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Characterization of strategic information systems




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    Characterization of strategic
    information systems

    Indice
    1.
    Overview

    2. General Definition
    3. Porter’s Competitive
    Advantage

    4. Wiseman’s Strategic Perspective
    View

    1.
    Overview

    Strategic systems are information systems that are
    developed in response to corporate business initiative. They are
    intended to give competitive advantage to the organization. They
    may deliver a product or service that is at a lower cost, that is
    differentiated, that focuses on a particular market segment, or
    is innovative.
    Some of the key ideas of torefront writers are summarized. These
    include Michael Porter’s Competitive Advantage and the
    Value Chain, Charles Wiseman’s Strategic Perspective View
    and the Strategic Planning Process, F. Warren McFarlan’s
    Competitive Strategy with examples of Information Service’s
    Roles, and Gregory Parson’s Information Technology
    Management at the industry level, at the firm level, and at the
    strategy level.

    2. General Definition

    Strategic information systems are those computer systems that
    implement business strategies; They are those systems where
    information services resources are applied to strategic business
    opportunities in such a way that the computer systems have an
    impact on the organization’s products and business
    operations. Strategic information systems are always systems that
    are developed in response to corporate business initiative. The
    ideas in several well-known cases came from information Services
    people, but they were directed at specific corporate business
    thrusts. In other cases, the ideas came from business operational
    people, and Information Services supplied the technological
    capabilities to realize profitable results.
    Most information systems are looked on as support activities to
    the business. They mechanize operations for better efficiency,
    control, and
    effectiveness, but they do not, in themselves, increase corporate
    profitability. They are simply used to provide management with
    sufficient dependable information to keep the business running
    smoothly, and they are used for analysis to plan new
    directions. Strategic information systems, on the other hand,
    become an integral and necessary part of the business, and
    directly influence market share, earnings, and all other aspects
    of marketplace profitability. They may even bring in new
    products, new markets, and new ways of doing business. They
    directly affect the competitive stance of the organization,
    giving it an advantage against the competitors.
    Most literature on strategic information systems emphasizes the
    dramatic breakthroughs in computer systems, such as American
    Airline’s Sabre System and American Hospital Supply’s
    terminals in customer offices. These, and many other highly
    successful approaches are most attractive to think about, and it
    is always possible that an equivalent success may be attained in
    your organization. There are many possibilities for strategic
    information systems, however, which may not be dramatic
    breakthroughs, but which will certainly become a part of
    corporate decision making and will, increase corporate
    profitability. The development of any strategic information
    systems always enhances the image of information Services in the
    organization, and leads to information management having a more
    participatory role in the operation of the organization.
    The three general types of information systems that are developed
    and in general use are financial systems, operational systems,
    and strategic systems. These categories are not mutually
    exclusive and, in fact, they always overlap to some.
    Well-directed financial systems and operational systems may well
    become the strategic systems for a particular organization.
    Financial systems are the basic computerization of the
    accounting, budgeting, and finance operations of an organization.
    These are similar and ubiquitous in all organizations because the
    computer has proven to be ideal for the mechanization and
    control or
    financial systems; these include the personnel systems because
    the headcount control and payroll of a company is of prime
    financial concern. Financial systems should be one of the bases
    of all other systems because they give a common, controlled
    measurement of all operations and projects, and can supply
    trusted numbers for indicating departmental or project success.
    Organizational planning must be tied to financial analysis. There
    is always a greater opportunity to develop strategic systems when
    the financial systems are in place, and required figures can be
    readily retrieved from them.
    Operational systems, or services systems, help control the
    details of the business. Such systems will vary with each type of
    enterprise. They are the computer systems that operational
    managers need to help run the business on a routing basis. They
    may be useful but mundane systems that simply keep track of
    inventory, for example, and print out reorder points and cost
    allocations. On the other hand, they may have a strategic
    perspective built into them, and may handle inventory in a way
    that dramatically impacts profitability. A prime example of this
    is the American Hospital Supply inventory control system
    installed on customer premises. Where the great majority of
    inventory control systems simply smooth the operations and give
    adequate cost control, this well-know hospital system broke
    through with a new version of the use of an operational system
    for competitive advantage. The great majority of operational
    systems for which many large and small computer systems have been
    purchased, however, simply help to manage and automate the
    business. They are important and necessary, but can only be put
    into the "strategic" category it they have a pronounced impact on
    the profitability of the business.
    All businesses should have both long-range and short-range
    planning of operational systems to ensure that the possibilities
    of computer usefulness will be seized in a reasonable time. Such
    planning will project analysis and costing, system development
    life cycle considerations, and specific technology planning, such
    as for computers, databases, and communications. There must be
    computer capacity planning, technology forecasting, and personnel
    performance planning. It is more likely that those in the
    organization with entrepreneurial vision will conceive of
    strategic plans when such basic operational capabilities are in
    place and are well managed.
    Operational systems, then, are those that keep the organization
    operating under control and most cost effectively. Any of them
    may be changed to strategic systems if they are viewed with
    strategic vision. They are fertile grounds for new business
    opportunities.
    Strategic systems are those that link business and computer
    strategies. They may be systems where a new business thrust has
    been envisioned and its advantages can be best realized through
    the use of information technology. They may be systems where new
    computer technology has been made available on the market, and
    planners with an entrepreneural spirit perceive how the new
    capabilities can quickly gain competitive advantage. They may be
    systems where operational management people and Information
    Services people have brainstormed together over business
    problems, and have realized that a new competitive thrust is
    possible when computer methods are applied in a new way.
    There is a tendency to think that strategic systems are only
    those that have been conceived at what popular, scientific
    writing sometimes calls the "achtpunckt." This is simply
    synthetic German for "the point where you say ‘acht!’
    or ‘that’s it!’" The classical story of
    Archimedes discovering the principle of the density of matter by
    getting into a full bathtub, seeing it overflow, then shouting
    "Eureka!" or "I have found it!" is a perfect example of an
    achtpuncht. It is most pleasant and profitable if someone is
    brilliant enough, or lucky enough, to have such an experience.
    The great majority of people must be content, however, to work
    step-by-step at the process of trying to get strategic vision,
    trying to integrate information services thinking with corporate
    operational thinking, and trying to conceive of new directions to
    take in systems development. This is not an impossible task, but
    it is a slow task that requires a great deal of communication and
    cooperation. If the possibilities of strategic systems are
    clearly understood by all managers in an enterprise, and they
    approach the development of ideas and the planning
    systematically, the chances are good that strategic systems will
    be result. These may not be as dramatic as American
    Airline’s Sabre, but they can certainly be highly
    profitable.
    There is general agreement that strategic systems are those
    information systems that may be used gaining competitive
    advantage. How is competitive advantage gained?. At this point,
    different writers list different possibilities, but none of them
    claim that there may not be other openings to move through. Some
    of the more common ways of thinking about gaining competitive
    advantage are:

