Strategic case for information & IT Acknowledgements to Euan Wilson (Staffordshire University)

Strategic case for IS/IT ‘strategic’ - 2 components: –strategy long term issues –‘programmes’ of activity creating future company ‘vision’/direction –tactics short term issues –‘projects’/’opportunities’ meeting business immediate needs

Strategic case for IS/IT ‘information’ - 2 elements: –information systems(IS) applications –information technology(IT) infrastructure where both are concerned ‘IS/IT’ will be used

IS/IT management issues creating a business environment in which IS applications can be developed to support business strategies establishing the detail of user requirements & business application requirements creating managerial environment & IT infrastructure to allow strategic IS applications to be developed developing/ modifying IT infrastructure to support immediate IS implementations & IT developments =applications strategytactics information systems - demand - ‘business pull’ information technology - supply - ‘technology push’

Why IS/IT assumed strategic role? high expenditure critical success factor (CSF) strategic business weapon economic climate favours use affects all business functions ‘information revolution’ involves multiple stakeholders matters at highest level management of IS/IT makes a difference

IS/IT strategic role strategic IS/IT applications using IS/IT to support (era 3) strategic business strategy MIS/decision support tactical improving ability to systems exploit business (era 2) opportunities DP/TP systems operational making operations (era 1) more efficient

High expenditure activity 5%-20% of revenue dependent on spend effectiveness not size low level IS/IT investment = low benefit sector leaders often high IS/IT spenders IS/IT expenditure is growth area effective IS/IT spend linked to effective strategy

Critical success factor IS/IT at business operations core IS/IT excellence written into mission statements of many major companies increasing dependence on IS/IT increasing impact on how businesses do business perceived area of competition IS/IT increasingly linked to business strategy

Strategic business weapon gain competitive advantage –‘1 st mover’ benefits often temporary –product/service/delivery channel improve productivity & performance –internal systems focus –setting up inter-organisational systems (IOS)

Strategic business weapon enable new processes & structures –business process re-engineering (BPR) –e-business virtual organisation create new business opportunities –value added information processing –product/service innovation IS/IT offers both strategic opportunities & threats

Economic climate increased competition for smaller markets IT seen as enabling technology speed & ‘time compression’ important IS/IT is needed to cause change & to respond to it

Business functions business users demand IS applications public demand IT facilities IS/IT use across all management levels IT links different parts of business IS/IT becoming more varied & flexible IS/IT rate of change accelerating rate of IS/IT change exceeds ability to predict outcomes

Information revolution insatiable demand for information companies ‘negative development’ –new application demand > supply –increased rate of legacy system replacement new IT uses constantly developed information – ‘ultimate commodity’

Information revolution ‘new world’ focus changes information needs –customisation –demassification –‘data mining’ information needs change faster than IT can

Stakeholders end usersgovernmentvendors -needs-regulations-developments -standards-policies-standards Clientsconsumers & suppliersIS/IT-expectation -linkages-behaviour CompetitorsIT Stakeholdersemployees -new products-conditions -new markets-job satisfaction

IT matters at highest level wrong decisions can damage can inhibit & enable can influence major policy decisions security is vital infrastructure is vital IRM decisions have serious implications IT is too important for technologists only to decide!!

IS/IT management identifying ‘high payoff’ applications top management support raising IS/IT awareness regular IS/IT investment important information (IS/IT) strategy linking IS/IT strategy with business strategy IS/IT is another business resource to be managed

IT evolution & strategic impact era 3 transformation strategic transformate era 2 effectiveness tactical informate era 1 efficiency operational automate

IS/IT key drivers knowledge productivity & service workers –gaining productivity lower cost high performance

IS/IT key drivers quality –information based product/service quality increasing –high consistency & predictability employee motivation supplier involvement performance measurement

IS/IT key drivers responsiveness –reduced dependency time space –IS/IT key to achieve high responsiveness globalisation –enterprise level coordination & collaboration –virtual organisation

IS/IT key drivers outsourcing –value adding capacity –business process focus –improved IS/IT investment management social/environmental responsibilities –social awareness –organisational autonomy –business empowerment