Strategy and IS Describe the roles of business ...
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  • 1. Strategy and IS
    • Describe the roles of business, organizational and IS strategy
    • Compare and contrast key strategy frameworks: Porter’s three generic strategies and D’Aveni’s hypercompetition model
    • Compare and contrast key organizational strategy frameworks: Business Diamond, Managerial Levers
    • Discuss evolution of Information Resources
    • Compare, contrast and apply: Porter’s competitive forces model, value chain model and and Brandenburger and Nalebuff’s co-opetition model
    • Discuss the risks of using IS
  • 2. Strategic Advantage
    • Does an organization need Information Systems to gain strategic advantage?
  • 3. Information Systems Strategy Triangle Business Strategy Organizational Strategy Information Strategy
  • 4. Strategy - A Plan
    • Business strategy drives organizational and information systems strategy
    • Information systems strategy - plan the organization uses in providing information services
    • Information systems strategy is affected by a firm’s business and organizational strategies
    • Organizational strategy - organization’s design as well as the choices it makes to define, set up, coordinate and control its work processes
    • Remember interdependency!
  • 5. Porter’s Three Generic Strategies
    • Cost leadership (lowest cost in industry)
    • Differentiation of products/services
    • Focus (finding a specialized niche)
      • cost
      • differentiation of product or services
  • 6. Be Low Cost Producer - IT strategic if it can:
    • Help reduce production costs & clerical work
    • Reduce inventory, accounts receivable, etc.
    • Use facilities and materials better
    • Offer interorganizational efficiencies
  • 7. Produce Unique Product - IT strategic if it can:
    • Offer significant component of product
    • Offer key aspect of value chain
    • Permit product customization to meet customer’s unique needs
    • Provide higher/unique level of customer service/satisfaction
  • 8. Fill Market Niche - IT strategic if it can:
    • Permit identification of special needs of unique target market
    • Spot and respond to unusual trends
  • 9. D’Aveni’s Hypercompetition Model
    • Focused on turbulent environment
    • Advantages are rapidly created and easily eroded
    • Sustaining an advantage can be a deadly distraction
    • The goal is disruption, not sustainability, of advantage
    • Initiatives are achieved with a series of small steps
  • 10. Four Arenas of Competitive Advantage
    • Cost/quality
    • Timing/know-how
    • Strongholds
    • Deep pockets (short-term only)
  • 11. Seven S’s
    • Superior Stakeholder Satisfaction
    • Strategic Soothsaying
    • Positioning for Speed
    • Positioning for Surprise
    • Shifting the rules of competition
    • Signaling strategic intent
    • Simultaneous and Sequential Strategic Thrusts
  • 12. Organizational Strategy Frameworks
    • Business Diamond
    • Managerial Levers
  • 13. Business Diamond: Hammer & Champy, 1994 Business Processes Jobs & Structures Values & Beliefs Management & Measurement Systems
  • 14. Managerial Levers
    • Organizational Variables
      • Decision rights
      • Business processes
      • Formal Reporting Relationships
      • Information Networks
    • Control Variables
      • Data
      • Planning
      • Performance Measurement & Evaluation
      • Incentives & Rewards
    • Cultural Variable: Values
  • 15. Evolution of Information Resources Scarcity Scarcity Scarcity Value Basis User-driven Data-driven Application Specific Information Models Individual mgr/group Organization/ group Organization Target of Systems Competitive Position Productivity & decision qlty ROI IT Justification Strategic Effectiveness Efficiency Role of IT Era III (1980s) Era II (1970s) Era I (1960s)
  • 16. Evolution of Information Resources Plentitude Plentitude Value Basis Knowledge-driven Business-driven Information Models Customer, supplier, ecosystem Business processes, ecosystem Target of Systems Adding value Competitive Position IT Justification Value Creation Strategic Role of IT Era V (2000+) Era IV (1990s)
  • 17. Strategic Information Systems
    • IS that help gain strategic advantage
    • Significantly change manner in which business supported by the system is done
    • Outwardly aimed at direct competition
    • Inwardly focus on enhancing the competitive position
    • Create strategic alliances *
    • IS can support business strategies
  • 18. Unusual Suspects: Information Resources
    • Information systems infrastructure
    • Information and knowledge
    • Proprietary technology
    • Technical skills of the IT staff
    • End users of the information system
    • Relationship between IT and business managers
    • Business processes
  • 19. Firm Infrastructure (general management, accounting, finance, strategic planning) Human Resource Management (recruiting, training, development) Technology Development (R&D< product and process improvement) Procurement (purchasing of raw materials, machines, supplies) Support Activities Primary Activities Inbound Logistics (raw materials handling and warehous- ing) Operations (machine assembling, testing) Outbound Logistics (warehous- ing and distribution of finished product) Service (installation, repair, parts) Marketing and Sales (advertising, promotion, pricing, channel relations)
  • 20. Value Chain Model
    • Chain of basic activities that add to firm’s products or services
      • Primary activities
      • Secondary activities
    • Includes firm’s larger value system (i.e., suppliers, buyers, channels)
  • 21. Value Chain Primary Activities
    • Inbound
    • Outbound
    • Operations
    • Marketing and Sales
    • After-Sale Services
  • 22. Value Chain Support Activities
    • Technology development
    • Procurement
    • Human Resources Management
    • Management Control
      • accounting/finance
      • coordination
      • general management
      • central planning
  • 23. Competitive Forces
    • Threat of entry of new competition
    • Bargaining power of suppliers
    • Bargaining power of buyers
    • Threat of substitute products or services
    • Rivalry among existing firms
  • 24. Strategies for Competitive Forces
    • Note - strength of force is determined by factors in industry
    • Gain a competitive edge
    • Build defenses against forces
    • Formulate actions to influence forces
  • 25. Strategic Questions
    • Can IT create barriers to entry? (new entrants)
    • Can IT build in switching costs? (buyers)
    • Can IT strengthen customer relationships? (buyers)
  • 26. Strategic Questions (cont)
    • Can IT change the balance of power in supplier relationships? (suppliers)
    • Can IT change the basis of competition? (competitors)
    • Can IT generate new products?(competitors, substitutes)
  • 27. Searching for Specific Opportunities
    • What is the mode of the thrust? (offensive, defensive)
    • What is the direction of the thrust? (use, provide)
    • What is the strategic target of the thrust? (supplier, customer, competitor)
  • 28. Brandenburger and Nalebuff’s Co-opetition
    • Optimally combining cooperation and competition
    • Value Net of competitors, complementors, customer, suppliers
  • 29. Risks of IS Success
    • Change the Basis of Competition
    • Promote Litigation or Regulation
    • Awake Sleeping Giant
    • Reflect Bad Timing
    • Are Too Advanced
    • Fail to Deliver What Users Want
    • Are Implemented Poorly