    1. Deliver a product or a service at a lower cost. This does
      not necessarily mean the lowest cost, but simply a cost related
      to the quality of the product or service that will be both
      attractive in the marketplace and will yield sufficient return
      on investment. The cost considered is not simply the data
      processing cost, but is the overall cost of all corporate
      activities for the delivery of that product or service. There
      are many operational computer systems that have given internal
      cost saving and other internal advantages, but they cannot be
      thought of as strategic until those savings can be translated
      to a better competitive position in the market.
    2. Deliver a product or service that us differentiated.
      Differentiation means the addition of unique features to a
      product or service that are competitive attractive in the
      market. Generally such features will cost something to produce,
      and so they will be the setting point, rather than the cost
      itself. Seldom does a lowest cost product also have the best
      differentiation. A strategic system helps customers to perceive
      that they are getting some extras for witch they will willingly
      pat.
    3. Focus on a specific market segment. The idea is to identify
      and create market niches that have not been adequately filled.
      Information technology is frequently able to provide the
      capabilities of defining, expanding, and filling a particular
      niche or segment. The application would be quite specific to
      the industry.
    4. Innovation. Develop products or services through the use of
      computers that are new and appreciably from other available
      offerings. Examples of this are automatic credit card handing
      at service stations, and automatic teller machines at banks.
      Such innovative approaches not only give new opportunities to
      attract customers, but also open up entirely new fields of
      business so that their use has very elastic demand.

