2003 - information systems and alignment levels

Information Systems and Alignment Levels

First TuesdayMarch 4, 2003

Genève

Yves PigneurHEC Lausanne

[email protected](+41 21) 692.3416

© 2003, Pigneur IS & alignment levels 2

Université de Lausanne

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Agenda

• Roles of information systems– Information, decision and coordination

1. Alignment with business– Business model

2. Alignment with environment– Market Scorecard

3. Alignment with evolution– Scenario

• ConclusionCustomer

Innovation

Finance

Infrastructure



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Information systems LEVEL 0

INFORMATION

DECISION

COORDINATION

Teamwork

Inter-organizational

Organization

MIS

ERPDSS

BSC

CSCW

workflow SCM

CRM

0.1

0.2

0.3



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ENVIRONMENT

STRATEGY

BUSINESS TECHNOLOGY

Scenarios

3 levels of adaptation

EVOLUTION

Marketscorecard

Businessmodel

1

23



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STRATEGY

BUSINESS TECHNOLOGY

Alignment with business LEVEL 1

STRATEGIC FIT AUTOMATION LINKAGE

FUNCTIONAL INTEGRATION

INTE

RN

AL

EXTE

RN

AL

BUSINESS STRATEGY I/T STRATEGY

ORGANIZATIONAL INFRASTRUCTUREAND PROCESSES

IS INFRASTRUCTURE AND PROCESSES

BUSINESSSCOPE

DISTINCTIVE COMPETENCIES

BUSINESSGOVERNANCE

BUSINESSSCOPE

TECHNOLOGYSCOPE

I/TGOVERNANCE

PROCESSES

ARCHITECTURES

SKILLSSKILLS

ADMINISTRATIVE INFRASTRUCTURE

PROCESSES

[Venkatraman, 1993]

Business

model



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e-Business Model Framework (eBMF)

Customerrelationship

Productinnovation

FinancialAspects

Infrastructureoperation

Capability

Configuration

Partnership

Channel

Customer

Proposition

Cost

Revenue

Relationship

Profit

Business model

Browsing in price lists Online booking Transportation (low flight fares)

explanation

The customer can navigate on the Website and check-

out prices for flights on different dates and at

different times

The customer can book flights directly on the

easyJet.com Website by using his credit card

The customer buys a transportation service from easyJet.com that is similar

to competitor offers but cheaper because there is no in-flight service and no seat

reservation

reasoning This service essentially reduces the risk of not choosing the cheapest

convenient flight

This service reduces the customer’s effort of having

to go to a travel agency

nature of value element

Value creation: The customer individually

chooses the flight that fits him best

Value appropriation: This service concerns the buying

process

Value consuming: The main product is transportation

from A to B

value measure me-too me-too me-too price free free highly attractive

HOW?

WHO?WHAT?

HOW MUCH?



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Value Proposition Illustration



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Distribution channel Illustration

Advertising of new mobile phone models

Mobile phone catalogue

Advertising of new Nokia and other mobile

phones

Phone subsidies by operators, in store sales

force

Promotion of state-of-the art Nokia equipment

Mobile phone catalogue Only Nokia USA Support, games, cartoons, ring tones

Profile evaluator, phone comparison, product

catalogue

Support, games, cartoons, ring tonesNokia.com

Nokia.xy(Country

websites)

Telecom operators

Club Nokia(Web site

per nation)

Nokia Concept

Stores

CHANNEL Awareness Evaluation Purchase After sales

Nokia Snowboard World cup, Beach volleyball

Nokia Events

Personalized support, games, ring tones,

editors

Qualified Nokia sales personnel

In store sales of Nokia equipment

In store sales of Nokia and other

equipment

Promotion of state-of-the art Nokia equipment

Courses on the use of Nokia phone features

Advertising of new mobile phone

technology & models

Advertising of new mobile phone

technology & models

Purchase of games, images, ring tones

Support

Support, games, SMS, MMS, ring

tones

Nokia Academy

C U S T O M E R B U Y I N G C Y C L E

R A

N G

E

O F

C

H A

N N

E L

S



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Illustration

uploadimages

Print ofimages

Deliveryof items

Marketingof product services

Printinginfrastructure

Packingstaff

ColorMailerWebsite

enablesvalue forACTIVITIES

RESOURCES

PARTNERS

Infrastructure management



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Balanced scorecard (BSC) & Intangible Assets Monitor

Customerperspective

Innovationperspective

Financialperspective

Internalperspective

How do the customers perceive us?

In which process do we have to prove excellence?

How to improve our services and our quality?

How do shareholder perceive us?

