Strategic Information Systems Strategic Advantage and Strategic Necessity

Strategic Information Systems

Strategic Advantage and Strategic Necessity n n Strategic advantage refers to obtaining a sustainable competitive edge over competitors. The ability to obtain a greater than normal return on investment. A strategic necessity is a system that must be installed to remain competitive and stay in business.

The Value Chain a v d A Technology Development e Human Resource Management g a t n Support Activities Administrative Coordination & Support Services Primary Activities Porter’s Value Chain tit pe Marketing Customer and Service Sales Co m Inbound Outbound Operations Logistics ive Procurement of Resources

Strategic Roles for Information Systems n n n Improving business operations Promoting business innovation Locking in customers and suppliers n Interorganizational IS, EDI, automatic inventory replenishment system Creating switching costs n make customers dependent on the continued use of innovative IS. Raising barriers to entry n discourage competitors from entering a market

Strategic Information Systems n n “Systems which contribute significantly to the achievement of an organization's overall objectives. ” (Clark, 1994) “The information system to support or change an enterprise's strategy. ” (Wiseman, 1985) “Enhance competitiveness of the organization through the application of IT to business processes. ” (Davenport) A type of Information System that is aligned with business strategy and structure n Can help create a competitive advantage

Strategic Information Systems n n n Technology used to gain an edge over an organization’s competition Can be used at all levels of an organization or just a few Makes a difference Profoundly alters the way an organization does business Sustained strategic, competitive advantage

Information Systems for Strategic Advantage n How can information systems improve the value chain? n n By reducing the cost of primary and support activities How can information systems change the way an organization reacts to its competitive forces? n n By changing the bargain power of suppliers By building closer ties with customers By increasing or decreasing barriers to entry in a market By serving as the basis for new products and/or services

Model for Development of Strategic Information Systems Commerce Knowledge Management Business Processes SIS Planning Customer Management IT Management Information Management

Types of Strategic Information Systems n n n n Customer Relationship Management (CRM) Just-In-Time (JIT)/Build-To-Order (BTO) E-Commerce Operations Support Systems (OSS) Enterprise Resource Planning (ERP) Data Mining/Data Warehousing Decision Support Systems (DSS/GDSS) Supply Chain Management (SCM)

Examples of Strategic Information Systems n n n n American Airlines Fed Ex Citibank Wal-Mart Dell Amazon. com e. Bay n n n Cisco Yahoo! Google PNC Corporation Price. Waterhouse Coopers Baxter Healthcare