02 Strategy Flashcards
1
Q
Briefly mention when (years) were the origins of the Stategic Thinking in IS:
A
- Strong during the 90’s
- Declining in the e-business era in 2000’s
2
Q
Elaborate on the definition of Strategic Information Systems (SIS), what do they provide and some key characteristics of them:
A
- Also called competitive Information Systems
- SIS function/application is to shape competitive strategy and provide competitive advantage
- SIS operate in any area (administrative, technical…)
- SIS can be visible, unnoticeable or confidential
- SIS shape competitive posture and strategy (could shape industries)
- SIS shape or support a business unit’s competitive strategy
- SIS are able to significantly change the manner of conducting business
- SIS give the firm strategic advantage
3
Q
Briefly give 3 examples of SIS covered in the lecture and mention its strategic effects:
A
-
Baxter: American hospitals supplies, order entry distribution system ASAP, during early 80’s, ASAP used to automate ordering and inventory control through EDI.
- Strategic effects: simpler ordering process, current availability info, delivery periods info, stock reductions through daily delivery, automatic invoicing, increased volume of sales.
-
American Airlines: SABRE online reservation system for travel agents.
- Strategic effects: travel agencies invested on their IT, privileged display of AA flights, additional earnings (royalty fees).
-
Walmart: Satellite network (stores to HQ), up-to-date data (inventory, sales) and EDI to exchange data with suppliers (continous replenishment).
- Strategic effects: having the right products in the right quantities in each store, reduced inventory and transports costs (consolidation), better provider integration (log in).
4
Q
What are (4) typical features of SIS?
A
- SIS transform relationships to customers/consumers by sharing information
- SIS link organizations to external partners/organizations
- SIS extend/enhance products and services by integrating information
- SIS provide executives with better management information
5
Q
Name some (4) common characteristics of effective SIS projects:
A
- SIS have an external focus (from ideas and needs from the market)
- SIS add value (instead of reducing costs)
- SIS support business strategy (not pure tech aims)
- SIS informate (not automate; informed decisions, information for customers)
6
Q
Describe the (4) main myths from Strategic Information Systems (SIS):
A
- SIS are a distinct type of systems => SIS are conventional systems used in creative ways.
- SIS are a result of careful plans => SIS are evolutionary, not revolutionary, grow incrementaly, small innovative enhancements are added.
- SIS originate in the IT group => SIS true origin are where there is close contact from employees to customers/suppliers, IT just enables them.
- SIS provide enduring advantage => Advantages from SIS are difficult to sustain, competitors will try to copy, duplicate or emulate them.
7
Q
Mention the (2) perspectives that can be used to analyse the competitive impact of IT?
A
- MBV = Market Based View (mainly Porter’s 5 forces)
- RBV = Resource Based View (mainly using theories, using inside-out perspective)
8
Q
The MBV can be used to analyse the competitive impact of IT, this is mainly done through the Porter’s 5 forces, describe each of them and relate them to how IS influence them:
A
- Bargaining power of suppliers (IS changing power balance, switch of suppliers)
- Bargaining power of buyers (IS changing power balance, IS modify visibility for customers)
- Threat of new entrants (IS modify barriers, IS provide new solutions)
- Threat of substitute products and services (IS generate replacements, new digital distributions)
- Rivalry among competitors (IS change power balance in industry/sector, IS and market transaction costs)
9
Q
Describe the RBV and its definitions of resources and capabilities.
A
- Also called inside-out perspective.
- RBV tell us that the source of competitive advantage is rooted within the firm
- … through the use of valuable, distinctive, rare and inimitable resources.
- Resources = tangible/intangible assets (organizational processes, items, firm attributes, information, tools, staff) that enable a firm to conceive and implement strategies to improve efficiency and effectiveness. More identified usually with physical assets.
- Capabilities = the capacity to deploy such resources (alone, combined) with organizational processes (knowledge, skills, management, relationships).
