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Assessment and Justification of Information Strategy
Competitive and technological forces simply do not seem to permit any one organisation to enjoy a sustainable competitive advantage just from its use of Information Technology. However, it has been possible for an organisation, over the last decade to capture many competitive benefits and advantages. Thus, the benefits do not flow from the mere use of IT but occur from the human, organisational and system innovations that are all a part of the company's structure. Scott Morton states that, "IT is merely an enabler that offers an organisation the opportunity to vigorously invest in added innovations if it wishes to stay ahead of its competitors." This information can assist in the sale of goods.
An organization is able to maintain competitive advantage over its competitors, not based on the amount of resources at its disposal, or the skill of its workforce, but rather on how it is able to manage and device its information strategy.
It is a complex and problematic activity because;
Without a viable information systems strategy, a company losses its competitive advantage
A company's information strategy does not operate in isolation, it is intertwined and must be developed in consonance with the organization and Business strategy. Otherwise, you will end up with an information strategy that does not support the organizations strategy or an information strategy that does not support the Business strategy
It is complex as it requires lots of commitment during implementation and planning stages, especially full participation from top management
2. The Difficulties in Strategic Information Systems Planning
According to Vitale, et al. (1986), the task of strategic information systems planning is difficult and often time organizations do not know how to do it. Strategic information systems planning is a major change for organizations, from planning for information systems based on users' demands to those based on business strategy.
In order for an organisation to implement a new form of information technology upper management must be able to assess the company's needs. Organisations do this by analysing past performance and expected future trends, so that a future direction can be planned. Once these characteristics are assessed then a company can develop a plan on how to increase the efficiency of their IS systems, to achieve and even surpass their goals. Companies must strive to continuously improve the quality of their products or services, therefore Information Systems that are introduced into the organisation must be able to enhance these objectives, directly or indirectly.
Many factors must be considered for an organisation to accurately clarify all of their needs and determine what IS will best meet their needs. These factors include:
Business relationships, Technology, Strategic options, Integration scope, Participant roles in strategic implementation
3. Strategic Management of IS & Competitive Environment
There are many elements that influence the competitive environment of an organization. Overlooking a single element can have disastrous results for the organization. This slim tolerance for error requires management to take multiple views of the strategic landscape. I am outlining the difficulties and intricacies of these views from three perspectives. My first view uses Michael Porter's five forces model to look at how information systems must be used to influence a firm's competitive environment, while the second view uses Porter's value chain model to assess how information systems can be directed at altering the value-supporting activities of the firm.
3.1 POTENTIAL THREAT OF NEW ENTRANTS - Information systems is now been used as a tool by organizations to create barriers to entry for their competitors. The higher the quality of barriers erected by an industrial leader,the less likely it is for new entrants to come in and try to compete. Through massive investments in its information systems, the Boeing Company was able to create a significant barrier to entry for its competitors, these systems included; the Define and Control Airplane Configuration/Manufacturing Resource Management (DCAC/MRM) design to streamline and simplify the processes of configuring and producing Airplane. Also the Enterprise Resource Planning (ERP) software from Baan; with the forecasting software from i2 technologies, factory floor process planning software from CimLinc, product data management software from Structural Dynamic Research and a product configuration system from Trilogy are intimidating barriers for any entrant to the Airplane production industry. The new company must possess either all this or more to have an edge over Boeing in the Aircraft manufacturing business.
3.2 BARGAINING POWER OF BUYERS - Information systems can also be used to reduce the competitive pressure in the market occasioned by the threat and bargaining power of buyers. The Boeing Company was able to reduce the threat of its defense and commercial buyers with the merger of Boeing, Rockwell International Corporation and McDonnell Douglas Corporation in 1994. In an effort to meet its defense commitment in Delivering 120 C-17's to the Air Force by the year 2004, Boeing had to install a Catalyst software for its warehouse support system, thereby resulting in an increased number of daily work orders being processed and considerable labor cost savings.
3.3 BARGAINING POWER OF SUPPLIERS - The more the suppliers, the higher the power of the firm within an industry and the lower the competitive pressure. Conversely, there will be more competitive pressure in an industry with few suppliers. Boeing decided to purchase ERP software in 1995 from Baan (a Dutch company), because it could be used to control the flow of parts, as it was based on client/server architecture. Moreover, Baan was an option because it was felt to be particularly well suited to companies with multi-site hybrid manufacturing process like Boeing. The ERP was not purchased from SAP (the ERP market leader) based on some technical reasons.
