Strategic information system

Strategic Information Systems (SIS) are information systems that are developed in response to corporate business initiative . They are intended to give competitive advantage to the organization. They are a market segment , or is innovative.

Strategic Information Management (SIM) is a salient feature in the world of information technology (IT). In a nutshell, SIM helps businesses and organizations categorize, store, process and transfer the information they create and receive. It aussi offers tools for helping companies apply metrics and analytical tools to Their information repositories, Allowing Them to Recognize Opportunities for growth and pinpoint ways to Improve operational efficiency.

Some of the key ideas of storefront writers are summarized. These include Michael E. Porter ‘s Competitive Advantage and the Value Chain, Charles Wiseman’s Strategic Perspective View and the Strategic Planning Process, F. Warren McFarlan’s Competitive Strategy [1] with examples of Information Service’s Roles, and Gregory Parson’s Information Technology Management [2 ] At the industry-, firm-, and at the strategy level. [3]


The concept of SIS was first introduced into the field of information systems in 1982-83 by Dr. Charles Wiseman, President of a newly formed consultancy called “Competitive Applications, Series of public readings on SIS in NYCsponsored by the Datamation Institute, a subsidiary of Datamation Magazine. [4] [5] [6]

The following quotations from the preface of the first book [5] establishes the basic idea behind the notion of SIS:

Jack Rockart , Michael Scott Morton , et al. At that time)………….. The examples belief the theory, and the theory in general blinds believers from seeing SIS. Indeed, some conventional information systems planning methodologies, which act like theories in guiding the systematic search for computer application opportunities, exclude certain SIS possibilities of what might be found. (ibid.) ” And the theory in general blinds believers from seeing SIS. Indeed, some conventional information systems planning methodologies, which act like theories in guiding the systematic search for computer application opportunities, exclude certain SIS possibilities of what might be found. (Ibid.) ” And the theory in general blinds believers from seeing SIS. Indeed, some conventional information systems planning methodologies, which act like theories in guiding the systematic search for computer application opportunities, exclude certain SIS possibilities of what might be found. (Ibid.) “
“This growing awareness of the inadequacy of the dominant dogma of the day led me to investigate the conceptual foundations, so to speak, of information systems. IEEE International Conference on Computer Science and Technology (ICT). “
“I want to be able to use the information on a computer system or to use it as a backup solution. “

Strategic information system topics


A SIS is a computer system that implements business strategies; They are the ones who are the ones who need to be involved in the business process. Strategic information systems are always systems that are developed in response to corporate business initiative. The ideas in many well-known cases have come from information Services people, but they were directed to specific corporate thrusts. In other cases, the ideas came from business operational people, and Information Services provided the technological capabilities to realize profitable results.

Most of the time, They mechanize operations for better efficiency, control, and effectiveness, but they do not, in themselves, increase corporate profitability . They are simply used to provide management with sufficient dependable information to keep the business running smoothly, and they are used for analysis to plan new directions. Strategic information systems, on the other hand, become an integral and necessary part of the business, and they affect the profitability and growth of a company. They open up new markets and new businesses. They directly affect the competitive stance of the organization, giving it an advantage over the competitors.

Most literature is strategic information systems emphasizes the dramatic Breakthroughs in computer systems, Such As American Airlines ‘ Saber System and American Hospital Supply’s terminals in customer offices. These, and many other highly successful approaches are most attractive to you. There are many possibilities for strategic information systems, however, which may not be a dramatic breakthrough, but which will certainly become a part of corporate decision making . Services in the organization,

Three general types of information systems

The three general types of information systems that are developed and in general use are financial systems, operational systems, and strategic systems. These categories are not mutually exclusive and, in fact, they always overlap to some. Well-directed financial systems and operational systems may well become the strategic systems for a particular organization.

