Strategic Information Systems

Some Major Themes

Week #1 pt. B

Information technology is arguably the most disruptive force in organizations since the Industrial Revolution.

Information as A Strategic Asset

Information Technology as a Strategic Asset

Theme #1

Expectations of IT have changed…4 WAYS OF USING IT

1) AUTOMATING2) INFORMATING3) STRATEGIZING4) BUSINESS INTELLIGENCE

(integration)

IT for Automating: The First Step

• Operations emphasis

• View technology as a way to continue doing the same things

• Use technology to automate existing tasks

• Easily measurable value

IT for Automating: The First Step

• Time: 1960’s to mid-1970’s

• Objective: Labor reduction; faster, cheaper, more accurate

• Value Added: Relatively low

• Risk: Moderate

• Technology: Mainframes; centralized

IT for Informating: The Second Step

• Emphasis on information for decision making

• Use technology to provide information about operations

• Use technology to help detect problems with processes

• Use of technology without informating can make a bad process worse

IT for Informating: The Second Step

• Time: 1980’s to early 1990’s

• Objective: Process improvement

• Value Added: Moderate

• Risk: Low

• Technology: Distributed computing; networks

IT for Strategizing:The Third Step

• IT as enabler of better, faster, cheaper

• View technology as an enabler of organizational strategy

• IT impacts all functions of the organization’s value chain

IT for Strategizing: The Third Step

• Time: early-1990’s to current

• Objective: Better, faster, cheaper, competitive advantage, process re-engineering

• Value Added: High

• Risk: High

• Technology: Ubiquitous computing

IT for Business Intelligence:The Next Step???

• Gathering information from sources inside and out of the organization

• Ubiquitous/real time information

• Information integration

Information Technology as the chief enabler of …

Theme #2

BETTER, FASTER, CHEAPER!

Organizations in the Information Age

• New products• New ways to

market/sell/deliver products

• New processes/ways to operate (BPR)

• New organizational forms• New ways to work

E-business exploits IT to bring

“better, faster, cheaper”

to all processes in the Value Chain.

PurchasedSuppliesInboundLogistics

Operations

Product R&D, Technology, and Systems Development

Human Resources Management

General Administration

OutboundLogistics

Sales andMarketing Service

BETTER FASTER CHEAPER

What has enabled IT to become a Strategic Enabler?

(1) Moore’s Law (Gordon Moore)

Every eighteen months

processing power doubles

while costs hold constant.

What has enabled IT to become a Strategic Enabler?

(2) Metcalfe’s Law (Robert Metcalfe)

The usefulness of a network equals the square of the number of users.

(i.e., the usefulness of a network increases exponentially with each

additional user)

Metcalfe’s Law:

“The more people use your software, your network, your standard, your game, your book, the more valuable it becomes. The more new users it will attract, increasing the utility and the speed of its adoption by still more users”.

*Adapted from Unleashing The Killer App, by Larry Downs

The challenge of rapidly changing IT

The Law of Disruption

Social, political, and economic systems change incrementally,

technology changes exponentially.

From Islands of Technology…

Accounting systems

Sales/ Marketing

systems

Order/ Inventory systems

Interfaces

interfaces

Theme #3 Integration

To Enterprise Information Architechture (EIA)

Integration

E-business Application Architecture

BACK OFFICE: accounting, order processing

FRONT OFFICE: sales/customer service

CRM ERP

Enterprise Resource Planning Customer Relationship Management Selling Chain Management Supply Chain Management E-procurement

SCM

SCM

Trading partners

EP

Non-production goods/services

Enterprise Application Integration (EAI)

Information Technology is changing how organizations form themselves.

Theme #4

• Creating and controlling information is more powerful than moving and

manufacturing physical products.

• Virtual organizations.

• Alliances/partnering

• Businesses must build “e-business community” models to serve the customer.

• Management must align business strategies, processes, and applications fast, right, and all at once. Strong leadership is imperative.

Organizational Change for E-Business

Ubiquitous Computing

• anywhere/any time

• globalization

• networking; Internet

• information-infused products

• wireless telecommunications

Theme #5

Information Technology is changing the way people work

• Knowledge worker -- information and knowledge are the raw materials of his/her work

• Teamwork -- a new emphasis on collaborative work

• Anytime, anywhere work

Theme #6

The Role of the CIOYesterday’s Role

• 80% Technical• Hardware Orientation• Efficiency measures

Today’s Role

• 20% Technical• People Orientation• Competitive measures

Working in the Information Age

Working in the Information Age

Knowledge management

Organizational learning

Theme #7

Information Technology presents newEthical challenges.

• Privacy

• Accuracy

• Access equality

• Political governance

Is technology changing in response

to external forces,

or is technology driving change?

END