Strategies for information

Types of information systems

Kind of information systems Groups served
Strategic level Senior Managers
Management level Middle Managers
Knowledge Level Knowledge and Data Workers
Operational Level Operational Managers

Strategic Information Tactical information Operational Information

Derived from both internal and
external sources
• Summarized at a high level
• Relevant to the long term
• Concerned with whole
organization
• Often on ad hoc basis
• Both quantitative and qualitative
• Uncertain as future cannot be
accurately predicted
• Primarily generated internally
( but may have external
component)
• Summarized at lower level
• Relevant to short/medium term
• Concerned with activities of
departments
• Prepared routinely and regularly
• Based on quantitative measures
• Derived from internal sources
• Detailed, being the processing of
raw data
• Relevant to the immediate term
• Task-specific
• Prepared very frequently
• Largely quantitative
Information requirements in different sectors
Manufacturing

Information Type Example(s)

Strategic • Future demand estimates

• New product development plans
• Competitor analysis

Tactical • Variance analysis

• Departmental accounts
• Inventory turnover

Operational • Production reject rate

• Material and labour used
• Inventory turnover
• Daily attendance and manpower analysis

Service

Strategic • Forecast sales growth and market share

• Profitability, capital structure
Tactical • Resource utilization such as number of customer per hairdresser,
number of staff per account etc
Operational • Staff timesheets
• Customer waiting time
• Individual customer feedback
Information requirements in different sectors
Public Sector
Strategic • Population demographics
• Expected government policy
Tactical • Hospital occupancy rates
• Average class sizes
• Percent of reported crimes solved
Operational • Staff timeliness
• Vehicles available
• Student daily attendance records

Non-profit charities
Strategic • Activities of other charities
• Government policy
• Public attitudes
Tactical • Percent of revenue spent on administration
• Average donation
• Customer’ satisfaction statistics
Operational • Household collected from/ approached
• Banking documentation
• Donations
The strategic value of IT/IS in business
 The benefits of proposed information systems
 Increased revenue: previous unknown opportunity for sales can be discovered through data mining and other analysis tools
 Cost reduction by automating manually intensive work – eg. Stock control
 Enhanced service can be a source of competitive advantage by increasing customer satisfaction
 Improved decision making:
 Forecasting – sales trends, cost trends
 Developing scenarios
 Market analysis – prices, sales trends, demand, relationship between prices and sales volume
 Project evaluation

 Strategic implications:
 Key business areas that could benefit from investment in IT
 Cost of systems in terms of software costs, hardware, management commitment and time, education and training, conversion,
documentation, operational manning, and maintenance. Also consider lifetime application cost and benefit
 Criteria for performance – technical standards and meeting the perceived need of the user
 Earl’s system audit grid to analyze current use of IS
Business High Renew Maintain, enhance
Value
Low Divest Reassess
Low High
Technical Quality
The strategic value of IT/IS in business
Information systems and competitive advantage
Low-cost leadership: Use information systems to achieve the lowest operational costs and the lowest prices. For
example, a supply chain management system can incorporate an efficient customer response system to directly link
consumer behavior to distribution and production and supply chains, helping lower inventory and distribution costs.

Product differentiation: Use information systems to enable new products and services, or greatly change the
customer convenience in using your existing products and services. For instance, Land's End uses mass
customization, offering individually tailored products or services using the same production resources as mass
production, to custom-tailor clothing to individual customer specifications.

Focus on market niche: Use information systems to enable a specific market focus and serve this narrow target
market better than competitors. Information systems support this strategy by producing and analyzing data for finely
tuned sales and marketing techniques. Hilton Hotels uses a customer information system with detailed data about
active guests to provide tailored services and reward profitable customers with extra privileges and attention.

Strengthen customer and supplier intimacy: Use information systems to tighten linkages with suppliers and
develop intimacy with customers. Chrysler Corporation uses information systems to facilitate direct access from
suppliers to production schedules, and even permits suppliers to decide how and when to ship suppliers to Chrysler
factories. This allows suppliers more lead time in producing goods. Strong linkages to customers and suppliers
increase switching costs (the cost of switching from one product to a competing product) and loyalty to your firm. 
The strategic value of IT/IS in business
Information systems and competitive advantage
 Operations:
 Tighter process controls
 Automate machine tools to make it more precise
 Use of robots
 Computer aided manufacturing – MRPI or MRPII, capacity requirement planning
 Computer integrated manufacturing: (CIM) is the manufacturing approach of using computers to control the entire production process. 
 Enterprise Resource Planning: (ERP) is business process management software that allows an organization to use a system of
integrated applications to manage the business and automate many back office functions related to technology, services and human
resources.
 Logistics:
 Use MRP, MRPII, ERP and IT for inbound logistics
 Use of barcodes/ RFID tags to know about quantity and nature of stocks
 Use computer models to create virtual warehouses of stocks held by suppliers.
 Marketing:
 Create customer database enabling market segmentation
 Buying a mailing list is better than television advertising
 Market research companies use IT to monitor customers’ buying behavior
 Supermarkets use EPOS to have hour by hour idea of how products are selling to enable speedy ordering and delivering
The strategic value of IT/IS in business
Information systems and competitive advantage
 Service (CRM)
 CRM or Customer Relationship Management is a strategy for managing an organisation's relationships and
interactions with customers and potential customers. A CRM system helps companies stay connected to customers,
streamline processes, and improve profitability.
 What does CRM software do?
 CRM software records customer contact information such as email, telephone, website social media profile, and more. It can
also automatically pull in other information, such as recent news about the company's activity, and it can store details such as a
client's personal preferences on communications.
 The CRM system organizes this information to give you a complete record of individuals and companies, so you can better
understand your relationship over time.
 CRM software improves customer relationship management by creating a 360° view of the customer, capturing their
interactions with the business, and by surfacing the information needed to have better conversations with customers. 
 Support Services
 Procurement: IT can automate procurement decisions. Link with sales order system of suppliers
 Technology development: CAD is used for drafting engineers drawings, component design, layout , electronic
circuit diagrams. CAD is also used for updating designs.
 Use IT in HR by automating selection, training, performance appraisal, attendance and leave, payroll, employee
database, retirement benefits records.
Risks associated with IS/IT
Development and implementation: what can go wrong

