lecture 3 - is strategy

8/6/2019 Lecture 3 - Is Strategy

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Information Systems

Strategy



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Learning Objectives

• Understand PESTLE and SWOT analysis.

• Recognise the link between business strategy

and IT strategy.

• Understand that IT is a tool to support business

strategy.

• Recognise some different strategies and how IT

supports each.



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IS & Organisation Strategy

• Organisational Strategy is normally targeted

toward gaining competitive advantage:

Added value in the product or service that

consumers cannot obtain from other

competitors.

R&D is critical to the success of innovative companies suchR&D is critical to the success of innovative companies such

as Samsung and Sony. Continuous development of new as Samsung and Sony. Continuous development of new

products is an important aspect of strategic products is an important aspect of strategic

competitiveness.competitiveness.

Overview



4

Business & Strategy

• Strategic Plan

– Is visionary, conceptual and directional.

• Business or Operational Plans

– Shorter term, tactical, focused, implementable

and measurable.

Overview



5

Business & Strategy

• Strategic Plan – Vision

a description of the business in 3 years timeoutlining size, appearance, activities, and etc.

– Mission

a statement of the business purpose. – Values

the business relationship with society, employees,

environment etc. – Objectives

explicit statements of the business’ medium andlong term achievements.

Where are we now? Where do we want to be? How will we get there?

Overview



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Vision Statement

To be the first choice in the printed communications business. TheTo be the first choice in the printed communications business. Thefirst choice is the best choice, and being the best is what Atlandafirst choice is the best choice, and being the best is what AtlandaWeb pledges to work hard at being – every day! Web pledges to work hard at being – every day!

Mission Statement

• toto make our clients feel welcome, appreciated, and worthy of or best make our clients feel welcome, appreciated, and worthy of or best efforts in everything we do… each and every day efforts in everything we do… each and every day

• to be recognised as an exceptional leader In our industry and to be recognised as an exceptional leader In our industry and community community

• To conduct all our relationships with an emphasis on long-termTo conduct all our relationships with an emphasis on long-termmutual success and satisfaction, rather than short-term gainmutual success and satisfaction, rather than short-term gain

• ……

Atlanta Web Printers, Inc.

Overview



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PESTLE Analysis

• PESTLE framework can identify factors thatinfluence an organisation

–Political –Economic

–Sociological

–Technological –Legal

–Environmental

Overview



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SWOT Analysis

• Strategy may be developed from a SWOT

analysis

–Strengths

–Weaknesses

–Opportunities

–Threats

Conditions that may help or hinder

a company’s effort to achievestrategic competitiveness

Overview



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SWOT Analysis

Strengths Weaknesses

Opportunities Threats

Technical knowledge

Cost competitiveness

£1 million of funds allocated

Willing and experiencedworkforce.

Lack of manufacturing

presence.

Niche customer base.

Workforce has very limited

experience of computerizedsystems.

Possible merger with

competitor.

Later integration with e-commerce functions is

possible.

Cheaper competition from

Asian markets.

Internet competitors.

The software vendor is

rumoured to be in financial

trouble and may ‘disappear’.

How can we take

advantage of them?

How can we minimize

them?

How can we capitalize on

them?

How can we counter

them?

Overview



10

Business and IT Strategy

IT used to automate existing processes, makingimprovements in productivity and efficiency.

Later, IT used to replace existing processes and

make dramatic improvements in business effectiveness(BPR).

Then, IT becomes a method in its own right for

conducting business, e.g. Amazon, eBay

Now, IT is seen as a core skill to sustain business

improvement efforts through knowledge management.

Overview



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“New technologies trigger rampant

experimentation, by companies and their

customers, and the experimentation is often

economically unsustainable.”

(Porter, 2001)

It is tempting to adopt any successful technology or methods but it is important not to lose sight of the

fundamental principles of the business.

Overview



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Case Study 1

Tesco.com• an online UK-based grocer that is profitable

• implements successful IT to reach customers –

allows customers to buy groceries online

• follows “keep things simple” model for e-business and

fill orders from their own brick and mortar stores.

• but retains the primary business focus (sales out of

physical stores)



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Case Study 1

Tesco.com

• Customers can view PriceCheck to check and

compare prices of products.

• Top offers

• Customer loyalty program - Clubcard



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Case Study 2

- IT allows young entrepreneurs to set up abusiness.

- IT allows the business to operate without

requiring

Ticktock365.blogspot.comTicktockonsales.blogspot.com



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IS and Strategy

• “Information Systems … seem like a technical

issue but is in fact a strategic managerial view

of how an organisation operates.”

(Alter, 1996)

Overview



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Strategy

• Common strategic choice is to centralise or

decentralise

– Centralisation gives improved control,economies of scale, integrated approach,

simpler communication.

– Decentralisation gives responsiveness toissues, deeper understanding of

requirements.

Overview



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Strategy

• Uniform centralisation/decentralisation is not

always appropriate:

Some functions need to be globally standard,others need to be tailored toward local

conditions, expectations and opportunities.

Can you think of examples?

Overview



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Strategy

• Global image, local taste:McDonalds menus.

For example:

In India, the Maharaja Mac

is made of lamb, substitutesfor the beef-based Big Mac.

In Japan, popular corn soup

is offered,

In Argentina, McNifica burger is popular

• Global manufacturing, local delivery:

Most car dealers



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Strategy

• Galliers (1994) discusses research into the

global banking industry,

– Global systems that are standardised

– Commercial bank data processing

– Local systems that are tailor-made

– Local client centered service

Part global, part local is labelled an

asymmetrical approach.



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Strategy

• Global systems require global standards,

– Standards ensure minimal compatibility issues

between system elements, external systemssuch as vendors and customers.



21

Strategy

• Globalisation significantly affects the development

of IS:

Physical distances increase

Time zones change

Availability of technology differs

Attitude toward technology differs



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Strategy

• Problems associated with IT implementation thatcan affect the business strategy

– Inappropriate measures

– Inappropriate budgeting methods – Misunderstanding human and organisational costs

– Overstating costs

– Neglecting intangible benefits

– Not investigating risk – Failure to recognise timescale of benefits

(Brown, 1992)

Overview



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Summary

We can assess or develop strategy using PESTLE and

SWOT.

We have seen how IT has developed and changed

business strategy in the past and considered how itmay affect future business strategy.

We have discussed standards.

We have considered factors that can affect the success

of a business and IT strategy.

Overview



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IS Strategy

Development

Strategic

Situation

Analysis

Objective

Setting

Strategy

Definition

Strategy

Implementation

SWOT

Analysis

PESTLE

Analysis

Studying

internalstrengths

Studying

external

environment

Priorities for

applications

Support

services

Centralisation

Decentralisation

InfrastructureHardware

Network

architecture

Information

architecture

Implementation

issues

Reasons

for failure

Problems

Asymmetrical

approach

Overview

S u p p o r

t s

Vision, Mission

statement and

Core values

Business

Strategy

lecture 3 - is strategy

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