Prepared by Natalie Rose 1 Strategic Information Systems Lecture 2

Prepared by Natalie Rose 1

Strategic Information Systems

Lecture 2


Strategy

Connections to suppliers and customers.

Become the best firm in the industry. Block the competitors by keeping your customers happy.

Competition


What is Strategic IS?

Strategic information systems help organizations implement their long-term direction and the activities to achieve their goals. These systems can have an internal or external focus.


Key Issues Related to Strategic Information Systems


Strategic Alignment

Strategic alignment enable an organization to achieve its strategic goals and objectives, by creating new market opportunities and enhancing relationships with customers and suppliers.

It also uses strategic information system to meet customer loyalty.


BarrierTo Entry

Firm Rival

Supplier SupplierSupplier

Consumer

Consumer

Consumer

Consumer Consumer

Consumer

Consumer

DecreasedCosts

ImprovedQuality

Ties ToCustomers

IncreasedSwitching Costs

Wholesale

Ties ToSuppliers

Control OfDistribution

Innovation andDifferentiation

Methods to Gain Competitive

Advantage


Sustainable Advantage

Strategic information systems can create sustainable advantage by generating unique benefits that competitors cannot duplicate, alter industry characteristics, link customers or suppliers to the organization, help define and support a new market niche, and reflect the organization’s culture.


Money for research

Money for information technology

Dangers: Capital Cost


You

Rival

Time

IS Costs

Time

IS Costs

TransactionProcessing

Network & DSS

Network & linksales people

Link to suppliers& customers

Experimentaltechnology& global links

CompetitionFollows


Business Process Reengineering

Business process reengineering (BRP) describes a redesign that starts from scratch and involves discontinuous rather than incremental change. BPR takes maximum advantage of information technology to break traditional notions of how an organization accomplishes its work.


Business Process Reengineering

Redesigning business processes is a collaborative effort between business managers and information technology specialists. The business managers role is to establish the requirements for the new system; however, information technology specialists should be consulted for how state-of-the-art technology.


Five ways companies can use information systems to obtain low-cost leadership

Automation Quality Purchasing and Manufacturing Just-in-Time Inventory and Manufacturing Flattening Organizational Structures Business Process Reengineering


Automation

Automation can be used to reduce cost through time savings, labor reductions,


Just-in-time Inventory

Just-in-time inventory enables a company to receive inventory precisely as needed; this results in inventory, labor, and other cost savings.


Flattening Organizational Structure

Quality-oriented organizations first diagnose their information needs and then design the strategic information systems to meet these needs. Total quality management (TQM) is a comprehensive approach to improving quality and eliminating defects.

Flattening organization structures allowed Technology to enabled companies to reduce the number of managers, move to team-based management, and move to more lateral communication in organizations.


Using Information Systems for Differentiation

Companies can differentiate their products and services based on:

Differentiate on Customer Service Differentiate on Quality


Using Information Systems to Differentiate Quality

Information systems can monitor the raw materials used in production, the manufacturing process, and service both before and after the sale.

Information systems can help identify and correct quality defects at the earliest possible stage.


Using Information Systems to Differentiate Customer Service

Information systems can help improve the ease of ordering, reliability of delivery, accuracy and timeliness of product support and servicing, and flexibility in response to changing customer needs.

Product monitoring systems and computerized dispatch systems can speed a company’s response to a customer’s request for product maintenance.


Using Information Systems to Create Focus Companies pursuing a focus strategy can use

information systems to :

Identify Opportunities in Existing Market Segments

Create New Market Segments


Identifying Opportunities in the Existing Market Segments

Vast amounts of information are available online, allowing companies to use this information to identify new market opportunities.

The use of Geographic information systems can be used to display this data.


Creating New Market Segments

Information systems are used to create market segments by customizing or personalizing products and delivering products or services electronically.

Also, existing products can be altered to increase the amount of information that they contain.


Using Information Systems to Support Linkages

Customer Linkages Supplier Linkages Logistics Linkages


Linkage definition Linkage describes the strategy of forming inter-

organizational alliances. The use of computer and telecommunication technology have increased companies’ ability to link their operations more tightly to one another.


Linkages Value-adding partnerships (VAPs) refer to the linkage

of companies that view the whole value system, not just the value chain, as their competitive unit and who share information freely with others in the value system so they can compete successfully in this environment.

An interorganizational system (IOS) is an automated information system that two or more companies share to support the linkage of their businesses. The following three subsections address how IOS benefits provide a strategic advantage for its participants.


Customer Linkages A customer-focused IOS attempts to forge a linkage

between a company and its customers by providing or hosting information services that mutually benefit the customer and the host.