Stage/ Activity Problems

Analysis The problem the system is intended to solve is not fully understood
User input is inadequate through lack of consultation or lack of user interest
The project team is unable to dedicate the time required
Insufficient time spent in planning the project
Design Insufficient user input
Lack of flexibility. The organizations future needs are neglected
Organizational factors sometimes overlooked include:
• Ergonomics (including equipment, work environment and user interfaces)
• Health and Safety
• Compliance with legislation
• Job design
• Employee involvement
Programming Insufficient time and money allocated to programming
Programmers supplied with incomplete or inaccurate information
The logic of the program is misunderstood
The programming technique results in programs that are hard to modify
Programs are not adequately documented
Risks associated with IS/IT
Development and implementation: what can go wrong

Stage/ Activity Problems

Testing Insufficient time and money allocated to testing
Failure to develop an organized testing plan
Insufficient user involvement
User management do not review and sign off the results of testing
Conversion Insufficient time and money allocated to data conversion
Insufficient checking between old and new files
The process is rushed to compensate for time overrun elsewhere
Implementation Insufficient time, money and /or appropriate staff mean the process has to be rushed
Lack of user training increases the risk of system under-utilization and rejection
Poor system and user documentation
Lack of performance standards to assess system performance against
System maintenance provisions are inadequate
Risks associated with IS/IT
Theories to explain user resistance
Theories to explain user resistance
Stage/ Activity Problems
People oriented User resistance is caused by factors internal to users as individuals or as groups
For example, users may not wish to disrupt their current work practices and social groups
System oriented User resistance is caused by factors inherent in the new system design relating to ease of use and
functionality
For example, poorly designed user interface will generate user resistance
Interaction User resistance is caused by the interaction of people and the system
For example, the system may be well designed by its implementation will cause organizational
changes that users resist eg reduced chance of bonuses, redundancies, monotonous work
Risks associated with IS/IT
Theories to explain user resistance

Risks from IT systems

Natural threats Fire, flood, electrical storms
Human threats Individuals with grudges – whether by spilling a cup of coffee over a desk covered with
papers, or tripping and damaging themselves or an item of office equipment.
Data system integrity Incorrect entry of data, use of out of date files, loss of data through lack of back ups
Fraud Theft of funds by dishonest use of computer system
Deliberate sabotage Commercial espionage, malicious damage or industrial action
Viruses and other Can spread through the network to all of the organizations computers. Hackers may be
corruptions able to get into the organizations internal network, either to steal data or to damage the
system or ransom
Denial of service attack Characterized by an attempt by attackers to prevent legitimate users of a service from
using that service
Non compliance with Data is normally regulated in most countries. Data Protection Act exists for which
regulations penalties are imposed by courts if data is wrongly used or control procedures are not in
place
Risks associated with IS/IT
Combating IT risks and IT security
Natural threats
Business continuity planning
System access control
Systems development and
maintenance
Physical and environmental
security
Compliance
Personnel security
Security organization
Computer and network
maintenance
Asset classification and control
Security Policy
Fire, flood, electrical storms
Measures to ensure that if major failures or disasters occur, the business will be able to function
Protection of information, information systems, networked services, detection of unauthorized activities and
security when using the systems
Security measures and steps to protect data in operational and application systems and also ensuring that IT
projects and support are conducted securely
Measures to prevent unauthorized access, damage and interference to business premises, assets, information and
information facilities and prevention of theft
With relevant legal requirements and also with organizational policies and standards.
Issues such as recruitment of trust worthy employees, and also reporting of security related incidents. Training and
awareness is particularly important
Clarity on who is responsible for the various aspects of information security. Additional considerations will apply
if facilities and assets are accessed by third parties or responsibility for information processing has been
outsourced
Ensuring continuity of operations and minimizing the risk of systems failure, protecting the integrity of systems
and safeguarding information particularly when exchanged between organizations
Information is an asset, just like a machine, building or a vehicle, and security will be improved if the information
assets have an “owner” and are classified according to how much protection is needed
A written document setting out the organization’s approach to information security should be available to all staff