CORPORATE STRATEGIC INFORMATION SYSTEMS PLANNING (ITS 582)

1.0 STRATEGIC MANAGEMENT CONCEPTS

Definitions The

of Strategic Management

major elements of strategic management

Evolution

of information and information systems strategies

DEFINITIONS OF STRATEGY
Strategy is the pattern of resource allocation decisions made throughout an organization. These encapsulate both desired goals and beliefs about what are acceptable and, most critically, unacceptable means for achieving them (Robson, 1997)

Strategy is the direction and scope of an organization over the long term; which achieves advantage for the organization through its configuration of resources within a changing environment, to meet the needs of markets and to fulfil stakeholder expectations (Johnson & Scholes, 1999)

THE VOCABULARY OF STRATEGY

TERM Mission DEFINITION Overriding purpose in line with the values or expectations of stakeholders Desired future state: the aspiration of the organization A PERSONAL EXAMPLE Be healthy and fit

Vision or strategic intent

To run the London Marathon

Goal
Objective

General statement of aim or Lose weight and strengthen purpose muscles

Quantification (if possible) or more precise statement of the goal Lose 10 pounds by 1 September and run the Marathon next year

Core Competences

Resources, processes or skills which provide Competitive advantage

Proximity to a fitness centre, supportive family and friends and past experience of successful diet.

THE VOCABULARY OF STRATEGY

TERM Strategies DEFINITION Long-term direction A PERSONAL EXAMPLE Associate with a collaborative network (e.g. join running club), exercise regularly, compete in marathon locally, stick to appropriate diet Specific exercise and diet regime, appropriate training facilities, etc. Monitor weight, miles run and measures times: if progress satisfactory, do nothing; else, consider other strategies and actions

Strategic architecture

Combination of resources, processes and competences to put strategy into effect The monitoring of action steps to: Assess effectiveness of strategies and actions Modify strategies and/or actions as necessary

Control

WHY WE NEED STRATEGY?

THE FUTURE IS A PROBLEM FOR

EVERY BUSINESS

FAILING TO PLAN IS PLANNING TO FAIL!

WHY WE NEED STRATEGY?

Results from lack of a coherent strategy for IS/IT investment

Business opportunities are missed Systems and technology investment do not support the business objectives Lack of integration os systems and ineffective information management produces duplication of effort, inaccurate and inadequate information for managing the business. Priorities are not based on business needs, resource levels are not optimal, project plans are consistently changed- Business performance is not improved, cost are high, solutions are of poor quality and IS/IT productivity is low. Technology strategy is incoherent, incompatible options are selected and large sums of money are wasted attempting to fit things together retrorespectively. Lack of understanding and agreed direction between users, senior management and the IS/IT specialists - leads to conflict, inappropriate solutions and a misuse of resources.

THE CHARACTERISTICS OF STRATEGIC DECISIONS

Concern with or affect the long-term direction of an organization Trying to achieve some advantage for the organization, for example over competition. Concern with the scope of an organizations activities; does (and should) the organization concentrate on one area of activity, or should it have many? Matching of the activities of an organization to the environment in which it operates.

THE TYPES OF PLAN

Project Plan
Plan covering a particular capital investment or marketing operation. E.g an investment in a new factory would be supported by a detailed study of the expected results of that investment. Prepared on as a required basis

Strategic Plan

Sets out the objectives of the company and the means (strategy) by which the company intends to reach those objectives

Plan of an established areas of the company.

Operating Plan

E.g.- A division or a subsidiary

GENERALISED PLANNING SYSTEM

Operating management Strategic management New products for

Existing products for existing markets

Improvement Plan
Marketing Plans
Operation Plan

new and existing

Divestment Plan
Progress Plan

markets

Finance

Facilities Plan

Diversification Plan

Personnel

Strategic Plan

Production

New markets for

existing products

Plan Research and development plan

Acquisition Plan

CHARACTERISTICS OF STRATEGIC MANAGEMENT AND OPERATIONAL MANAGEMENT

STRATEGIC MANAGEMENT Ambiguous

OPERATIONAL MANAGEMENT Routinised Operationally specific Short-term implications

Complex
Organization-wide Fundamental Long-term implications

WHAT IS STRATEGIC MANAGEMENT

Strategic management is : Something to do with deriving and describing the strategy. Applicable to all organizations whether large or small, public or private, profit or non-profit making. Encompasses the entire enterprise and looks beyond day-to-day operating concerns in order to focus upon the organizations long-term prospects and development.

WHAT IS STRATEGIC MANAGEMENT

Strategic management is : Not a technique; it is a complete way of running a business With strategic management, the future implications of every decision are evaluated in advance of implementation The shorter the period, the more accurate the forecasting events

DEFINITIONS OF STRATEGIC MANAGEMENT

Strategic management is a systematic approach to a major and increasingly important responsibility of general management to position and relate the firm to its environment in a way which will assure its continued success and make it secure from surprises (Ansoff, 1990).

Strategic management is concerned with the overall long-range direction of organizations and consequently also provides a framework for operational management (Greenley, 1989).

