Strategic Information Systems

Strategic Advantage and Strategic Necessity Strategic advantage refers to obtaining a sustainable competitive edge over competitors. The ability to obtain a greater than normal return on investment. Strategic advantage refers to obtaining a sustainable competitive edge over competitors. The ability to obtain a greater than normal return on investment. A strategic necessity is a system that must be installed to remain competitive and stay in business. A strategic necessity is a system that must be installed to remain competitive and stay in business.

The Value Chain Administrative Coordination & Support Services Human Resource Management Technology Development Procurement of Resources Inbound Logistics Inbound Logistics Operations Outbound Logistics Outbound Logistics Marketing and Sales Marketing and Sales Customer Service Customer Service Competitive Advantage Porter’s Value Chain Primary Activities Support Activities

Strategic Roles for Information Systems Improving business operations Improving business operations Promoting business innovation Promoting business innovation Locking in customers and suppliers Locking in customers and suppliers Interorganizational IS, EDI, automatic inventory replenishment system Interorganizational IS, EDI, automatic inventory replenishment system Creating switching costs Creating switching costs make customers dependent on the continued use of innovative IS. make customers dependent on the continued use of innovative IS. Raising barriers to entry Raising barriers to entry discourage competitors from entering a market discourage competitors from entering a market

Strategic Information Systems “Systems which contribute significantly to the achievement of an organization's overall objectives.” (Clark, 1994) “Systems which contribute significantly to the achievement of an organization's overall objectives.” (Clark, 1994) “The information system to support or change an enterprise's strategy.” (Wiseman, 1985) “The information system to support or change an enterprise's strategy.” (Wiseman, 1985) “Enhance competitiveness of the organization through the application of IT to business processes.” (Davenport) “Enhance competitiveness of the organization through the application of IT to business processes.” (Davenport) A type of Information System that is aligned with business strategy and structure A type of Information System that is aligned with business strategy and structure Can help create a competitive advantage Can help create a competitive advantage

Strategic Information Systems Technology used to gain an edge over an organization’s competition Technology used to gain an edge over an organization’s competition Can be used at all levels of an organization or just a few Can be used at all levels of an organization or just a few Makes a difference Makes a difference Profoundly alters the way an organization does business Profoundly alters the way an organization does business Sustained strategic, competitive advantage Sustained strategic, competitive advantage

Information Systems for Strategic Advantage How can information systems improve the value chain? How can information systems improve the value chain? By reducing the cost of primary and support activities By reducing the cost of primary and support activities How can information systems change the way an organization reacts to its competitive forces? How can information systems change the way an organization reacts to its competitive forces? By changing the bargain power of suppliers By changing the bargain power of suppliers By building closer ties with customers By building closer ties with customers By increasing or decreasing barriers to entry in a market By increasing or decreasing barriers to entry in a market By serving as the basis for new products and/or services By serving as the basis for new products and/or services

Model for Development of Strategic Information Systems Business Processes IT Management Commerce Information Management Customer Management Knowledge Management SIS Planning

Types of Strategic Information Systems Customer Relationship Management (CRM) Customer Relationship Management (CRM) Just-In-Time (JIT)/Build-To-Order (BTO) Just-In-Time (JIT)/Build-To-Order (BTO) E-Commerce E-Commerce Operations Support Systems (OSS) Operations Support Systems (OSS) Enterprise Resource Planning (ERP) Enterprise Resource Planning (ERP) Data Mining/Data Warehousing Data Mining/Data Warehousing Decision Support Systems (DSS/GDSS) Decision Support Systems (DSS/GDSS) Supply Chain Management (SCM) Supply Chain Management (SCM)

Examples of Strategic Information Systems American Airlines American Airlines Fed Ex Fed Ex Citibank Citibank Wal-Mart Wal-Mart Dell Dell Amazon.com Amazon.com eBay eBay Cisco Cisco Yahoo! Yahoo! Google Google PNC Corporation PNC Corporation PriceWaterhouse Coopers PriceWaterhouse Coopers Baxter Healthcare Baxter Healthcare