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Topic 1:

The Evolving Role of Information


Systems and Technology in
Organizations

ISP680 – Corporate Strategic Information System Planning


Outline

1. Information Systems (IS), Information Technology (IT) and ‘Digital’


2. ‘Digital Disruption’: The Impact of IS/IT
3. A Classification of the Strategic Uses of IS/IT
4. Success Factors in Strategic Information Systems
5. What Is an IS/IT or Digital Strategy?
6. Digital Strategies for the 21st Century: Building a Dynamic Capability to
Leverage IS/IT
Information Systems (IS), Information
Technology (IT) and ‘Digital’

Information Technology

IT refers specifically to technology, essentially Information System Application


hardware, software and telecommunications
networks, including devices of all kinds: Information systems (IS) are the Application refers to software,
computers, sensors, cables, satellites, means by which people and or a combination of software
servers, routers, PCs, phones, tablets; and all organizations, increasingly utilizing and hardware, used to
types of software: operating systems, data technology, gather, process, store, address or enable a business
management, enterprise and social use and disseminate information. or personal activity
applications and personal productivity tools.

IT facilitates the acquisition and collection, processing, storing, delivery, sharing and presentation of
information and other digital content, such as video and voice.
‘Digital Disruption’: The Impact of IS/IT
Digital Disruption

Digital Digital Government


Transformation
Digital
Digital Business
Strategies
Digital Enterprise

Digital Disruption of Industries New Business Model


Online Retailing Online Payment
No longer necessary to have a
physical presence to compete Smart homes Open data
The Pillars of Digitization
1. From Marketplace to Marketplace
• Steadily moving from being conducted in the physical marketplace to the virtual marketspace.
• This online environment has a number of distinctive features:
• Pervasive - directly reaching end-customers, facilitating the conduct of business directly with
them
• Trade-off between richness (the degree to which an organization can facilitate the exchange
of information to deliver products/services that match customers' exact wants) and reach
(the degree to which an organization can manage its activities to connect its customers)
made in the physical world does not apply in an online environment
• Interactive – imperative for business and public sector activity to consists of interactions:
human and machine-to-machine (M2M) communication, data gathering, collaborative
problem solving and negotiation
The Pillars of Digitization

2. Blurring of physical/ digital divide


• Physical products are becoming increasingly digitized, blurring the traditional distinction
between physical and virtual products.
• Proactive, remote or 'touchless' servicing and new business models quite unlike traditional
'fee-for-service’.

3. Move from push to pull economy


• Using analytics, retail organizations in particular are trying to predict which customers are
likely to demand particular products and services. Rather than waiting for an approach from
the customer, they seek to be proactive, even influencing their demand.

4. Development of open standards


• Adoption and innovation are accelerated by open standards, which make the interchange and
flow of data both easy to achieve technically and seamless to users.
A Three-era Model of Evolving IT Application in
Organization

The prime objective of using IS/IT in the eras differs

Management Information Systems


(MIS) - to increase management
effectiveness by satisfying their Strategic Information
information requirements for Systems (SIS) - to improve
decision making. competitiveness by changing
the nature or conduct of
business (i.e. IS/IT
investments can be a source
of strategic advantage).

Data Processing (DP) - to improve


operational efficiency by automating
information flows and processes (often
referred to as digitizing processes
today).
A Classification of the Strategic Uses of IS/IT

Three types of 'revolutionary' uses of IT:


Business scope redefinition -
extending the market or creating
new products, based on information,
or changing the role of the
organization in the industry, such as
Business network redesign - with the introduction of a new
changing the way information information-enabled business model.
is used by the organization
Business process redesign - and its trading partners,
using IS/IT to realign business thereby changing how the
activities and their industry overall carries out the
relationships to achieve value-adding processes.
performance breakthroughs.
A Classification of the Strategic Uses of IS/IT
Types of Strategic IS/ IT Applications

