1. Prepared by Natalie Rose 1 Strategic Information Systems Lecture 2

2. Prepared by Natalie Rose2 Strategy Connections to suppliers and customers. Become the best firm in the industry. Block the competitors by keeping your customers happy. Competition

3. Prepared by Natalie Rose3 What is Strategic IS? Strategic information systems help organizations implement their long-term direction and the activities to achieve their goals. These systems can have an internal or external focus.

4. Prepared by Natalie Rose4 Key Issues Related to Strategic Information Systems

5. Prepared by Natalie Rose5 Strategic Alignment Strategic alignment enable an organization to achieve its strategic goals and objectives, by creating new market opportunities and enhancing relationships with customers and suppliers. It also uses strategic information system to meet customer loyalty.

6. Prepared by Natalie Rose6 Barrier To Entry FirmRival Supplier Consumer Decreased Costs Improved Quality Ties To Customers Increased Switching Costs Wholesale Ties To Suppliers Control Of Distribution Innovation and Differentiation Methods to Gain Competitive Advantage

7. Prepared by Natalie Rose7 Sustainable Advantage Strategic information systems can create sustainable advantage by generating unique benefits that competitors cannot duplicate, alter industry characteristics, link customers or suppliers to the organization, help define and support a new market niche, and reflect the organization’s culture.

8. Prepared by Natalie Rose8 Money for research Money for information technology Dangers: Capital Cost

9. Prepared by Natalie Rose9 You Rival Time IS Costs Time IS Costs Transaction Processing Network & DSS Network & link sales people Link to suppliers & customers Experimental technology & global links Competition Follows

10. Prepared by Natalie Rose10 Business Process Reengineering Business process reengineering (BRP) describes a redesign that starts from scratch and involves discontinuous rather than incremental change. BPR takes maximum advantage of information technology to break traditional notions of how an organization accomplishes its work.

11. Prepared by Natalie Rose11 Business Process Reengineering Redesigning business processes is a collaborative effort between business managers and information technology specialists. The business managers role is to establish the requirements for the new system; however, information technology specialists should be consulted for how state-of- the-art technology.

12. Prepared by Natalie Rose12 Five ways companies can use information systems to obtain low-cost leadership Automation Quality Purchasing and Manufacturing Just-in-Time Inventory and Manufacturing Flattening Organizational Structures Business Process Reengineering

13. Prepared by Natalie Rose13 Automation Automation can be used to reduce cost through  time savings,  labor reductions,

14. Prepared by Natalie Rose14 Just-in-time Inventory Just-in-time inventory enables a company to receive inventory precisely as needed; this results in inventory, labor, and other cost savings.

15. Prepared by Natalie Rose15 Flattening Organizational Structure Quality-oriented organizations first diagnose their information needs and then design the strategic information systems to meet these needs. Total quality management (TQM) is a comprehensive approach to improving quality and eliminating defects. Flattening organization structures allowed Technology to enabled companies to reduce the number of managers, move to team-based management, and move to more lateral communication in organizations.

16. Prepared by Natalie Rose16 Using Information Systems for Differentiation Companies can differentiate their products and services based on: Differentiate on Customer Service Differentiate on Quality

17. Prepared by Natalie Rose17 Using Information Systems to Differentiate Quality Information systems can monitor the raw materials used in production, the manufacturing process, and service both before and after the sale. Information systems can help identify and correct quality defects at the earliest possible stage.

18. Prepared by Natalie Rose18 Using Information Systems to Differentiate Customer Service Information systems can help improve the ease of ordering, reliability of delivery, accuracy and timeliness of product support and servicing, and flexibility in response to changing customer needs. Product monitoring systems and computerized dispatch systems can speed a company’s response to a customer’s request for product maintenance.

19. Prepared by Natalie Rose19 Using Information Systems to Create Focus Companies pursuing a focus strategy can use information systems to : Identify Opportunities in Existing Market Segments Create New Market Segments

20. Prepared by Natalie Rose20 Identifying Opportunities in the Existing Market Segments Vast amounts of information are available online, allowing companies to use this information to identify new market opportunities. The use of Geographic information systems can be used to display this data.

21. Prepared by Natalie Rose21 Creating New Market Segments Information systems are used to create market segments by customizing or personalizing products and delivering products or services electronically. Also, existing products can be altered to increase the amount of information that they contain.

22. Prepared by Natalie Rose22 Using Information Systems to Support Linkages Customer Linkages Supplier Linkages Logistics Linkages

23. Prepared by Natalie Rose23 Linkage definition Linkage describes the strategy of forming inter- organizational alliances. The use of computer and telecommunication technology have increased companies’ ability to link their operations more tightly to one another.

24. Prepared by Natalie Rose24 Linkages Value-adding partnerships (VAPs) refer to the linkage of companies that view the whole value system, not just the value chain, as their competitive unit and who share information freely with others in the value system so they can compete successfully in this environment. An interorganizational system (IOS) is an automated information system that two or more companies share to support the linkage of their businesses. The following three subsections address how IOS benefits provide a strategic advantage for its participants.

