the coffee shop. They will give us a competitive advantage over other coffee shops in the area. We will operate kiosks inside of the restaurant, drive thru services, a mobile app, an interactive website, and interactive order screens for employees. There will be 3 kiosks for ordering inside of the coffee shop. They will be run by Wi-fi which will also be available for customer use. These will increase the rate at which customers can order and will in return lessen the wait time for customers. The faster orders are taken, the faster they can be made and the customer can continue their day. If customers can be in and out quickly, they will be less likely to leave or not stop in which prevents loss in revenue. Kiosks are a fun and new way to order so the technology will attract customers of all ages, and a wider range of customers means more money. They will also say the coffee shop money by not needing to have multiple cashiers. There will be one cashier for those who don’t want to use the kiosk, leaving other employees to focus on making orders. The coffee shop will have a drive thru similar to Sonic, where there are multiple stations and people can order from their car and have their order brought out to them. This create convenience for the customers which will generate more orders and therefore revenue. We will also have a mobile app that allows customers to order from their phones. There will be various methods that customers can use to order. They will be able to use their phone to order and have their order brought out to a designated parking spot or they can set up a time to have their order ready for pickup. For example, the customer will be able to have their drink ready as soon as possible or at 3:15 pm. To prevent drinks being wasted, the customers will need to pay through the app at the time of the reservation. This app will also create convenience for the customer and they can use it to accumulate points which they can use to get a free item. The Coffee shop will also have a website that contains the menu and options to buy some of our products in bulk. This will allow us to partner with other suppliers who may want to sell our brands in their stores, or regular customers can buy them to serve at events. Companies could also make use of this feature by buying coffee to serve in their office buildings. The selling of our products outside of the coffee shop will increase our revenue. On the website, there will also be monthly survey where we will have multiple options for international students to choose their drink of interest and it will be featured for the month. Random participants in the survey will win a free featured drink which will bring in more international students. The website will also promote customers to post the coffee shop on their social media and random participants will be chosen to receive a free drink. This will increase marketing for the coffee shop which will in return increase revenue. The last IT Enabler that we will implement into the coffee shop are 3 interactive screens to help employees keep track of orders and know where they are going. There will be one screen for app orders, one for in store orders, and the last for outside/drive thru orders. Employees will be designated to 1 of the 3 areas and this will enhance productivity. As previously stated, the IT Enablers will provide various means of ordering which creates more convenience for the customers and decreases their wait time. Less wait time means we will be able serve more customers and bring in more revenue. The coffee shop will save money by not having to waste money on multiple cashier, there will only be 1 available at the request of a customer. These IT Enablers will build a new reputation for the coffee shop which will help it to grow, bring in new customers, and possible expand as a franchise. They will also create a competitive advantage for the coffee shop because it will now be more technologically advanced than other coffee shops in the area. We will also have more customer participation and more ways for customers to order based on what is more convenient for them, and not just the typical ordering at a cash register. Order reservations will also be something new to the industry because I don’t know of any other coffee shops with this option. All in all, these IT Enablers will bring great value to the coffee shop. Part 4: IT Security Information technology security is an important part of any business today. In order for your business to be successful, the customers must trust in your ability to keep the information they provide you safe. In our café shop, we have incorporated numerous new ideas for how people interact with technology in order to deliver a more efficient service to our customers. These new technologies for the café include a website, mobile application, and the kiosks. It now means we have to make sure the information says confidentially. According to the International Journal of Production Research, a fundamental understanding of IT security risk is essential as IT has become the medium of business functionality. The first part of information security that we will be focusing on is our electronic transaction security used in the kiosks. In the last few decades, we have been moving closer and closer to a cash-less. Most people these days make all their transactions with credit cards and debit cards. Our customers will