1. Linking to Customers, Business Partners and Suppliers


• share information via technology-based systems with customers/consumers and/or suppliers and change the nature of the
relationship;
• Technology today enables organizations to connect cheaply and easily with customers, business partners and suppliers almost
anywhere in the world
2. Improved Integration of Internal Processes
• produce more effective integration of the use of information in the organization's value-adding processes;
• Example:- CRM, ERP
3. Information-Based Products and Services
• Enable the organization to create, develop, produce, market and deliver new or enhanced products or services or new value
propositions based on information
• In going online, many organizations have also added more value to the physical products they sell by providing additional
information-based services. These can include online support, order tracking, order history, product use advice etc., mostly focusing
on deepening the relationship with customers or suppliers.
4. Augmenting Human Cognitive Processes to Support Strategic Decision Making
• Augment people's cognitive processes in generating knowledge and insight from information; they provide executives, management
and professionals with information to support the development, implementation and evaluation of strategies.
A Classification of the Strategic Uses of IS/IT
PURPOSE
Operational Management Knowledge discovery Business advantage
Efficiency effectiveness through change
Internal Data processing Management Generating new Internal business
automation of Information Systems knowledge and integration by process,
business tasks and (and Executive understanding about job and organization
processes Information Systems) existing business redesign
FOCUS

External Electronic links Haring information Generating new External business


between by direct access from knowledge and integration, changing
organizatons one company to understanding from the roles of the firms
automating data another’s combining with in the industry
exchanges and information external data
interaction resource

The information systems management environment


Success Factors in Strategic Information
Systems

1. External, not internal, focus: looking at customers, competitors, suppliers, even other industries
and what is happening in the outside world – both business and social.

2. Adding value, not cost reduction: although cost reductions may accrue due to business
expansion at reduced marginal costs, 'doing it better, not cheaper’ seems to be the maxim .

3. Sharing the benefits: within the organization, with suppliers, customers,


consumers and even competitors (on occasion!).

4. Understanding customers and what they do with the product or service: how they
obtain value from it, and the problems they may encounter in gaining that value.
Success Factors in Strategic Information
Systems

5. Business-driven innovation, not technology-driven: the pressures of the marketplace drove


developments in most cases.

6. Incremental development

7. Using the information gained from the systems to develop tbe business

8. Monetizing information.
IS/ IT and Digital Strategy

• The term Information Systems Strategic Planning (ISSP) was defined by Boynton and Zmud as
'activities directed toward:
(1) recognizing organizational opportunities for using information technology,
(2) determining the resource requirements to exploit these opportunities,
(3) and developing strategies and action plans for realizing these opportunities and for
meeting the resource needs’.

• Earl's definition refers to the 'long term, directional plan which decides what to do with IT' that is
concerned primarily with 'aligning IS development with business needs and seeking advantage
from IT’.

• Ward and Peppard (2016) 'thinking strategically and planning for the effective long-term
management and optimal impact of information in all its forms: information systems (IS) and
information technology (IT)'.
IS/ IT and Digital Strategy

• IS strategy is concerned with the • IT strategy is about the technology,


organization's required information infrastructure and associated specialist
systems or application set skills
• firmly grounded in the business, taking into • The IT strategy is concerned with how that
consideration both alignment with the
business strategy and the potential demand for information and applications
competitive impact will be enabled and supported by
technology
• the ‘IS demand’
• ‘IT supply'.
• It defines and prioritizes the investments
required to achieve the 'ideal' application
portfolio, the nature of the benefits
expected and the changes required to
deliver those benefits, within the
constraints of resources and application
interdependencies.
IS/ IT and Digital Strategy

Digital Strategy

Information Systems Strategy Information Technology Strategy


… is a business led, agreed list of prioritized … is a statement of the IT components required
initiatives to be undertaken in the to satisfy the IS Strategy and the ways in which
organization’s planning horizon these are to be supplied to the business

Demand Supply
‘Digital strategy’ is a convenient label for the combined IS and IT strategies
IS/ IT and Digital Strategy
IS/IT Industry Business Strategy
Business & - Business Drivers Where is the business
Organizational - Objectives and Direction going and why?
Impact & Potential - Change

Support business Direction from business

IS Strategy
- Business Based What is required?
- Demand Oriented
- Information Focused

Infrastructure and service Needs and priorities

IT Strategy
The relationship between - Activity Based How it can be delivered?
business, IS and IT strategies - Supply Oriented
- Technology Focused
Digital Strategies for the 21st Century: Building
a Dynamic Capability to Leverage IS/IT
1. The external context 2. The internal context
Industries

Business
Environment i. Fusing IS/IT knowledge and business
Impact of competitors
strategies (c)
knowledge
Redefines (d)
ii. A flexible and reusable IT platform
Disrupts –
changes the iii. An effective use process to link IS/IT
rules (e)
assets with value realization
Provides Duality of ICT
opportunities or Enabled by or
shapes (b) aligns (a)

The competitive
dynamics of IS/IT
IT developments

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