Management & Information
Systems
B. Dobrev
Strategic Information Systems
What is a SIS?
Change goals, operations, product, services or
environmental relationships to help the
organisation to gain Competitive Advantages
Competitive Advantages due to:
New products & services
Quality
Lower costs
Marketing
Logistics
Customer relations
Firm strategies
 Cost Leadership
 Product differentiation
 Focus on Market niche
 Enhancing Core
Competencies
Industry Level
Strategies
 Information partnership
 Network economics
Business Strategy
IS Strategy
Major
Corporate
Changes
External
Competitive
Opportunities
or trends
(O’Brien)
Evolutionary
Change
in IS maturing
Business Environment
Business Strategy
IS Strategy
Business Strategy
Business Environment
O’Brien Model
of SIS perspectives
 Dramatic Efficiency Gains
 Promote Business Innovation
 Build Strategic IS resource
Characteristics of SIS
 IT is used to achieve
business goals
 Partnership between
business and IT managers is
required
Industry Impacts of SIS
 Nature of Products &
Services
 Product Life Cycle
 Geographical Scope
 Economies of scale in
production
 Bargaining power of
suppliers
 New business creation
Competitive Impacts of SIS
 Products development cycle
 Product quality enhancement
 Sales force and selling support
 Order cycle automation
 Cost reduction
 Reduction of management levels
Four Potential business impacts of IS
Market place
(external)
Approaches to
operations
Improve ways
of interacting
with competitive
marketplace
Alter ways of
competing
Improve ways of
managing
internal operations
Alter ways of
operating
(Internal)
Improve
traditional ways
Alter
Traditional
ways
Strategic opportunities offered by IS
Parson’s Generic IS Strategies
 Centrally planned
 Leading edge
 Free market
 Monopoly
 Scarce resources
 Necessary evil
Ward
Low cost/cost leadership
- Scarce
Resource
Free market
Necessary evil
Differentiation
- Monopoly
Leading edge
Focus / niche
- Centrally
planned
The competitive forces model
New market
entrants
Substitute products
and services
The Industry
The Firm
Suppliers
Traditional
industry
competitors
Customers
Strategic importance matrix
High
Strategic
importance
of planned IS
Turnaround
Strategic
Support
Factory
Low
Low
Strategic importance of current IS
High
SWOT Matrix
Internal factors
Strengths
Opportunities
External factors
Strengths
Threats
Weaknesses
Opportunities
Weaknesses
Threats
Value Chain
Administrative Coordination and Support Services
SIS: Collaborative Workflow Intranet-Based System
Support
Processes
Human Resource Management
SIS: Career Development Intranet for Employees
Technology Development
SIS: Computer-Aided Engineering and Design Extranet with Partners
Procurement of Resources
SIS: E-Commerce Auctions and Exchanges for Suppliers
Primary
Business
Processes
Inbound
Logistics
Operations
Outbound
Logistics
Customer
Marketing and
Services
Sales
SIS: Computer
SIS: Customer
SIS: Online
Aided
SIS: Computer
SIS: Interactive Relationship
Point-of-Sale
Flexible
Just-in-time
Targeted
Management
and Order
Warehousing Manufacturing
Marketing
Processing
Competitive
Advantage
Internet
capability
Benefits
to
company
Marketing and
Product Research
Data for
market
research
Establishes
consumer
Response
to new
Products
Environmental
scanning
Opportunities
for
Advantage
Increased market
Share
Sales and
Distribution
Reaches new
Customers
Low-cost
distribution
methods
Electronic
catalog
Multiplies
contact
points at no
Incremental cost
Lower cost
margins
Support and
Customer Feedback
Access to
consumer
comments
online
More staff in
contact with
Customers
Immediate
response to
consumer
problems
Enhanced customer
satisfaction
Relationship between strategic importance grid
and generic IS Strategies
High
Turnaround
Strategic
1. Centrally planned 1. Leading edge
2. Leading edge
2. Centrally planned
3. Free market
Strategic
importance
of planned IS
Support
Low
1.
2.
3.
4.
Scarce resource
Monopoly
Free market
Necessary evil
Factory
1. Monopoly
2. Scarce resource
Low
Strategic importance of current IS
High
Opportunities and Vulnerabilities of Strategic
Information Technology Applications
HIGH
General
Value-adding
potential of
IT Applications
LOW
Beware
Attack
Be safe
Explore
LOW
HIGH
Quality of Current Information
System Resources
Principles for SIS Planning
 Support Business Strategy
 Evaluate ICT
 Recognise SDLC Costs
 Assure Maintenance
 Human Resources
 Management & Control
Earl’s 5 Types of
Planning Approaches
 Business led
 Method driven
 Administrative
 Technological
 Organisational
The four phases of strategic IS/IT planning
FOCUS
• Business objectives
• IS/IT opportunities
• Initial blueprint
• Current IS/IT
• Scope of strategy
MAIN OUTPUTS
Confirm business
Objective and analysis
IS/IT opportunities
Analysis needs, assess
current IS/IT and
determine scope
of strategy
• Detailed blueprints for
main components
• Assessment IS/IT
strategies
Define target IS/IT
architectures (IDATO)
and determine alternative
strategies
• Conclusion of strategy
• Implementation plan
• Costs and benefits
Complete IS/IT strategy
And develop IS/IT
Implementation plan
• Business objectives
• IS/IT opportunities
• Initial blueprint
• Assessment of current IS/IT
• Review of IT organisation
• Prioritisation of applications
• Scoping of IS/IT strategy
• Detailed target architecture
Information
I
Data
D
Applications
A
Technology
T
IT organisation
O
• IS/IT strategy
• IS/IT implementation
• Executive summary
= checkpoint
Decision Making Process
Models:
Individual
Rational
Cognitive (systematic, intuitive)
Organisational
Bureaucratic
Political
“Garbage Can”
Steps in Decision Making
Internal or
External Environment
Problem finding
Scan the environment
Identify problems
that need to be solved
Internal or
external data
Problem to be solved
Problem Solving
Intelligence
• Collect and
analyse data
about the problem
Design
Choice
•Identify criteria
•Create alternatives
•Evaluate outcomes
• Select preferred
alternative
Implementation
• Inform others
of the decision
• Put the decision
into effect
Results
Components of DSS
External
Data
TPS
DSS
Database
DSS Software system
Models
OLAP Tools
Datamining Tools
User
Interface
User
Group DSS
 Preplanning
 Effective participation
 Evaluation opportunities
 Set priorities
 Access to external information