10
Q
In relation to the RBV, mention some IT-related Resources:
A
- Information (media, stored, data)
- Information Technology (physical assets, processing, communication)
- Information System (socio-technical system)
- IT/IS capital (capital for investments)
- IT infrastructure (components for basic IT service)
- IT personnel (staff)
- IT management (executive IT staff, CIO, IT Director, IT Project Managers)
11
Q
In relation to the RBV, mention some IT-related Capabilities:
A
- IT Standards and Architecture (principles and logic for application-integration of HW-SW)
- IT Business knowledge (IT understanding/experience of business, CIO business knowledge)
- IT Knowledge of business management (senior executives knowing IT functionality)
- IT Technical skills (knowledge for implementing, operate IT smoothly)
- IT Managerial skills (senior/executive IT personnel managerial skills)
- IT-business relationship (communication, shared vision, priorities, risks, responsibilities).
12
Q
How is Strategy defined? From where does the term come from?
A
- From the Greek “Strategia” (generalship).
- Strategy has a relation to the deployment of troops, the art of war.
- It means to employ political, economic, psychological and military forces from nation(s) to support adopted policies either in peace or war.
- To meet the enemy in advantageous conditions.
- A careful plan or method, a clever stratagem.
- Devising or employing plans or stratagems toward a goal.
- Strategy must define an aim, this aim will determine the series of actions intended to achieve it.r
13
Q
What is the nature of strategy?
A
Strategy:
- Defines organizations fields of activity.
- It’s future-oriented, based on developments from the environment and the organizations’ competences.
- Refers to opportunities and threats in the external environment => influence/adapt it.
- Refers to organizations resources (strength / weaknesses)
- Geared towards competition (determine actions)
- Provides general guidance, concerned with the whole business or large parts of it.
- Made up of “big decisions”.
14
Q
Mention the key characteristics of Strategic Decisions (in a nutshell):
A
Strategic Decisions:
- Affect entire business/large parts of it.
- Are success oriented (profit-aimed).
- Are competitive.
- Direct resources.
- Long-term binding (can be irreversible).
- Have far reaching consequences.
15
Q
What are the 3 Strategy Levels? Explain each of them.
A
-
Corporate Strategies (+5 years)
- Vision & Mision, business goals, products & markets, resources & structures.
- Focus on corporate mission and objectives.
- Coordination of business units (BU’s strategies) to reach those objectives.
-
Business Unit Strategies (3-5 years)
- Design & organize BU’s, Competitive Strategy (incentives, time, rivals & partners)
- Direct the business of a division.
- Aim to improve BU competitive position (develop and retain competitive advantage)
-
Functional Strategies (internal strategies, short term)
- Focus on Skills: Finance, HR, Technology, Production, Procurement, Distribution
- Implement strategic decisions (measures and resource assingments)
- Impact on individual organizational functions/departments.
16
Q
Why engage in Strategy? Explain the (2) main reasons:
A
Practical reasons:
- IS stragies are a top concern (in theory and practice)
- IS strategy among the highest-ranking management topics in practice (+2 decades)
- IS strategy conferences for practitioners
- IT management consultancies are interested on strategy consulting
Theoretical reasons:
- Strategy as a major topic in IS research (las 2 decades)
- Question: does IT delivers value to the business? (observation of the IT investments)
- Assumption that IT always pays off (thinking that computers directly increase productivity)
-
Studies and explanations like the IT Productivity Paradox:
- IT by itself does not provide value or competitive advantage, instead, it enables business processes.
17
Q
Explain and elaborate on the (4) IS Strategy Conceptions in literature: (“IS Strategy seen as…”)
A
- A shared managerial attitue towards the role of IT/IS in the organization.
- General stance of the role of IT and its management/use in the organization.
- Normative standpoint, organisation-centric.
- IS Strategy is company-wide but it’s developed separately from business strategy.
- Intent to give a shared understanding in the org. to guide IIS investments/management/deployment.
- Use of IT/IS to support business strategy (an appendix to business strategy).
- How can IT support BU’s strategies for competitive advantage.
- Business-centric, IIS as a whole.
- IS Strategy subordinated to the business strategy (might be part of it, an annotation, an appendix).