    Almost any data processing system may be called "strategic" if
    it aligns the computer strategies with the business strategies of
    the organization, and there is close cooperation in its
    development between the information Services people and
    operational business managers. There should be an explicit
    connection between the organization’s business plan and its
    systems plan to provide better support of the
    organization’s goals and objectives, and closer management
    control of the critical information systems.
    Many organizations that have done substantial work with computers
    since the 1950’s have long used the term "strategic
    planning" for any computer developments that are going to
    directly affect the conduct of their business. Not included are
    budget, or annual planning and the planning of developing
    Information Services facilities and the many "housekeeping" tasks
    that are required in any corporation. Definitely included in
    strategic planning are any information systems that will be used
    by operational management to conduct the business more
    profitably. A simple test would be to
    ask whether the president of the corporation, or some senior vice
    presidents, would be interested in the immediate outcome of the
    systems development because they felt it would affect their
    profitability. If the answer is affirmative, then the system is
    strategic.
    Strategic system, thus, attempt to match Information Services
    resources to strategic business opportunities where the computer
    systems will have an impact on the products and the business
    operations. Planning for strategic systems is not defined by
    calendar cycles or routine reporting. It is defined by the effort
    required to impact the competitive environment and the strategy
    of a firm at the point in time that management wants to move on
    the idea.
    Effective strategic systems can only be accomplished, of course,
    if the capabilities are in place for the routine basic work of
    gathering data, evaluating possible equipment and software, and managing the
    routine reporting of project status. The calendarized planning
    and operational work is absolutely necessary as a base from which
    a strategic system can be planned and developed when a priority
    situation arises. When a new strategic need becomes apparent,
    Information Services should have laid the groundwork to be able
    to accept the task of meeting that need.
    Strategic systems that are dramatic innovations will always be
    the ones that are written about in the literature. Consultants in
    strategic systems must have clearly innovative and successful
    examples to attract the attention of senior management. It should
    be clear, however, that most Information Services personnel will
    have to leverage the advertised successes to again funding for
    their own systems. These systems may not have an Olympic effect
    on an organization, but they will have a good chance of being
    clearly profitable. That will be sufficient for most operational
    management, and will draw out the necessary funding and support.
    It helps to talk about the possibilities of great breakthroughs,
    if it is always kept in mind that there are many strategic
    systems developed and installed that are successful enough to be
    highly praised within the organization and offer a competitive
    advantage, but will not be written up in the Harvard Business
    Review.
    Another way of characterizing strategic information systems is to
    point out some of the key ideas of the foremost apostles of such
    systems. In the following sections there are brief summaries of
    some the thoughts about:

    • Porter’s Competitive Advantage
    • Wiseman’s Strategic Perspective View
    • McFarian’s Competitive Strategy
    • Parson’s Strategic Information Technology
      Management.

    These people have all written and spoken about their ideas at
    length, and with great clarity. The only way that justice can
    really be done to their concepts is to read their original
    papers. Some of these therefore, are referenced.

    3. Porter’s Competitive
    Advantage

    Dr. Michael E. Porter, Professor of Business Administration,
    Harvard Business School, Has addressed his ideas in two keystone
    books. Competitive Strategy: Techniques for Analyzing Industries
    and Competitors, and his newer book, Competitive Advantage,
    present a framework for helping firms actually create and sustain
    a competitive advantage in their industry in either cost or
    differentiation. Dr. Porter’s theories on competitive
    advantage are not tied to information systems, but are used by
    others to involve information services technologies.
    In his book, Dr. Porter says that there are two central questions
    in competitive strategy:

