1. Week 1 - Strategic Management Information in Context
3/31/2017
IS715 – The Development, Management and Exploitation of Business Information Systems
Week 1 - Strategic Management Information in Context
IS447 Strategic Management of Information

2. Objectives: to introduce the concept of strategic information
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Objectives:
to introduce the concept of strategic information
to understand the role of information in organisations
to look at internal sources of strategic information
to recognise the importance of external sources
IS447 Strategic Management of Information

3. What is Strategic Information (SI)?
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What is Strategic Information (SI)?
What is your understanding of the term strategic information?
What are the components of strategic information?
Try to remember what you did in IS446 - Operational Information Systems
IS447 Strategic Management of Information

4. Lecture Structure: Building Blocks of Strategic Information
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Lecture Structure: Building Blocks of Strategic Information
Requires awareness of:
data, information, knowledge
characteristics of information
managerial activities
managerial decision making
management levels
information requirements of levels
systems to support
CBIS & competitive advantage
IS447 Strategic Management of Information

5. 1. Data, Information, Knowledge
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1. Data, Information, Knowledge
What is this?
‘A slight inclination of the cranium
is as adequate as a spasmodic
movement of the optic to an
equine devoid of its visionary
capacity’
IS447 Strategic Management of Information

6. 3/31/2017
What is this?
IS447 Strategic Management of Information

7. Definitions ‘Data, is the record of an event or fact.’
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Definitions
‘Data, is the record of an event or fact.’
‘Information is data processed for a purpose.’
G Curtis. Business Information Systems.
IS447 Strategic Management of Information

8. 3/31/2017
More definitions...
‘Data items are the raw materials for producing information.’
‘Information is generally defined as data that is meaningful or useful to the recipient.’
Davis & Olsen. Management Information Systems
IS447 Strategic Management of Information

9. Final definitions... ‘Data refers to facts.’
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Final definitions...
‘Data refers to facts.’
‘When data are filtered through one or more processors to that they take on both meaning and value to a person, they become information.’
Parker & Case. Management Information Systems.
IS447 Strategic Management of Information

10. 2. Characteristics of Information
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2. Characteristics of Information
Characteristics/qualities of information:
TME DIMENSION - deals with the time period with which the information deals, & frequency with which information is received
TIMELINESS - should be available when needed
CURRENCY - should reflect current circumstances when provided
FREQUENCY - in addition to being available when needed, should also be available as often a needed
TIME PERIOD - cover correct time period
CONTENT DIMENSION - deals with the scope and content of the information
FORM DIMENSION - describes how the information is presented to the recipient
CLARITY - presented in form appropriate to the receiver - user should be able to locate items quickly and understand them
DETAIL - correct level of detail to match information needs
IS447 Strategic Management of Information

11. 3. Managerial Activities
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3. Managerial Activities
‘To manage is to forecast and plan, to organise, to command, to co-ordinate and control.’ Fayol 1916
going to look at :
information needs, levels of management,nature of problems etc.
To function effectively organisations activities must be managed in efficient and organised manner.
Main core elements of the definition can be found in many modern definitions of the term information system
Number of areas forcing need for effective information systems - globalisation, as the management structures have become flatter the need for access to information about internal and external activities becomes more important.
As organisations become larger, effective information systems become critical to continuing survival.
IS447 Strategic Management of Information

12. 3/31/2017
What Does a Manager Do?
operational process involving management functions of : planning, organising, staffing, directing, leading, controlling
increasingly complex resulting from:
IT developments
globalisation
international economics - Twin towers
shrinking time frames - ‘chasing the sun’
social constraints - ‘green’ purchasing
IS447 Strategic Management of Information

13. 4. Managerial Decision Making
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4. Managerial Decision Making
what Information does a manager need ?
Information needs determined by
decisions that must be made
which are determined by set objectives
Objectives
Decisions
Info Needs
IS447 Strategic Management of Information

14. Model of Decision Making Simon (1960)
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Model of Decision Making Simon (1960)
Decision Stage
Search and scanning procedures
Intelligence
Choice
Design
Develop awareness that problem exists. Gather information on the problem.
Formulate model, search for alternatives, Predict/measure outcomes
Try to develop alternative solutions. May require additional info. at this stage
Select the best or best alternatives, design a plan of action
Heavily reliant on Design stage being undertaken properly. Should be straight forward.
IS447 Strategic Management of Information

