Information Systems '" for Managers in the Digital Age With Cases, 5th Edition Gabriele Piccoli, Federi... Expand Collapse V Chapter 5. Digital 110 My Library Transformation, Innovation, and Entrepreneurship Planning Systems This Chapter 7.1. Introduction Added Value of Value Created Value Created Appropriating the Value Created The Definition of Added Value Added Value in a Competitive Market III Part III: The strategic Use 144 of Information Systems Chapter 6. Strategic 147 Information Systems A Chapter 7. Value Creation 165 and Strategic Information What You Will Learn in 165 166 7.2. The Analysis of l66 The Definition of Value 1637 Defining the Components 168 Computing the Total l69 170 171 171 Information Systems for Managers in the Digital Age With Cases, 5th Edition Q AA F; .0. Chapter 7 Value Creation and Strategic Information Systems What You Will Learn in This Chapter This chapter focuses on the strategic role of information systems (IS) and the digital technology that enables them. The definitions, analytical frameworks, examples, and exercises in this chapter will help you develop a knowledge base that allows you to confidently identify and evaluate the added value creation potential of information technology (IT)- dependent strategic initiatives. In this chapter, you will become well versed in the language of added value analysis and strategic information systems. Al Dente is a London-based small chain of four restaurants focused on fresh pasta dishes. The concept is based on quality of food and the mystique of its fresh pasta lab and kitchen. While housed in the basement of each restaurant, the pasta lab and kitchen are open to customers who want a tour to understand what makes fresh pasta so good. The concept has been very successful since its inception, seemingly hitting the target with a sophisticated clientele willing to pay a premium for authentic, fresh Italian pasta. Located in densely populated, affluent, residential London neighborhoods, each Al Dente restaurant offers dine-in options, with a very popular wine bar concept, but does a lot of takeout business. While it has yet to experiment with delivery, worried about the quality of the dishes when they get to destination, AI Dente's head chef was nonetheless experimenting with packaging to find the right solution, ensuring the preservation of AI Dente's food quality upon delivery. The restaurant chain is in need of upgrading its Kitchen Display System (KDS) from Oracle, which is at the end of its useful life. The KDS is the unsung hero of back-ofthe-house restaurant operations. The system delivers critical functionalities, such as meal coursing, delayed routing, and cook times, which ensure accurate order management. As orders are received from the point of sale (POS), the KDS routes them and displays them to the kitchen staff so as to ensure that all items are prepped and cooked for simultaneous delivery and optimal quality. The AI Dente KDS is at the end of its five-year useful life. After five years, Oracle stops guaranteeing support for legacy applications and requires customers to upgrade hardware and software to the current version. While some restaurants take the risk of running III w www.mm mm: Expand Collapse A Part III: The Strategic Use of Information Systems V Chapter 6. Strategic Information Systems Planning A Chapter 7. Value Creation and Strategic Information Systems What You Will Learn in This Chapter 7.1. Introduction 7.2. The Analysis of Added Value The Definition of Value Defining the Components of Value Created Computing the Total Value Created Appropriating the Value Created The Definition of Added Value Added Value in a Competitive Market Pricing Considerations The Relationship between D Information Systems '" for Managers in the Digital Age With Cases, 5th Edition Gabriele Piccoli, Federi... 144 147 165 165 166 166 167 168 169 170 171 171 172 172 My Library Information Systems for Managers in the Digital Age With Cases, 5th Edition Q AA takeout business. While it has yet to experiment with delivery, worried about the quality of the dishes when they get to destination, Al Dente's head chef was nonetheless experimenting with packaging to find the right solution, ensuring the preservation of AI Dente's food quality upon delivery. The restaurant chain is in need of upgrading its Kitchen Display System (KDS) from Oracle, which is at the end of its useful life. The KDS is the unsung hero of back-of-the-house restaurant operations. The system delivers critical functionalities, such as meal coursing, delayed routing, and cook times, which ensure accurate order management. As orders are received from the point of sale (POS), the KDS routes them and displays them to the kitchen staff so as to ensure that all items are prepped and cooked for simultaneous delivery and optimal quality. The AI Dente KDS is at the end of its five-year useful life. After five years, Oracle stops guaranteeing support for legacy applications and requires customers to upgrade hardware and software to the current version. While some restaurants take the risk of running obsolete, unsupported software to save money, Al Dente is a dynamic, growing chain focused on quality food and service and has already decided to upgrade to the Oracle MICROS Express Station 400 (Figure 7.1) and sign a new five-year agreement. The Al Dente setup for each restaurant is a dedicated Windows machine based on commodity hardware, with two overhead 24-inch antiglare displays with an integrated soundbar, sealed against humidity, grease, and other airborne contaminants. The hardware/software bundle costs Al Dente $1,000 per restaurant and requires signing the Enterprise License, totaling $200 a year per restaurant. WizTech, a California-based high-tech firm specializing in cloud solutions, has recently contacted Al Dente's general manager. This contact is very timely, given the imminent upgrade to Oracle MICROS Express Station 400. WizTech is beginning to commercialize a cloud-native KDS solution that delivers the exact same functionalities as the leading KDS. It also uses the same displays. However, being cloud native, it does not require any other hardware, including the dedicated Windows machine. Moreover, to ensure a degree of business continuity, WizTech offers, free of charge, a "work offline service" that enables temporary operations in case of unavailable Internet access; this service is secure and managed seamlessly by WizTech until the connection is back in operation. Thus the WizTech solution is a perfect substitute for the Oracle KDS. WizTech's premium solution has a subscription price of $500 per year for four restaurants. The hardware, setup, and installation for all four Al Dente restaurants costs WizTech $1,500 to produce and install. Discussion Questions 1. What should Al Dente's general manager do? 2. Does WizTech enjoy a competitive advantage (or disadvantage) in this market? 3. Can you quantify such an advantage (or disadvantage)?