DEFINITIONS OF STRATEGIC MANAGEMENT

Strategic management is concerned with decising on strategy and planning how that strategy is to be put into effect via : Strategic analysis Strategic choice Strategic implementation (Johnson and Scholes, 1993)

THE MAJOR ELEMENTS OF STRATEGIC

MANAGEMENT
Concerned with understanding the strategic position of the organizations in terms of its external environment, internal resources and competences, and the expectations and influence of stakeholders

Involves understanding the underlying bases guiding future strategy, generating strategic options for evaluation and selecting from among them

Strategic Analysis

Strategic Choice

Strategy Implementation

Concerned with the translation of strategy into organizational action through organizational structure and design, resource planning and the management of strategic change

The environment

Expectations, objectives and power : culture Resources

Bases of strategic choice

Strategic Analysis

Organization structure and design

Strategic options

Strategic Choice

Strategy Implementation

Resources allocation and control

Strategy evaluation and selection

Managing strategic change

STRATEGIC MANAGEMENT IN DIFFERENT CONTEXT

The small business context The multinational corporation Manufacturing and service organizations The innovatory organization Strategy in the public sector Privatised utilities The voluntary and non-for-profit sectors Professional service organizations

EVOLUTION OF INFORMATION AND

INFORMATION SYSTEMS STRATEGIES
Expert System and Knowledge Management System

Transaction Processing System

Management Information System

Decision Support System

Executive Information System

EVOLUTION OF INFORMATION AND

INFORMATION SYSTEMS STRATEGIES
These process data resulting from business transactions, update operational databases, and produce business documents. Examples: sales and inventory processing and accounting systems.

Transaction Processing System

Management Information System

Decision Support System

Executive Information System

Expert System and Knowledge Management System

EVOLUTION OF INFORMATION AND

INFORMATION SYSTEMS STRATEGIES
Provide information in the form of prespecified reports and displays to support business decision-making. Examples: sales analysis, production performance and cost trend reporting systems.

Transaction Processing System

Management Information System

Decision Support System

Executive Information System

Expert System and Knowledge Management System

EVOLUTION OF INFORMATION AND

INFORMATION SYSTEMS STRATEGIES

Provide interactive ad hoc support for the decision-making processes of managers and other business professionals. Examples: product pricing, profitability forecasting and risk analysis systems.

Transaction Processing System

Management Information System

Decision Support System

Executive Information System

Expert System and Knowledge Management System

EVOLUTION OF INFORMATION AND

INFORMATION SYSTEMS STRATEGIES

Provide critical information from MIS, DSS and other sources, tailored to the information needs of executives. Examples: systems for easy access to analysis of business performance, actions of all competitors, and economic developments to support strategic planning.

Transaction Processing System

Management Information System

Decision Support System

Executive Information System

Expert System and Knowledge Management System

EVOLUTION OF INFORMATION AND

INFORMATION SYSTEMS STRATEGIES
Expert systems knowledge-based systems that provide expert advice and act as expert consultants to users. Examples: credit application advisor, process monitor, and diagnostic maintenance systems. Knowledge management systems knowledge-based systems that support the creation, organization and dissemination of business knowledge within the enterprise. Examples: intranet access to best business practices, sales proposal strategies and customer problem resolution systems.

Transaction Processing System

Management Information System

Decision Support System

Executive Information System

Expert System and Knowledge Management System

EVOLUTION OF INFORMATION AND

INFORMATION SYSTEMS STRATEGIES
From MIS to e-Commerce: The rapid growth of the Internet, intranets, extranets and other interconnected global networks in the 1990s dramatically changed the capabilities of information systems in business. Higher level of integration of system functions across applications, greater connectivity across both similar and dissimilar system components, and the ability to reallocate critical computing tasks such as data storage, processing, and presentation to take maximum advantage of business and strategic opportunities. E-business is the use of Internet technologies to work and empower business processes, electronic commerce and enterprise collaboration within a company and with its customers, suppliers and other business stakeholders. These companies rely on e-business applications to (i) reengineer internal business processes, (ii) implement electronic commerce systems with their customers and suppliers, and (iii) promote enterprise collaboration among business teams and workgroups.

TRENDS IN THE EVOLUTION OF BUSINESS IS/IT

Aspects DP Nature of the technology Computers MIS Distributed process Era SIS Networks

Fragmented
Hardware limitation

Interconnected
Software limitation Regulated by management services

Integrated
People/Vision limitation Available and supportive to users

Nature of operations

Remote from users controlled by DP Technical issues (programming/ project management)

Issues in systems development

Support business users Relate to business needs (information strategy? management)

TRENDS IN THE EVOLUTION OF BUSINESS IS/IT

Aspects DP Reasons for using the technology Reducing costs (esp administrative) (technology driven) Characteristics of systems Regimented/ Operational (internal) MIS Supporting the business (manager) (user driven) Accommodating/ Control Era SIS Enabling the business? (business driven) Flexible/Strategic? (External)

TUTORIAL 1 : STRATEGIC MANAGEMENT IN DIFFERENT CONTEXT

The small business context The multinational corporation Manufacturing and service organizations The innovatory organization Strategy in the public sector Privatised utilities The voluntary and non-for-profit sectors Professional service organizations

TUTORIAL 1 : STRATEGIC MANAGEMENT IN DIFFERENT CONTEXT

1.Each group will pick one context. 2.Identify the key strategic issues.
Example: The Multinational Corporation.

Key strategic issues:

1. Structure and control at the corporate level 2. Relationship between business and the corporate centre 3. The coordination of operational logistics across different countries