15. Decision Making Model 3/31/2017
Model illustrates number of important points:
1. Emphasises importance of information in playing critical role in arriving at effective and successful decision
- in design phase essential to examine the implications of each possible solution
- unless have access to information may not be able to make fully informed decision
2. The information required to support the decision making process is determined by the decision itself.
- the decision needs determine information needs
3. Remember that the implementation stage is not the end of the process - if the chosen solution is unsuccessful then the cycle begins again
IS447 Strategic Management of Information

16. 3/31/2017
Types of Decision
IS447 Strategic Management of Information

17. 5. Management Levels Unstructured (non-programmable) Strategic
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5. Management Levels
Unstructured
(non-programmable)
Operational
Tactical
Strategic
Structured
(programmable)
IS447 Strategic Management of Information

18. Levels of Decision Making
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Levels of Decision Making
Strategic Decision Making
involves establishing objectives
outlining long-term plans to meet those objectives
Tactical Decision Making
implementing decisions made at strategic level
allocating resources needed to meet organisational objectives
Operational Decision Making
executing tasks
ensure efficient, effective
STRATEGIC - long term organisational planning, decisions likely to have large impact on organisation and not easily reversed.
examples - markets to move into, merger, setting turnover targets etc.
TACTICAL - medium term planning, decisions at this level used to set medium term goals that represent the stages leading to the accomplishment of the organisations strategic objectives
examples - setting departmental budget, employing staff to achieve output targets, identifying and deploying new technology
OPERATIONAL - short term, day to day planning, decisions taken ensure effort directed towards achieving medium term tactical goals
examples - setting shift rotas, production schedule
IS447 Strategic Management of Information

19. Nature of Decisions at Management Levels
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Nature of Decisions at Management Levels
IS447 Strategic Management of Information

20. 6. Decision Levels and Info Type
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6. Decision Levels and Info Type
Orientation
Planning Horizon
Performance Focus
Coverage
Level of Detail
Uncertainty
Degree of objectivity
Level of Accuracy
primarily internal
immediate/few days
current activities
specific activities
highly detailed
low
objectively measured
high accuracy levels required
internal & external
short /medium term
historical & current
dept/function
detailed & summarised reports
degree of uncertainty
objective & subjective data
moderate accuracy levels
more external
medium/long term
predictive rather than historical performance
total organisation
typically highly summarised
high levels of uncertainty
higher proportion is subjective
accuracy less critical to decisions at this level
Info Attributes
Operational
Tactical
Strategic
IS447 Strategic Management of Information

21. 7. Computer Based Information Systems (CBIS)
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7. Computer Based Information Systems (CBIS)
What is an information system?
‘An information system is a group of interrelated components that work collectively to carry out input, processing, output, storage and control actions in order to convert data into information products that can be used to support forecasting, planning, control, co-ordination, decision making and operational activities in an organisation.’Business Information Systems (Bocij 1999)
Long definition but makes use of many of the concepts we have already looked at:
- data, information
- role and function of management
- interrelated systems
- managerial decision making
Are alternative definitions:
- information systems automatically involve the use of IT - not always the case, becoming rarer but can find ‘manual’ systems
- systems only used to support decision making, yet managers make use of information at a number of levels ie. obtaining feedback
IS447 Strategic Management of Information

22. What are the Resources? people - users of the system (designers etc.)
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What are the Resources?
people - users of the system (designers etc.)
hardware - all machinery
software - includes manuals, company documentation
communication - intranets, extranets
data - all data access regardless of form
information technology - the technology
computer based information systems (CBIS)
IS447 Strategic Management of Information

23. 3/31/2017
What are the CBIS’s
IS447 Strategic Management of Information

24. Transaction Processing Systems (TPS)
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Transaction Processing Systems (TPS)
basis of business operations
recording and processing basic data
sales, purchases etc.
batch or online
online - banking
batch - bill processing
main activities
data capture
data validation
processing
classification
sorting
data retrieval
calculation
summarising
IS447 Strategic Management of Information

25. query responses/reports
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outputs from TPS
transaction documents
action documents ie. airline tickets, picking slips to identify warehouse products
information documents
confirmation - list of credit card charges etc.
query responses/reports
transaction logs
error (edit) reports
detail reports
summary reports
IS447 Strategic Management of Information

26. Strategic Use of TPS underestimated as purely technically oriented
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Strategic Use of TPS
underestimated as purely technically oriented
can provide strategic advantage by focusing on internal and customer interfaces
airlines - TPS systems provide strategic information i.e. Platform Thomas Cook
allows horizontal & vertical integration
IS447 Strategic Management of Information

