Strategic Information Systems Chapter 3 Strategic Information Systems

Agenda IT strategic deployment pressure Strategic information systems (SISs) Porter’s competitive forces model

Pressure Increase performance, not just marginally, but substantially Private sector: Highly competitive Rapidly changing Global markets Public sector: Improvement demand from taxpayers

1998 Study by Hackett Group IT staff spend an average of 3 days/week administering day-to-day operations Only 8% of IT staff focused on decision support or strategic planning for future use of IT technology Half of application development for supporting revenue generating function A third of application development for rebuilding administrative and support functions

IT as Competitive Tool Innovation (IT) Speed (delivery) Service (tailoring) Quality (TQM) Alliances (intranet, extranet)

Agenda IT strategic deployment pressure Strategic information systems (SISs) Porter’s competitive forces model

Strategic Information Systems IS supports or shapes a business unit’s competitive strategy for competitive advantage Approaches Outward (customer services) Inward (employee productivity) Strategic alliances (supply chain) Competitive intelligence (internal & external information)

Agenda IT strategic deployment pressure Strategic information systems (SISs) Porter’s competitive forces model

Porter’s Competitive Forces Model Threat of new competitors Bargaining power of supplies Bargaining power of buyers Threat of substitute product or services Rivalry among existing firms

Porter’s Value Chain Analysis Model Primary activities Inbound logistics (input) Operations (manufacturing and testing) Outbound logistics (storage and distribution) Marketing and sales Service (installation and repair)

Porter’s Value Chain Analysis Model Support activities Firm infrastructure (accounting, finance, management) Human resources management Technology development (R&D) Procurement Value system Increase efficiency, effectiveness, competitiveness

Porter & Millar’s SIS Process Access information intensity (usage) Determine the role of IT in the industry structure (competitive forces) Identify & rank IT in terms of creating competitive advantage Investigate IT to spawn new business Develop a plan for taking advantage of IT

SISs Applications Cost leadership Differentiation Growth Time Alliance Innovation Improve internal efficiency Customer-oriented approaches

Points to Remember IT strategic deployment pressure Strategic information systems (SISs) Porter’s competitive forces model

Discussion Questions Is there any strategic information system in your organization? Yes, name them. No, can you suggest one or more? What are the risk and ethical problems associated with implementing an E-commerce for a large grocery store?

Assignment Review technology guides 1-2 & chapters 1- 3 Read chapter 4 Group Assignment Research paper