    1. How structurally attractive is the industry?
    2. What is the firm’s relative position in the
      industry?

    Both of these questions are dynamic, and neither is sufficient
    alone to guide strategic choices. Both can be influenced by
    competitor behavior, and both can be shaped by a firm’s
    actions. It is imperative that these questions be answered by
    analysis, which will be the starting point for good strategic
    thinking, and will open up possibilities for the role of
    information systems.Industry profitability is a function of live
    basic competitive forces: the threat of new entrants, the threat
    of substitute products or services, the bargaining power of
    suppliers, the bargaining power of buyers, and the intensity of
    the rivalry among existing competitors. Porter’s books give
    techniques for getting a handle on the possible average
    profitability of an industry over time. The analysis of these
    forces is the base for estimating a firm’s relative
    position and competitive advantage. In any industry, the
    sustained average profitability of competitor’s varies
    widely. The problem is to determine how a business can outperform
    the industry average and attain a sustainable competitive
    advantage. It is possible that the answer lies in information
    technology together with good management.
    Porter claims that the principal types of competitive advantage
    are low cost producer, differentiation, and focus. A firm has a
    competitive advantage if it is able to deliver its product or
    service at a lower cost than its competitors. If the quality of
    its product is satisfactory, this will translate into higher
    margins and higher returns. Another advantage is gained if the
    firm is able to differentiate itself in some way. Differentiation
    leads to offering something that is both unique and is desired,
    and translates into a premium price. Again, this will lead to
    higher margins and superior performance.
    It seems that two types of competitive advantage, lower cost and
    differentiation, are mutually exclusive. To get lower cost, you
    sacrifice uniqueness. To get a premium price, there must be extra
    cost involved in the process. To be a superior performer,
    however, you must go for competitive advantage in either cost or
    differentiation.
    Another point of Porter’s is that competitive advantage is
    gained through a strategy bases on scope. It is necessary to look
    at the breadth of a firm’s activities, and narrow the
    competitive scope to gain focus in either an industry segment, a
    geographic area, a customer type, and so on. Competitive
    advantage is most readily gained by defining the competitive
    scope in which the firm is operating, and concentrating on
    it.
    Based on these ideas of type and scope, Porter gives a useful
    tool for analysis which he calls The Value Chain (Figure No. 1).
    This value chain gives a framework on which a useful analysis can
    be hung. The basic notion is that to understand competitive
    advantage in any firm, one cannot look at the firm as a whole. It
    is necessary to identify the specific activities which the firm
    performs to do business. Each firm is a collection of the things
    that it does that all add up to the product being delivered to
    the customer. These activities are numerous and are unique to
    every industry, but it is only in these activities wherecost
    advantage or differentiation can be gained.
    The basic idea is that the firm’s activities can be divided
    into nine generic types. Five are the primary activities, which
    are the activities that create the product, market it and deliver
    it; four are the support activities that cross between the
    primary activities. The primary activities are:

    • Inbound logistics, which includes the receipt and storage
      of material, and the general management of supplies.
    • Operations, which are the manufacturing steps or the
      service steps.
    • Outbound logistics, which are associated with collecting,
      storing, and physically distributing the product to buyers. In
      some companies this is a significant cost, and buyers value
      speed and consistency.
    • Marketing and sales includes customer relations, order
      entry, and price management.
    • After-sales services covers the support of the product in
      the field, installation, customer training, and so on.

    The support activities are shown across the top of Figure No.
    1 because they are a part of all of the firm’s operations.
    They are not directed to the customer, but they allow the firm to
    perform its primary activities. The four generic types of support
    activities are:

    • Procurement, which includes the contracting for and
      purchase of raw materials, or any items used by the enterprise.
      Part of procurement is in the purchasing department, but it is
      also spread throughout the organization.
    • Technology development may simply cover operational
      procedures, or many be involved with the use of complex
      technology. Today, sophisticated technology is pervasive, and
      cuts across all activities; it is not just an R&D
      function.
    • Human resource management is the recruiting, training, and
      development of people. Obviously, the cuts across every other
      activity.
    • Firm infrastructure is a considerable part of the firm,
      including the accounting department, the legal department, the
      planning department, government relations, and so on.

