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THE EVOLVING ROLE OF INFORMATION SYSTEMS AND
TECHNOLOGY IN ORGANIZATIONS: A STRATEGIC
PERSPECTIVE
• According to Peppard and Ward (2016), a number of forces affect
the face and effectiveness of progress in using IS/IT and in
delivering operational and strategic benefits.
• The relative importance of each factor varies over time and will
also vary from one organization to another. These factors include:
▪ The capabilities of the technology and the applications that
are feasible
▪ The economics of acquiring provisions, deploying, and
maintaining the technology applications, services, and
infrastructure.
▪ The skills and abilities available, either in-house or from
external sources, to design and implement the applications.
▪ The skills and competence within the organization to use the
applications and information.
▪ The capability to manage any organizational changes
accompanying technology deployments.
▪ The pressures on the particular organization or its industry to
improve performance or adapts to changing circumstances,
such as a new regulatory environment or ‘digital disruption’.
INFORMATION SYSTEMS (IS), INFORMATION TECHNOLOGY
(IT), AND DIGITAL
• While IS and IT are often used interchangeably or even casually,
it is important to differentiate between them to create a meaningful
dialogue between business staff and IS/IT specialists. This is
essential if successful IS/IT strategies are to be developed.
• The term ‘digital’ is being used more frequently in many
organizations and in the practitioner and academic literature- it is
also important to relate digital to IS/IT.
• Information Technology (IT)
o IT refers specifically to technology, essentially hardware,
software, and telecommunications networks, including
devices of all kinds: computers, sensors, cables, satellites,
servers, routers, PCs, phones, tablets; and all types of
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software operating systems, data management, enterprise,
and social applications and personal productivity tools.
o IT facilitates the acquisition and collection, processing,
storing, delivery, sharing, and presentation of information and
other digital content, such as video and voice.
o The term Information and Communication Technologies (ICT)
is used instead of IT to recognize the convergence of
traditional computer technology and telecommunications.
• Information System (IS)
o Information systems (IS) are the means by which people and
organizations, increasingly utilizing technology, gather,
process, store, use and disseminate information.
o IS will remain in a state of continual development and change
in response both to technological innovation and to its mutual
interaction with human society as a whole.
• Application
o It refers to software or a combination of software and
hardware used to address or enable a business or personal
activity.
o These applications can be purchased, pre-written software
programs for particular business activity, or developed ‘in-
house’ to provide particular functionality.
o Many applications for personal productivity as well as
business use are now delivered via mobile devices of all
kinds, and increasingly, they are provisions from the cloud
(see Figure 1).
o With the emergence of smartphones and tablets, the concept
of ‘an app’ has entered the dictionary, and it is usually seen
differently from an application. In general, an app is designed
for a single purpose and has one piece of functionality. An
application, on the other hand, may handle a wide variety of
functions.
• Digital
o The term ‘digital’ is being used to embrace both IS and IT
since it has both components.
o Building a digital strategy is imperative to understand how
information and systems (IS) will be leveraged and used as
well as the supporting technological (IT) capabilities that will
be required.
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An Overview of Cloud Computing
• The convergence of software and IT infrastructure to an
Internet-centric environment has enabled the concept of cloud
computing to emerge.
• A cloud provider is a third-party service firm that deploys,
manages, and remotely hosts a pre-packaged software
application through centrally located servers in a ‘rental’,
lease, or ‘pay-as-you-go’ arrangement.
• No matter how the cloud provider is structured, the ultimate
objective is a seamless service in which the client interacts
only with the cloud.
• The most significant elements of seamless integration of
services include providing the hardware and software,
integration and testing, a secure network infrastructure,
reliable mission-critical data center facilities, a highly qualified
team of IT experts managing the entire solution (Peppard &
Ward, 2016).
Figure 1. Schematic of cloud computing
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DIGITAL DISRUPTION: THE IMPACT OF IS/IT
• Gartner defines digital disruption as “an effect that changes the
fundamental expectations and behaviors in a culture, market,
industry or process that is caused by, or expresses through digital
capabilities, channels or assets.”
• SearchCIO of techtarget.com calls digital disruption as “the
change that occurs when new digital technologies and business
models affect the value proposition of existing goods and
services”.
• Examples of digital disruption:
o Facebook has become the largest media company on the
planet.
o The world’s largest bookseller, Amazon, is a software
company.
o The largest video service by a number of subscribers is a
software company: Netflix
o Online pure-play Google is the world’s largest advertising
business.
o Online social network LinkedIn is the global leading
recruitment business.
Opportunities Digital Disruption Provides
• Make things happen
o With agile organizations, both the internal and external
workings of an organization can become more complex
as the company grows. It also changes the needs and
requirements that keep the whole organization move.
o The digitization of the business process is essential in
making the organization more efficient, cost-effective,
productive, and more customer-friendly.
• Involves the use of business intelligence and big data
o Digital disruption allows executives, leaders, and other
decision-makers to make informed decisions that are
based on solid data and reliable information.
o Digital disruption brings better and improved decision-
making, which in turn helps the organization grow, evolve,
and remain relevant.
