Characterization of strategic
information systems
Indice
1.
Overview
2. General Definition
3. Porter’s Competitive
Advantage
4. Wiseman’s Strategic Perspective
View
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.
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:
- 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. - 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. - 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. - 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:
- How structurally attractive is the industry?
- 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:
- Identify the appropriate value chain and assign costs and
assets to it. - Identify the cost drivers of each value activity and see
how they interact. - Determine the relative costs of competitors and the sources
of cost differences. - Develop a strategy to lower relative cost position through
controlling cost drivers or reconfiguring the value chain. - 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:
- Determine the identify of the real buyer.
- Understand the buyer’s value chain, and the impact of
the seller’s product on it. - Determine the purchasing criteria of the buyer.
- Assess possible sources of uniqueness in the firm’s
value chain. - Identify the cost of these sources of uniqueness.
- Choose the value activities that create the most valuable
differentiation for the buyer relative to the costs
incurred. - 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:
- Give a Tutorial on Competitive Strategy. Introduce the
concepts of strategic thrusts, strategic targets, and
competitive strategy. - Apply SIS Concepts to Actual Cases. Develop an
understanding of SIS possibilities and their strategic thrusts
and targets. - Review the Company’s Competitive Position. Try to
understand its presents business position and its
strategies. - Brainstorm for SIS Opportunities. Generate SIS ideas in
small groups. - Discuss the SIS Opportunities. Use the experience of the
group to correlate and condense the SIS ideas. - Evaluate the SIS Opportunities. Consider the competitive
significance of the SIS ideas. - 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