strategic management of the is s

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STRATEGIC MANAGEMENT OF THE ISS

RESOURCESThomas A. Fotiadis*, George Haramis*, and Dimitrios Soubeniotis*

Abstract

Information Systems (ISs) ManagementFrameworks, the ISs and the competitiveStrategy of the corporation, the ISs Technology /Value added, and the Computing Management

along with the Management Overview of the ISsare studied in this paper. An integration of the

benefits enjoyed by the systemic approach of boththe managerial information system and the

viewpoint adopted by the strategic marketingmanagement reveals the ways currentorganizations have to follow in order to remaincompetitive in the ever demanding business

environment.

INTRODUCTION

The structure of the information systems

management depends on:

1. The change in the design environment ofthe information systems that are

constantly formed, the constantdevelopment of technology, the new

applications, the easier disposal to the

market of computer technology services,

the lack of specialized staff and the mass

renovation of applications.

2. The change of terms that base the designsuch as the range of information systems

technology and the phases of its

assimilation, the strategic role of

technology, the credo and principles of

companies and the use of information

systems as competition tools.

In addition, it is also necessary to estimate the

effect of information systems on the

*University of Macedonia, [email protected]

[email protected], [email protected].

companies operations and the units of the

companies as well. Namely, how adverse or

positive these strategic effects of the already

existing information system or future

information systems will be.

Depending on these estimations, companies

or units are ranked into SUPPORT, FACTORY,

TURNAROUND, andSTRATEGIC.

Each company unit must know its category

since this category is responsible for the type

of personnel, the organization and planning of

its operations as well. That is, if for example a

company belongs to the category:

1. SUPPORT, then the EDP STEERING BOARDshould consist of executives.

2. STRATEGIC, then the EDP STEERING BOARDshould consist of managers.

I. COMPETITIVE STRATEGYA. Information and Strategy SystemsInformation Systems are regarded as means

of supporting operations and decisions.

Recently, it has been ascertained that

Information Systems can be considered as

true competition tools, mainly in DEREGULATED

industries such as transportations and

financial services.

The application of Information Systems is

considered of strategic importance when these

can change the companys competition ways.

According to studies, five main competition

forces exist:

1. The entrance of new competitors.


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2. How intense the competition amongcompetitors is.

3. The pressure by replacement products.4. The buyers bargaining force.5. The suppliers bargaining force.The following questions should be posed

(according to the aforementioned forces) in

order to estimate the strategic effect of the

Information Systems in a company. If there

is a yes, then there is a strategic chance

that should be examined closely.

B. Can Information Systems block newcompetitors?

At this point, we can refer to a company that

installed terminals to its clients and connected

them to its system for the order of variousproducts. Later, after 2-3 years, competitors

developed similar systems and suggested

installing their own terminals, but clients gave

a point-black refusal. According to this

example, there are many benefits:

1. Clients best service.2. Barrier against competitors (clients are

hooked).

3. Increasing sales and getting a bigger partof the market.

C. Can the Information Systems change thecompetition basis?

According to a Harvard professors analysis,

there are three types of strategic competition

with different basic rules:

1. The first is based on cost: when acompany can produce in lower cost than

its competitors (i.e. companies producing

high tech products).

2. The second is based on the productdifferentiation: when a company can

offer a different composition of the

product specifications i.e. services and

quality (airline companies offering

tickets plus tourist packets).

3. The third is based on high specializationin a small market area and is

characterized by the lower cost or the

differentiation of the product

specifications.

There are many examples mentioned about

companies that passed from one strategy to

the other thanks to I.Ss.

D. Can Information Systems create newproducts?

Worth to mention here is a company that

connected clients in its system with a

relatively low cost in order to receive

information from its data base which included

econometric details and was developed for its

own use. This, additional cost resulted in an

important increase in the companys incomes.

E. Can Information Systems create needs foradditional expenses in case of a change in the

system use?

Repeatedly, clients using one companys

systems for their service are so much

depended on them that it is impossible to

address to other competitive companies even

if they need a change.

This happens because the time required for

the change is very important and the expenseas well. (Dependence on bank systems or on

electronic systems by heavy machinery

manufacturers: when this machinery has

breakdowns, these are detected by the

systems, which also manage the repairing

procedures).

F. Can Information Systems change thebalance of powers regarding the relations

with suppliers?

Developing systems so that clients and

suppliers are connected poses great effects :1. On a financial level: for example, thepossibility to supply fast raw materials,

materials, etc., reduces greatly bulk

stocks.

