Chapter 11 Strategic Analysis The Strategic Management of Information Technology
The Strategic Management of Information Technology Chapter 11 Strategic Analysis
Transaction Processing System Input Process Output Systems Development Communication Information
Transaction Processing System Input Process Output Information Communication Systems Development
Six Key Messages For Managers And Analysts Process innovation is a new and desirable approach to transforming organizations and improving their performance An explicit approach to process innovation is important Information and information technology are powerful tools for enabling and implementing process innovation How a firm approaches organization and human resources is critical to enable and implement innovative processes Process innovation must occur within a strategic context and be guided by a vision of the future process state Innovation initiatives can benefit all manner of processes
Six Key Messages For Managers And Analysts Process innovation is a new and desirable approach to transforming organizations and improving their performance An explicit approach to process innovation is important Information and information technology are powerful tools for enabling and implementing process innovation How a firm approaches organization and human resources is critical to enable and implement innovative processes Process innovation must occur within a strategic context and be guided by a vision of the future process state Innovation initiatives can benefit all manner of processes
Strategic and Is Planning process StrategIc Business Strategic restment Pla IS Planning Plar Critical VISION Strategy Strategic Success VBP Fa Products Services Competitive External Social political Strategic Models
Strategic Business Planning Strategic IS Planning IS Investment Plan VISION Strategy External Strategic Models Strategic Goals Competitive Social Political Critical Success Factors CDS VBP CAS IS Products and Services S D M Strategic and IS Planning Process
REQUESTS AGREEMENTS WORK AGREEMENTS COMPLETED REACHED COMPLETIONS REACHED
REQUESTS COMPLETED AGREEMENTS REACHED AGREEMENTS REACHED WORK COMPLETIONS
Traditionalorganizations Customer-driven organizations Productand service planning Short-term focus Long-term focus Reactionary management Prevention-based management Management by objectives Customer-driven strategic planning process Measure of performance Bottom-line financ ial results Customer satis faction Quick returns on investment Market share Long-term profitability Quality orientation Attitudes toward Customers are irrational and a pain. Votaeporbthactistomer is important customers Customers are a bottleneck to Professional treatment and attention to profitability customers are required Quality of products and Provided according to organizational . Provided according to customer serices requirements requiremen Marketing focus .Increased market share and financ ial Careless about lost customers growth achieved through customer Process management Focus on error and defect setosa t error and defect prevention pproach oauctand service delivery . for customers to wait for It is best to provide fast-time-to-market lattitude s aI RoumAna sences People orientation People are the source of problems People are an organizations greatest and are burdens on the organization. resource Basis for decision Product-driven Customer-driven making Management by opinion Management by data Attitudes toward Hostile and careless Courteous and responsive customers lake It oI eave It altiude Imoa and iesp ecru altitude Improvement stratesgrisis management Continuous process improvement Management by fear and intimidation Mode of Career-driven and independent work Management-supported improvement operation Customers, suppliers, and process owners have .Teamwork between suppliers, process owners, and
Traditional organizations Customer-driven organizations Product and service planning •Short-term focus •Reactionary management •Management by objectives •Long-term focus •Prevention-based management •Customer-driven strategic planning process Measure of performance •Bottom-line financial results •Quick returns on investment •Customer satisfaction •Market share •Long-term profitability •Quality orientation Attitudes toward •Total productivity customers •Customers are irrational and a pain. •Customers are a bottleneck to profitability. •Voice of the customer is important •Professional treatment and attention to customers are required. Quality of products and services •Provided according to organizational requirements •Provided according to customer requirements and needs Marketing focus •Seller’s market •Careless about lost customers •Increased market share and financial growth achieved through customer satisfaction. Process management approach •Focus on error and defect detection •Focus on error and defect prevention Product and service delivery attitude •It is OK for customers to wait for products and services. •It is best to provide fast-time-to-market products and services People orientation •People are the source of problems and are burdens on the organization. •People are an organization’s greatest resource. Basis for decision making •Product-driven •Management by opinion •Customer-driven •Management by data Attitudes toward customers •Hostile and careless •“Take it or leave it” attitude •Courteous and responsive •Empathic and respectful attitude Improvement strategy•Crisis management •Management by fear and intimidation •Continuous process improvement •Total process management Mode of operation •Career-driven and independent work •Customers, supppliers, and process owners have nothing in common •Management-supported improvement •Teamwork between suppliers, process owners, and customers practiced
