2. Lecture 1: Course introduction
Strategic
Management of
Information Systems

3. Lecturer introduction
Olga Yugay
MEng in Computer Science
BSc Business Computing

4. Roadmap WHAT is SMIS about? Strategy and Strategic Management
Information Systems
Strategic Management of IS
WHY do we need it?
IS fundamental roles
Emerging trends
HOW do we achieve it?
Upcoming lectures roadmap

5. WHAT is SMIS about?

6. What is SMIS about? Strategy and Strategic Management
Strategy is a broad based formula for how business is going to compete, what its goals should be, and policies will be needed to carry out those goals. The essence of formulating competitive strategy is relating a company to its environment.
Porter(1980) Competitive Strategy
Strategic Management is the decision process that aligns the organisation‘s internal capability with the opportunities and threats in faces in its environment.
Roweet al. (1994) Strategic Management

7. Business Strategy Functional Strategy
What is SMIS about? Strategy and Strategic Management
Corporate Strategy
Business Strategy
Functional Strategy
identifies the direction for the entire organisation. What business(es) are we in?
deals with the single SBU and how it can contribute to the corporate strategy.
best use of the resources available to contribute to the business strategy

8. What is SMIS about? Information Systems
test

9. Examples of IS: Operational support
Sector and example
Description
Retailing: electronic point-of-sale (EPOS) terminals
Provide faster customer checkout, identify customer preferences and improve inventory control; linked with suppliers’ computer systems
Financial services: automated teller machines (ATMs), online, internet, telephone banking
Support 24-hour-a-day banking services. Telephone banking enables customers to make transactions from their home.
Travel: computerised reservation systems
Enable customers to survey availability and fares, and to reserve and pay for travel directly without having to work with an agent
Manufacturing: computer-aided design and manufacturing
Linking design and manufacturing significantly improves the time to market. Better logistics by computerised material requirements planning. Electronic data interchange between suppliers and customers

10. What is SMIS about? Information Systems
test

11. Examples of IS: Support of knowledge work
Categories
Examples
Professional support systems
Automotive engineers use computer-aided engineering (CAE) software together with virtual reality systems to design and test new models for fuel efficiency, handling, and passenger protection before producing prototypes,
Office information systems
MS Office software and similar
Knowledge management systems
Groupware systems & KM 2.0
The intranet and extranet
Data warehousing, data mining, & OLAP
Decision Support Systems
Content management systems
Document management systems
Artificial intelligence tools
Simulation tools
Semantic networks

12. What is SMIS about? Information Systems
test

13. Examples of IS: Management support
Categories
Examples
Executive information systems
Marketing
EIS enables sales forecasting, which can allow the market executive to compare sales forecast with past sales; evaluate pricing as related to competition along with the relationship of product quality with price charged; manipulate the data by looking for trends, performing audits of the sales data, and calculating totals, averages, changes, variances, or ratios.
Financial analysis
Financial ratios and cash flow analysis allow estimating the trends and make capital investment decisions.
An EIS integrates planning or budgeting with control of performance reporting, and it can be extremely helpful to finance executives. EIS focuses on financial performance accountability, and recognizes the importance of cost standards and flexible budgeting in developing the quality of information provided for all executive levels.
Management reporting systems
Decision support systems

14. WHY SMIS matters?

15. Why SMIS matters?
Need for information
People at all levels of the organisation need to work in ways to add value to the resources they use
To do so they need information – about inputs (cost and availability of materials, staff, equipment), the transformation process (delivery schedules, capacity utilization, efficiency, quality costs) and outputs (prices, market share, customer satisfaction).

16. Why SMIS matters?
Dependence on information

17. SMIS facilitate SMIS enable Information Storage and Analysis
Why SMIS matters?
SMIS facilitate
Information Storage and Analysis
Assist With Making Decisions
Assist With Business Processes
SMIS enable
Electronic coordination
Globalisation
Growth of information-intense firms

18. SIEMENS’ E-STRATEGY Case study: When SMIS bring value
Knowledge management
Sharenet
E-procurement
10% of Siemens €35 billion/year
Savings from economies of scale by pooling demands of several purchasing departments using company called click2procure
Deal with customers online
“Buy from Siemens” on the homepage
30% of sales online
Automate internal administrative processes
Handle 30,000 job applications/year online
Employees book business travel arrangements online
Source: Boddy et.al p. 42

19. NESTLE STRUGGLES WITH ENTERPRISE SYSTEMS
Case study:
When SMIS fail
NESTLE STRUGGLES WITH ENTERPRISE SYSTEMS
Problem: many purchasing systems, no information on how much business they did on each supplier -> local differences deemed inefficient and costly
Proposed solution: install SAP’s financial, purchasing, sales and distribution modules throughout every Nestle USA division to standardise and coordinate the company’s IS and processes
Result: FAILURE, increased staff turnover, low motivation to learn to use the system -> project stopped
Reason: overreliance on technology, failure to understand the impact the technology will have business processes. Nestle’s corporate culture is more decentralized, but new IS solution tried to centralize it.
Source: Boddy et.al p. 42

20. HOW to achieve SMIS?

21. How to achieve SMIS?
IS management environment: The External Context

22. How to achieve SMIS?
Relationship between business, IS and IT strategies

23. How to achieve SMIS?
Future lectures roadmap

24. Recommended reading
Boddy D. et al, Managing Information Systems: An Organsational Perspective -Chapters 1 and 2
Beynon-Davies P., Information Systems: An Introduction to Informatics in Organisations – Chapters 4-6
Applegate L. et al., Corporate Information Strategy and Management -Introduction