- Ensure the business strategy is implemented to achieve the desired business position.
- A corporate master plan for the development of the IIS/IF.
- How to develop the corporate IIS. Assets to be deployed in the IIS and allocated to the IF.
- Information Processing centric.
- IS Strategy its a strategy by itself, co-aligned to business strategy.
- The IS Strategy enables/supports the business one since both are in-line.
- A departmental plan of the IT/DP function.
- Seen as tasks to be imposed to Information Processing departments.
- IT departmental centric (located below in importance)
- IS Strategy is an implementation of the business strategy but on the level of departments responsible for IT/IS.
- Breaks down the business strategy to the IT department level.
- Ensures the IF focus is in line with the business strategy and has the resources for its tasks.
18
Q
List the (4) IS Strategy Conceptions in literature: (“IS Strategy seen as…”)
A
- Managerial attitude towards IS/IT in the organization (global view to IT).
- Use of IT/IS to support business strategy (as an appendix).
- Corporate IS/IT Master Plan (aligned to business, IIS development).
- Departmental plan (department focused, IF development).
19
Q
Describe the Szyperski’s Generic Strategies related to the view of IS as a shared managerial attitude towards IS/IT in the organization:
A
Szyperski’s Generic Strategies describe different management’s outlook on investing in IT:
- Momentum Strategy = see and wait. IIS supports current business well, no fundamental changes.
- Aggresive Strategy = IT as an important lever for business. Experiment with new technologies/applications (even influence them).
- Moderate Development Strategy = mixing momentum and aggresiveness in one field strategy.
- Defensive Strategy = keep the influence of IT limited (might rollback IT diffusion).
20
Q
Describe the Chen et al. Generic Strategies related to the view of IS as a shared managerial attitude towards IS/IT in the organization:
A
Chen et al. Generic Strategies:
-
IS Innovator (related to Szyperski’s “aggresive + moderate”)
- Leading IS innovator in the industry.
- Be the firsts to try/develop unproven IS initiatives.
- Responding fast to areas of opportunities for IS.
-
IS Conservative (related to Szyperskis’ “momentum + defense”)
- Safe and stable approach to IS innitiatives.
- Adopt IS innovations once they have been proven in the industry.
- IS innovations are carefully examined before being chosen.
-
Undefined
- Organizations without long-term IS goals
- No articulated IS Strategy
- No consistent pattern of behaviour regarding IS
21
Q
Describe the Parson’s Generic Strategies related to the view of IS as a shared managerial attitude towards IS/IT in the organization:
A
Parson’s Generic Strategies:
-
Centrally planned
- Central coordination of requirements to take decisions. IT provides for business demands at all organizational levels.
-
Leading edge
- Tech creates business advantages, worth the risks. IT pushing boundaries, used in all fronts, users identify advantages.
-
Free market
- The market makes the best decisions, IT as a profit-centre that needs returns on resources used.
-
Monopoly
- Information as a corporate good and resource for users. IT satisfies users requirements but don’t drive them.
-
Scarce resource
- Information is a limited resource, its development must be justified. Tight control of expenses/projects. Justify capital investments. A strong need to see benefits.
22
Q
Describe the Earl’s Strategy Model related to the view of IS as Corporate IS/IT Master Plan:
A
3 interconnections:
-
IS Strategy
- Application development portfolio
- The “shopping list” of applications and projects
- An AS Strategy
-
IT Strategy
- Provides technical components (PC, networks, applications)
- Design parameters, schemas, goals and plans
-
IM Strategy
- Guides the organization to run IS/IT activities
- Concerned with the relationship between IS/IT function and the business
23
Q
Describe the view of an IS Strategy as an IS/IT Departmental Plan:
A
- IS Strategy is directly subordinated to Corporate Strategy
- IS Strategy is at the same level of other strategies (production, financial, marketing, HR)
- IS Strategy also colaborates with the other strategies that are at the same level.
24
Q
What (in essence) is an IS Strategy?