    The basic idea is that competitive advantage grows out of the
    firm’s ability to perform these activities either less
    expensively than its competitors, or in a unique way. Competitive
    advantage should be linked precisely to these specific
    activities, and not thought of broadly at a firm-wide level. This
    is an attractive way of thinking for most information Services
    people, as it is, fundamentally, the systems analysis approach.
    Computer people are trained to reduce systems to their
    components, look for the best application for each component,
    then put together an interrelated system.
    Information technology is also pervasive throughout all parts of
    the value chain. Every activity that the firm performs has the
    potential to imbed information technology because it involves
    information processing. As information technology moves away from
    repetitive transaction processing and permeates all activities in
    the value chain, it will be in a better position to be useful in
    gaining competitive advantage. Figure No. 2, Value Chain: Key
    Activities, gives a brief example of a typical analysis of a
    value chain for a manufacturing company. It is obvious that
    information processing plays an important role in all these key
    activities.
    Porter emphasizes what he call the linkages between the
    activities that the firm performs. No activities in a firm are
    independent, yet each department is managed separately. It is
    most important to understand the cost linkages that are involved
    so that the firm may get an overall optimization of the
    production rather than departmental optimizations. A typical
    linkage might be that if more is spent in procurement, less is
    spent in operations. If more testing is done in operations,
    after-sales service costs will be lower. Multifunctional
    coordination is crucial to competitive advantage, but it is often
    difficult to see. Insights into linkages give the ability to have
    overall optimization. Any strategic information system must be
    analyzed across all departments in the organization.
    Cost and Competitive Advantage. Cost leadership is one of
    Porter’s two types of competitive advantage. The cost
    leader delivers a product of acceptable quality at the lowest
    possible cost. It attempts to open up a significant and
    sustainable cost gap over all other competitors. The cost
    advantage is achieved through superior position in relation to
    the key cost drivers.
    Cost leadership translates into above-average profits if the cost
    leader can command the average prices in the industry. On the
    other hand, cost leaders must maintain quality that is close to,
    or equal to, that of the competition. Achieving cost leadership
    usually requires trade-offs with differentiation. The two are
    usually incompatible.
    Note that a firm’s relative cost position cannot be
    understood by viewing the firm as a whole. Overall cost grows out
    of the cost performing discrete activities. Cost position is
    determined by the cumulative cost of performing all value
    activities.
    To sustain cost advantage, Porter gives a number of cost drivers
    which must be understood in detail because the sustainability of
    cost advantage in an activity depends on the cost drivers of that
    activity. Again, this type of detail is best obtained by
    classical systems analysis methods. Some of the cost drivers
    which must be analyzed, understood, and controlled are:

    • Scale. The appropriate type of scale must be found.
      Policies must be set to reinforce economies of scale in
      scale-sensitive activities.
    • Learning. The learning curve must be understood and
      managed. As the organization tries to learn from competitors,
      it must strive to keep its own learning proprietary.
    • Capacity Utilization. Cost can be controlled by the
      leveling of throughput.
    • Linkages. Linkages should be exploited within the value
      chain. Work with suppliers and channels can reduce costs.
    • Interrelationships. Shared activities can reduce
      costs.
    • Integration. The possibilities for integration or
      de-integration should be examined systematically.
    • Timing. If the advantages of being the firs mover or a late
      mover are understood, they can be exploited.
    • Policies. Policies that enhance the low-cost position or
      differentiation should be emphasized.
    • Location. When viewed as a whole, the location of
      individual activities can be optimized.
    • Institutional Factors. Institutional factors should be
      examined to see whether their change may be helpful.

    Care must be taken in the evaluation and perception of cost
    drivers because there are pitfalls if the thinking is incremental
    and indirect activities are ignored. Even though the
    manufacturing activities, for example, are obvious candidates for
    analyses, they should not have exclusive focus. Linkages must be
    exploited and cross-subsidies avoided.