  • Financial systems are the basic computerization of the accounting, budgeting, and finance operations of an organization. They are similar and ubiquitous in all organizations because the mechanics and control or financial systems; These include the personnel systems because the headcount control and payroll of a company is of prime financial concern. Financial systems should be one of the bases of all other systems because they give a common, controlled measurement of all operations and projects, and can supply trusted numbers for indicating departmental or project success. Organizational planning should be tied to financial analysis .
  • Operational systems , or services systems, help control the details of the business. Such systems will vary with each type of enterprise. They are the computer systems that need to run the business on a routing basis. They may be useful but mundane systems that simply keep track of inventory, for example, and print out reorder points and cost allocations. On the other hand, they may have a strategic perspective built into them, and may handle a dramatically affects profitability. A prime example of this is the American Hospital Supply Inventory Control System. Where the great majority of inventory control systems simply smooth the operations and give adequate cost control, This well-known hospital system is an excellent example of a competitive advantage. The great majority of operational systems for which many large and small computer systems have been purchased, however, simply help to manage and automate the business. They are important and necessary, but can only be put into the “strategic” category.

All businesses should have both long-range and short-range planning of operational systems to ensure that the possibilities of computer usefulness will be seized in a reasonable time. Such planning and costing, system development and life cycle considerations, and specific technology planning, such as computers, databases, and communications. There must be computer capacity planning, technology forecasting, and personal performance planning.

Operational systems, then, are those that keep the organization operating under control and most cost effectively. Any of them may be changed to strategic systems if they are viewed with strategic vision.

  • Strategic systems are those that link business and computer strategies. They are the systems where new business strategies have been developed and they can be realized using Information Technology. They May be systems Where new computer technology has-been made available on the market, and planners with an entrepreneurial spirit Perceive how the new capabilities can Quickly gain competitive advantage. They can be used in a variety of ways. They have a brainstormed approach to the problem.

There is general agreement that these systems may be used gaining competitive advantage. How is competitive advantage gained ?. At this point, different writers list different possibilities, but none of them claim that there may be other openings to move through.

Gaining competitive advantage

Some of the more common ways of thinking about gaining competitive advantage are:

  • Delivered to a lower cost. This cost-effective, low-cost, low-cost, low-cost, low-cost, The cost is not just the cost of the service. There are a number of factors that can affect the performance of the firm.
  • Deliver a product or service that is differentiated. Differentiation means the addition of unique features to a product or service that are competitively attractive in the market. Generally such features will cost something to produce, and so they will be the setting point, rather than the cost itself. Seldom does not have the best differentiation. A strategic system helps customers to perceive that they are getting some extras for which they will willingly pay.
  • Focus on a specific market segment. The idea is to identify and create market niches that have not been adequately filled. Information technology is able to provide the capabilities of defining, expanding, and filling a particular niche or segment. The application would be quite specific to the industry.
  • Innovation. Develop products or services through the use of computers that are new and appreciably from other available offerings. Examples of this are automatic teller machines at banks. Such innovative approaches not only give new opportunities to attract customers, but also open up entirely new fields of business so that their use has very elastic demand.

Almost any data processing system may be called “strategic” if it aligns the computer strategies with the business strategies of the organization, and there is close cooperation in its development between the information services people and operational business managers. It should be an explicit connection between the organization’s business plan and its systems to provide better support for the organization’s objectives and objectives.

Many organizations that have done substantial work with computers since the 1950s have long used the term “strategic planning” for any computer developments that are going to directly affect the conduct of their business. Not included are budget, or annual planning and the planning of developing information services facilities and the many “housekeeping” tasks that are required in any corporation. Definitely included in strategic planning are any information systems that will be used by business management more profitably. A simple test would be whether the president of the corporation, or some senior vice presidents, would be interested in the immediate outcome of the systems development because they felt it would affect their profitability. If the answer is affirmative,

Strategic system, thus, attempt to match. Planning for strategic systems is not defined by calendar cycles or routine reporting. It is defined by the effort required to affect the competitive environment and the strategy of a firm at the time.

Effective strategic systems can only be accomplished, of course, if the capabilities are in place for the routine basic work of gathering data, evaluating possible equipment and software, and managing the routine reporting of project status. The planning and operational work is absolutely necessary as a basis for a strategic plan. When a new strategic need becomes apparent, Information Services should have the groundwork to be able to accept the task of meeting that need.

Strategic systems that are dramatic innovations will always be the ones that are written about in the literature. Consultants in strategic systems must have clearly innovative and successful examples to attract the attention of senior management. It should be clear, however, that most information services staff will have to leverage the advertised successes for their own systems. These systems may not have an Olympic effect on an organization, but they will have a good chance of being clearly profitable. That will be sufficient for most operational management, and will provide the necessary funding and support. It helps to talk about the possibilities of great breakthroughs,

Another way of characterizing strategic information systems is to point out some of the key ideas of the foremost apostles of such systems.

