Introduction
Strategic Information Systems (SIS)
Certain types of systems have become especially critical to firms' long term
prosperity and survival. Such systems are powerful tools for staying ahead of the
competition. They are called strategic information systems (SIS).
SIS computer systems at any level of the organization that change goals,
operations, products, services, or environmental relationships to help the
organization gain a competitive advantage.
Systems that have these effects may even change the business of organizations.
SIS is able to change significantly the manner in which biz is done by
Contributing to the strategic goals of the organization and Ability to increase
performance and productivity significantly.
SIS should be distinguished from strategic level systems (executive information
system) that are used by senior managers.
SIS can be used at all organizational levels.
SIS profoundly alter the way a firm conducts its business or the very business of
the firm itself.
Different Types of SIS
1- Outward systems: aimed to compete directly with other companies in the
industry.
2- Inward systems: directed to enhance the competitive position of an
organization by increasing employee productivity, improving teamwork, and
enhancing communications between various components of the organization.
3- Hybrid systems: for e.g. CAT combined both outward (EDI and CAT TV) and
inward (computer integrated manufacturing).
4-Strategic alliances: two or more companies share a SIS .Eg. Banks share the
same ATM network.
Management Challenges
* Implementing SIS can be risky the investment involved in implementing SIS is
high.
* IS requires planning—Porter and Millar framework can be used to plan and
develop a strategy of how to use SIS.
* Sustainability of competitive advantage—competitive advantage isn't always
sustainable.
Why SIS are difficult to build and sustain?
* Expensive.
* Risky to build (time consuming)
* Easily copied by other firms.
* Implementing strategic systems often requires extensive organizational change
and a transition from one sociotechnical level to another.
Different Levels of Strategy and Strategic Systems
* There is generally no single all encompassing strategic systems, but instead there
are a number of systems operating at different levels of strategy—the business, the
firm, and the industry level.
* For each level of business strategy, there are strategic uses of systems. And for
each level of business strategy, there is an appropriate model used for analysis.
A- Business-level strategy: Porter's value chain model
B- Firm-level strategy: synergy and core competency
c- Industry level strategy: information partnership, competitive forces model,
network economics.
The Competitive Forces Model
* Competitive forces model: model used to describe the interaction external
influences, specifically threats and opportunities, that affect organizations; strategy
and ability to compete.
* Most well-known model for analyzing competitiveness.
* Has been used to develop strategies for companies to increase the competitive
edge.
* Five Forces:
1-The threat of new competitors.
2-The bargaining power of suppliers.
3-The bargaining power of customers (buyers).
4-The threat of substitute products.
5-The rivalry among existing firms in the industry.
Network Economics
Model of strategic systems at the industry level based on the concept of a network
where adding another participant entails zero marginal costs but can create much
larger marginal gain.
SUSTAINING STRATEGIC ADVANTAGE
a- Major problem is how to sustain competitive advantage.
b- SIS of the 1970s and 1980s were primarily outward systems.
c- They are visible and easily imitable.
d- Advances in computerized system development methodologies, such as CASE
tools and object-oriented programming, allow companies to duplicate visible
systems in a fast manner (in months vs years).
TO SUSTAIN STRATEGIC ADVANTAGE
a- Create inward system.
b- Create comprehensive, innovative, expensive system. e.g. CAT case (250m).
c- Implemented a GIS, sensors in machines computers that diagnosed problems
and instruct technicians in how to make repairs and IS that ties together all its
factories, distribution centers, dealers, and large customers.
d- Combine SIS with structural changes
e- Attempted in BPR and organizational transformation.
Aligning IT and Business objectives
1- Luftman (2003) reported that the more successful a firm can align IT with biz
goals, the more profitable it will be, and half of biz firm's profits can be explained
by alignment of IT with biz.
2- Perform a strategic system analysis:
a- What is the structure of the industry?
b- What are the biz, firm and industry value chain for the firm?
c- Have we align IT with our biz strategy and goals?
References
Laudon, K & Laudon, J, (2014). Management Information Systems: Managing the
Digital Firm, Pearson Education. (Laudon). Twelve Edition.
Turban, E, McLean, E & Wetherbe, J . Information Technology for Management:
Making Connections fcr Strategic Advantage, John Wiley & Sons, Inc.
Turban, E, Jae Lee, David King, H, Micheal Chung, Electronic Commerec: A
Managerial Perspective, Prentice Hall.
