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).
25
Q
Describe the comprehensive IS Strategy Model (overview) graphically and elaborate on its key propositions and rationales:
A
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).
28
Q
Explain the IT Productivity Paradox:
A
IT enables business processes and they deliver organizational value, rather than just a technical value.
29
Q
Explain the IS Strategy Alingmnet Model:
A
- 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
Q
Explain the background of the diagram of Strategic Alingment and Success:
A
- 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
Q
Explain the main diagram of the Strategic Planning Process:
A
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:
-
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
-
Assess the internal IS Situation
- IS Strenghts open up future potential (retain and extend them)
- IS weaknesses constraint potential (overcome them)
-
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)
-
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
-
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
37
Q
Explain the framework of frameworks (clasification) of Planning Frameworks:
A
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
Q
From the Awareness frameworks, describe the Information intesity matrix:
A
- 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
Q
From the Opportunity frameworks, describe the Porter’s 5 forces analysis:
A
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
Q
From the Opportunity frameworks, describe the Porter’s generic strategies:
A
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
Q
From the Opportunity frameworks, elaborate on the Porter’s Value Chain analysis:
A
- 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
Q
From the Orientation (Valuation) frameworks, describe McFarland’s Strategic Grid:
A
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
Q
From the Orientation (Valuation) frameworks, describe the merge of the McFarland’s strategic grid and Parson’s Generic IS strategies:
A
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
Q
From the Orientation (Valuation) frameworks, describe the Earl’s Systems Audit Grid:
A
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
Q
Graphically describe where to apply each of the Planning frameworks on the main IS Planning process:
A
