Information Systems – A Business ApproachSteve Benson & Craig Standing
Information SystemsA Business Approach
Strategic IS Management
Information Systems – A Business ApproachSteve Benson & Craig Standing
Strategy and Information Systems
Strategy works at different levels in the organisation
There should be a corporate strategy
There should be an information systems strategy
The IS strategy should be aligned with the corporate strategy
Much of this section may seem to focus on general strategy but these techniques can be used for IS strategy formulation
Information Systems – A Business ApproachSteve Benson & Craig Standing
StrategyA strategy is a plan for achieving medium and long term goals
A strategic plan includes the goals, means (strategies) and metrics (measurements e.g. critical success factors) and addresses the mission and vision statement of the organisation
The more mature an organisation the better defined its plans are
Strategic plans can date very quickly in a changing environmentmany businesses opt for a loose fitting general framework rather
than a detailed plan as a result
Information Systems – A Business ApproachSteve Benson & Craig Standing
Advantages Of A Strategic PlanProvides the organisation with a focus - this should be communicated
to staff, suppliers and customers.
People are more effective when they know what they are supposed to be doing - their activities are more focussed … also decision making should improve.
The production of a strategic plan involves SWOT analysis finding out where strengths and weaknesses lie and
developing/maintaining a competitive advantage.NB. Planning is like cutting the grass, you can do a great job today but
it will need doing again fairly soon and on a regular basis.
Information Systems – A Business ApproachSteve Benson & Craig Standing
Components Of Corporate Strategy
Skills Capital
MISSION
Environment
Politics Economy
GrowthGrowth
DefensiveDefensive
Business
Functional
StabilityStability
Strategy ImplementationStrategy Implementation
Resources
Markets
Corporate
SWOTAnalysis Porter's Competitive
ForcesInformationArchitecture
Value Chain Analysis
Levels of Strategy
Strategic Analysis
Outsourcing
Organisational Culture and EnvironmentAlliances
Competition
Information Systems – A Business ApproachSteve Benson & Craig Standing
Level of organisational strategy
Information Systems – A Business ApproachSteve Benson & Craig Standing
Strategic Analysis
SWOT Analysis
A form of competitive analysisStrengths – of the organisationWeaknesses – of the organisationOpportunities – in the environment Threats – in the environment
Information Systems – A Business ApproachSteve Benson & Craig Standing
Example SWOT AnalysisInternal to Organisation External to Organisation
Strengths Weaknesses Opportunities Threats
Sound
management
Poor administrative
procedures
Growth market Skills shortage
Greatest market
share
Low profit margin New government
legislation
Recession in
economy
Latest
technology
infrastructure
High staff turnover Take advantage of
new technology
New product
developments -
obsolescence
Highly skilled
staff
Market image Expand into new
markets
Increasing
competition
Low cost
product
development
High cost product
development
Niche product New legislation
Information Systems – A Business ApproachSteve Benson & Craig Standing
Porter’s Competitive Forces
Porter’s competitive forces another form of competitive analysisnever intended for IS use but often applicable in
a general sensePorter’s 5 competitive forces are:
• New entrants• Increased bargaining power of buyers• Increased bargaining power of suppliers• Threat of other industries offering substitutes• Rivalry between competing sellers
Information Systems – A Business ApproachSteve Benson & Craig Standing
Value Chain Analysis Value chain analysis
a lower form of analysis than SWOT in which the organisation is viewed as an input output system
resources (inputs) are brought into the organisation, processed and then sold (outputs)
Improvements can be made in the each of the primary & secondary activities in the value chain
Primary activities - Inbound logistics, Operations, Outbound logistics, Marketing, Service
Secondary activities – administration, research and development, human resource management and information systems development
Information Systems – A Business ApproachSteve Benson & Craig Standing
Example Value Chain
Primary activities are key tasks that return most value, secondary activities are support tasks (e.g. admin) … here Web applications add value to both.
Information Systems – A Business ApproachSteve Benson & Craig Standing
Aligning IS With Business GoalsThe IS strategic plan must be conformant with the business plan (top down).
For some organisations, the IS is the business plan.
Care must be taken to avoid developing systems which:Take too much time and money to develop because they do not have the full
backing of senior people.Do not provide a significant return to the organisation because they are
peripheral to the core business needs.Displace other, perhaps more worthwhile, projects from being developed as
they consume organisational resources.Are not maintained effectively and eventually become a problem for the
business. The information systems may be poorly perceived by the customers and/or employees.
Information Systems – A Business ApproachSteve Benson & Craig Standing
Traditional vs. Dynamic Companies
Traditional Company Dynamic Company
Hierarchy and bureaucracy Flatter, dispersed personnel and outsourcing
Optimising existing processes Innovation - create new processes
Slow and methodical Speed as a competitive edge Conflict covered up Openness Clear boundaries between functions
Few boundaries, knowledge sharing
Knowledge "silos" Networks and alliances Computers play support role Computer systems and networks essential Product and structure define company
Service and innovation define company
Precise and certainty Live with uncertainty Avoid risk Take risks Centralised decision making and ideas
Decentralised innovation - ideas come from anywhere
Information Systems – A Business ApproachSteve Benson & Craig Standing
Knowledge ManagementKM consists of creating, storing, managing, accessing and sharing tacit
knowledge (personal knowledge) and explicit knowledge (documented in books, intranets, etc.)
A wide range of companies are effectively developing knowledge management programmes for: cost reductionprocess improvement improving productivity improving time to marketand increasing innovation
The types of application include: Frequently Asked Questions (FAQs), reuse, best practices, problem solving software, decision support systems, resource management systems, and asset management systems
Information Systems – A Business ApproachSteve Benson & Craig Standing
Types Of Knowledge
Know-why - explanatory knowledge, scientific knowledge of principles (laws of nature)
Know-how - skills, the ability to organise resources to achieve desired outcomes
Know-who - social knowledge, refers to specific social relations - e.g. who controls the resources needed in a particular situation.
Know-when/Know-where - economically useful knowledge about markets
Know-what - catalogue knowledge
Information Systems – A Business ApproachSteve Benson & Craig Standing
The Learning Organisation
Peter Senge (1990) coined the term to describe companies whose ability to learn will provide them with a competitive advantage
A company which creates new knowledge may not manage it effectively
The learning organisation and knowledge management should go hand in hand.
How many companies can you think of which have a feedback mechanism in the systems and processes for learning?
Information Systems – A Business ApproachSteve Benson & Craig Standing
The Real Challenge
The reward structures in most companies often conspire against good knowledge managementPay and conditions are related to status which in turn
relates to knowledge and skillsWhy would employee A help employee B to become
a rival in the promotion and pay stakes?Information systems can play a key role in helping
people share knowledge, store knowledge, and find knowledge
Information Systems – A Business ApproachSteve Benson & Craig Standing
Summary A strategy is a medium to long term plan outlining the goals of the
organisation The information systems plan should be aligned with the
organisation's strategic plan IS managers can employ one or a number of strategic planning
methods, such as Porter's Competitive Model and SWOT Analysis There are occasions when the information technology can act as a
strategic driver in its own right The Information Architecture is a plan for the organisation's
information and technology infrastructure Creating an effective knowledge based organisational environment
is a strategic direction facilitated by information systems