IT 4 Strategic management


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IT 4 Strategic management

  1. 1. Information Technology for Strategic Management Mahmoud Anbar Executive Director NOSSTIA
  2. 2. The problem <ul><li>There is a huge gap between the vision and strategy developed at the top and the things people down in the organization, at the frontline, are doing. </li></ul>
  3. 3. Global business environment <ul><li>Natural selection </li></ul><ul><li>Survival of the fittest </li></ul><ul><li>c-commerce ( Collaborative commerce) </li></ul><ul><li>Interoperability (applications, business processes, and data ) </li></ul><ul><li>Demand identified is demand realized, in a matter of nanoseconds </li></ul>
  4. 4. Business and technology <ul><li>Technology is considered to be an integral part of an organization’s core-competency and a key evaluation factor used by investors and industry analysts </li></ul>
  5. 5. Information or industry view <ul><li>a company may acquire a competitive edge by viewing itself as an information business instead of taking the traditional industry—or vertical—view </li></ul>
  6. 6. Supermarket chain <ul><li>ِ a business that sells food </li></ul><ul><li>or </li></ul><ul><li>is it a business that exploits knowledge about </li></ul><ul><ul><li>Customer preferences </li></ul></ul><ul><ul><li>Geographical biases </li></ul></ul><ul><ul><li>Supply chain logistics </li></ul></ul><ul><ul><li>Product lifecycle </li></ul></ul><ul><ul><li>competitive sales information to optimize its delivery, </li></ul></ul><ul><ul><li>Inventory, pricing, and product placement as a way to increase margin for each item sold </li></ul></ul>
  7. 7. Strategic decisions <ul><li>Acquire another company </li></ul><ul><li>Enter a new geographic area. </li></ul><ul><li>Launch or discontinue a product line. </li></ul><ul><li>How do we optimally allocate resources to ensure profitability and growth targets? </li></ul><ul><li>What factors or combinations of factors are directly impacting marketing campaigns? </li></ul>
  8. 8. Tactical decisions <ul><li>Should we extend credit to a particular customer? </li></ul><ul><li>Which customers are likely to become profitable, when and to what extent? </li></ul><ul><li>Who are our best suppliers or most profitable customers? </li></ul><ul><li>Close someone's credit card account due to suspected fraudulent activity. </li></ul>
  9. 9. Data management and profitability <ul><li>“ Companies that manage their data as a strategic resource and invest in its quality are already pulling ahead in terms of reputation and profitability.” </li></ul><ul><li>PricewaterhouseCoopers </li></ul>
  10. 10. Information Strategy <ul><li>The part of the business strategy that describes how the firm will leverage information to create value in a dynamic business environment. </li></ul>
  11. 11. IT Strategy
  12. 12. IT Strategic role <ul><li>Strategy and execution are the ultimate drivers of business performance. </li></ul><ul><li>While technology does not actually deliver business strategy, it enables alignment and solid execution. </li></ul>
  13. 13. Operational data usage <ul><li>Data is the “fuel” driving the automation of a business operation. </li></ul><ul><li>Without the operational use of information a business could not survive </li></ul>
  14. 14. Strategic Data usage <ul><li>Strategic (forward-looking view ) </li></ul><ul><li>How to improve the business </li></ul><ul><li>Strategic knowledge is embedded in the collection of a company’s data and that extracting actionable knowledge will help a company improve its business. </li></ul>
  15. 15. Key Management Tools <ul><li>ERP : Enterprise Resource Planning </li></ul><ul><li>SCM: Supply Chain Management </li></ul><ul><li>CRM : Customer Relationship Management ---------------------------------------------------- </li></ul><ul><li>BPM : Business Process Management </li></ul><ul><li>BI : Business Intelligence </li></ul><ul><li>PM : Performance Management </li></ul>
  16. 16. Agile enterprises <ul><li>If you cannot change a plan, you cannot effectively manage performance. </li></ul><ul><li>Performance-oriented enterprise planning activities require a degree of flexibility that enables an organization to be responsive to changes in customer demand, competitors’ new offerings, margin-friendly supply opportunities, or other important shifts that occur during the course of business. </li></ul>