Models for strategic information system

Porter’s competitive advantage [3]

Michael E. Porter , Professor of Business Administration, Harvard Business School, has addressed his ideas in two keystone books. Competitive Strategy: Techniques for Analyzing Industries and Competitors, and his newer book, Competitive Advantage, present a framework for helping firms. Dr. Porter’s theories on competitive advantages are not tied to information systems, but are used by others to involve information technologies technologies. In his book, Dr. Porter says that there are two central questions in competitive strategy:

  • How structurally attractive is the industry?
  • What is the firm’s relative position in the industry?

Neither of these questions is sufficient to guide strategic choices. Both can be influenced by competitor behavior, and both can be shaped by a firm’s actions. It is imperative that these questions be answered by analysis, which will be the starting point for good strategic thinking, and will open up possibilities for the role of information systems.Industry profitability is a function of five basic competitive forces:

  • The threat of new entrants
  • The threat of substitute products or services
  • The bargaining power of suppliers
  • The bargaining power of buyers and
  • The intensity of the rivalry among existing competitors

Porter’s books give techniques for getting a handle on the possible average profitability of an industry over time. The analysis of these forces is the basis for a firm’s relative position and competitive advantage. In any industry, the sustained average profitability of competitors varies widely. The problem is to determine how a business can outperform the industry average and attain a sustainable competitive advantage. It is possible that the answer lies in information technology together with good management. Porter claims that the main types of competitive advantage are low cost producer, differentiation, and focus. A firm has a competitive advantage if it is able to deliver its product or service at a lower cost than its competitors. If the quality of its product is satisfactory, This will translate into higher margins and higher returns. Another advantage is gained if the firm is able to differentiate itself in some way. Differentiation leads to offering something that is both unique and is desired, and translates into a premium price. Again, this will lead to higher margins and superior performance. It seems that these two types of competitive advantage, lower cost and differentiation, are mutually exclusive. To get lower cost, you sacrifice uniqueness. To get a premium price, there must be extra cost involved in the process. To be a superior performer, however, you must go for competitive advantage in either cost or differentiation. Another point of Porter’s is a competitive advantage. It is necessary to look at the breadth of a firm’s activities, And, on the other hand, a narrower and more complex geographical area. Competitive advantage is most readily gained by defining the competitive scope in which the firm is operating, and concentrating on it. Based on these ideas of type and scope, Porter gives a useful tool for analysis which he calls the value chain. This value chain gives a framework on which a useful analysis can be hung. The basic concept is that it can not be seen at the firm as a whole. It is necessary to identify the specific activities which the firm performs to do business. Each firm is a collection of the things that it does all that it adds to the product being delivered to the customer. These activities are numerous and unique to every industry, But it is not possible to make a difference. The basic lis that the firm’s activities can be divided into nine generic types. Five are the primary activities, which are the activities that create the product, market it and deliver it; Are the activities that cross the primary activities.

The primary activities are:

  • Inbound logistics, which includes the receipt and storage of material, and the general management of supplies.
  • Operations, which are the steps or steps.
  • Outbound logistics, which are associated with collecting, storing, and physically distributing the product to buyers. In some companies this is a significant cost, and buyers value speed and consistency.
  • Marketing and sales includes customer relations, order entry, and price management.
  • After-sales service covers the support of the product in the field, installation, customer training, and so on.

The support activities are not directed to the customer, but they allow the firm to perform its primary activities. The four generic types of support activities are:

  • Procurement, which includes the contracting for and purchase of raw materials, or any items used by the enterprise. Part of procurement is in the purchasing department, but it is also spread throughout the organization.
  • Technology development may simply cover operational procedures, or many be involved with the use of complex technology. Today, sophisticated technology is pervasive, and cuts across all activities; It is not just an R & D function.
  • Human resources management is the recruiting, training, and development of people. Obviously, the cuts across every other activity.
  • Firm infrastructure is a large part of the firm, including the accounting department, the legal department, the planning department, government relations, and so on.