2. On a political level.


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2.1 The dependence on the supplier islimited. When suppliers install terminals

to clients and these terminals are

connected to the systems of many

suppliers, then the client is in a favorable

position and can impose his/ hersconditions.

All studies about the aforementioned issues

present the strategic importance of ISs and

are very useful in order to describe the

existing applications and give quality criteria

so as to estimate the new applications to be

developed. However, these studies are not so

helpful for the definition of new applications

to be developed. This is the reason why there

must be a prolific dialogue among

computerization and users, and also

imagination. This procedure becomes even

more complex if one takes into account the

fact that, while an IS can be of great strategic

importance, it is difficult to define its

benefits, sometimes subjective ones.

Frequently, the placing which is based on the

strict return of one investment, evaluates very

specific and limited goals of the strategic ISs

that are difficult to be analyzed.

Concluding, it is believed that, using a model

that is developed based on the analysis of

various phases of clients RESOURCE LIFE CYCLE,

the supplier can define new applications in

order to acquire competition ability.

In order to create a new product or service,

there must be a Product Life Cycle in order to

be invented, manufactured, distributed, and

finally called in. If a client wants to have it,

he must pass through various phases of Life

Cycle. According to the referred model there

are 13 phases that the supplier can help client

to manage them. With this action, the supplier

can be differentiated from his competitors,

offering important and unique services and

ways to reduce the expenses.

G. Priority of means disposal for thedevelopment of Information Systems

depending on the level of an industrys

strategic importance

Developing,

highly

competitive

Rel/ly

stable

industry

Static or

decaying

industry

Machinery

maintenance

1 1 1

Research for

new

technologies

2 3 3

Achieving

competitive

predominance

2 2 3

Maintaining or

retrieving thecompetition

equality

2 3 4

Strictly justified

investment

return

3 3 4

Note: minor numbers are highly prioritized.

II. INFORMATION SYSTEMS TECHNOLOGY/VALUE ADDED

Frequently, alternative expenses in ISs

should not be based only on cost but also on

their capacity to grant added value. For

example, an airline company can spend 1

million dollars in order to negotiate an

additional tourist program that will increase

its incomes the following year per 30-40

million dollars.

Applications permitting added values can

result in important effects on 4 major sectors:

1. New forms of accessing the market andthe distribution channels.

2. Differentiation of the products and thecompany.

3. Change of the industrys structures.


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Getting to know the effects of Information

Systems on competition powers (as

mentioned in 2), and on a companys powers,

one can perform a detailed analysis in order

to find chances for added values. This

systematic analysis is not a simple task. Theprocedures that need to be followed are

complex and time-consuming.

In any case, each company should follow the

development of computer technology in order

to find new chances for values added.

Companies that can trace down such chances

are the ones with profits while the others are

the ones, which lose.

Positioning of Your Firm?

High Beware AttackPotentialSystems

ContributionLow Safe Explore

Low High

Total Value Added

III. MANAGING PERSONAL COMPUTINGNowadays, computer environment is

characterized by:

1.

A trend for a spectacular cost reductionin the equipment and increase in the

staffs wages.

2. The increasing needs for information andthe trend for reduction of the time for the

service.

3. The reduction of the availableexperienced staff in relation to the

widening of the research and applications

field in computer science.

Within the framework of this environment,

the role of computerization is:

1. To manage and support with maintenancethe company data bases.

2. To develop and maintain systems thatpose strategic importance for the

company.

3. To coordinate the company systems.4. To inform users for the developments of

technology and its applications, and

5. To support users so that they can beupdated and receive information from

data bases or mutual computerized files(Support End-user computing).

Supporting users that will have terminals

(End Users) means:

1. Informing users about the possibilities ofthe server, their connection with it, the

possibilities of microcomputers when

they operate separately or within an

intranet, connected or not with the server.

2. Informing users about models andprocedures of Software and Hardware

and monitoring their status.

3. Training them in simple programminglanguages so that they will be able to

handle information they want on their

own.

4. Helping them in order to developprograms and operate the corresponding

applications.

5. Helping them for the installation andrenovation of the equipment.

This support will aim at making the end users

operatively independent but with the certainty

that the information of databases will not be

double-logged and will be safe from

destruction or alteration by non-authorizedusers.

In addition, support will secure from the risk

of buying and not using microcomputer

terminals or ready-made packets and also

from the time loss caused by the existence

and operation of inadequate applications.

In conclusion, it can be mentioned that the

use of microcomputers or/ and terminals

connected to the central computer (Personal

Computing) offers important chances as the

performance and efficiency of the company isconcerned.


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