Neha Chopra (12609200)Arpit Goyal (12609159)

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What is strategy

Strategy is :knowing where you are, knowing where you could choose to be, and knowing how you intend to get there.

It states how business should be conduct to achieve the desired goals. Without a strategy, management has no roadmap to guide them. 

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Importance of strategy in information system

The benefits of IT-related investments are not financial but strategic.

If an organization gets the access to a piece of management information that was previously unavailable it might drive the organization towards success.

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Consequences of lack of strategy. Competitors, suppliers and customers may gain avoidable

and undesirable advantages.

Duplication of effort, inaccuracy, delays and poor management information because of a lack of proper systems integration.

Technologies will become a constraint to the business because of a failure to maintain compatibility where it is needed

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IT and IS Strategies

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Development of IS strategies

External environment – WHY we must act?

Strategy formulation and implementation is driven by “why”, targeted by “what” and constrained by “how”

If all these factors can be taken into account, then the resulting plans for systems implementation should be both viable and appropriate.

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The Strategy process

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Information system strategy in context

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STRATEGY PROCESS & IMPLEMENTATION

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Current situation: Where are we now?

SWOT Analysis-can be used to summarize the internal and external factors that might affect strategic intentions.

Business Process Model-provide a framework for analyzing cost and efficiency and the prospects for improving both with new information systems.

Assessment of current information technology will reveal shortfalls (or surpluses) that demand management action.

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Opportunity spotting: Where we could be?

Scenario planning will be a useful approach that allows discussion to work through different scenarios and begin to understand some of the implications and potential benefits

Business Process Model to see what the consequence might be for organizational structures and for external business partners.

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Decision time: where we want to be?

Decision will be based on a systematic review of business objectives.

Critical success factor analysis is a technique that will lead to a more specific understanding of information needs and areas of business where improved systems will deliver the most benefit.

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Establishing the IS/IT strategic planning process

The planning process must deliver valuable intermediate results throughout the process, not just at the end.

It is therefore a matter of: what is involved How it is to be achieved What the expected product are to be.

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How to get started with strategic planning

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Problems faced during implementation of strategy

• Top management commitment to implementing the plan cannot be obtained.

• The planning exercise takes too long for management to sustain interest - it is also very expensive and takes up too much of the management's time.

• The resulting plan fails to spell out resourcing and financial implications.

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Assessment of priorities

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Strategic analysis tools• Strategic drivers: Tools to identify the strategic forces that are

bearing upon our business.

• Value analysis: The way in which value is delivered in our industry, and in our business.

• Business modelling: how the business works and, if at all possible, the extent and the quality of the information that it is working with.

• Portfolio management: This gives a simple but very effective overview of the benefits that will be delivered to the business, with risks and timescales.

• Implementation: finally tools to assist in the planning of implementation.

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The analysis of strengths, weaknesses, opportunities and threats is the straightforward deployed techniques for strategic analysis.

It deals well with the internal issues and the external issues.

The opportunities and threats is the most useful to start with because understanding the external situation gives a context for internal assessment, although it is common to start with strengths and weaknesses.

SWOT (Strategic drivers: Where are we now? Where could we be?)

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Critical success factor analysis

Five key sources of Critical Success Factors The industry. Competitive strategy and industry position. Environmental factors. Temporal factors. Managerial position

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Value chain analysis

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The value chain

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The internal value chain shows how the various activities and functions in a business unit contribute to the customer's requirements, and how costs are incurred in so doing.

The model identifies two different types of business activity - primary and support - and provides a framework for organizing the detail within them

Internal value chain

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• Inbound logistics

• Operations

• Outbound logistics

• Sales and marketing: making customers and consumers aware of the product or service and how they can obtain it; promoting

• Services

• Information intensive: activities such as forecasting, capacity planning, scheduling, pricing and costing must be linked throughout the chain.

Primary activities

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Michael Porter’s Five Competitive Forces

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Business modelling

We need a basis upon which to decide about:

Business processes and those who should be involved in them

Business information and those who should be responsible for it

System interdependencies, and required changes to organizational responsibilities

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Typical Business Areas

• Marketplace

• Products / Services

• Procured inputs

• Corporate resources

• Corporate performance

• Corporate processes

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MARKETPLACE

PRODUCT / SERVICE

VALUE ADDED

PROCESSES

SUPPORT PROCESSES

PROCURED INPUT

PERFORMANCE

CORPORATE RESOURCE

Deals with Specifies needs with

Assessed by

buys

supports produces

specifies

Assessed by

services services

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Boston box

• This 2x2 matrix allows us to explore the differences between current and future potential. It originated in the Boston Consulting Group.

The four quadrants in the box are based on two criteria:

• What is the growth potential and potential cash requirement to market the product?

• What is the current market share and how much cash is the product generating?

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Types of system required during different stages of PLC ( Product life cycle)

Information needs are different for different stages of product life cycle

Emergence Growth Maturity Decline

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Managerial issues in strategic management

• Strategic alignment: setting well aligned

information systems strategies in place.

• Analysis tools: Choosing and successfully applying appropriate tools for analyzing, formulating and refining information system strategies.

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Contd…

• Balance: Maintaining a balance between the internal and external strategic drivers that bear upon the organization and determine the actual requirement of strategic management.

• Ownership and responsibility: Placing ownership and responsibility for information systems strategies, clearly articulating appropriate targets that indicate the success or failure of those strategies.

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