(also called IT Strategy, Information Strategy)
A
An IS Strategy:
- Sets the playing field (where?, which areas?)
- Defines goals (ends?, achievements?)
- Determines courses of actions and blueprints (how?, guidelines?)
- Determines resources (required means?)
- … all this for the development of the IIS and set-up the IF.
Main question : which information and communication capabilities the organization needs for the future? How can it be provided?
Produces = an effect on information and communication capabilities of the whole organization, thus, influencing the success of the business.
25
Describe **the comprehensive IS Strategy Model (overview)** graphically and elaborate on its **key propositions and rationales**:
**IS Strategy Model elements:**
* **Business Strategy**
* **IF Strategy**
* **IIS Strategy**
* **IR Strategy** (teplicable, Accesible. Relation to human knowledge and decisions making)
* **AS Strategy** (technical solutions to collect, transfer information. Focused on specific business purposes)
* **TI Strategy** (technical Infrastructure: technical devices. Shared, flexible, agile)
**Key propositions and rationales:**
* **Separate strategy for the 3 layers of IIS (IR, AS, TI)** due to different decisions in nature, usage of different logics and competencies.
* **IIS as a whole subject of strategic considerations:** IR + AS + TI as prerequisites for effective and efficient Information and Communication.
* The IR, AS, TI decisions are interdependent (layers are connected by requirements and services).
* **Partial strategies for the IIS and IF can be distinguished.**
* **IIS Strategy** = What? (mainly investments decisions)
* **IF Strategy** = Who? (personnel and institutional decisions: staffing, organizing, sourcing, governance)
* **IS and Business Strategy distinguished on a mental level, but they are not separated.**
* Alingment: managers should think about strategic IT decisions when thinking about business strategy.
* The IIS permeates the whole business (also related strategic decisions).
26
What are the **(3) assumptions (different views) about Strategic Planning?**
**Thesis, antithesis and synthesis:**
* **Thesis: planning is rational.**
* Strategy making as rational decision making.
* Design school, Planning school, Positioning school
* **Antithesis: planning is emergent**
* ****Strategy as uncontrolled, decentralised and evolutionary process.
* Entrepreneurial school, Cognitive school, Learning school, Power school, Cultural school
* **Synthesis: rationality improves planning**
* Strategic planning is rational and emergent.
* Intended strategy from top management (has further non-realized strategies). This Deliberate strategy its enhanced by Emerging strategies from deparments
* The final Realized strategy is just seen ex-post, after actual realization.
27
Elabore on **why rationality improves planning (synthesis):**
In support of planning rationality:
* Formal models based on rational assumption =\> Useful frameworks for strategic thinking.
* Even if strategic planning is socio-political, emergent or decentralized (instead of formal top-down approaches).
* Strategies and IS Strategies can and should be planned in a structured process.
* Better deviate from a plan that being lost in caos.
28
Explain the IT Productivity Paradox:
**IT enables business processes** and they deliver organizational value, rather than just a technical value.
29
Explain the **IS Strategy Alingmnet Model:**
* If Business Strategy and IT Strategy are aligned, then the business and IS infrastructure will be.
* Both underlying infrastructures need to support processes (see MIMF -\> IIS).
30
Explain the background of the **diagram of Strategic Alingment and Success:**
* **If IS Strategy and the Business Strategy** are **synchronized**...
* and the **IIS and Organization are also synchronized**...
* there is a **high correlation** of coordination and later **success**.
