Strategic Information Systems

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 Strategic Advantage and IT
• Strategic Information System (SIS)
• Elements of strategic management

3-2
 Elements of Strategic
Management
• Innovation
• Role of IT
• Competitive intelligence

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 Competitive Intelligence
• Internet
• Competitive strategy and sustainable
advantage

3-4
 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

3-5
 Porter’s Competitive Forces
Strategies
• Cost leadership
• Differentiation
• Focus
• Strategic positioning
• Customer service

3-6
 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

3-8
 Porter’s Value Chain Analysis
Model - Primary Activities
• Inbound logistics
• Operations
• Outbound logistics
• Marketing / sales
• Service

3-9
 Porter’s Value Chain Analysis
Model - Support Activities
• Firm infrastructure
• Human resource management
• Technology department
• Procurement

3-10
 Strategic Information Systems
Frameworks
• Porter and Millar’s framework
• Wiseman and MacMillan framework
• Bakos and Treacy framework
• Customer resource life cycle framework

3-11
 Porter and Millar Framework
• Industry structure has changed
• Rules of competition have changed
• Organizations have outperformed
competition using IT

3-12
 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
3-15
 Customer Resource Life Cycle
Framework
• Ives and Learmouth, 1984
• Customer relationship key to strategic
advantage?
• Thirteen fundamental stages of the
customer relationship

3-16
 Framework for Global
Competition
• Apply IT through global business drivers
• Quality
• Risk reduction
• Suppliers

3-17
 Strategic Information Systems
Applications
• Cost leadership
• Differentiation
• Growth
• Alliances
• Innovation
• Improve internal efficiency
• Customer-oriented approaches
3-18
 Strategic Information Systems
Applications
• Florida Power and Light - computerized
TQM
• Geisinger - intranet
• J.C. Penny - custom made suits
• MacGregor - EDI
• Otis: IT used to block competitors

3-19
 Strategic Information Systems
Applications
• Port of Singapore: intelligent systems
• Volvo: global network
• Baxter International: IT for the customer
• Merril Lynch: cash management accounts
system
• American Airlines: reservation system

3-20
 Strategic Information Systems
Applications
• Odense Shipyard: CAD
• Dun and Bradstreet: credit evaluation
• National Car Rental: car pickup

3-21
 Sustaining A Strategic
Advantage
• Inward systems: efficient, effective
• Comprehensive, innovative and expensive
system: difficult to duplicate

3-22
 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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