    Porter gives five steps to achieving cost leadership:

    1. Identify the appropriate value chain and assign costs and
      assets to it.
    2. Identify the cost drivers of each value activity and see
      how they interact.
    3. Determine the relative costs of competitors and the sources
      of cost differences.
    4. Develop a strategy to lower relative cost position through
      controlling cost drivers or reconfiguring the value chain.
    5. Test the cost reduction strategy for sustainability.

    Differentiation Advantage. Differentiation is the second of
    Porter’s two types of competitive advantage. In the
    differentiation strategy, one or more characteristics that are
    widely value by buyers are selected. The purpose is to achieve
    and sustain performance that is superior to any competitor in
    satisfying those buyer needs.
    A differentiator selectively adds costs in areas that are
    important to the buyer. Thus, successful differentiation leads to
    premium prices, and these lead to above-average profitably if
    there is approximate cost parity. To achieve this, efficient
    forms of differentiation must be picked, and costs must be
    reduced in areas that are irrelevant to the buyer needs.
    Buyers are like sellers in that they have their own value chains.
    The product being sold will represent one purchased input, but
    the seller may affect the buyer’s activities in other ways.
    Differentiation can lower the buyer’s cost and improve the
    buyer’s performance, and thus create value, or competitive
    advantage, for the buyer. The buyer may not be able to assess all
    the value that a firm provides, but it looks for signals of
    value, or perceived value.
    A few typical factors which may lower the buyer’s costs
    are:

    • Less idle time
    • Lower risk of failure
    • Lower installation costs
    • Faster processing time
    • Lower labor costs
    • Longer useful life, and so on.

    Figure No. 3 Representative Sources of Differentiation, shows
    a number of typical examples of activities that should be
    considered. It indicates the breadth and detail that must be
    involved in the study.
    Porter points out that differentiation is usually costly,
    depending on the cost drivers of the activities involved. A firm
    must find forms of differentiation where it has a cost advantage
    in differentiating.
    Differentiation is achieved by enhancing the sources of
    uniqueness. These may be found throughout the value chain, and
    should be signaled to the buyer. The cost of differentiation can
    be turned to advantage if the less costly sources are exploited
    and the cost drivers are controlled. The emphasis must be on
    getting a sustainable cost advantage in differentiating. Efforts
    must be made to change the buyer’s criteria by
    reconfiguring the value chain to be unique in new ways, and by
    preemptively responding to changing buyer or channel
    circumstances.
    Differentiation will nor work if there is too much uniqueness, or
    uniqueness that the buyers do not value. The buyer’s
    ability to pay a premium price, the signaling criteria, and the
    segments important to the buyer must all be understood. Also,
    there cannot be over reliance on sources of differentiation that
    competitors can emulate cheaply or quickly.

    Porter lists seven steps to achieving differentiation:

    1. Determine the identify of the real buyer.
    2. Understand the buyer’s value chain, and the impact of
      the seller’s product on it.
    3. Determine the purchasing criteria of the buyer.
    4. Assess possible sources of uniqueness in the firm’s
      value chain.
    5. Identify the cost of these sources of uniqueness.
    6. Choose the value activities that create the most valuable
      differentiation for the buyer relative to the costs
      incurred.
    7. Test the chosen differentiation strategy for
      sustainability.

    Focus Strategies for Advantage. Porter’s writings also
    discuss focus strategies. He emphasizes that a company that
    attempts to completely satisfy every buyer does not have a
    strategy. Focusing means selecting targets and optimizing the
    strategies for them. Focus strategies further segment the
    industry. They may be imitated, but can provide strategic
    openings.
    Clearly, multiple generic strategies may be implemented, but
    internal inconsistencies can then arise, and the distinctions
    between the focused entities may become blurred.
    Porter’s work is directed towards competitive advantage in
    general, and is not specific to strategic information systems. It
    has been reviewed here at some length, however, because his
    concepts are frequently referred to in the writings of others who
    are concerned with strategic information systems. The value chain
    concept has been widely adopted, and the ideas of low cost and
    differentiation are accepted. This section, therefore, is an
    introduction into a further discussion of strategic information
    systems. The implementation of such systems tends to be can
    implementation of the factors elucidated by Porter.