25. Prepared by Natalie Rose25 Customer Linkages A customer-focused IOS attempts to forge a linkage between a company and its customers by providing or hosting information services that mutually benefit the customer and the host. The IOS benefits the host company by increased sales, lower costs, better management information, and greater bargaining power. The IOS benefits the customer by making it easier and less expensive for the customer to select, order, and account for the products and services it buys.

26. Prepared by Natalie Rose26 Supplier Linkages A supplier-focused IOS attempts to forge a linkage between a company and its suppliers by providing information services that mutually benefit the suppliers and the host. Supplier-focused IOSs are most common in industries where many suppliers compete for the attention of a few major purchasers. The greatest benefit of an IOS is its ability to increase the efficiency of the company’s operations.

27. Prepared by Natalie Rose27 Logistic Linkages Logistics refers to the transport of goods and its associated activities. Inbound logistics describes the transport of raw goods to a company from its suppliers. Outbound logistics describes the transport of finished products from a company to its customers. Companies often forge alliances with logistics providers to improve control over service..

28. Prepared by Natalie Rose28 MANAGEMENT INFORMATION SYSTEM A management information system gives managers at all levels of the organization the ability to collect, analyze, and summarize information. Management information systems support top-level managers, middle-level managers, and first-line supervisors

29. Prepared by Natalie Rose29 Types of MIS Management reporting systems, decision support systems, groupware, and executive information systems are types of management information systems.

30. Prepared by Natalie Rose30 Managing Reporting System Management reporting systems (MRSs) help managers monitor the operations and resources of an organization and the environment in which the organization operates. An MRS can produce: detailed reports, summary reports, and exception reports.

31. Prepared by Natalie Rose31 Report Types Detail Reports. Detail reports provide managers with information useful in overseeing the day-to-day operations of a department or working group. These reports provide data about individual transactions. These reports are used primarily by low-level managers; however, higher-level managers may refer to detail reports when summary data is not as helpful. Summary Reports. Summary reports or statistical reports show totals, averages, maximums, minimums, or other statistical data aggregated over time, personnel, products, or some other quantity. Each line of a statistical report summarizes large amounts of transaction data that can be examined in a detail report.

32. Prepared by Natalie Rose32 Reports cont… Exception Reports. An exception report alerts managers to potential problems by showing only data that fall outside an accepted or expected range. Data is shown at either a transaction or a summary level. Notification systems occur as the result of a specific event and can replace exception reports in some situations. Notification systems use alerts to highlight exceptions

33. Prepared by Natalie Rose33 Decision Support System A decision support system is an information system designed to assist managers in evaluating the impact of alternative decisions and in making the best possible choice. DSSs differ from Mangement Reporting Systems in that DSSs offer forecasts of future conditions. The benefits of DSS include improved decision making, the examination of more alternatives, an ability to implement ad hoc analysis, faster response to expected situations, improved communication, more effective teamwork, better control, and time and cost savings.

34. Prepared by Natalie Rose34 Components of a DSS a database, a knowledge base, a model base, and a user interface.

35. Prepared by Natalie Rose35 The Components The database provides access to internal and external data that may influence or be affected by decisions under consideration. A knowledge base provides information about the relationships among data that are too complex for a database to represent. A model base provides analysis tools, including spreadsheets, simulation packages, forecasting tools, and statistical packages. A user interface allows users to control which data and models. A high-quality DSS should support facilities to compare, contrast, and aggregate data in a wide range of graphical and tabular formats.

36. Prepared by Natalie Rose36 Groupware Group decision support systems make use of a class of software called groupware. Groupware (computer- supported work or group support systems) refers to information technology that facilitates the sharing or communication of information among members of a group and helps the group to perform common tasks and to accomplish its goals. Groupware can improve group coordination, discussions, problem solving, and meetings.

37. Prepared by Natalie Rose37 Elements of Groupware Groupware elements include message systems, multiuser editors, computer conferencing, intelligent agents, and coordination systems.

38. Prepared by Natalie Rose38 Groupware Elements Message Systems. Electronic mail, electronic lists, electronic notes, and electronic bulletin boards are four examples of message systems. Multiuser Editors. A multiuser editor is software that allows multiple users to access and modify a common document. Computer Conferencing. Conferences are held in one of three ways. Real- time conferencing allows people to hold meetings electronically by typing their comments into networked computers. The Internet. Workgroups can use Internet-based tools to complete projects from remote locations. Intelligent Agents. An intelligent agent automatically make decisions based on what they know about the user. Coordination Systems. Coordination systems help coordinate the scheduling of project activities and team member participation.

39. Prepared by Natalie Rose39 Executive Information System An executive information system is software that supports executive activities, often specifically designed for a particular executive, reflecting his or her style and information requirements. Most EISs include mainly hard information; however, increasingly they include soft information.

40. Prepared by Natalie Rose40 Technology Toolbox: GIS MapPoint File Microsoft MapPoint Data Mapping Wizard Shaded Area: Demographics, Population 2002 by County Multiple Symbol Households with Internet Access Three levels, lowest uses Blank8x8.bmp

41. Prepared by Natalie Rose41 Question 1.Why is location an important element in business decisions?