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Strategic Information Systems

Strategic Information System is a system that helps companies alter their business strategy or structure. It is used to hasten the reaction time to environmental changes and aid the company in achieving a competitive advantage over its

competitors. They help in producing low cost quality products

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Strategic Advantage and IT

• Strategic Information System (SIS)• Elements of strategic management

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Elements of Strategic Management

• Innovation• Role of IT• Competitive intelligence

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Competitive Intelligence

• Internet• Competitive strategy and sustainable

advantage

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Porter’s Competitive Forces Model

• Threat of new competitors• Bargaining power of suppliers• Bargaining power of customers• Threat of substitute products or services• Rivalry among existing firms

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Porter’s Competitive Forces Strategies

• Cost leadership• Differentiation• Focus• Strategic positioning • Customer service

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Use of Porter’s Model

• List players• Analyze business drivers• Devise a strategy• Investigate supportive information

technologies

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Porter’s Value Chain Analysis Model

• Primary activities• Support activities

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Porter’s Value Chain Analysis Model - Primary Activities

• Inbound logistics• Operations• Outbound logistics• Marketing / sales• Service

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Porter’s Value Chain Analysis Model - Support Activities

• Firm infrastructure• Human resource management• Technology department• Procurement

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Strategic Information Systems Frameworks

• Porter and Millar’s framework• Wiseman and MacMillan framework• Bakos and Treacy framework• Customer resource life cycle framework

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Porter and Millar Framework

• Industry structure has changed• Rules of competition have changed• Organizations have outperformed

competition using IT

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Porter and Millar Five-Step Process

• Access information intensity• Determine the role of IT in the industry

structure• Identify and rank the ways in which IT can

create competitive advantage• Investigate how IT might spawn new

businesses• Develop a plan for taking advantage of IT

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Wiseman and MacMillan Framework

• Based on Porter’s strategies• Innovation• Growth• Alliance• Time

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Bakos and Treacy Framework

• Bargaining power and comparative efficiency

• Search related costs• Unique product features• Switching costs• Internal efficiency• Interorganizational efficiency

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Customer Resource Life Cycle Framework

• Ives and Learmouth, 1984• Customer relationship key to strategic

advantage?• Thirteen fundamental stages of the

customer relationship

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Framework for Global Competition

• Apply IT through global business drivers• Quality• Risk reduction• Suppliers

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Strategic Information Systems Applications

• Cost leadership• Differentiation• Growth• Alliances• Innovation• Improve internal efficiency• Customer-oriented approaches

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• Florida Power and Light - computerized TQM

• Geisinger - intranet• J.C. Penny - custom made suits• MacGregor - EDI• Otis: IT used to block competitors

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• Port of Singapore: intelligent systems• Volvo: global network• Baxter International: IT for the customer• Merril Lynch: cash management accounts

system• American Airlines: reservation system

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• Odense Shipyard: CAD • Dun and Bradstreet: credit evaluation• National Car Rental: car pickup

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Sustaining A Strategic Advantage

• Inward systems: efficient, effective • Comprehensive, innovative and expensive

system: difficult to duplicate

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Managerial Issues

• Implementing strategic information systems can be risky

• Strategic information systems require planning

• Sustaining competitive advantage is challenging

• Ethical issues

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Copyright 1999 John Wiley & Sons, Incorporated. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner in unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Son, Inc. Adopters of the textbook are granted permission to make back-up copies for his/her own use only, to make copies for distribution to student of the course the textbook is used in, and to modify this material to best suit their instructional needs. Under no circumstances can copies be made for resale. The publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

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