    4. Wiseman’s Strategic
    Perspective View

    Charles Wiseman has applied the current concepts of Strategic
    Information Systems in work at GTE and other companies, and in
    his consulting work as President of Competitive Applications,
    Inc. His book, Strategy and Computers: Information Systems as
    Competitive Weapons, extends Porter’s thinking in many
    practical ways in the Information Systems area, and discusses
    many examples of strategic systems.
    Wiseman emphasizes that companies have begun to use information
    systems strategically to reap significant competitive advantage.
    He feels that the significance of these computer-based products
    and services does not lie in their technological sophistication
    or in the format of the reports they produce; rather, it is found
    in the role played by these information systems in the
    firm’s planning and implementation in gaining and
    maintaining competitive advantage.
    Wiseman points out that although the use of information systems
    may not always lead to competitive advantage, it can serve as an
    important tool in the firm’s strategic plan. Strategic
    systems must not be discovered haphazardly. Those who would be
    competitive leaders must develop a systematic approach for
    identifying strategic information systems (SIS) opportunities.
    Both business management and information management must be
    involved.
    He emphasizes that information technology is now in a position to
    be exploited competitively. A framework must be developed for
    identifying SIS opportunities. There will certainly be
    competitive response, so one should proceed with strategic
    thrusts based on information technology. These moves are just as
    important as other strategic thrusts, such as acquisition,
    geographical expansion, and so on. It is necessary to plan
    rationally about acquisition, major alliances with other firms,
    and other strategic thrusts.
    IMB’S Business Systems Planning (BSP) and MIT’s
    Critical Success Factor (CSF) methodologies are ways to develop
    information architectures and to identify conventional
    information systems, which are primarily used for planning and
    control purposes. To identify SIS, a new model or framework is
    needed. The conventional approach works within the perceived
    structures of the organization. An effective SIS approach arises
    from the forging of new alliances that expand the horizon of
    expectation. Such an approach is most difficult to attain, and
    can only work with top management support. Innovations, however,
    frequently, come from simply a new look at existing
    circumstances, from a new viewpoint. Information Services people
    must start to look systematically at application opportunities
    related to managers.
    Wiseman believes that the range of opportunities is limited by
    the framework adopted. He contrasts the framework for
    Conventional IS Opportunities (Figure No. 4) with the framework
    for Strategic IS Opportunities (Figure No. 5).
    In the conventional view, there are two information system
    thrusts: to automate the basic processes of the firm, or to
    satisfy the information needs of managers, professionals, or
    others. There are three generic targets: strategic planning,
    management control, and operational control. In this perspective,
    there are, thus, six generic opportunity areas.
    In the strategic view of IS opportunities, there are five
    strategic information thrusts and three strategic targets. This
    gives fifteen generic opportunity areas. This opens up the range
    and perspective of management vision.
    Sustainable competitive advantage can mean many things to
    different firms. Competitive advantage may be with respect to a
    supplier, a customer, or a rival. It may exist because of a lower
    price, because of desirable features, or because of the various
    resources that a firm possesses. Sustainability is also highly
    relative, depending upon the business. In established businesses,
    it may refer to years, and the experience that the firm develops
    may be quite difficult to emulate. In other industries, a lead of
    a few weeks or months may be all that is necessary.
    There is an advantage in looking at Figure No. 5 as a study
    group, and brainstorming through it to find out what information
    may be needed to do a job better. One can find competitive
    advantage in information systems when the subjects are broken
    down to specifics.
    Strategic Thrusts. Wiseman uses the term strategic thrusts for
    the moves that companies make to gain or maintain some kind of
    competitive edge, or to reduce the competitive edge of one of the
    strategic targets. Information technology can be used to support
    or to shape one or more of these thrusts. Examining the
    possibilities of these thrusts takes imagination, and it is
    helped by understanding what other firms have done in similar
    situations. This is why so many examples are presented in the
    literature. Analogy is important.
    There is no question that there is considerable overlap between
    conventional information systems and strategic information
    systems. Systems are complex and a great deal of data is
    involved. The idea is to look at this complexity in a new light,
    and see where competitive advantage might possibly be gained.
    Note that Wiseman takes Porter’s three generic categories:
    low cost producer, differentiation, and focus, and extends them
    to five categories: differentiation, cost, innovations, growth,
    and alliance.
    Cost may be move that not only reduces the costs, but also
    reduces the costs of selected strategic targets so that you will
    benefit form preferential treatment. A strategic cost thrust may
    also aim at achieving economies of scale. The examples always
    seem obvious when they are described, but the opportunities can
    usually only be uncovered by considerable search.
    Innovation is another strategic thrust that can be supported or
    shaped by information technology in either product or process. In
    many financial firms, the innovative product is really an
    information system. Innovation requires rapid response to
    opportunities to be successful, but this carries with it the
    question of considerable risk. There can be no innovation without
    risk, whether information systems are included or not.
    Innovation, however, can achieve advantage in product or process
    that results in a fundamental transformation in the way that type
    of business is conducted.
    Grown achieves an advantage by expansion in volume or
    geographical distribution. It may also come from product-time
    diversification. Information systems can be od considerable help
    in the management of rapid growth.
    Alliance gains competitive advantage by gaining growth,
    differentiation, or cost advantages through marketing
    agreements, forming joint ventures, or making appropriate
    acquisitions.
    The Strategic Planning Process. Wiseman advocates brainstorming
    and the systematic search for SIS opportunities. He has had
    considerable success with a formalized framework for surfacing
    ideas. He describes his SIS Planning Process in five phases:
    Phase A: Introduce the Information Services management to SIS
    concepts. Give an overview of the process describe cases. Gain
    approval to proceed with an idea-generation meeting in
    Information Service.
    Phase B: Conduct an SIS idea-generation meeting with Information
    Services middle management. Test the SIS
    idea-generation methodology. Identify significant SIS areas for
    executive consideration.
    Phase C: Conduct an SIS idea-generation meeting with senior
    Information Services management. Identify SIS ideas, and evaluate
    them together with the ideas from the previous meeting
    Phase D: Introduce the top business executives to the SIS
    concept. Discuss some of the SIS ideas that were considered for
    the business. Gain approval to proceed with the SIS
    idea-generation meetings with business planners.
    Phase E: Conduct an SIS idea-generation meeting with the
    corporate planners. Identify some SIS ideas and evaluate them
    together with the ideas that have emerged from the previous
    meeting.