The basic idea is that competitive advantage grows out of the firm’s ability to perform these activities either less expensively than its competitors, or in a unique way. Competitive advantage should be linked to specific activities, and not thought of broadly at a firm-wide level. This is an attractive way of thinking for people, as it is, fundamentally, the systems analysis approach. Computer users are trained to reduce systems to their components, look for the best application for each component, then put together an interrelated system. Information technology is also pervasive throughout the value chain. Every activity that the firm performs has the potential to embed information technology because it involves information processing. As information technology moves away from repetitive transaction processing and permeates all activities in the value chain, it will be in a better position to be useful in gaining competitive advantage. Porter emphasizes what he calls the linkages between the activities that the firm performs. No activities in a firm are independent, yet each department is managed separately. It is most important to understand the cost linkages that the firm may be involved in the optimization of production rather than departmental optimizations. A typical linkage could be more productive. If more testing is done in operations, after-sales service costs will be lower. Multifunctional coordination is crucial to competitive advantage, but it is often difficult to see. Insights into linkages give the ability to have overall optimization. Any strategic information system should be analyzed across all departments in the organization. Cost and Competitive Advantage. Cost leadership is one of Porter’s two types of competitive advantage. The cost leader delivers a product of acceptable quality at the lowest possible cost. It is a great place to spend a lot of money. The cost advantage is achieved through superior position in relation to the key cost drivers . Achieving cost leadership requires trade-offs with differentiation. The two are usually incompatible. A firm’s relative cost can not be achieved by viewing the firm as a whole. The cost of performing discrete activities. Cost position is determined by the cumulative cost of performing all value activities. To sustain cost advantage, Porter gives a number of cost drivers which must be understood in detail because the sustainability of cost in an activity depends on the cost drivers of that activity. Again, this type of detail is best obtained by classical systems analysis methods.

Some of the cost drivers which must be analyzed, understood, and controlled are:

  • Scale. The appropriate type of scale must be found. Policies must be set up in scale-sensitive activities.
  • Learning. The learning curve must be understood and managed. As the organization tries to learn from competitors, it must strive to keep its own proprietary learning.
  • Capacity Utilization. Cost can be controlled by the leveling of throughput.
  • Linkages. Linkages should be exploited within the value chain. Work with suppliers and channels can reduce costs.
  • Interrelationships. Shared activities can reduce costs.
  • Integration. The possibilities for integration or de-integration should be examined systematically.
  • Timing. If the advantages of being the first mover or a mover are understood, they can be exploited.
  • Policies. Policies that enhance the low-cost position or differentiation should be emphasized.
  • Location. When viewed as a whole, the location of individual activities can be optimized.
  • Institutional Factors. Institutional factors should be examined to see whether their change may be helpful.

Care should be taken in the evaluation and perception of cost drivers because there are pitfalls if the thinking is incremental and indirect activities are ignored. Even though the manufacturing activities, for example, are obvious candidates for analysis, they should not have exclusive focus. Linkages must be exploited and cross-subsidies avoided.

Porter gives five steps to achieving leadership cost:

  • Identify the appropriate value chain and assign costs and assets to it.
  • Identify the cost drivers of each activity and how they interact.
  • Determine the relative costs of competitors and the sources of cost differences.
  • Developing a strategy to lower the cost of controlling or reconfiguring the value chain.
  • Is the cost reduction strategy for sustainability.

Differentiation advantage

Differentiation is the second of Porter’s two types of competitive advantage. In the differentiation strategy, one or more characteristics that are widely appreciated by buyers are selected. The purpose is to achieve and sustain performance that is superior to any competitor in satisfying those buyer needs. A differentiator selectively adds costs in areas that are important to the buyer. Thus, successful differentiation leads to premium prices, and these lead to above-average profitably there is approximate cost parity. To achieve this, efficient forms of differentiation must be picked, and costs must be reduced in areas that are irrelevant to the buyer needs. Buyers are like sellers in that they have their own value chains. The product being sold will represent one input input, but the seller may affect the buyer’s activities in other ways. Differentiation can lower the buyer’s cost and improve the buyer’s performance, and thus create value, or competitive advantage, for the buyer. The buyer may not be able to assess all the value that a firm provides, but it looks for signs of value, or perceived value.

