SYLLABUS

Strategic roles of IS-Breaking Business Barriers – Reengineering Business Processes-Improving

Business Quality – Creating Virtual Company – Building knowledge -Creating Company –
Using Internet Strategically – Challenges of Strategic IS – Enterprise-wide systems and E-
Business applications.

Strategic roles of information system

• Strategy is a plan of action designed to achieve a long-term or overall goals

• Information systems support strategic planning and implementation

• Strategy delves into future in the long term

• Strategy adopts tactics for short term results leading towards the overall goal

• Tactics is short term strategy. Used for a series of actions that leads to the overall
strategic goal

• The strategic role of information system helps the organization in crafting and
implementation of a strategy by providing the necessary inputs of information.

• This in turn provides the company the necessary competitive advantage to achieve its
goals against the competitors.

• A strategic information system alters the way the organization functions in a

competitive environment.

• The strategic information system makes the company an effective competitor with
competitive advantage.

• A strategic information system will be:

Outward looking: customers, competitors, environment

Inward looking: employees, systems, procedures

Characteristics of strategic information system :

1. Increase competitive advantage

2. Change the business practice to achieve the desired goal competitively

3. Contribute to attaining the strategic goal

 4. Strategically change all the activities of the company for the betterment of the
company

5. Aims at sustainability of the organization

6. Innovative use of information technology

Strategic role of information system is allowing the company to compete with:

1. Existing competitors

2. New entrants

3. Suppliers

4. Customers

Information systems can change pattern of competition:

e.g. Help product /service with new features:

• Change pattern f distribution

• Change pattern of customer service

• Competition no more on price basis alone

• Deliver products with better value

• Prevent substitution

• Create market niche

Competitve strategy concepts

 • Cost leadership strategy

• Differentiation strategy

• Innovation strategies

• Growth strategy

• Alliance strategies

Information system can give support to follow these strategies

Breaking business barriers

What are the barriers?

1. Geographical barriers

2. Cost barriers

3. Time barrier

4. Structural barriers

There are many ways of breaking the barriers. Some of the suggestions are t the following:

1. Always remain prepared

2. Watch the indicators of growth

3. See the big picture

4. Keep an eye on competition

5. Recruit talent not relatives, friends or sycophants

6. Constantly assess risk

Use information system for all these activities for strategic advantage

Re-engineering busienss processes

Business Process Reengineering is radical redesign of core business processes to achieve

improvements in

1.Cost

2.Speed
3.Quality

4.service

Business process reengineering is a business strategy originally started in 1990

focusing the analysis and design of workflows and business processes within an organizations.

Reengineering helps in:

• improving customer service

• cut costs

• save energy

• compete globally

• improve social relations

Most of the successful companies will have reengineering behind them.

Creating Virtual Company

Virtual company is an organization that uses computer and telecommunications technologies to

extend its capabilities by working routinely with employees or contractors located throughout the
country or the world. Using e-mail, faxes, instant messaging, data and videoconferencing, it
implies a high degree of telecommuting as well as using remote facilities.
A virtual company/business employs electronic means to transact business as opposed to a
traditional brick and mortar business that relies on face-to-face transactions with physical
documents and physical currency or credit.
The most extreme type of virtual company is one with only "virtual employees" and no central
office. Everyone works from home, including top management.

Six Characteristics of virtual companies

1. Adaptability
2. Borderless

3. Excellence
4. Technology
5. Opportunism
6. Trust-based

Examples

 Amazon.com

 Virtual corporations

 Virtual enterprises

 Virtual worlds

 Virtual blending in e-commerce

Step 1

 Hire the best talent. One of the most significant benefits of a virtual company is that one
is not restricted to hiring candidates in one specific geographic area. Identify and hire the
very best person for the position, and do not settle for less.

Step 2

 Motivate remote workers. Always motivate the team.

Step 3

 Build a sense of community. Even though the virtual company may not see the remote
workers each day, the company should still create a sense of community within the
 business. Small touches like mailing a birthday card or taking the time to ask how
someone is doing can be powerful.

Step 4

 Complement remote work with in-person interaction. As wonderful as technology is,

nothing surpasses a face-to-face meeting. In-person conferences or retreats — however
frequent — can only strengthen virtual bonds.

Step 5

 Balance trust with proper monitoring. One cannot view the project a team member is
working on at any given moment in a virtual company, but he or she can establish
checkpoints and hold people accountable for the results they produce.

Step 6

 Establish clear lines of communication. With online communication, it’s all too easy to
gloss over details. Always explain ideas and requests clearly and succinctly in writing.

Step 7

 Research and use multiple tools. Instead of experimenting with a wide range of tools,
conduct research first to determine the best options for the needs. Don’t rely on just one,
either. Take advantage of instant messaging, video chat, shared documents and
spreadsheets, Dropbox, etc.