    Wiseman points out that the whole idea is designed to
    introduce the strategic perspective on information systems,
    stimulate the systematic search for SIS opportunities, and
    evaluate and select a set of projects that are expected to secure
    the greatest competitive advantage for the firm. In the
    idea-generation meetings of Phases B, C, and E of the process,
    there are always seven explicit steps:

    1. Give a Tutorial on Competitive Strategy. Introduce the
      concepts of strategic thrusts, strategic targets, and
      competitive strategy.
    2. Apply SIS Concepts to Actual Cases. Develop an
      understanding of SIS possibilities and their strategic thrusts
      and targets.
    3. Review the Company’s Competitive Position. Try to
      understand its presents business position and its
      strategies.
    4. Brainstorm for SIS Opportunities. Generate SIS ideas in
      small groups.
    5. Discuss the SIS Opportunities. Use the experience of the
      group to correlate and condense the SIS ideas.
    6. Evaluate the SIS Opportunities. Consider the competitive
      significance of the SIS ideas.
    7. Detail the SIS Blockbusters. Select the best SIS ideas, and
      detail their competitive advantages and key implementation
      issues.

    Wiseman says that typical SIS idea-generation meetings will
    last for days. Each step takes about two hours, at least. The
    process generates many good SIS ideas, and a few will always be
    considered well worth implementation. Top management begins to
    focus their attention on SIS opportunities. The ideas that are
    generated can produce significant competitive advantage.

     

     

    Autor:

    Leopoldo

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