Lecture 1

Question 1

Information Technology (IT)

Answer 1

Information technology falls under the IS umbrella but deals with the technology involved in the systems themselves. Information technology can be defined as the study, design, implementation, support or management of computer-based information systems.

Question 2

Information Systems (IS)

Answer 2

Information systems is an umbrella term for the systems, people and processes designed to create, store, manipulate, distribute and disseminate information. The field of information systems bridges business and computer science.

Question 3

Digital disruptions of organizations (Coase)

Answer 3

Vertically integrated organizations are created because the transaction costs of doing business in the open market were too great for complex enterprises. The advent of the Internet has further decreased transaction costs. Differentiate your company from competition

Question 4

Four characteristics of Digital Disruption

Answer 4

1. From marketplace to marketspace
2. Blurring of physical/digital divide
3. Move from push to pull economy
4. Development of open standards

Question 5

Explain the three-era model of evolving IT application in organizations in words

Answer 5

First, IT was used for automating core processes to achieve efficiency. Focus was on transaction processing and exception reporting.
Then, management’s goal was to satisfy information needs to achieve effectiveness. Focus was on information enquiry, analysis and presentation and knowledge discovery.
Now, strategic information systems objective is to affect the business strategy. The core of companies today is the digital part. (Example: Uber platform)

Question 6

Names of the three eras in three-era model

Answer 6

1. Data processing era
2. Management information systems era
3. Strategic information systems era

Question 7

The four main types of strategic systems are those applications that…

Answer 7

1. Share information via technology-based systems with customers/suppliers, change the nature of the relationship
2. Produce more effective integration: of the use of information
3. Enable organization to create, develop, produce, market, and deliver new or enhanced products or services or new value propositions based on information
4. Augment people’s cognitive processes: in generating knowledge and insight from information; provide mgmt/professionals with info to support development, implementation and evaluation of strategies

Question 8

Two distinctions when classifying strategic uses of IT

Answer 8

1. Purpose: operational efficiency, management effectiveness, knowledge discovery, business advantage through change
2. Focus: internal (using IT within the company) vs. external (more important to use IT and IS for external stakeholders

Question 9

Internal vs. external focus of operational efficiency

Answer 9

Internal: data processing - automation of business tasks and processes
External: electronic links between organizations, automating data exchangesa and interatction

Question 10

Internal vs. external focus of management effectiveness

Answer 10

Internal: management/executive information systems
External: sharing information by direct access from one company to another’s information resource

Question 11

Internal vs. external focus of knowledge discovery

Answer 11

Internal: generating new knowledge and understanding about existing business
External: generating new knowledge and understanding from/combining with external data

Question 12

Internal vs. external focus of business advantage through change

Answer 12

Internal: internal business integration by process, job and organization redesign
External: external business integration, changing the roles of the firms in the industry

Question 13

Success factors in strategic information systems

Answer 13

1. External focus (not internal)
2. Adding value, not cost reduction
3. Sharing the benefits (within organization/with suppliers, etc.)
4. Understanding customers and what they do with the product or service
5. Business-driven innovation (not technology-driven)
6. Incremental development
7. Information-driven development
8. Monetizing information

Question 14

What produces success?

Answer 14

1. Least - Information technology: is the ‘enabler’ which provides short-term advantage
2. Then - Information systems: utilize technology and are more difficult to imitate
3. Best - Information: gained from information systems to improve products and services (e.g., Google creating map of traffic jams)

Question 15

Backbone strategy

Answer 15

Strategy is central, but the company relies really heavily on the strategy

Question 16

Opportunistic strategy

Answer 16

You have different areas in a company where departments are working on the same stuff. It wants to show you can have short-term gain in improving the system. It’s not really central and not really the core of the business (e.g. VW that is trying to improve customer satisfaction through marketing/engineering)

Question 17

Complex strategy

Answer 17

Lots of activities are going on

Question 18

3 aspects of business strategy

Answer 18

1. Business drivers
2. Objectives and direction
3. Change
   - -> where is the business going and why?

Question 19

3 aspects of IS strategy

Answer 19

1. Business based
2. Demand orientated
3. Information focused
   - -> what is required?

Question 20

3 aspects of IT strategy

Answer 20

1. Activity based
2. Supply orientated
3. Technology focused
   - -> how can it be delivered?

Question 21

What is a business strategy?

Answer 21

You have some needs/demands (e.g., need a platform), but you also have the technology part (e.g., how to design the platform). IT is technology

Question 22

IS strategy definition

Answer 22

A business led, agreed list of prioritized initiatives to be undertaken in the organization’s planning horizon
(demand: ‘we need’)

Question 23

IT strategy definition

Answer 23

A statement of the IT components required to satisfy the IS strategy and the ways in which these are to be supplied to the business
(supply: ‘I supply’)

Question 24

What are the four domains of strategic choice?

Answer 24

1. Business strategy
2. Digital strategy
3. Organizational infrastructure and processes
4. IT infrastructure and processes

Question 25

Consequences of having no IT/digital strategy

Answer 25

1. IT investments don’t support business objectives
2. Loss of control of IT
3. Systems are not integrated
4. No means of setting priorities –> problems in resource allocations
5. Poor management information
6. Inadequate infrastructure investments made
7. Problems caused by IT investments can become source of conflict between organizations’ parts
8. Local investments can produce counterproductive benefits in overall business context
9. Applications require replacing more frequently than should be necessary

Question 26

Duality of ICT

Answer 26

It redefines the business environment, but it’s also influenced by the business environment. What you do in this part, influences competitors, who may also influence your strategy.

Question 27

Dynamic capabilities

Answer 27

A company has to build up capabilities that help adjust to fast-changing environments. This is more a cultural thing; you have to have a proper mindset.

Question 28

Internal view of organizational IS capability

Answer 28

Fusing business knowledge and IS/IT knowledge
An effective use process
Flexible and reusable IT platform
These three have arrows going in both directions between them.

Question 29

4 phases of strategic management evolution in organizations

Answer 29

1. Financial planning: traditional component, only use IT to meet goals, focus on budget
2. Forecast-based planning: more focused on the future
   - — gap internal vs. external focus —-
3. Externally oriented planning: more strategically thought (e.g. VW looking to change in car usage and coming up with what to do)
4. Strategic management: think about and create the future, dynamic capabilities, culture of the company

Question 30

Scope of strategy development

Answer 30

1. Corporate
2. Business unit
3. Functional

Question 31

Questions in the framework for strategy formulation

Answer 31

1. Where to compete? –> requires understanding of the industry (Porter, PESTEL)
2. How to gain an advantage? –> how to compete in chosen market place? (Porter, BCG matrix)
3. What assets do we have? –> assessing resources (VRIN)
4. What assets are required? –> identify areas of weakness
5. How to change? –> agree on what to change

Question 32

What is the Strategic Information Systems (SIS) era premised on?

Answer 32

Management proactively seeking out opportunities for competitive advantage through IT, with approaches to IS strategy formulation accommodating the requirement for both alignment of IS/IT investments with corporate strategy, and assessing the disruptive impact of technology and the options for its use in shaping business strategy.

Question 33

The strategic necessity hypothesis (article)

Answer 33

With the rise of e-commerce, the use of technology is becoming just an accepted, often expected way of conducting business transactions. Consequently, commercial organizations are increasingly looking towards the innovative application of technology to provide them with a source of competitive advantage.