it 4 strategic management

7-11-20057-11-2005 SEBC - Management & Marketing Club: maSEBC - Management & Marketing Club: [email protected]@scs-net.org

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Information Technology Information Technology for for

Strategic Management Strategic Management

Mahmoud AnbarMahmoud Anbar

Executive DirectorExecutive Director

NOSSTIANOSSTIA

7-11-2005 SEBC - Management & Marketing Club: [email protected]

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The problem The problem

There is a huge gap between the vision and strategy developed at the top and

the things people down in the organization, at the frontline, are

doing.


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Global business environment Global business environment

►Natural selection Natural selection ►Survival of the fittestSurvival of the fittest►c-commerce ( Collaborative c-commerce ( Collaborative

commerce) commerce) ► Interoperability (applications, business Interoperability (applications, business

processes, and data ) processes, and data ) ►Demand identified is demand realized, Demand identified is demand realized,

in a matter of nanoseconds in a matter of nanoseconds


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Business and technology Business and technology

►Technology is considered to be an integral part of an organization’s core-competency and a key evaluation factor used by investors and industry analysts


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Information or industry view Information or industry view

a company may acquire a competitive edge by viewing itself as an information business instead of taking the traditional industry—or vertical—view


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Supermarket chainSupermarket chain

► ِ4ِ4a business that sells fooda business that sells foodoror► is it a business thatis it a business that exploits knowledge exploits knowledge

aboutabout Customer preferencesCustomer preferences Geographical biasesGeographical biases Supply chain logisticsSupply chain logistics Product lifecycleProduct lifecycle competitive sales information to optimize its delivery,competitive sales information to optimize its delivery, Inventory, pricing, and product placementInventory, pricing, and product placement

as a way toas a way to increase margin for each item increase margin for each item soldsold


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Strategic decisionsStrategic decisions

►Acquire another companyAcquire another company►Enter a new geographic area. Enter a new geographic area. ►Launch or discontinue a product line. Launch or discontinue a product line. ►How do we optimally allocate resources How do we optimally allocate resources

to ensure profitability and growth to ensure profitability and growth targets? targets?

►What factors or combinations of factors What factors or combinations of factors are directly impacting marketing are directly impacting marketing campaigns? campaigns?


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Tactical decisionsTactical decisions

►Should we extend credit to a particular Should we extend credit to a particular customer?customer?

►Which customers are likely to become Which customers are likely to become profitable, when and to what extent?profitable, when and to what extent?

►Who are our best suppliers or most Who are our best suppliers or most profitable customers?profitable customers?

►Close someone's credit card account Close someone's credit card account due to suspected fraudulent activity. due to suspected fraudulent activity.


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Data management and Data management and profitability profitability

““Companies that manage their data as a Companies that manage their data as a strategic resource and invest in its strategic resource and invest in its quality are already pulling ahead in quality are already pulling ahead in terms of terms of reputation and profitability.”reputation and profitability.”

PricewaterhouseCoopersPricewaterhouseCoopers


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Information Strategy Information Strategy

The part of the business strategy that describes how the firm will leverage information to create value in a dynamic business environment.


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IT StrategyIT Strategy


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IT Strategic roleIT Strategic role

►Strategy and execution are the ultimate drivers of business performance.

►While technology does not actually deliver business strategy, it enables alignment and solid execution.


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Operational data usageOperational data usage

Data is the “fuel” driving the Data is the “fuel” driving the automation of a business operation.automation of a business operation.

Without the operational use of Without the operational use of information a business information a business could not could not survivesurvive


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Strategic Data usage Strategic Data usage

Strategic (forward-looking view )Strategic (forward-looking view )►How to How to improve the businessimprove the business►Strategic knowledge is embedded in Strategic knowledge is embedded in

the collection of a company’s data and the collection of a company’s data and that extracting that extracting actionable knowledgeactionable knowledge will help a company improve its will help a company improve its business.business.


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Key Management Tools Key Management Tools

►ERP : Enterprise Resource Planning ERP : Enterprise Resource Planning ►SCM: Supply Chain Management SCM: Supply Chain Management ►CRM : Customer Relationship CRM : Customer Relationship

Management Management --------------------------------------------------------------------------------------------------------

►BPM : Business Process Management BPM : Business Process Management ►BI : Business Intelligence BI : Business Intelligence ►PM : Performance Management PM : Performance Management


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Agile enterprises Agile enterprises

►If you cannot change a plan, you cannot effectively manage performance.

►Performance-oriented enterprise planning activities require a degree of flexibility that enables an organization to be responsive to changes in customer demand, competitors’ new offerings, margin-friendly supply opportunities, or other important shifts that occur during the course of business.