CUSTOMERGoals Measures& initiatives

INNOVATIONGoals Measures& initiatives

FINANCEGoals Measures& initiatives

PROCESSESGoals Measures& initiatives

MEASURE[Kaplan, 1992]

http://balancedscorecard.com/

http://business.fullerton.edu/pfoote/StrategicForecastingpaper.html



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Alignment with environment LEVEL 2

CAPTURE

VISUALIZE

Multi-perspective

MODEL

DATAWAREHOUSE

GRAPHICS

WIRELESSLANDSCAPE

CustomerMarket

Productinnovation

Financialaspects

InfrastructureIndustry

http://www.smartmoney.com/marketmap/

http://www.thefeature.com/

http://www.durlacher.com/fr-research.htm



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Market Scorecard (MSC)

MARKETperspective

Innovationperspective

Financialperspective

INDUSTRYperspective

ACTORSIndustry analysis

supply demand

APPLICATIONSMarket survey

ISSUESInfluence analysis

ACCOUNTS

Financial analysis

Disruptivetechnology

NEW

http://www.smartmoney.com/marketmap/

http://www.thefeature.com/

http://www.mckinseyquarterly.com/article_abstract.asp?ar=1032&L2=21&L3=37



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Applications (products and services)

APPLICATIONS[Durlacher, 2001]

m-business



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Market survey

Market survey[Durlacher, 2001]

TheFeature.com

Gartner group

m-business



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Application portfolio

Application analysis[Ward, , 2002]

STRATEGIC

Applicationsthat are criticalto sustaining future

KEY OPERATIONAL

Applicationsthat are essentialfor success

HIGH POTENTIAL

Applicationsthat may be importantIn achieving the future

SUPPORT

Applicationsthat are valuablefor success

High STRATEGIC IMPACT OF IT low

Hig

h

I

MP

OR

TAN

CE

OF

IT A

PP

LIC

ATI

ON

S l

ow

EMERGING

GROWTH

DECLINE

MATURITY

12

43



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Actors and stakeholders

Network Device

ServiceContent

Needs

ACTORS

Device makerDevice retailer

Equipment vendor

Technology enabler

Network operatorISP

Virtual operator

Venue (WLAN)

Content providerPortal

Content aggregator

Application providerUserCar manufacturer

Travel/transportation

LogisticsGovernmentRegulation authority

Standardization group

Customer union

Payment agentBilling party

Bank/FSP

PKI provider

m-business



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Actor/actor analysis

Industry analysis

competitors

Substituteproducts(services)

Customers(channels)

Newentrants

Suppliers

Bargaining power Bargaining power

threats

threats

Rivalries among the

Barriers to entries

[Porter, 2001]

Competitive

forces



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Issues, conflicts and challenges

Network Device

ServiceContent

Needs

- Application development- Billing and pricing- Gaming Vs office

- GSM Vs WLAN Vs ad hoc- network interoperability- infrastructure sharing

- Phone Vs PDA Vs laptop- Dedicated Vs generalized- Multi-modality

- Spectrum availability- Safety & health- Security & privacy- Digital divide

ISSUES

Integration

GeneralizationCentralization

Killer app.

Disruptivetechnology

Regulation

m-business



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Actor/issue analysis[Allas, 2001]

Sou

rce

McQ

inse

y Q

uarte

rly

Actor analysis







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Application/issue analysis

Disruption analysis[Raffi, 2002]

Sony and Microsoft: the battle of convergence

Source Harvard Business Review

time

perfo

rman

ce

marketrupture

New replaces old technology

Market for new technology



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123

A B

C D?

Clear-enough future

forecast

Traditional toolkit

Alternate futures

Discrete options

Game theoryDecision analysis

True ambiguity

No basis for forecast

analogiesPattern recognition

Range of futures

No natural option

Scenarioplanning

Levels of uncertainty:

[Courtney, 1997]

Alignment with future LEVEL 3

SIMULATE



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Scenario planning m-business

[Flament, 2001] [Sideris, 2002]

Marketchaos

Operatorintegration

Portalsyndication

[Karlson, 2002]

SCENARIO



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Value per user dueto network effects

Total expectedbenefit to a new

adopter

Willingness topay

Market Penetration

-

+

+

R

B

NetworkBenefits

MarketSaturation

Adoption+

+

+

Total expectedbenefit to a new

adopter

Total Revenue TotalInvestment

+

Total Value createdby investments

+

R

Installed BaseRevenue

Adoption

+

+

Switching Costs+

-

B

SlowedAdoption

Slowed Adoption and Installed Base Causal Loops

Market Saturation and Network Benefits Causal Loops

Strategic modeling

Simulation

SIMULATE

[Constance, 2001]

m-business

http://mitsloan.mit.edu/research/clockspeed/Wirelessthesisfinal.doc_1.doc

http://mitsloan.mit.edu/research/clockspeed/Wirelessthesisfinal.doc_1.doc

http://www.hps-inc.com/

http://www.hps-inc.com/Business/New_ithink.htm



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Synthesis

3 levels of maturity, adaptability, utility and … complexityfor Information systems

1. IS aligned with the business– Align strategy, business and IT with – with Business model

2. IS aligned with the environment– Assess the markets forces– with Market scorecard– and analysis: adoption, application portfolio, competitive forces, actor/issue,

disruption, …3. IS aligned with the future

– Tame the future uncertainty– with Scenarios– and simulation

Customer

Innovation

Finance

Infrastructure