L3 - Strategic use of IS systems

Question 1

What is an IS strategy?

Answer 1

The plan an organization uses to provide information systems and services. Include things such as; Hardware, Software, Networking and Data. One must also keep the information system strategy in mind. Is the plan an organization uses to provide information services. IS allows a company to implement its business strategy.

Question 2

What is step 1 in strategic planning?

Answer 2

Strategic business planning - i.e. identifying vision, mission and strategies of the organisation.

“Know who you are”

Given the mission - what is the best strategy?

Question 3

What is step 2 in strategic planning?

Answer 3

Information systems assessment - evaluating whether something from current systems can be used or if there are any constraints, i.e. to what extent do the current resources match the needs of the organisation
Can be relevant to look at the technical (Hardware, Software, Networking), data and info resources and human resources of the company.

Question 4

What is step 3 in strategic planning?

Answer 4

Information systems vision - develop vision for IS system i.e. how the organisation should use and manage IS systems for strategic purposes

Build on mission and available IS resources

Question 5

What is step 4 in strategic planning?

Answer 5

“Know how you get there”; Information systems architecture - how IS resources should be used and how they should work together

How IS should support business strategy

Can include statements about
› All IS resources (hardware, software, networks)
› Data storage and data protection as well as data management
› Human resources management (can IS work be outsourced?)

Question 6

What is step 5 in strategic planning?

Answer 6

“Know what you need”

Strategic initiatives identification - identifying IS systems initiatives that will give the organization a competitive advantage. Equally, it is important to stress that this step is long-term and the cycle as a whole is a continuous feedback loop, in the sense that each incentive will provide input for future initiatives.

Question 7

How can organisations use critical succes factors?

Answer 7

These are the critical factors that an organization has set out to be achieved in order for them to strive and be successful. Thereby, the specific factors that an organization needs to achieve in order to accomplish their mission. Thereby, this can also work as an evaluation tool.

Question 8

How can organisations use The priority matrix?

Answer 8

This allows for managers to evaluate potential initiatives and prioritize them along two key dimensions: The ease of implementation and the potential returns.
The ease of implementation: This includes factors such as costs, time required, efforts required, or the actual complexity of the system.
Potential returns: This can be in terms of revenue, market shares, savings, reputation, etc.

Question 9

What are imperatives?

Answer 9

Imperatives: These are initiatives that should be relatively easy to implement, as they are easy to implement with a low cost yet have a big return.

Question 10

What are quick wins and stay away?

Answer 10

Quick wins: These do not have much upside potential but are easy to implement.

Stay Away: These are lost causes, as they have limited potential returns and also would be difficult to implement.

Question 11

What are evaluate?

Answer 11

Evaluate: These need to be evaluated in depth. Some of these will be implemented and some of them won’t. There will be a high return, but there will also be some significant expenses in reaching that point.

Question 12

What is the strategy triangle?

When is alignment achieved?

Answer 12

Successful firms have an overriding business strategy that drives both organisational strategy and IS strategy

To have balanced needed for successful operation: changes in IS strategy must be accompanied by changes in organisational strategy and must accommodate overall business strategy

Alignment: the situation in which a company’s current and emerging business strategy is enabled, supported and unconstrained by technology

Question 13

What is strategy, mission, objectives and how are they related

Answer 13

Strategy - coordinated set of actions to fulfil objectives, purposes and goals. Starts with a mission

Mission - clear and compelling statement that unifies an organisation’s effort and describes the purpose

Set objectives and performance targets to achieve mission and then choose business strategy

Question 14

What are generic strategies?

Answer 14

(1) Cost leadership - lowest cost producer
(2) Differentiation - finds qualitative dimensions most important to customers and adds value, unique product

(3) Focus
o Cost focus
o Differentiation focus

Question 15

What is the hypercompetition strategy?

How should BI be used?

Answer 15

Questions the sustainability of a competitive advantage - all are eroded at some point

Sustaining an advantage can be a deadly distraction
Goal of advantage should be disruption, not sustainability
Initiatives are achieved through series of small steps

The hypercompetition models suggest that the speed and aggressiveness of the moves
and countermoves in any given market create an environment in which advantages are rapidly eroded

Firms should focus on their capability to dynamically adjust organisational resources, agility is the competitive advantage

Focus on: customer satisfaction, profit maximization and other goals consistent with the business’s values and beliefs + capability to dynamically adjust their organizational resources

Design the organisaiton to sense, restructure and respond quickly

Utilise business intelligence to: predict new opportunities + identify strategic opportunities that both surprise and confuse competitors

Question 16

What is a social business strategy?

Answer 16

A plan of how the firm will use social IT, aligned with organisation strategy and IS strategy

A vision of how the business would operate if it seamlessly and thoroughly incorporated social and collaborative capabilities throughout the business model

Most social business opportunities (and objectives) are in:
o Collaboration - using social IT to extend reach of shareholders, networking
o Engagement - using social IT to involve stakeholders in traditional business of the enterprise, communitites and blogs can create a sense of closer contact
o Innovation - using social IT to identify, describe, prioritize and create new ideas

Answers the same type of questions of what, how, and who, as any other business strategy

Question 17

What is the business diamond?