Step 8

 Create scalable systems, not one-off solutions. While it may be tempting to quickly
accept a system together and call it done, devoting time to making the internal databases
and back-end systems scalable will reap rewards as the virtual company grows.

Using Internet Strategically

• Creating competitive advantage and winning over competitors is the goal of any
business
 • Strategic planning supports the strategic on objectives leading to the goal.

• Internet is one of the effective tools that companies can use in this process to plan and
implement corporate strategies..

• When considering the Internet as a possible tool, it is necessary to look into the future
and ask how this network may change our industry over the next few years. It is not
sufficient to consider the possible advantages; it is also of prime importance to assess the
possible damage our competitive advantage could suffer if other businesses of the
particular industry entered the Internet and it became an important distribution channel
for them.

• What is internet? Is it a complete distribution channel or a mere information channel?

• Internet is a physical medium. It provides certain base for some services.

• The main services are e-mail, news groups and the Web.

Email:

• allows fast, inexpensive and asynchronous communication. It has merits over

phone (synchronous), fax (expensive) and postal service (slow)

• it is personal and discreet and others cannot easily interpret it.

• the main draw back is lack of security. Security protocol is still not widely
spread.

Newsgroups

Newsgroups are a form of receiving information on specific subjects that interest us and of
disseminating information aimed at particular people who may be interested in it. Their merit lies
in the fact that the information is unrestricted and is not screened by the major communications
corporations. While the newsgroups provide an interesting source of information for industries,
their use does not cover commercial purposes ethical reasons of the network.

World Wide Web (www)

The Web has broken through the barriers of Internet and made it a user-friendly tool. It has
transformed an information network into a real information channel that is open to every one. It
includes all the people. Among them are the customers of a company. In short, it changed the
anticommercial Internet into a commercial network that will eventually become an important
distribution channel.

Information channel (communication channel)

• Newspaper, television…

• Information but no transaction

• Distribution channel

• provides information of products to customers

• customers can purchase them

• provides information about customers to sellers

• Distribution channel does not involves in delivery of physical goods or services

• Distribution channel can be strengthened through advertisement in the

communication (information) channels such as media

• In information technology one model that is applied successfully in market

strategy is that of Michael Porter

• Porters model mentions five forces that influence the competitive advantage of a
business within its industry

• These forces are taken into account while developing corporate strategy

Factors that influence competitive advantage of a company are:

1. New competitors

2. Negotiating power of suppliers.

3. Negotiating power of customers (buyers)

4. Substitute products

5. Competition in the industry

Challenges of Strategic Information System

Strategic information systems (SIS) are information systems that are developed in response to
corporate business strategic initiatives. They are intended to give competitve advantage to the
organization. They may deliver a product or service that is at a lower cost, that is differentiated,
that focuses on a particular market segment, or is innovative. It is a part of IT and information
system management in business

Gaining competitive advantage

Deliver a product or a service at a lower cost. This does not necessarily mean the lowest cost,
but simply a cost related to the quality of the product or service that will be both attractive in the
marketplace and will yield sufficient return on investment. The cost considered is not simply the
data processing cost, but is the overall cost of all corporate activities for the delivery of that
product or service. There are many operational computer systems that have given internal cost
saving and other internal advantages, but they cannot be thought of as strategic until those
savings can be translated to a better competitive position in the market.

Deliver a product or service that is differentiated. Differentiation means the addition of

unique features to a product or service that are competitive 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 a lowest cost product also 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 frequently 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 credit card handing at
service stations, and 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.

Enterprise –wide systems and e-business applications

What is enterprise wide system?

Large scale software application to support business, information flows , reporting and data
analytics in identified organizations. Enterprise systems allow companies to integrate
information across operations on a company wide basis.

From a hardware perspective enterprise systems are the servers, associates software, and
software that large businesses use as the foundation for their IT infrastructure. These systems are
designed to manage large volumes of critical data.

Enterprise wide system comprise the following software

• Enterprise resource planning systems (ERP systems)

• Enterprise systems
• Supply chain management

• Customer relations management

They are also linked with data warehousing or business intelligence software systems though not
directly as enterprise-wide systems.

Enterprise-wide systems are built on software platforms such as SAPs Netweaver and oracles
Fusion and databases.

SAP SE is a German multinational software corporation that makes enterprise software to

manage business operations and customer relations. 130 countries.

Advantages of Enterprise-wide systems:

• supports competitive decision making
• supports automation in information systems

• supports to raise the quality of products

Disadvantages:

• High costs
• Training requirement

• Difficult to customize for specific business

Types of EWS:

• Customer relations management

• Supply chain management

• Enterprise resource planning (ERP)

• Business intelligence (BI)

E-business applications—Categories:
1. B2C Business to consumer
2. B2B Business to business

3. C2B Consumer to business

4. C2C Consumer to consumer
5. B2G Business to government