Read Microsoft%20PowerPoint%20-%20Lecture%202-UoA.pdf text version

The Strategic Role of Information Systems

Prof. Drakoulis Martakos University of Athens Department of Informatics Email: [email protected]

Dr. Panagiotis Kanellis

Business Consulting Email: [email protected]

Objectives

s s

s

s s

s

what is `strategy' six major types of IS in organizations relationship between the types of IS information as a strategic resource how IS support the three levels of strategy issues in developing a strategic IS

What is Strategy?

s

s

s

"Operational Effectiveness" means performing similar activities better than rivals do "Strategic Positioning" means performing different activities from rivals or performing similar activities in different ways "Organizations have competitive advantage when they provide more value to their customers or when they provide the same value to customers at a lower price"

Source: Porter, M.E. HBR November-December 1996

The Essence of Strategy

"The essence of strategy is choosing to perform activities differently than rivals do"

Source: Porter, M.E. HBR November-December 1996

Areas of Agreement on Strategy (Chaffee, 1985)

s

Strategy concerns both organization and environment

x

"A basic premise of thinking about strategy concerns the inseparability of organization and environment...the organization uses strategy to deal with changing environments" "Because change brings novel combinations of circumstances to the organization, the substance of strategy remains unstructured, un-programmed, nonroutine, and non-repetitive..."

s

The substance of strategy is complex

x

s

Strategy affects overall welfare of the organization

x

"Strategic decisions are considered important enough to affect the overall welfare of the organization"

Areas of Agreement on Strategy (Chaffee, 1985)(2)

s

Strategy involves issues of both content and process

x

"The study of strategy includes both the actions taken, or the content of strategy, and the processes by which actions are decided and implemented" "Theorists... Agree that intended, emergent, and realized strategies may differ from one another" "...Firms have...corporate strategy (What business shall we be in?) and business strategy (how shall we compete in each business?)" "Strategy involves conceptual as well as analytical exercises. Some stress the analytical dimension more than others, but most affirm that the heart of strategy making is the conceptual work done by leaders of the organization"

s

Strategies are not purely deliberate

x

s

Strategies exist on different levels

x

s

Strategy involves thought processes

x

Different Kinds of Information Systems

INFORMATION SYSTEM GROUPS SERVED

Strategic Level Senior Managers

Management Level

Middle Managers

Knowledge Level

Knowledge and Data Workers

Operational Level

Operational Managers

Sales & Marketing

Manufacturing

Finance

Accounting

Human Resources

Six Major Types of IS

Strategic-Level Systems

Executive Support Systems Decision Support Systems Management Information Systems

5-year sales trend forecasting 5-year operating plan 5-year budget forecasting

Management-Level Systems

Sales region analysis Production scheduling Cost analysis Pricing/profitability analysis

Sales management

Inventory control

Annual budgeting

Capital investment analysis

Knowledge-Level Systems

Knowledge Work Systems Office Automation Systems Transaction Processing Systems

Engineering workstations I Work processing systems mage storage Electronic calendars Graphics workstations Managerial workstations

Operational Level Systems

Order processing Plant scheduling Payroll Employee record keeping

Sales and Marketing

Manufacturing

Finance

Accounting

Human Resources

Systems Integration

ESS

Systems Integration is performed at 3 levels:

M IS DSS

· Business · Application · Technology

KW S & O AS

TPS

Systems Integration(2)

Business Architecture

Business Architecture Application Architecture Technology Architecture Organizational Unit

InterOrganizational Processes Enterprise Application Integration Middleware Integration

* **

Application Architecture Technology Architecture Organizational Unit

* `semantic' level ** `syntactical' level

Strategic Information Systems

· 1950-1960 ·Necessary evil, bureaucracy ·1960-1970 ·General purpose support, MIS reporting ·1970-1980 ·Customized management control ·1985-Today ·strategic resource, business foundation

A Strategic Information System can be any IS at any level of an organization that change the goals, processes, products, services, or environmental relationships to help the organization gain a competitive advantage"

Strategy Levels and IT

Strategies Industry

C ooperation Vs C petition om Licensing Standards Synergy C C petencies ore om

M odels

C petitive Forces M om odel N ork econom etw ics

ITTechniques

Electronic Transactions C m om unication Netw orks Interorganizational System s Inform ation Partnerships Know ledge System s O rganization-w System ide s D ining atam IT-based Products/Services Interorganizational System s Supply Chain M anagem ent Efficient C ustom R er esponse

Firm

C C petency ore om

B usiness LowCost

D ifferentiation Scope

Value Chain Analysis

Business Level Strategy and the Value-Chain Model

Adm inistration and Managem ent Scheduling and M essaging Systems Hum Resources an W Force Planning System ork s Technology Computer Aided Design System s Procurem ent Computerized Ordering System s Inbound Logistics Operations Outbound Logistics Automated Shipment Scheduling System s Sales and Marketing Computerized Ordering System s Service

SUPPORT ACTIVITIES

PRIMARY ACTIVITIES

Automated ComputerW arehousing Contolled System s M achining System s

Equipm ent M aintenance System s

M ar gi n

n gi ar M

Firm-Level Strategy and IT

s

s

Synergies - IT is used to tie together the operations of disparate business units so that they can act as a whole Core Competencies - IT is used to encourage the sharing of knowledge across business units

Industry-Level Strategy and IT

· Brand Identity · Switching Costs · Capital Requirements · Access to distribution · Government Policy

New Market Entrants

Substitute Products and Services

· Relative Price Performance of Substitutes

Threat of new entrants

Threat of substitutes

· Switching Costs · Buyer Propensity to Substitute

The Firm

Traditional Competitors

Intensity of Rivalry Bargaining power of suppliers

· Input Differentiation · Supplier Concentration · Importance of Volume to Supplier · Forward Integration · Impact of Inputs on Cost or Differentiation

Bargaining power of customers

Customers

· Buyer Information · Buyer Volume · Switching Costs · Backward Integration · Product Difference

Suppliers

Competitive Advantage can be achieved by enhancing the firm's ability to deal with customers, suppliers, substitute products and services, and new entrants to its market, which in turn may change the balance of power between a firm and other competitors in the industry in the firm's favor

Strategic Transitions

s s s

s

Internal Restructuring Blurring of Organizational Boundaries Redesign of a Firm's Operating Procedures Change is constant SIS are rarely planned -they evolve! Like most new products, they come from closely observing real-world situations

Strategic Thinking as Seeing

(Mintzberg)

Beyond

Above

Behind

Ahead

Through

Beside

And remember...

The competitive value of individual activities

should not be separated from the whole

Information

18 pages

Find more like this

Report File (DMCA)

Our content is added by our users. We aim to remove reported files within 1 working day. Please use this link to notify us:

Report this file as copyright or inappropriate

548536