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Powerpoint-Chapter1.pptxChapter 1
The Evolving Role of Information Systems and Technology in Organizations: A Strategic Perspective
OUTLINE
Information Systems (IS), Information Technology (IT) and ‘Digital’
‘Digital Disruption’: The Impact of IS/IT
A Three-era Model of Evolving IT Application in Organizations
A Classification of the Strategic Uses of IS/IT
Success Factors in Strategic Information Systems
A Portfolio Management Perspective on IS/IT Investments
What Is an IS/IT or Digital Strategy?
From Strategic Alignment to Strategy Co-evolution
Digital Strategies for the 21st Century: Building a Dynamic Capability to Leverage IS/IT
Information Systems (IS), Information Technology (IT) and ‘Digital’
Information systems (IS) are the means by which people and organizations increasingly utilize technology, gather, process, store, use and disseminate information
IT refers specifically to technology, essentially hardware, software and telecommunications networks, including devices of all kinds
“Digital”: A combination of IS & IT
The “Cloud”
Cloud Services
Applications provisioning (SaaS)
Infrastructure (IaaS)
A computing platform (PaaS)
Network connectivity (Naas)
Supporting services
Benefits of the Cloud
Reducing ‘costs of ownership’
Shifting IT spend from capital expenditure (CapEx) to operating expenditure (OpEx) and providing more predictable costs with less financial risk (Pay-as-you-go)
Flexibility to exit or radically change operating scale
Quicker deployment of new applications and IT capabilities
“Digital Disruption”
The Impact of IT
“I have a simple but strong belief. The most meaningful way to differentiate your company from your competition, the best way to put distance between you and the crowd, is to do an outstanding job with information. How you gather, manage, and use information will determine whether you win or lose” (Bill Gates)
Advances in IT continue to challenge established, even dominant, views about organizations and organizing, markets and competition
Disruption of Organizations
Disruption of Industries
“Pillars” of Disruption
Three “eras” of Evolving IT
Data Processing (DP)
Management Information Systems (MIS)
Strategic Information Systems (SIS)
Four Main Types (Uses) of Strategic Information Systems
Share information via technology-based systems with customers/consumers and/or suppliers and change the nature of the relationship
Produce more effective integration of the use of information in the organization's value-adding processes
Enable the organization to create, develop, produce, market and deliver new or enhanced products or services or new value propositions based on information
Augment people's cognitive processes in generating knowledge and insight from information
Benefits of Strategic Information Systems
Linking to Customers, Business Partners and Suppliers
Chapters 5 & 6
Improved Integration of Internal Processes
Chapters 4 & 6
Information-based Products and Services
Chapters 5 & 6
Augmenting Human Cognitive Processes to Support Strategic Decision Making
Chapters 4 & 5
Success Factors in Strategic Information Systems
External, not internal, focus
Adding value, not cost reduction
Sharing the benefits
Understanding customers and what they do with the product or service
Business-driven innovation, not technology-driven
Incremental development, not the total application vision turned into reality
Using the information gained from the systems to develop the business
Monetizing information.
The Application Portfolio
Strategic applications and investments are critical to future business success
High potential are (risk) investments in innovative applications of IS/IT which may create opportunities to gain a future advantage
Key operational applications and investments sustain the existing business operations
Support applications and investments reduce costs by increasing business efficiency, or improve management effectiveness
More to come in Chapters 8 & 9
What is a “Digital” Strategy
Infusion – The degree to which an organization becomes dependent on IS/IT to carry out its core operations and manage the business
Diffusion – The degree to which IS/IT has become distributed throughout the organization and decisions concerning its use are devolved
Low diffusion/low infusion – the ‘traditional’ environment typical of companies using IT solely to improve efficiency on an application by application basis
Low diffusion/high infusion – where IS/IT is critical to business operations and control – the ‘backbone’
High diffusion/low infusion – largely decentralized control, giving business managers the ability to satisfy their local priorities and enable ‘opportunistic’ investment, driven by short-term priorities and the desire to create business advantage
High diffusion/high infusion – this is a ‘complex’ environment that is difficult to manage: too much central control to avoid poor investments will limit innovation, hence new strategic opportunities may be missed; too little control and the core systems may disintegrate
IS vs. IT Strategies
IS strategy
Concerned with the organization's required information systems or application set
IS Supply
IT strategy
About the technology, infrastructure and associated specialist skills
IT Demand
More in Chapter 3
Strategic Information Systems and Business Strategy: Alignment
The twelve components of alignment
Business strategy
Business scope.
Distinctive competences
Business governance
Organizational infrastructure and
Administrative structure
Processes
Skills
Alignment (Cont)
Digital strategy
Technology scope
Systemic competences
IT governance
IT infrastructure and processes
Architecture
Processes
Skills
Issues when there is NO Digital Strategy
IS/IT investments are made that do not support business objectives
Loss of control of IS/IT, leading to individuals often striving to achieve incompatible objectives through IS/IT
Systems are not integrated
No means of setting priorities for IS/IT projects
No mechanisms for deciding optimum resource
Poor management information
Misunderstanding between users and IT
Technology strategy is incoherent and constrains options
All projects evaluated on a financial basis only
Problems caused by IS/IT investments can become a source of conflict between parts of the organization
Localized justification of investments can produce benefits that are actually counterproductive in the overall business context
Applications, on average, have a shorter than expected business life and require replacing more frequently than should be necessary
Fourth Era: IS Capability
The challenge with this era is not merely to build an IS/IT strategy but to develop a more comprehensive capacity in an organization to ensure that any expected value is also delivered
External Context
Internal Context
Fusing IS/IT knowledge and business knowledge
A flexible and reusable IT platform
An effective use process to link IS/IT assets with value realization
