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 such

as Samsung and Sony. Continuous development of new
products is an important aspect of strategic
competitiveness.
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Overview
 Business & Strategy

• Strategic Plan
– Is visionary, conceptual and directional.

• Business or Operational Plans

– Shorter term, tactical, focused, implementable
and measurable.

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Overview
 Business & Strategy
• Strategic Plan
– Vision
a description of the business in 3 years time
outlining size, appearance, activities, and etc.
Where are we now? Where do we want to be? How will we get there?
– Mission
a statement of the business purpose.
– Values
the business relationship with society, employees,
environment etc.
– Objectives
explicit statements of the business’ medium and
long term achievements.
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Overview
 Atlanta Web Printers, Inc.
Vision Statement
To be the first choice in the printed communications business. The
first choice is the best choice, and being the best is what Atlanda
Web pledges to work hard at being – every day!

Mission Statement
• to make our clients feel welcome, appreciated, and worthy of or best
efforts in everything we do… each and every day
• to be recognised as an exceptional leader In our industry and
community
• To conduct all our relationships with an emphasis on long-term
mutual success and satisfaction, rather than short-term gain
• …

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Overview
 PESTLE Analysis
• PESTLE framework can identify factors that
influence an organisation

– Political
– Economic
– Sociological
– Technological
– Legal
– Environmental

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Overview
 SWOT Analysis

• Strategy may be developed from a SWOT

analysis
Conditions that may help or hinder
a company’s effort to achieve
– Strengths strategic competitiveness

– Weaknesses
– Opportunities
– Threats

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Overview
 SWOT Analysis
How can we take
advantage of them?
Strengths
Technical knowledge
Cost competitiveness
£1 million of funds allocated
Willing and experienced
workforce.
Opportunities
Possible merger with
competitor.
Later integration with e-
commerce functions is
possible.
How can we capitalize on
them?
Overview
How can we minimize
them?
Weaknesses
Lack of manufacturing
presence.
Niche customer base.
Workforce has very limited
experience of computerized
systems.
Threats
Cheaper competition from
Asian markets.
Internet competitors.
The software vendor is
rumoured to be in financial
trouble and may ‘disappear’.
How can we counter
them?
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 Business and IT Strategy

IT used to automate existing processes, making

improvements 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.
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Overview
 “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.

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Overview
 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
Ticktock365.blogspot.com
Ticktockonsales.blogspot.com

- IT allows young entrepreneurs to set up a

business.
- IT allows the business to operate without
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requiring
 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)

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Overview
 Strategy

• Common strategic choice is to centralise or

decentralise

– Centralisation gives improved control,

economies of scale, integrated approach,
simpler communication.
– Decentralisation gives responsiveness to
issues, deeper understanding of
requirements.

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Overview
 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?

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Overview
 Strategy
• Global image, local taste:
McDonalds menus.
For example:
In India, the Maharaja Mac
is made of lamb, substitutes
for 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 systems
such as vendors and customers.

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 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

• Reasons for Failure

– Lack of understanding of business needs

– Communication problems
– Strategic misalignment between the IT
department and the rest of the business

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Overview
 Strategy
• Problems associated with IT implementation that
can 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)
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Overview
 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 it
may affect future business strategy.
We have discussed standards.
We have considered factors that can affect the success
of a business and IT strategy.

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Overview
 Overview Vision, Mission
statement and
Core values
Studying
SWOT internal
Analysis strengths

Priorities for Strategic

Situation PESTLE Studying
applications Analysis external
Analysis
environment
Centralisation
Support IS Strategy Objective
services Development Setting
Decentralisation

Supports
Asymmetrical Strategy
approach Definition

Strategy Implementation
Hardware Infrastructure Implementation issues
Business
Network Strategy
architecture Reasons
for failure
Information
architecture Problems

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Important References for Reading
• Chapter 4 – Information management
strategy

• Chapter 5 – Knowledge management

strategy

• Chapter 6 – Information systems strategy

Business Information Management, Chaffey

& Wood, Prentice Hall, Financial Times,
2005.

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