  17. 17. Agile control mechanism <ul><li>understanding what is happening within your organisation, at a detailed level, and having an agile control mechanism that allows you to constantly improve these processes , and when necessary, change or advance your strategy to keep one step ahead of the competition </li></ul>
  18. 18. The Management Cycle
  19. 19. Business analytics software <ul><li>Enables organizations to monitor, capture and analyze the vast amounts of data generated by transaction-processing systems (ERP, CRM, SCM ) </li></ul><ul><li>provide management and staff at all levels with tools necessary to optimize these processes through strategic and tactical decisions. </li></ul>
  20. 20. Performance Indicators <ul><li>plans and strategies can be defined and communicated as a set of interconnected performance indicators that are presented as dynamic scorecards that people can “drill into” to analyze what’s behind a result that’s not performing as it should be. </li></ul>
  21. 21. The Intelligence Dashboard <ul><li>provide a visualization dashboard that reflects those KPI measurements , presented in a form for management review </li></ul><ul><li>It provides visibility into what needs to be fixed </li></ul>
  22. 22. Balanced Scorecard <ul><li>You cannot control what you cannot measure . </li></ul><ul><li>A technique in strategic management, provides a comprehensive set of measures used to communicate and evaluate achievement of an organization’s mission and strategy </li></ul>
  23. 23. BSC- concept
  24. 24. Performance control <ul><li>The Balanced Scorecard complements financial measures of past performance with measures of the drivers of future performance. </li></ul><ul><li>Balanced Scorecard is a new concept mainly designed to translate a company's vision and actions into a consistent set of measures </li></ul>
  25. 25. From Strategy to execution <ul><li>A Scorecard is essentially a carefully selected set of measures derived from an organization's strategy. </li></ul><ul><li>It's a tool for leaders to communicate to employees and external stakeholders the outcomes and performance drivers by which the organization will achieve its strategic objectives. </li></ul><ul><li>The Scorecard provides the link that translates strategy into action across the enterprise, aligning long-term strategy with coordinated, cohesive business activities. </li></ul>
  26. 26. BSC measures <ul><li>Financial Perspective </li></ul><ul><li>Customer Perspective </li></ul><ul><li>Internal Business Process </li></ul><ul><li>Learning Process and Growth Perspective </li></ul>
  27. 27. BSC
  28. 28. Practical case <ul><li>Vision: “Incorporating our core VALUES we will be the acknowledged industry leader for the supply of INNOVATIVE custom-engineered products of EXCEPTIONAL value.” </li></ul><ul><li>Mission: “To create value by DELIGHTING our customers by ENHANCING the capabilities of the entire company.” </li></ul>
  29. 29. Core Values: <ul><li>“ We are a manufacturing company with the following core values: uncompromising INTEGRITY , exceptional customer SERVICE , continuous IMPROVEMENT in all we do, and recognize the contributions of our employees.” </li></ul>
  30. 30. Key words <ul><li>Values </li></ul><ul><li>Innovative </li></ul><ul><li>Exceptional </li></ul><ul><li>Delighting </li></ul><ul><li>Enhancing </li></ul><ul><li>Integrity </li></ul><ul><li>Service </li></ul><ul><li>Improvement </li></ul>
  31. 32. From output to outcome
  32. 34. Linking Scorecard Components
  33. 35. Balanced Scorecard Vision and Strategy Objectives Measures Targets Initiatives Financial “ To succeed financially, how should we appear to our shareholders?” Internal Business Process Objectives Measures Targets Initiatives “ To satisfy our shareholders and customers, what business processes must we excel at?” “ To achieve our vision, how will we sustain our ability to change and improve?” Learning and Growth Objectives Measures Targets Initiatives Objectives Measures Targets Initiatives Customer “ To achieve our vision, how should we appear to our customers?” Objectives Measures Targets Initiatives
  34. 36. <ul><li>Balanced Scorecard makes strategy everyone’s job </li></ul>