Answer 17

An organisational strategy

Crucial components of an organisation’s plan: structure, information and control, people and task -> all interrelated

Useful for designing new organisations and diagnosing troubles

Using IS in an organization will affect each of these components. Use this framework to identify where these impacts are likely to occur

Question 18

What are managerial levers?

Answer 18

Organisational strategy

The successful execution of a business’s organisational strategy comprises the best combination of organisational, control and culture variables

These variables are managerial levers used by decision marker to effect changes in their organisations

Question 19

What is a SWOT analysis and how can we use it to identify strategic IS-initiatives?

Answer 19

Consider factors beyond technology

Strengths and weaknesses: what gives the organisation (dis)advantages over others in their industry?

Opportunities and threats: what activities or factors could help the organisation get new (dis)advantage over others in their industry?

E.g. look at which opportunities that can be achieved or which weaknesses that can be mitigated with a new IS system

How can the organization reduce the external threats by making better use of information systems? How it can make better use of its strengths through new information systems?

Question 20

What are Porter’s five forces and how can the model be used to identify strategic IS initiatives?

Answer 20

Potential threat of new entrants - how can IS systems increase barriers to entry?

Bargaining power of buyers/suppliers - how can IS systems reduce bargaining power of buyers/suppliers?

Potential threat of substitutes - how can IS systems be used to make products unique or unwilling to use substitutes?

Industry competitive rivalry - how can IS systems be used to limit competition?

Question 21

What is Porter’s value chain analysis and how can it be used to identify strategic IS initiatives?

Answer 21

As each activity is performed, the organization adds value to the product or service it delivers.

Primary activities are directly related to the creation, processing, or delivery of the product or service.

Support activities are those overall tasks that make it possible for the organization to function, but that are not directly involved in the product or service.

2 major ways to create competitive advantages in the value chain:
o How can IS systems be used to perform the activity at a lower cost?
o How can IS systems improve the value added from this activity to final product/service?

Question 22

What is the virtual value chain?

Answer 22

Gather info

Organizing: organize the gathered information in a way to retrieve easily for further analysis.

Selection: analyze captured information to add value to customers. Organizations develop better ways of dealing with customers, product delivery, etc. using information.

Synthesization: synthesize the available data. The data reaches the end user in the desired format.

Distribution: delivery of information to the end user. In a physical value chain, products are delivered to customers, in the virtual value chain this is replaced by a digital product. For example, digital movie streaming of movies compared to mail delivery of DVD. Therefore, today’s businesses are also known as information business.

Question 23

What is accelerated competition?

Answer 23

Increased competition leads to wider gaps between industry leaders and laggards

“Winner-take-all” environments

Sharp increases in the quality and quantity of IT investment

The changes in competitive dynamics are particularly striking in sectors that spend the most on IT

Joseph Schumpeter predicted the “creative destruction” over 60 years ago

Destroy your business (DYB) approach to strategic planning
› Find your weaknesses before your competitors
› Destroy your competitive advantages by complete disruption of current practices
› Grow your business (GYB) by reaching new customers or serving existing better

Question 24

What are organisational strategies?

Answer 24

Organizational strategy is the organization’s design as well as the choices the organization makes to define, set up, coordinate, and control its work processes

Question 25

Examples of IS strategy matrix decisions

Answer 25

Which infrastructure will support the chosen business strategy (for example servers, communication network and so on)?

What type of software will support the business processes required by the chosen business strategy?

What level of security is key to succeed with the strategy?

What data are we to capture, process, and disseminate?

Will the choice of IT architecture, standards and interfaces limit or exploit the strategy?

Can the business strategy be improved by investments in IT research and development?

Question 26

What are the elements of the IS strategy matrix?

Answer 26

Hardware - physical components

Software - programmes, applications

Networking - diagram of how hardware and sofware components are connected

Data - Bits of information stored in the system

Who uses, who delivers:
The first three - system users and managers

Data - data owners and administrators

Where
Hardware - physical location
Software - what hardware it resides on
Networking - where notes, wires and other transport media are located

Data - where the info resides

Question 27

How to identify and evaluate strategic IS initiatives?

Answer 27

Ind the initiatives: SWOT, Porter’s five forces, virtual value chain, D’Avenis 7 and the value chain can be used as aids to identify strategic IS initiatives. → Needs to be aligned with the vision

Evaluation: Critical success factors, priority matrix

Question 28

Explain D’Aveni’s 7’s

Answer 28

D’Aveni’s approach to lead an organisation in a hypercompetitive market

Superior stakeholder satisfaction

Strategic soothsaying: Using new knowledge to predict or create new windows of opportunity.

Positioning for speed: strategy about preparing the organization to react as fast as possible.

Positioning for surprise: strategy about preparing the organization to respond to the marketplace in a manner that will surprise competitors.

Shifting the rules of competition - transform industry, new ways to serve customers

Signalling strategic intent - communicating intentions in order to stall responses by competitors

Simultaneous and sequential strategic thrusts: Taking steps to stun and confuse competitors in order to disrupt or block their efforts.

Question 29

Explain how IS systems can add value to the virtual value chain

Answer 29

Managers can ask themselves in what ways can information systems make gathering, organizing, selecting, synthesizing, and distributing information less expensive, adding value to the firm.

Question 30

2 major ways to create competitive advantages in the value chain:

Answer 30

How can IS systems be used to perform the activity at a lower cost?

How can IS systems improve the value added from this activity to final product/service?