Chapter 4 Gaining Strategic Value from Information Information Systems for Business: An Experiential Approach Second Edition France Bélanger, Craig Van Slyke, Robert E. Crossler Bélanger, Van Slyke, Crossler © Prospect Press 2016

Practice: Focusing Story (p. 54) What mHealth applications are you aware of? What mHealth applications do you use? Are there mHealth applications that you would use if they existed? What are they? What are the benefits of mHealth for existing health care organizations? For consumers? Bélanger, Van Slyke, Crossler © Prospect Press 2016

Strategic Information Systems Designed and implemented to enable creation and appropriation of value (competitive advantage) No need for proprietary IT: Technology alone does not determine added value. Bélanger, Van Slyke, Crossler © Prospect Press 2016

Strategic IS Planning Process Strategic planning: a structured set of steps, in an iterative process. Goal: identification of strategic information systems initiatives. Figure 4.1 Information Systems Strategic Planning Process Bélanger, Van Slyke, Crossler © Prospect Press 2016

Step 1: Strategic Business Planning Know Who You Are Identify the organization’s: Mission Strategies (How to achieve the mission) Goals and objectives Freestockphotos.biz Bélanger, Van Slyke, Crossler © Prospect Press 2016

Step 2: Information Systems Assessment Know Where You Start Assessment of the organization’s current IS resources and how well they fulfill the needs of the organization But… IS resources IT resources Technical resources Data and information resources Human resources 4-6

Step 3: Information Systems Vision Know Where You Want To Go Broad statement of how the organization should use and manage its information systems for strategic purposes Information Systems Vision Firm’s Business Strategy aligned and reflect Freestockphotos.biz Bélanger, Van Slyke, Crossler © Prospect Press 2016

Step 4: Information Systems Architecture Know How You Are Going To Get There How IS resources should be used and how they should work together. Architectural guidelines can include statements about all information resources hardware, software, networks Bélanger, Van Slyke, Crossler © Prospect Press 2016

Step 5: Strategic Initiatives Identification Know What You Need Proposals Long-term (two to five year) Identify new systems, new projects, or new directions for the organization. Frameworks IS SWOT Analysis Porter Five Competitive Forces Model Porter’s Value Chain Virtual Value Chain © Dr. F. Bélanger - ACIS 5514 (3564) - F2015

Advantages of IS Strategic Planning Process Improved Communication Improved Coordination Shared mental image of initiatives Clear responsibilities agreed upon Improved Decision Making Clear guidelines and criteria Consistent decisions making over time Bélanger, Van Slyke, Crossler © Prospect Press 2016

Information Systems SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) Table 4.1 SWOT Analysis Components Component Description Example for Amazon.com Strengths   What gives the organization advantages over others in their industry? Leadership position in online retailing Weaknesses What creates disadvantages for the organization relative to others in their industry? Increased size of the company requires more investments Opportunities What activities or factors could help the organization get new advantages over others in their industry? Expand to services instead of just retailing Threats What activities or factors could create disadvantages or troubles for the organization relative to others in their industry? Increasing global competition from online retailers Bélanger, Van Slyke, Crossler © Prospect Press 2016

Porter’s Five Competitive Forces Model Analysis of how competitive an industry. Can determine if a particular market could be attractive for an organization to consider. Figure 4.2 Porter’s Five Competitive Forces Model Bélanger, Van Slyke, Crossler © Prospect Press 2016

Five Competitive Forces Model Bélanger, Van Slyke, Crossler © Prospect Press 2016

Figure 4.3 Porter’s Value Chain in Manufacturing Firm Two types of activities: primary and support Competition can come from two sources: Lowering cost to perform an activity Adding value to product or service Figure 4.3 Porter’s Value Chain in Manufacturing Firm Bélanger, Van Slyke, Crossler © Prospect Press 2016

Figure 4.4 Virtual Value Chain: Handling Information Bélanger, Van Slyke, Crossler © Prospect Press 2016

Evaluating Strategic Initiatives Cannot implement all initiatives Therefore, evaluate them with tools like: Critical Success Factors Important considerations to be achieved for organizational survival and success Not focused on technology! Aligned with business vision and mission Only a few critical success factors Priority Matrix Bélanger, Van Slyke, Crossler © Prospect Press 2016

Practice: Learning Activity 4.2 (p. 67) Your group is a top management team from the company Yahoo! Identify the critical success factors for the company. Compare with the other groups in the class. Bélanger, Van Slyke, Crossler © Prospect Press 2016

Figure 4.5 Sample Priority Matrix Bélanger, Van Slyke, Crossler © Prospect Press 2016

Practice: Learning Activity 4.3 (p. 68) Complete a competitive analysis of Outrigger Hotels and Resorts (Piccoli, 2005). Identify the competitive position of Outrigger Hotels and Resorts, and Identify three strategic information systems initiatives you believe the company should consider. Bélanger, Van Slyke, Crossler © Prospect Press 2016

Hyper-competition: Sustainability of Competitive Advantage D’Aveni’s 7Ss suggest: Every competitive advantage is eroded Sustaining an advantage can be a deadly distraction Goal of advantage should be disruption, not sustainability Initiatives are achieved through series of small steps Bélanger, Van Slyke, Crossler © Prospect Press 2016

D’Aveni’s 7Ss for Hyper-competition Table 4.3 D’Avenis’ 7Ss Approach Definition Superior stakeholder satisfaction Maximizing customer satisfaction by adding value strategically. Strategic soothsaying Using new knowledge to predict or create new windows of opportunity. Positioning for speed Preparing the organization to react as fast as possible. Positioning for surprise Preparing the organization to respond to the marketplace in a manner that will surprise competitors. Shifting the rules of competition Finding new ways to serve customers, transforming the industry. Signaling strategic intent Communicating intentions in order to stall responses by competitors. Simultaneous and sequential strategic thrusts Taking steps to stun and confuse competitors in order to disrupt or block their efforts. Bélanger, Van Slyke, Crossler © Prospect Press 2016

Practice: Learning Activity 4.4 (p. 69) Your top management team at Yahoo! is tasked with selecting one of the 7Ss from the D’Aveni’s framework, specifically targeted at finding a way for Yahoo! to better compete with Google. Identify a specific strategic initiative that will be used to implement the selected strategy (one of the 7s). Rank all of the groups’ proposed initiatives in the class using the Critical Success Factors (LA 4.2) Bélanger, Van Slyke, Crossler © Prospect Press 2016

Reflection If the strategic planning process has the benefits of improved communication, coordination, and decision making, could it be used or applied by students for group projects? How? In what situations in your personal life could you apply a SWOT analysis (not for a course)? How does the priority matrix relate to critical success factors? Do you believe that hyper-competition exists today? If so, do you think it will continue to happen in the future? Bélanger, Van Slyke, Crossler © Prospect Press 2016

Copyright 2016 Prospect Press All rights reserved.  This material may not be copied or distributed without permission from Prospect Press. Bélanger, Van Slyke, Crossler © Prospect Press 2016