Discuss the synergy between the business strategy of Zipcar and information technology.

Discussion: Cognizant Technology Solutions

Strategic Use of Information Resources

bringing the new Web 2.0 mind‐set of focusing on automation, customer empowerment, transparency, and community. Zipcar is very successful; as of August 2015, its Website boasts over 900,000 paying members and renting over 10,000 vehicles in 30 major metro markets in the United States, Canada, and the United Kingdom, as well as 400 college cam- puses and 50 airports.

Discussion Questions

1. Apply the resource‐based view to Zipcar ’ s business model to show how information resources may be used to gain and sustain competitive advantage.

2. Discuss the synergy between the business strategy of Zipcar and information technology.

3. What network effects are part of Zipca r ’ s strategy? How do they add value?

4. As the CEO of Zipca r, what is your most threatening competition? What would you do to sustain a competitive advantage?

Sources: Adapted from Paul Boutin , “ A Self‐Service Rental Car ,” Businessweek (May 3 , 2006 ), http://www.bloomberg.com/bw/ stories/2006‐05‐03/a‐self‐service‐rental‐car (accessed August 19, 2015) ; Mary K. Pratt , “ RFID: A Ticket to Ride ,” Computerworld (Decem- ber 18, 2006 ), http://www.computerworld.com/article/2554153/mobile‐wireless/rfi d—a‐ticket‐to‐ride.html (accessed August 19, 2015) ; “Zipcar: Our Technology Downloaded,” http://www.zipcar.com/how/technology; Zipcar: “Zipcar Overview,” http://www.zipcar.com/ press/overview (accessed August 19, 2015).

c02.indd 54 11/26/2015 6:20:51 PM

http://www.bloomberg.com/bw/stories/2006%E2%80%9005%E2%80%9003/a%E2%80%90self%E2%80%90service%E2%80%90rental%E2%80%90car
http://www.computerworld.com/article/2554153/mobile%E2%80%90wireless/rfi
http://www.zipcar.com/how/technology
http://www.zipcar.com
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3 chapter

In order for information systems (IS) to support an organization in achieving its goals, the organization must refl ect the business strategy and be coordinated with the organizational strategy. This chapter focuses on linking and coordinating the IS strategy with the three components of organizational strategy:

• Organizational design (decision rights, formal reporting relationships and structure, informal networks)

• Management control systems (planning, data collection, performance measurement, evaluation, incentives, and rewards)

• Internal culture (values, locus of control)

Organizational Strategy and Information Systems

After 20 years of fast growth, in 2014 Cognizant Technology Solutions was a company with $8.84 billion in revenues from providing IS outsourcing services. However, growing at such a breakneck speed, it had to reinvent its organizational structure many times to make sure that it facilitated the fl ow of information. Initially, its India‐centric structure located managers of each group in India along with software engineers. Employees at customer locations worldwide reported to the man- agers. As the company grew and its focus shifted from simple, cost‐based solutions to complex, relationship‐based solutions, this structure had to be changed to be more customer oriented. Under the redesigned reporting structure, managers were moved to customer locations but software engi- neers remained in India.

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