31
Explain the **main diagram of the Strategic Planning Process:**
The diagram has the rationale of internal (RBV) and external factors (MBV) distributed across a Business and Information Processing layers/areas. It comprises 5 main steps:
1. **Analyse the business trategy**
* Business trategies imposes IS requirements for the future
* Appraisal of business strategy and internal and external business situation
* Business demands addressed
2. **Assess the internal IS Situation**
* ****IS Strenghts open up future potential (retain and extend them)
* IS weaknesses constraint potential (overcome them)
3. **Assesss the external (information processing) environment**
* ****Relevant developments in IT
* Standards, services on the IT market and industry
* Complexity and uncertainty change informational requirements
* IT/IS Services can open up opportunities or being threats (used by competitors)
4. **Devise an IS Strategy**
* ****Balance (IT) restrictions and demands (from business)
* Within the context and limits of the internal IS situation + external IT-IS context
5. **Balance IT restrictions-opportunities as an ongoing process**
* ****Full-alingment of Business-IS Strategy is not achieved one-way and one-time
* IIS restrictions might limit business strategy
* Newer/Future tech opportunities might enhance the business strategy
32
From main IS Planning Process diagram, **elaborate on the Business Strategy building block:**
On this block you have to revise the organization paying attention to:
* Look at the Vision and Mission
* Goals (business and organizational)
* Strategies (Corporate, BU's, Departmental plans)
33
From main IS Planning Process diagram, elaborate on the **External Economic Environment building block:**
You have to **understand the external economic environment** through:
* **Politics** (government, economic system, economic policy...)
* **Culture** (lifestyle, attitude to work, ecological awareness, morale...)
* **Legal system** (constitution, business law, media laws...)
* **Target markets** (market size, state, competitive situation...)
* **Procurement markets** (suppliers, market structures...)
34
From main IS Planning Process diagram, elaborate on the **Internal Business Situation building block:**
You have to **know your business, organization and departments looking at:**
* **Business culture** (accepted values, modes of acting...)
* **Organization** (structural and process organisation, philosophy...)
* **Personnel** (staff size, skills, educational level...)
35
From main IS Planning Process diagram, elaborate on the **Internal Information Processing Situation (IF + IIS) building block:**
This block looks at the **application quality, the information as an object in the organization:**
* **Application landscape** (number of applications, application areas, ages...)
* **Technological infrastructure** (structure, age of components, performance...)
* **Information assets** (corporate knowledge, information available, DB's)
* **Personnel** (staff, workload, IT skills and know-how)
* **Organisation** (outsourcing levels, organization of the IF, integration into business, internal structure, IT governance)
36
From main IS Planning Process diagram, elaborate on the **Information Processing Environment building block:**
This block looks at the external tech developments and environment:
* **IT provider markets** (IT suppliers, IT service providers, offerings, information services, number, size and power of suppliers, co-operations...)
* **Technologies** (technological trends, standards, innovations, price, developments...)
* **Industry IT use** (by customers, partners, suppliers, competitors...)
* **IT Compliance & Legislation** (privacy, data protection, reporting requirements...)
37
Explain the **framework of frameworks (clasification) of Planning Frameworks:**
There are 3 types of Planning Frameworks:
* **Awareness**
* Information intensity matrix
* Purpose: Grasp
* Scope: Industry
* Use: Eduation
* **Opportunity**
* Porter's generic strategies, The 5 forces & Value chain
* Purpose: Options
* Scope: Competition
* Use: Identification
* **Orientation (Valuation)**
* McFarlan's strategic grid, Earl's audit grid
* Purpose: Direction
* Scope: IS Capabilities
* Use: Assessment
38
From the Awareness frameworks, **describe the Information intesity matrix:**
* There are **different levels of information intensity across industries**.
* **X axis: Information content** of Products and Services
* **Y axis: Information intensity** of the Value Chain
39
From the Opportunity frameworks, describe the Porter's 5 forces analysis:
How IT/IS affects each of the Porter's 5 forces?:
* **Suppliers (bargaining power of)**
* IT able to increase/decrease bargaining power
* Switching suppliers more easily?
* **Buyers (bargaining power of)**
* IT to increase/decrease bargaining power
* Customers switching costs higher/lower?
* **New entrants (threat of)**
* ****IT to erode/build market entry barriers
* **Rivalry (among industry)******
* IT/IS changing the basis of competition in a market?
* **Substitute products (threat of)**
* ****IT able to create/replacing existing products
* IT rendering products obsolete
40
From the Opportunity frameworks, **describe the Porter's generic strategies:**
There are **4 Porter's generic strategies:**
* **Cost leadership:** a firm targeting customers in most or all segments of an industry based on offering the lowest price.