3.4 THREAT OF SUBSTITUTE PRODUCTS - Boeing seeks to maintain a greater percentage of the total market share by adopting a number of strategies to avoid the possibility of customer switching to its competitors. In the process of achieving this, a lot of resources were expended on information system to better improve her manufacturing processes, from manual production (paper based to a fully computerised environment). All these efforts are geared towards producing qualitative aircraft, increase production rate; so that all competitors will be kept at bay. The point was that when qualitative aircraft which are second to none are produced, customers will find it difficult to find a close substitute anywhere else.
3.5 INDUSTRY COMPETITORS - Through the creative use of information systems, competitors are able to differentiate themselves with an otherwise undifferentiated product. For example FedEx adds information to their delivery service helping them differentiate their offerings from those of other delivery services. A FedEx customer is able to track their packages, and know exactly where their package is in transit, see who signed for the package, and know exactly when it was delivered. Competitors offer some of the same information, but FedEx was able to take an early lead by using its information systems to differentiate their services.
4. Strategic Management of IS & the Value Chain
The Value Chain
The Value System
Supplier value chains
Firm value chain
Channel value chains
Buyer value chains
The value chain model addresses the activities that create, deliver, and support a company's product or service.
As shown from figure 1.1, activities fall into nine generic categories. Primary activities are those involved in the physical creation of the product, its marketing and delivery to buyers, and its support and servicing after sale. Support activities provide the inputs and infrastructure that allow the primary activities to take place. Every activity employs purchased inputs, human resources, and a combination of technologies. Firm infrastructure, including such functions as general management, legal work, and, counting, supports the entire chain. Within each of these generic categories, a company will perform a number of discrete activities, depending on the particular business”
Organizations have utilized Information systems to add value and improve customer satisfaction, E.g. Otis Elevator's Otisline system. The customer's service call is automatically routed to the field technician with the skill and knowledge to complete the repair. Otis Elevator knows that customers value a fast response to minimize the downtime of the elevator. The goal is therefore achieved by using information systems to move the necessary information between activities. When a customer call for a service, their request is automatically and accurately stored in a customer service database and communicated to the technician linked to the account. This technician is then contacted immediately over the wireless handheld computer network, that way he / she can make sure they have got both the parts and knowledge to make repairs. This provides Otis with an advantage since no time is wasted in arriving and fixing the problem.
5. IS Crucial for the Business & Organizational Strategy
Failure to consider IT strategy when planning business strategy and organization strategy leads to one of three business consequences: information systems that fail to support business goals, information systems that fail to support organizational systems, and a misalignment between business and organizational strategies.
E.g. in 1994, Dell Computer Corporation formally stopped selling personal computers in retail stores since reaching customers in this way was expensive, time consuming and did not fit with Michael Dell's vision of the Direct Business Model. The internet combined with their well designed information systems infrastructure allowed customers to electronically contact dell and design a PC for their specific needs. Dells ordering system is integrated with their production system and shares information automatically with each supplier of PC components. This information enables the assembly of the most current computers without the expense of storing large inventories. Dells executives achieved a strategic advantage in reducing response time, but crucial to that was the creative use of information systems.
6. Potential Impact on Profitability
Decisions about Information Systems have a direct impact on the profits of a business. The basic formula PROFIT = REVENUE - EXPENSES can be used to evaluate the impact of these decisions.
Adopting the wrong technologies can cause a company to miss business opportunities and any revenues they would generate. Inadequate information systems can cause a breakdown in servicing customers, which directly impacts sales. On the expense side, a poorly calculated investment in technology can lead to overspending and excess capacity. Inefficient business processes sustained by ill-fitting information systems also increase expenses. Lags in implementation or poor process adaptation each reduce profits and therefore growth.
7. Justifications of Sources
The second chapter gives an overview of the literature review and research document relevant to establishing a theoretical background to the theme. Prominent within these themes are; usability, human computer interaction, user interface design and connectivity between java and database.
Chapter third chapter outlines the design methodology used in this study. After careful analysis of the objectives, a design methodology was chosen for the project. The chapter begins with the main definitions, objectives and progresses to the functional requirements of the system, system analysis and design
The fourth chapter gives an overview of the implementation and testing stages of the project. The main application and graphical user interface designed in java together with the MySQL database were implemented and tested. Crucial to this stage were the original design objectives.
The fifth chapter provides an overall evaluation the results obtained from the previous research studies and the test results obtained from the testing carried out in the previous chapter. Participants were drawn from different proficiency levels, such as experienced, non-experienced and one expert user. Their views were recorded in the forms stated in appendix B.
9. Reference & Bibliography
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