The IOS benefits the host company by increased sales, lower costs, better management information, and greater bargaining power. The IOS benefits the customer by making it easier and less expensive for the customer to select, order, and account for the products and services it buys.


Supplier Linkages A supplier-focused IOS attempts to forge a linkage

between a company and its suppliers by providing information services that mutually benefit the suppliers and the host.

Supplier-focused IOSs are most common in industries where many suppliers compete for the attention of a few major purchasers. The greatest benefit of an IOS is its ability to increase the efficiency of the company’s operations.


Logistic Linkages Logistics refers to the transport of goods and its

associated activities. Inbound logistics describes the transport of raw goods to a company from its suppliers. Outbound logistics describes the transport of finished products from a company to its customers. Companies often forge alliances with logistics providers to improve control over service..


MANAGEMENT INFORMATION SYSTEM

A management information system gives managers at all levels of the organization the ability to collect, analyze, and summarize information. Management information systems support top-level managers, middle-level managers, and first-line supervisors


Types of MIS

Management reporting systems, decision support systems, groupware, and executive information systems are types of

management information systems.


Managing Reporting System

Management reporting systems (MRSs) help managers monitor the operations and resources of an organization and the environment in which the organization operates. An MRS can produce:

detailed reports, summary reports, and exception reports.


Report Types

Detail Reports. Detail reports provide managers with information useful in overseeing the day-to-day operations of a department or working group. These reports provide data about individual transactions. These reports are used primarily by low-level managers; however, higher-level managers may refer to detail reports when summary data is not as helpful.

Summary Reports. Summary reports or statistical reports show totals, averages, maximums, minimums, or other statistical data aggregated over time, personnel, products, or some other quantity. Each line of a statistical report summarizes large amounts of transaction data that can be examined in a detail report.


Reports cont…

Exception Reports. An exception report alerts managers to potential problems by showing only data that fall outside an accepted or expected range. Data is shown at either a transaction or a summary level. Notification systems occur as the result of a specific event and can replace exception reports in some situations. Notification systems use alerts to highlight exceptions


Decision Support System A decision support system is an information system

designed to assist managers in evaluating the impact of alternative decisions and in making the best possible choice. DSSs differ from Mangement Reporting Systems in that DSSs offer forecasts of future conditions.

The benefits of DSS include improved decision making, the examination of more alternatives, an ability to implement ad hoc analysis, faster response to expected situations, improved communication, more effective teamwork, better control, and time and cost savings.


Components of a DSS a database, a knowledge base, a model base, and a user interface.


The Components

The database provides access to internal and external data that may influence or be affected by decisions under consideration.

A knowledge base provides information about the relationships among data that are too complex for a database to represent.

A model base provides analysis tools, including spreadsheets, simulation packages, forecasting tools, and statistical packages.

A user interface allows users to control which data and models. A high-quality DSS should support facilities to compare, contrast, and aggregate data in a wide range of graphical and tabular formats.


Groupware

Group decision support systems make use of a class of software called groupware. Groupware (computer-supported work or group support systems) refers to information technology that facilitates the sharing or communication of information among members of a group and helps the group to perform common tasks and to accomplish its goals. Groupware can improve group coordination, discussions, problem solving, and meetings.


Elements of Groupware

Groupware elements include message systems, multiuser editors, computer conferencing, intelligent agents, and coordination systems.


Groupware Elements

Message Systems. Electronic mail, electronic lists, electronic notes, and electronic bulletin boards are four examples of message systems.

Multiuser Editors. A multiuser editor is software that allows multiple users to access and modify a common document.

Computer Conferencing. Conferences are held in one of three ways. Real-time conferencing allows people to hold meetings electronically by typing their comments into networked computers.

The Internet. Workgroups can use Internet-based tools to complete projects from remote locations.

Intelligent Agents. An intelligent agent automatically make decisions based on what they know about the user.

Coordination Systems. Coordination systems help coordinate the scheduling of project activities and team member participation.


Executive Information System

An executive information system is software that supports executive activities, often specifically designed for a particular executive, reflecting his or her style and information requirements. Most EISs include mainly hard information; however, increasingly they include soft information.


Technology Toolbox: GIS

MapPoint File

Microsoft MapPoint

Data Mapping Wizard

Shaded Area: Demographics, Population 2002 by County

Multiple Symbol

Households with Internet Access

Three levels, lowest uses Blank8x8.bmp


Question

1. Why is location an important element in business decisions?

Documents

Prepared by Natalie Rose 1 Strategic Information Systems Lecture 2