• Drives innovation
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o Digital disruption allows companies to exceed outdated
standards and reach new heights in terms of service and
product quality, productivity, efficiency, and profitability.
o Digital disruption enables companies to meet the new
needs and wants of customers, whose tastes and
demand change all the time.
Characteristics of Digital Disruption
• From marketplace to marketspace
- With the opening of the Internet for commercial activity, the
business has been steadily moving from being conducted in
the physical marketplace to the virtual marketspace.
- This online environment has several distinctive features:
1. It is pervasive, directly reaching end-customers,
facilitating the conduct of business.
2. The trade-off between richness (the degree to which an
organization can facilitate the exchange of information to
deliver products/services that match customer’ 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.
3. It is interactive, which is of crucial importance as much
business, and public sector activity consists of
interactions: human and machine-to-machine (M2M)
communication, data gathering, collaborative problem
solving, and negotiation.
• Blurring of the physical/digital divide
- A vast majority of consumers prefer shopping online on
their mobiles or tablets from the comfort of their homes,
offices, or on-the-go rather than going to a physical store
and facing long queues, limited stock of items, and pushy
sales assistants.
- Technologies like the Internet of Things (IoT), sensors,
artificial intelligence (AI), wearable tech, Virtual Reality
(VR), and Augmented Reality (AR) have become popular
and are leading retailers in a new direction.
• Move from push to pull the economy
- Using analytics, retail organizations are trying to predict
which customers are likely to demand products and
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services. Rather than waiting for an approach from the
customer, they seek to be proactive, even influencing
their demand.
- Example: The modern car with its inbuilt diagnostic
software can detect when a component needs to be
replaced or maintenance service is required and thus can
automatically book an appointment with a garage. The
garage will know what components need replacement
and can order them from the manufacturer, scheduling
them to be delivered when the car arrives at the garage.
This data can also be very useful to manufacturers in
designing the next generation of components
• Development of an open standard
- Open standards are standards made available to the
general public and are developed (or approved) and
maintained via a collaborative and consensus-driven
process.
- Open standards facilitate interoperability and data
exchange among different products or services and are
intended for widespread adoption (Peppard & Ward,
2016)..
A THREE-ERA MODEL OF EVOLVING IT APPLICATION IN
ORGANIZATION
• Data Processing (DP) era – This is the first early investment in
IT that is concerned with automating manual information
processes using computers. Its objective is to improve
operational efficiency by automating information flows and
processes (often referred to as digitizing processes today).
• Management Information System (MIS) era – this era is
concerned about providing information from operations for
managerial decision-making. Its objective is to increase
management effectiveness by satisfying their information
requirements for decision-making.
• Strategic Information System (SIS) era – this era started in the
early 1980s and continues today, which refers to the search for
opportunities to create or achieve strategic advantages from
IS/IT. Its objective is to improve competitiveness by changing
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the nature or conduct of business (i.e., IS/IT investment can be
a source of strategic advantage).
• The relationship between the three eras and the evolving
application objectives are as follows:
Figure 2. Relationship between DP, MIS, analytics, and SIS
• Just as good as MIS systems rely on comprehensive, operational
DP systems for accurate and timely information, SIS (such as
those linking the company directly to its customers via the Internet
and mobile devices) rely on DP or MIS systems for appropriate
information provisioning or effective processing.
A CLASSIFICATION OF THE STRATEGIC USES OF IS/IT
• The following classification is helpful in considering the
implications of strategic IS/IT use.
• The four main types of strategic system are those applications
that:
1. share information via technology-based systems with
customers/consumers and/or suppliers and change the
nature of the relationship;
2. produce more effective integration of the use of information in
the organization’s value-adding processes;
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3. enable the organization to create, develop, produce, market,
and deliver new enhanced products or services or new value
propositions based on information.
4. 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.
• There are three types of revolutionary uses of IT, which
require a considerable transformation in terms of what the
organization does or how it does it.
1. Business process redesign - using IS/IT to realign
business activities and their relationships to achieve
performance breakthroughs.
2. Business network redesign - changing the way
information is used by the organization and its trading
partners, thereby changing how the industry overall
carries out the value-adding processes.
3. Business scope redefinition - extending the market or
creating new products based on information or changing
the role of the organization in the industry (Peppard &
Ward, 2016)..
REFERENCES:
Peppard, J., and Ward, J. (2016). The strategic management of information
systems: Building a digital strategy. (4th Ed.). Wiley.
Laudon, K., and Laudon, J. (2016). Management information systems:
Managing the digital firm. (14th Ed.).
Pearson Education
Limited.
Pearlson, K., Saunders, C., and Galleta, D. (2016). Managing and using
iInformation systems: A strategic approach. (6th Ed.). John Wiley &
Sons, Inc
Grant, G. and Collins, R. (2016) The value imperative: Harvesting value
from your IT initiativesPalgrave MacMillan.
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