A few typical factors which may lower the buyer’s costs are:

  • Less idle time
  • Lower risk of failure
  • Lower installation costs
  • Faster processing time
  • Lower labor costs
  • Longer useful life, and so on.

Porter points out that differentiation is usually costly, depending on the cost drivers of the activities involved. A firm must find forms of differentiation where it has a cost advantage in differentiating. Differentiation is achieved by enhancing the sources of uniqueness. These may be found throughout the value chain, and should be signaled to the buyer. The cost of differentiation can be turned to advantage if the costly sources are exploited and the cost drivers are controlled. The emphasis should be on a sustainable cost advantage in differentiating. Efforts must be made to change the buyer’s criteria by reconfiguring the value chain to be unique in new ways, and by preemptively responding to changing buyer or channel circumstances. Differentiation will not work if there is too much uniqueness, Uniqueness that the buyers do not value. The buyer’s ability to pay a premium price, the signaling criteria, and the important segments to the buyer must all be understood. Also, there can be no over reliance on sources of differentiation that competitors can emulate cheaply or quickly.

Porter lists seven steps to achieving differentiation:

  • Determine the identify of the real buyer.
  • Understand the buyer’s value chain, and the effect of the product’s on it.
  • Determine the purchasing criteria of the buyer.
  • Assess possible sources of uniqueness in the firm’s value chain.
  • Identify the cost of these sources of uniqueness.
  • Choose the value activities that create the most valuable differentiation for the buyer relative to the costs incurred.
  • Test the chosen differentiation strategy for sustainability.

Focus Strategies for Advantage. Porter’s writings also discuss focus strategies. He emphasizes that a buyer does not have a strategy. Focusing means selecting targets and optimizing the strategies for them. Focus strategies further segment the industry. They may be imitated, but can provide strategic openings. Clearly, multiple generic strategies may be implemented, but internal distinctions may become blurred. Porter’s work is directed towards competitive advantage in general, and is not specific to strategic information systems. It has been reviewed here at some length, however, because its concepts are often referred to in the writings of those who are concerned with strategic information systems. The value chain concept has been widely adopted, and the ideas of low cost and differentiation are accepted. This section, therefore, is an introduction to a further discussion of strategic information systems. The implementation of such systems by Porter.

Wiseman’s strategic perspective view

Wiseman applied the concepts of SIS in GTE (Implementors of SIS for competitive advantage) and other companies, and in his consulting work. His book [5] extends Porter’s thinking in many practical ways in the Information Systems area, and discusses many examples of strategic systems.

Wiseman emphasizes that companies have begun to use information systems strategically to reap significant competitive advantage. He feels that the significance of these computer-based products and services does not lie in their technological sophistication or in the form of the reports they produce; Rather, it is found in the role played by these information systems in the firm’s planning and implementation in gaining and maintaining competitive advantage.

Wiseman points out that although the use of information systems may not always lead to competitive advantage, it can serve as an important tool in the firm’s strategic plan. Strategic systems must not be discovered haphazardly. Those who would be competitive leaders should develop a systematic approach for identifying strategic information systems (SIS) opportunities. Both business management and information management must be involved.

A framework must be developed for identifying SIS opportunities. There will certainly be competitive response, so one should proceed with strategic thrusts based on information technology. These moves are just as important as other strategic thrusts, such as acquisition, geographical expansion, and so on. It is necessary to plan rationally about acquisition, major alliances with other firms, and other strategic thrusts.

IMB’S Business Systems Planning (BSP) and MIT’s Critical Success Factor (CSF) methodologies are ways to Develop information architectures and to Identify conventional information systems, qui are Primarily used for scheduling and control practical purposes. To identify SIS, a new model or framework is needed. The conventional approach to the organization of the organization. An effective SIS approach arises from the forging of new alliances that expand the horizon of expectation. Such an approach is the most difficult to attain, and can only work with top management support. Innovations, however, frequently, come from simply a new look at existing circumstances, from a new viewpoint.

Wiseman believes that the range of opportunities is limited by the framework adopted. He contrasts the framework for Conventional IS Opportunities with the framework for Strategic IS Opportunities.