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Agile control mechanism Agile control mechanism

►understanding understanding what is happeningwhat is happening within your organisation, at a detailed within your organisation, at a detailed level, and having an agile control level, and having an agile control mechanism that allows you to mechanism that allows you to constantly constantly improve these processesimprove these processes, , and when necessary, and when necessary, change or change or advance your strategyadvance your strategy to keep one to keep one step ahead of the competitionstep ahead of the competition


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The Management CycleThe Management Cycle


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Business analytics softwareBusiness analytics software

►Enables organizations to monitor, Enables organizations to monitor, capture and analyze the vast amounts capture and analyze the vast amounts of data generated by transaction-of data generated by transaction-processing systems (ERP, CRM, SCM ) processing systems (ERP, CRM, SCM )

►provide management and staff at all provide management and staff at all levels with tools necessary to levels with tools necessary to optimizeoptimize these processes through strategic and these processes through strategic and tactical decisions. tactical decisions.


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Performance Indicators Performance Indicators

►plans and strategies can be defined and communicated as a set of interconnected performance indicators that are presented as dynamic scorecards that people can “drill into” to analyze what’s behind a result that’s not performing as it should be.


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The Intelligence Dashboard The Intelligence Dashboard

►provide a visualization dashboard that provide a visualization dashboard that reflects those reflects those KPI measurementsKPI measurements, , presented in a form for management presented in a form for management reviewreview

►It provides visibility into what needs to be fixed


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Balanced ScorecardBalanced Scorecard

►You cannot control what you cannot You cannot control what you cannot measuremeasure..

►A technique in strategic management, provides a comprehensive set of measures used to communicate and evaluate achievement of an organization’s mission and strategy


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BSC- concept BSC- concept


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Performance controlPerformance control

►The Balanced Scorecard complements The Balanced Scorecard complements financial measures of past financial measures of past performance with measures of the performance with measures of the drivers of future performance. drivers of future performance.

► Balanced Scorecard is a new concept Balanced Scorecard is a new concept mainly designed to mainly designed to translate translate a a company'scompany's vision and actions vision and actions into a into a consistentconsistent set of measures set of measures


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From Strategy to executionFrom Strategy to execution► A Scorecard is essentially a A Scorecard is essentially a carefully selected set carefully selected set

of measuresof measures derived from an organization's derived from an organization's strategy. strategy.

► It's a tool for leaders to communicate to It's a tool for leaders to communicate to employees and external stakeholders the employees and external stakeholders the outcomes and performance driversoutcomes and performance drivers by which the by which the organization will achieve its strategic objectives.organization will achieve its strategic objectives.

► The Scorecard provides the link that The Scorecard provides the link that translates translates strategy into actionstrategy into action across the enterprise, across the enterprise, aligning long-term strategy with coordinated, aligning long-term strategy with coordinated, cohesive business activities. cohesive business activities.


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BSC measures BSC measures

►Financial Perspective►Customer Perspective► Internal Business Process►Learning Process and Growth

Perspective


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BSCBSC


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Practical case

►Vision: “Incorporating our core VALUES we will be the acknowledged industry leader for the supply of INNOVATIVE custom-engineered products of EXCEPTIONAL value.”

►Mission: “To create value by DELIGHTING our customers by ENHANCING the capabilities of the entire company.”


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Core Values:

►“We are a manufacturing company with the following core values:

uncompromising INTEGRITY, exceptional customer SERVICE,continuous IMPROVEMENT in all we do, andrecognize the contributions of our employees.”


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Key words Key words

►Values► Innovative► Exceptional►Delighting►Enhancing►Integrity► Service►Improvement


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From output to outcomeFrom output to outcome


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Linking Scorecard Components


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““To succeed financially, To succeed financially, how should we appear to how should we appear to our shareholders?”our shareholders?”

Internal Business ProcessInternal Business Process

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shareholders andshareholders andcustomers, what customers, what business processesbusiness processesmust we excel at?”must we excel at?”

““To achieve our vision, To achieve our vision, how will we sustain ourhow will we sustain ourability to change and ability to change and improve?”improve?”

Learning and GrowthLearning and Growth

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CustomerCustomer““To achieve ourTo achieve ourvision, how vision, how should we should we appear to ourappear to ourcustomers?”customers?”

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Balanced ScorecardBalanced Scorecard

VisionVisionandand

StrategyStrategy

VisionVisionandand

StrategyStrategy


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Balanced Scorecard

makes strategy everyone’s job