1. Lecture 1 MGMT 6180 - © 2012 Houman Younessi MGMT 6180 – Strategic Information Systems Management Course Convenor: Houman Younessi Tel: 860-548-7880 Email: youneh@rpi.edu

2. Lecture 1 MGMT 6180 - © 2012 Houman Younessi Course objectives: The major objective of this course is to construct a solid foundation for understanding the role of information systems in formulating and executing business strategy and application of information systems principles, techniques and technologies used by progressive organizations in the development of effective business strategy.

3. Lecture 1 MGMT 6180 - © 2012 Houman Younessi Key textbook: Applegate, Austin, and Soule; “Corporate Information Strategy and Management; 8 th Edition; McGraw Hill

4. Lecture 1 MGMT 6180 - © 2012 Houman Younessi Teaching Method: The principal teaching is through lectures and discussions. There will be 11 lectures during the semester. While formal attendance is not taken, attending all lectures is expected of students and is deemed a critical success factor. Assessment: Semester assignment and presentation50 percent Case presentations40 percent Class participation10 percent

5. Lecture 1 MGMT 6180 - © 2012 Houman Younessi Syllabus:  Introduction, strategic management and planning  What are Information Systems?  Crafting strategy based business models  Strategic planning for IS and the IS strategy toolkit  Frameworks for cogenerating IS strategy within business strategy  Managing and IS organization  The IS profession

6. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategy: A rule for making decision under conditions of partial ignorance. (Ansoff, 1965, Corporate Strategy) Formulation of basic organizational missions, purposes and objectives…..(Steiner and Miner, 1977, Management Policy and Strategy) Interpretation of the environment and the development of consistent patterns in streams of organizational decisions. (Mintzberg, 1979, The structuring of Organizations) A Broad-based formula for how business is going to compete. (Porter, 1980, Competitive Startegy)

7. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategy: Strategy comes from the Greek Stratos (camp), and Ago (to lead). In short it means “leading the camp”. It is a military term and in “leading the camp” is latent leading it to victory. Business is often compared to war. But, perhaps similarly to war, it is not very clear when victory is attained. The first thing we have to do is to define victory In other words Where do we want to get from here?

8. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategy: So, great strategists first identify their specific and measurable overall goals. Only when the overall goal is identified, can we then decide how we are going to get there.

9. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategy: Great leaders are prepared for the challenges they have to face in order to get to their objectives. We need to know what resources we need for victory and how much of those resources are available to us. We then create the means of acquiring the additional resources we need but lack

10. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategy: So, very simply, strategy is:The Way to a Victorious Future. Make sure you have a great future, you will be spending the rest of your life there! Make sure your business has a great future, you will be responsible for where it is in the market forever.

11. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategy: So in terms of business and business leadership, strategy is: The overall plan of how we will attain our overall business objectives given the reality of our present resource set.

12. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategic Planning: The project management of developing the strategy We need to: Set our overall goal Make our goal measurable Determine the best process available to achieve our goal Determine the resources needed for achieving our goal Determine what resources are currently available Clearly formulate and communicate the strategy

13. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategic Planning: Observations: Strategic planning is: 1.Complex 2.Cyclical (evolving) 3.Itself just a phase (still must be implemented) Do not confuse strategy with:  Strategic planning (strategizing),  The business model (process methodology), or  The implementation plan

14. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategic Planning: Determine the best process available to achieve our goal Business Model The best process available to achieve our goal. A business model defines how and organization (should) interact with its environment to (execute) a unique (approach/set of tactics), attract the resources and build the capabilities required to execute the (model and therefore the overall) strategy, and create value for all stakeholders (page 43 of Applegate et al)

15. Lecture 1 MGMT 6180 - © 2012 Houman Younessi A business model defines how and organization (should) interact with its environment to (execute) a unique (approach/set of tactics), attract the resources and build the capabilities required to execute the (model and therefore the overall) strategy, and create value for all stakeholders (page 43 of Applegate et al) STRATEGIC Information Systems Management Strategic Planning: Do you buy it? Does it have to be unique? Sometimes established ways are as good if not better Do we/should we create value for ALL stakeholders? Sometimes we intentionally do not create value or actually create dis-value for some stakeholders (think of war strategy) Overall, not a bad definition and the one we more or less use (with the provisos here) for the rest of the course

16. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategic Planning: We must first analyze where we are. We must analyze our:  Current goal  Current environment  Current resources These each have several dimensions

17. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategic Planning: GOAL  Market Positioning (Determine whom to serve)  Product Positioning (Determine what to offer)  Boundary Positioning (Determine what not to offer, whom not to serve)  Value Positioning (Determine what “added” value to deliver to what “internal” stakeholder) Each “positioning” implies doing some “analysis” to determine the correct positioning

18. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategic Planning: ENVIRONMENT  Socio-cultural Positioning  Economic Positioning  Technological Positioning  Political and legal Positioning  Competitive Positioning with respect to forces that impact our goal from these perspectives

19. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategic Planning: Socio-cultural Positioning: Life-style changes Career expectations Rate of family formation Population growth rates Regional shifts in population and taste Life expectancies Race Party and organizational affiliation Etc. Economic Positioning: GNP trends Interest rates Money supply Inflation rates Wealth profile Unemployment levels Wage/price controls Devaluation/revaluations Energy availability Etc. Technological Positioning: Total organization R&D spending Total Industry R&D spending Patent protection New product innovation programs Technology transfer programs Productivity improvement programs Industry technology base (how sophisticated) Organization technology base Level of technology and likely change Cost structure, economies of scale Dependence on particular raw materials Etc.

20. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategic Planning: Political and Legal Positioning: Antitrust regulations Environmental protection laws Tax laws Technology specific special incentives Foreign trade regulations FDI special incentives Attitude towards global/foreign/your company(ies) HR laws and regulations Government stability Stability of special incentives Etc. Competitive Positioning: Number of competitors Size of competitors Distribution of competitors Barriers to entry Barriers to exit (cost of exit) Your product’s unique characteristics Marketing incentives possible Segmenting and sealing potential Size and growth of existing market Product demand elasticities Number, potential and distribution of customers Market structure (monopolistic/perfect competition) Etc.

21. Lecture 1 MGMT 6180 - © 2012 Houman Younessi STRATEGIC Information Systems Management Strategic Planning:RESOURCES  Marketing and Sales Capability Positioning  Production Capability Positioning  Financial Capability Positioning  Technological Capability Positioning (our technology)  Organizational and Human Resource Capability Positioning  Leadership Capability Positioning NOW:  Marketing and Sales Capability Positioning  Production Capability Positioning  Financial Capability Positioning  Technological Capability Positioning (our technology)  Organizational and Human Resource Capability Positioning  Leadership Capability Positioning NEEDED TO ATTAIN GOAL And then we need a GAP ANALYSIS