In the conventional view, there are two information systems thrusts: to automate the basic processes of the firm, or to satisfy the information needs of managers, professionals, or others. There are three generic targets: strategic planning, management control, and operational control. In this perspective, there are, therefore, six generic opportunities areas.

In the strategic view of IS opportunities, there are five strategic thrusts and three strategic targets. This gives fifteen generic opportunity areas. This opens up the range and perspective of management vision.

Sustainable competitive advantage. Competitive advantage may be with respect to a supplier, a customer, or a rival. It may exist because of a lower price, because of desirable features, or because of the various resources that a firm possesses. Sustainability is also highly relative, depending on the business. In established businesses, it may be difficult to emulate. In other industries, it is necessary to carry out the work.

Wiseman uses the term strategic thrusts for the moves that companies make to gain or maintain some kind of competitive edge, or to reduce the competitive edge of the strategic targets. Information technology can be used to support or to shape one or more of these thrusts. Examining the possibilities of these thrusts takes imagination, and it is helped by understanding what other companies have done in similar situations. This is why so many examples are presented in the literature. Analogy is important.

There is no question that there is considerable overlap between conventional information systems and strategic information systems. Systems are complex and a great deal of data is involved. The idea is to look at this complexity in a new light, and see where competitive advantage could possibly be gained. Note that Wiseman takes Porter’s three generic categories: differentiation, cost, innovations, growth, and alliance.

The cost of a preventive treatment is limited to the cost of the treatment. A strategic cost thrust may also achieve attaining economies of scale. The examples always seem obvious when they are described, but the opportunities can usually only be uncovered by considerable search.

Innovation is another strategic thrust that can be supported or shaped by information technology in either product or process. In many companies, the innovative product is really an information system. Innovation requires rapid response to opportunities to be successful, but this carries with it the question of considerable risk. There can be no innovation without risk, whether information systems are included or not. Innovation, however, can achieve advantages in product or process that results in a fundamental transformation in the way that type of business is conducted.

Grown achieves an advantage by expansion in volume or geographical distribution. It may also come from product-time diversification. Information systems can be of considerable help in the management of rapid growth.

Alliance gains competitive advantage by gaining growth, differentiation, or cost advantages through joint ventures, or making necessary acquisitions.

The Strategic Planning Process. Wiseman advocates brainstorming and the systematic search for SIS opportunities. He describes his SIS Planning Process in five phases:

  1. Introduce the Information Management Services to SIS concepts. Give an overview of the process describe cases. Gain approval to proceed with an idea-generation meeting in Information Service.
  2. Conduct an SIS idea-generation meeting with Information Services middle management. Test the SIS idea-generation methodology. Identify significant SIS areas for executive consideration.
  3. Conduct an SIS. Identify SIS ideas, and evaluate them together with the ideas from the previous meeting
  4. Introduce the top business executives to the SIS concept. Discuss some of the SIS ideas that were considered for the business. Gain approval to proceed with the SIS idea-generation meetings with business planners.
  5. Conduct an SIS idea-generation meeting with the corporate planners. Identify some SIS ideas and evaluate them together with the ideas that have emerged from the previous meeting.

Wiseman is a leading provider of information and communication technology (SIS) solutions for the development and implementation of SIS solutions. In the idea-generation meetings of Phases 2, 3, and 5 of the process, there are always seven explicit steps:

  • Give a Tutorial on Competitive Strategy. Introduce the concepts of strategic thrusts, strategic targets, and competitive strategy.
  • Apply SIS Concepts to Actual Cases. Develop an understanding of SIS possibilities and their strategic thrusts and targets.
  • Review the Company’s Competitive Position. Try to understand its business position and its strategies.
  • Brainstorm for SIS Opportunities. Generate SIS ideas in small groups.
  • Discuss the SIS Opportunities. Use the SIS ideas.
  • Evaluate the SIS Opportunities. Consider the competitive significance of SIS ideas.
  • Detail the SIS Blockbusters. Select the best SIS ideas, and detail their competitive advantages and key implementation issues.

Wiseman says that typical SIS idea-generation meetings will last for days. Each step takes two hours, at least. The process generates many good SIS ideas, and a few will always be considered worth implementation. Top management begins to focus their attention on SIS opportunities. The ideas that are generated can produce significant competitive advantage.


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