IS STRATEGY
,MANAGEMENT
HADEEL EL GERBI
Information system strategy
◦ The first business activities that were computerized are payroll,
sales, stock control, and invoicing.
◦ The same activities were computerized to make them more
efficient.
◦ Ex: payroll previously required large numbers of manual payroll
clerks to perform the activity. When computerized, it did not
need all these clerks.
Information system strategy
◦ Projects that seek to reduce the cost of performing a particular
process or task by utilizing information technology. They simply
seek to achieve the same objectives at lower cost and perform
existing tasks more efficiently.
◦ The cost justification for revamping systems that have already
been computerized is more difficult, however more recently,
there have been a number of justifications based on cost savings.
Information system strategy
◦ A major problem with the cost / benefit justification of computer
systems or IT investments in organizations is that it is very difficult to
justify systems that do not deliver savings but may deliver benefits
such as
◦ increased market share.
◦ New opportunities.
◦ Better management information.
Information system strategy
◦ Over the years information systems moved from just being about
cost savings and efficiencies to more strategic or effectiveness
systems.
◦ Information systems can be used to improve the business in
market place in this way:
1. Redefine the boundaries of particular industries.
2. Develop new products or services.
3. Change the relationships between suppliers and customers.
Information system strategy
concept
stage1
implementation
concept
benefit
benefit
implementation
◦
benefit
Effect stage2
onenviment
behavior Effectiveness projects
Efficiency projects
benefit
Benefits realization process
◦ Process which may result in stage1, however it is not necessary for
any cost benefits to accrue at this stage.
◦ The second stage of the process is the effect of the
implementation of stage1 on the environment and any resultant
change in behavior leading to stage2 benefits.
◦ Stage 2 benefits may be for example improved sales resulting in
improved revenues.
Industry analysis framework strategy
◦ Identify the competitive forces that any company needs to
consider:
1. It deals with the industry and competitive dynamics.
2. It highlights that competition is not simply concerned with the
action of rivals.
3. It facilitates discussion and is based on sound principles of
industrial economics.
Technology driven model
◦ The reaction of some organization has been implicitly to make
the assumption that investment in IT will automatically result in
business success and the achievement of competitive
advantage.
◦ It is the view that if the technology exists it should be employeed.
◦ A result of this approach is information technology that may not
be appropriate for the needs of the organization and a lack of
control over IT budgets.
Competitor driven model
◦ An alternative model or approach that some organizations have
adopted is to react to their competitors by copying them.
◦ There is evidence that this happens in some sectors rather more
than other.
◦ The competitor driven model is an approach based on fear that
an organization’s competitors will use information technology to
gain significant advantage over them. Therefore they must
copied at each stage of their development.
Competitor driven model
disadvantages
1. By simply following competitor the organization will never
innovate to its own strengths and advantages.
2. It may miss opportunities for being a leader itself.
3. It may still lose out by not itself being the first in the field.