* **Differentiation:** targets customers in most or all segments of an industry based on attributes other than price (higher quality, services).
* **Cost focus:** focusing on one or few industry segments, while attempting to offer a lower price.
* **Differentiation focus:** focusing on one or few industry segments, while trying to differentiate itself.
41
From the Opportunity frameworks, **elaborate on the Porter's Value Chain analysis:**
* **Value chain = activities performed to create value in an industry.**
* Value chain analysis = focuses on the value generation process (creation, delivery of a product). **Primary and support activities are distinguished.**
* **Linkages between activities** themselves are crucial for corporate success.
* **Linkages are flows of: goods, services and information.**
* Analysis levels are either organizational or inter-organizational (suppliers and customers).
* **IT is used to:**
* **Enhance value** of activities
* **Better link** of activities together (company)
* **Better link firm's activities to partners** for value creation (inter-organisational)
* **Expected benefits** from the analysis:
* **Overview** of primary activities' **information requirements and links** between them.
* **Interaction of organisation and partners** by exchanging information.
* Reveal **areas where IT investments can improve activities**, links to internal parts or partners.
42
From the Orientation (Valuation) frameworks, **describe McFarland's Strategic Grid:**
There are **four views for the role of IS depending on 2 axis: X (future importance) and Y (criticality to core operations):**
* **Factory (Key operational):** heavy dependence on cost-effective and reliable IIS operations.
* Improve core applications, BU executives, process optimisation/reengineering.
* **Strategic:** IS activities are essential for executing the strategy and operations. New IT applications are crucial to future competitive success.
* Transformation of organisation, Senior IS & biz executives, IT enabled changes.
* **Support:** the role of IS for both operations and future strategy is low. This type of firm could operate in the event of major failures in IIS operations and current developments.
* Improve performance, local oversight, grassroots experimentation.
* **Turnaround (High Potential):** IT supports daily operations but firm is not dependent on smooth IIS operations. However, new IT applications are vital for executing its business strategy in the future.
* Build new business, Innovation Group, IS venture.
43
From the Orientation (Valuation) frameworks, **describe the merge of the McFarland's strategic grid and Parson's Generic IS strategies:**
Has the same 2 axis from the McFarland's strategic grid: X (future potential through IT) and Y (IT criticality to core operations).
It clasifies the 4 IS views as follow:
* **Key operational (factory)**
* **Monopoly:** IT viewed as a source service or utility. User satisfaction.
* Scarce resource: IT/IS investments need to be carefully planned and justified.
* **Strategic**
* **Centrally planned:** integrated with business strategy, centralized, senior, dedicated agency. Understanding of requeriments and opportunities of IIS and IF.
* Leading edge: state of the art tech, comp. advantage. High investing on R&D and IT/IS. Need strong senior mgmt. support.
* **Support**
* **Scarce resource:** IT/IS investments need to be carefully planned and justified.
* **Free market:** internal IT service offers compete with external providers. Little senior management attention, line-managers have more responsibility.
* Necessary evil: IT is applied as much as it is necessary (meet legal demands, abnormaly high returns).
* **Turnaround (High potential)**
* **Leading edge:** state of the art tech, comp. advantage. High investing on R&D and IT/IS. Need strong senior mgmt. support.
* **Free market:** internal IT service offers compete with external providers. Little senior management attention, line-managers have more responsibility.
* Centrally planned: integrated with business strategy, centralized, senior, dedicated agency. Understanding of requeriments and opportunities of IIS and IF.
44
From the Orientation (Valuation) frameworks, describe the Earl's Systems Audit Grid:
There are 4 "options" of what to do with Systems according to 2 assesment axis.
X axis = Technical quality
Y axis = Business value
* **Divest** (low business value, low technical quality)
* **Reassess** (low business value, High technical quality)
* **Renew** (High business value, low technical quality)
* **Maintain and enhance** (High business value, High technical quality)
45
Graphically describe **where to apply each of the Planning frameworks on the main IS Planning process:**
