Evolutionary Approach for EIS Strategy Decision Making Framework and Efficiency Measurement
Evolutionary Approach for IS strategy: Decision Making Framework and Efficiency Measurement Yuri Zelenkov NPO Saturn | Rybinsk State Aviation Technology University email@example.com
Conceptions of IS strategyDEFINITION: IS strategy is the process of identifying potential ways of informationsystems and technologies usage that the organization should implement to achieve itsgoals.IT strategy conception1 General management Practical method conception2Support of business Position (matching IT and Business Alignmentstrategy between IS and external environment)Master plan Plan (predefined course of IT Governanceof IS function action)Shared view of IS role Perspective (ingrained way Enterprise Architecturewithin organization of perceiving the world)1. Chen, D.Q., Mocker, M., Preston, D.S., Teubner, A.: Information systems strategy: reconceptualization,measurement, and implication. MIS Quarterly. 34(2), 233–259 (2010)2. Mintzberg, H. The strategy concept I: Five Ps for strategy. California Management Review. 30(1), 11–24 (1987)
Approaches for IS strategy management1. IT and Business Alignment3 2. IT Governance4 Business IT Strategy Strategy Organization IT infrastructure infrastructure 3. Henderson, J.C., Venkatraman, N.: Strategic alignment: Leveraging information technology for transforming organizations. IBM Systems Journal. 32(1), 472–484 (1993) 4. CobiT 4.1, http://www.isaca.org
Approaches for IS strategy management 3. Enterprise Architecture Present Future Business strategy Business Businessdrivers & goals drivers & goals Business Business architecture architecture Enterprise Enterprise IS strategy: architecture set of projects to architecture build new EA
Research problem formulation• All practical methods suggest that IS strategy has to match the business strategy. However, organizations in reality rarely follow business strategy even if it formally declared.• Matching business strategy generally reflects a top-down perspective of IS strategy in organization. Solution = perspective + patternIT strategy conception General management Practical method conceptionStandard response to Pattern Decision Making Frameworkchange in external Efficiency Measurementenvironment thatformed as result ofprevious experience
Evolutionary views of firm behavior Types of innovation5 • Operational • New products • New business models • New management models5. Hamel, G.: The Future of Management. Harvard Business School Press, Boston (2007)
Strategy as position and plan Goal External changes Plan Contingency plan Real Emergency achievementPosition. Ver. 1 plan Position. Ver. 2 (We always wanted to achieve exactly this goal)
Strategy as perspective and pattern Perspective - ingrained way of perceiving Incremental Pattern the world learning
Decision making frameworkTw – cost of transforming raw materials into finished products and servicesTm – transaction costs of managing the process of transformation;T int a – transaction costs of coordination between the departments within the firm;T ext a – transaction costs of reaching an agreement with external agents.
IS efficiency measurement Organization as a complex system. Routine Event (business process) Response ISN - an amount of processes that performed for a period of time t, and each of them has the output value ofFi from set of n possible outcomes F, p(Fi) the proportion of processes that executed with result Fi
ExampleBusiness process Process metric Distribution of process output
Conclusions• Any organization is an open complex system. The main reason of complexity is lack of its information resources to describe its states, laws and behavior.• Organization uses standard routines to respond to changes in external environment. But routine outcomes always are unpredictable because external conditions are unknown and impossible create long-term plan (strategy) that will be really valid.• IS at the operational level aims to increase the amount of information about the system and to reduce uncertainty about possible routines outcomes.• Proposed approach allows to make strategic decisions about the implementation of IS to enhance the operational efficiency of the firm, the formal business strategy of the company is not required.• Introduced efficiency metric helps quantify measure the performance of decisions implementation.
Future work• Implemented IS fixes current state of business processes and often hampers a change of operational practices, because the change of the IS itself also requires additional resources.• Proposed pattern has to be improved by adding the IS agility concept.• Agility means here ability of an IS support and development team to sense environmental change and respond efficiently to that change.