be able to interact with the kiosks and use their credit card to pay for their order. This means that they are subjectable to payment card fraud use by a skimming device or bugs. Skimming devices are a physical device that is put on a card reader and is used by criminals and copy exact of the magnetic stripe found on payment devices and accesses or transmitted to the criminals. The danger is that these types of devices are typically not noticeable, and criminals can get away with a lot of information before anyone can find out. The first line of defense in security management which is why we will have all of our employees receive PCI (Payment Card Industry) awareness training. We want our employees to understand the importance of payment card data security as well as be able to identify potential threats. We will also have installed an anti-virus installed on the kiosks to detect and alert of any skimmer bugs put in the system to serve as a second level of the defense. The next incorporation of information technology security we used was to protect our website. Websites are a great tool and asset for any business that allows for constant interactions between the company and its customers. However, websites are susceptible to hacks that could make the website go down and even worse ruin the reputation of the company. In order to protect our website, we will have a firewall in place. A firewall is a network security device that monitors incoming and outgoing network traffic and decides to either allow or block that specific traffic. The café wants to use this to protect our website against any forms of hacks and miss use of the website and make sure our information we collect stays confidential. The next step for our website was to install Antivirus software. This is software specially designed to actively search and remove bugs and viruses if they made it past the firewall and into the system. The café sees the value of using multiple forms of protection in order to achieve the greatest level of security. In recent times smartphones have become a part of life and it seems like everyone is using them. Businesses have been creating applications for these smartphones for years in order to better reach their customers. However, this has opened new opportunities for hacks and criminals as well. According to the Institute of Electrical and Electronic Engineers, they found that there were 267,259 malware-infected apps available for download of which 254,158 were on the Android platform. This is a serious problem because personal data is stored in smartphones including online banking and other financial transactions from online shopping. This is why we want to ensure our mobile app will remain free of malware to protect our customers and reputation. This means we will have antivirus installed into the application on day one of its release for both apple and android Part 5: Integrated Solution and Conclusion The IT enablement strategy is compatible with the entity's business strategy and as a result, will enable the coffee shop to implement its differentiation strategy. The IT implementation decisions will enable the coffee shop to offer a wide variety of products in a convenient and timely manner. The IT enablers including a mobile app, an interactive website, kiosks, drive-thru facilities, and interactive order screens for workers will all work in tandem to enhance productivity and improve communication within the establishment. The kiosks will increment the capacity of clients orders at a go, and in turn, this scenario will diminish the wait time for clients. The drive-thru will enable clients to order from their vehicles, and such convenience will generate more orders leading to substantial revenues. The mobile app will allow clients to request services from any location, and the orders will be brought to a designated parking spot. The entity’s website will allow the coffee shop to partner with other vendors who may want to sell their products on its platform. The platform will also be accessible to corporate hosting events, and as a result, the revenues of the entity will increase considerably. The interactive screens will assist the employees in tracking the orders to the specific clients. The three screens catering to the three designated areas will enhance the firm's productivity. The IT enablers will build a new image and reputation for the coffee shop, and as a result, fuel its growth. The new clients will increase the entity’s earnings and profits. The IT enablers linked to the New Economy will result in creative and innovative ideas which build value. For instance, the collection of client information through the kiosks can be accompanied by the storage of the information on the cloud, which is more secure and can handle vast amounts of data. However, the successful implementation of the IT enablers will depend on the integration of customer security. The information technology security alongside the IT enablers will create value for the customers by providing a convenient and secure platform for purchasing the beverages and foodstuffs. The information on the clients will stay confidential, and this scenario will enable the coffee shop to gain the client's trust. The firewall and antivirus software will facilitate data protection on the website, mobile app, and kiosks by detecting and removing potential security threats (Partida and Andina 