27. Exploitation of TPS for Strategic Decision Making
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Exploitation of TPS for Strategic Decision Making
tracking systems
locational systems
asset management systems
growing area
electronic market place - securities, software, ideas, goods, services on the Internet
IS447 Strategic Management of Information

28. Office Automation Systems (OAS)
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Office Automation Systems (OAS)
applying IT to common office tasks
word processing
spreadsheets
fax machines
IS447 Strategic Management of Information

29. Management Information Systems (MIS)
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Management Information Systems (MIS)
designed to produce information needed for successful management of process, department or business
support recurring decisions, where information needs have been determined in advance
IS447 Strategic Management of Information

30. Management Information Systems alternative views
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Management Information Systems alternative views
MIS - includes operational systems and TPS that only used indirectly by managers
BIS - business information systems - used to describe all types of IS used in business ie. DSS, OIS and more appropriate than MIS
MIS taken to include DSS, EIS, ES
Depending on author, perspective of book MIS can be interpreted differently.
Zwass - does not use the term at all.
O’Brien refers to MIS as including operational systems and transaction processing systems that are used indirectly by managers
This lecture adopts the school of thought adopting the term BIS which is used to describe all types of IS used in business - including DSS, TPS etc. and is therefore more appropriate than MIS
Adopted this view because the term MIS implies only used by managers, as now anyone can and is capable of using the systems.
IS447 Strategic Management of Information

31. Decision Support Systems (DSS)
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Decision Support Systems (DSS)
provide information to support semi or unstructured decisions
provide information when needed
users interact with the system
identify, retrieve information to support decision, solve problem
‘what if’ problems
next phase - group decision support systems
aimed middle and lower management
IS447 Strategic Management of Information

32. Executive Information Systems (EIS)
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Executive Information Systems (EIS)
internal, external information highly summarised form
spot opportunity, problem or trend
identify course of action to solution
can have forecasting capabilities
represent strategic planning tool
serve control needs of high level management
IS447 Strategic Management of Information

33. EIS Characteristics easily tailored to specific mangers
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EIS Characteristics
easily tailored to specific mangers
‘drill down’ capacity - see the detail behind the summaries
immediate, easy access to information
user friendly interface, graphic etc. no middle user
access to int/ext. databases through standard interface
includes future & current data
IS447 Strategic Management of Information

34. Expert Systems apply human knowledge & experience to range of problems
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Expert Systems
apply human knowledge & experience to range of problems
comprises knowledge base controlled by rules
knowledge base
represents knowledge, experience of experts in given area
rules
organise knowledge base, allow interrogation
examples : choosing computer system, performing medical diagnosis
IS447 Strategic Management of Information

35. 8. CBIS & Competitive Advantage
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8. CBIS & Competitive Advantage
Porter - 5 competitive forces
threat new entrants
bargaining power of suppliers
bargaining power of customers
threat of substitute products or services
rivalry amongst competitors
competitive strategies to address
cost leadership
product differentiation
innovation
COST LEADERSHIP - providing goods or services at lowest cost
- achieved through reducing production costs, providing services
- working with suppliers to form alliances, linkages and reduce costs
- introduce new products which will be difficult for competitors to duplicate
DIFFERENTIATION - distinction between products and those of competitors
- identify specific market niche - Rolls Royce
- resources focused on maintaining and increasing market share
INNOVATION - new ways to approach organisations activities
- improving existing products, creating new ones - MICROSOFT
IS447 Strategic Management of Information

36. Using CBIS for Strategic Advantage
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Using CBIS for Strategic Advantage
improving operational efficiency
raising barriers to entry
locking in customers and suppliers - American Airlines, SABRE
promoting business innovation
increasing switching costs
leverage
Improving operational efficiency - manufacturing company wanting to adopt cost leadership
- inventory control system used to manage stock levels, reduce storage, transportation costs
- support activities ie. management and administration improve efficiency through introduction of office automation
Barriers to entry - employ complex, expensive systems which make new entrants reluctant due to cost - airline
Lock in customers/suppliers - strengthen business relationships - produce high levels of customer loyalty, horizontal and vertical integration - ensuring availability of raw materials (Nissan), tying in suppliers through supplying HW/SW, exclude competitors, American Airlines gave SABRE free to agents to tie in
Business innovation - CBIS can encourage business innovation, establish information base to generate new ideas (organisational learning)
Increase switching costs - cannot afford cost of changing
Leverage - provides information to identify opportunities, develop new initiatives, provide resources for information leadership ie. Reuters sell their information expertise, PriceWaterhouse
IS447 Strategic Management of Information