10). Confidentiality will boost the entity’s image in the corporate world and enhance its reputation. Businesses value information security, and as a result, the security measures implemented by the coffee shop will act as a source of competitive advantage. The provision of safe and secure means for making payment will increase the customers' trust in the entity, and this scenario will result in more sales. The increase in customers due to numerous benefits including a wide variety of offerings, convenience, and quick service will create awareness and boost the number of clients significantly. The increase in demand will necessitate the expansion of the entity to other areas through franchises. The franchising arrangement will also bring in additional revenues in terms of franchise fees. Monthly Revenues $300,000 Monthly Costs Kiosks equipment costs and salaries $50,000 Drive-thru costs (salaries and equipment) $30,000 Mobile app and website $100,000 Order screens $50,000 Antivirus software, firewalls, PCI awareness training $20,000 Anticipated profit $50,000 Works cited Partida, Alberto, and Diego Andina. IT Security Management: It Securiteers - Setting Up an IT Security Function. Dordrecht: Springer, 2010. ITM 209 Team Project: The New Economy The New Economy noun Activities based on knowledge and information, rather than traditional industries such as manufacturing: Software and electronic equipment have been the drivers of The New Economy. Spring, 2019 ITM 209 Team Project Ideas: The New Economy ► Your team has been challenged to be very creative and pursue innovative value creation ideas in the ITM 209 Team Project to create a competitive advantage for your grandfather’s coffee shop ► We have discussed in lecture how the IT Enablers associated with disruptive technology may be useful to open new markets and significantly gain market share ► Example New Economy ideas, associated with these IT Enablers for disruptive technologies, include Airbnb, Uber, Amazon and Whole Foods, new home delivery opportunities, wearable technologies, and other examples involving innovative and creative opportunities ITM 209 Team Project Ideas: The New Economy (continued) ► What are your IT Enablers related to the New Economy that will result in creative and innovative value creation ideas for you to create a competitive advantage for your grandfather’s coffee shop? ► Please include your New Economy ideas within your Team Project report to assure your team qualifies for an outstanding grade for your Team Project ► The following slides provide insights regarding New Economy Ideas for your team to consider ► Please research additional New Economy Ideas to gain additional insights regarding New Economy concepts for your ITM 209 Team Project report ITM 209 Team Project: Incorporating The New Economy Ideas Into Your Team Project Report the new economy noun activities based on knowledge and information, rather than traditional industries such as manufacturing: Software and electronic equipment have been the drivers of the new economy. Fourth Industrial Revolution (Industry 4.0) Blurring lines between physical, digital, and biological spheres VELOCITY, SCOPE, SYSTEMS Fundamentally change the way we live, work, play, relate to one another … and LEARN! Implications of Industry 4.0 ► “Computer intelligence will surpass human intelligence … by 2029.” - Ray Kurzweil (Futurist) … “Big Bang Disruption” ► Disruption ► ► ► ► ► Declining cost of Creation, Information, Experimentation Every business is a digital business Market penetration and saturation occurs in short blasts Rogers’ bell curve of technology adoption … now a “shark fin” Winner take all Implications of Industry 4.0 Competing in a World of Sectors without Borders ► Digitization is reordering industry boundaries ► CEO’s ► Cross-border dynamics: “Companies from other industries have clearer insight into my customers than I do.” ► Digital ► ► top-of-mind concern ecosystems Leading to industries converging Raising customer expectations ► Example: ► AMAZON … Retailer, Tech co., Logistics co., ??? Implications of Industry 4.0 Generation Z (born ~1995-2000) ► Parents: Gen X (usually not Millennials) ► Look at smartphones more than TV (2.5 times) ► See social media as a “community” ► Seek ► more than a job Truly want to change the world ► DiY generation ► Prefer intrapersonal and independent learning over group work Of the top 10 private unicorns, only one is not part of the New Economy Top 10 private unicorns based in the U.S. ► AirBnB, (room sharing), CA ► Palantir (analytics), CA ► WeWork (workspace provider for creatives), NY ► Pinterest (visual bookmarking), CA ► Space-X (rocketry design and mfring), CA ► Dropbox (cloud file sharing), CA ► Infor (enterprise CRM, ERP software), NY ► Stripe (online payment), CA ► Lyft (ride sharing), CA All but one of the fastest growing public tech companies in 2017 are New Economy Fastest Growing Public Tech Companies in 2017 ► Grubhub (delivers from restaurants) ► Facebook ► Arista Networks (networking equipment for data centers) ► Paycom (payroll, HR software) ► Ellie Mae (automatic mortgage processing for small lenders) ► Stamps.com (internet-based mailing, shipping) ► Netscout Systems (app and network management systems) ► Veeva Systems (Big Pharm software) ► Gigamon (data visibility) ► Shutterstock (stock pics, video, music)
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