What drives the What the Competitor Is doing Competitor and Can De FUTURE GOALS CURRENT STRATEGY At all levels of management and in How the business is currently multiple dimensions competing COMPETITORS RESPONSE PROFILE Is the competitor satisfied with its current position? What likely moves or strategy shifts will the competitor make? Where is the competitor vulnerable? What will provoke the greatest and most effectiv retaliation by the competitor? ASSUMPTIONS CAPABILITIES Held about itself and the Both strenghts and industry weaknesses The Components of a Competitor Analysis
What Drives the Competitor What the Competitor Is Doing and Can Do FUTURE GOALS At all levels of management and in multiple dimensions CURRENT STRATEGY How the business is currently competing COMPETITORS RESPONSE PROFILE Is the competitor satisfied with its current position? What likely moves or strategy shifts will the competitor make? Where is the competitor vulnerable? What will provoke the greatest and most effective retaliation by the competitor? ASSUMPTIONS Held about itself and the industry CAPABILITIES Both strenghts and weaknesses The Components of a Competitor Analysis
Scope of electronic network integration Strategic alliance " Standard bus iness contracts EDI Tightly coupled Collaborative Business network redesign Proces Business Hehes- governance Inventory triggers Electronic Competitive 1 Transactions coupled infrastructure - advantage Common role IT governance
Scope of electronic integration Business governance Tightly coupled Loosely coupled Common role Unique role IT governance Transactions Inventory triggers Process linkages Expertise Electronic infrastructure Competitive advantage Collaborative advantage Business network redesign “EDI” “Standard business contracts” “Strategic alliances” “Knowledge networks
Conventional and ir design variables Class of variable Conventional and design Source It design variables Structual Definition of organizational Nadler and Tushman Virtual components subunits Galbraith, Thompson Determining purpose, output of subunits Nadler and Tushman Galbraith Thompson Reporting mechanisms Nadler and Tushman; Linking mechanisms Mintzberg Galbraith: Nadler and Work process Control mechnisms Electronic linking Tushman Staffing Nadler and tushman asKs Mintzberg Technological leveling Communications Workflows Nadler Tushman Production automation Dependencies Virtual components Output of processes Nadler Tushman Interorganizational Electronic communications relations Buffers Thompson Technological matrixing Formal channels Informal communications/ collaboration Galbraith Electronic customer/supplier Make versus buy decision Exchange of materials Mintzberg Electronic customer/supplier Communications relationships mechanisms Mintzberg Electronic linking
Conventional and IT Design Variables Class of variable Conventional and design variables Source IT design variables Structual Work process Communications Interorganizational relations Definition of organizational subunits Determining purpose, output of subunits Reporting mechanisms Linking mechanisms Control mechnisms Staffing Tasks Workflows Dependencies Output of processes Buffers Formal channels Informal communications/ collaboration Make versus buy decision Exchange of materials Communications mechanisms Nadler and Tushman; Galbraith; Thompson Nadler and Tushman; Galbraith; Thompson Nadler and Tushman; Mintzberg Galbraith; Nadler and Tushman Nadler and Tushman Mintzberg Nadler & Tushman Nadler & Tushman Thompson Galbraith Mintzberg Mintzberg Virtual components Electronic linking Technological leveling Production automation Virtual components Electronic communications Technological metrixing Electronic customer/ supplier relationships Electronic customer/supplier relationships Electronic linking
IT Design varia bles and four Vertically Prototypical Organizations irtual Traditional ntegrated orgaizations conglomerates Virtual components Substitute electronic Substitute electronic Use to replace Force components into for physical for physical isolated components electronic subsidiary componenets componenets Electronic linking and Essential part communications Essential part Essential part Optional Technological Use for coordination and matrixing Participate in Use for Use for various task forces matrixed group coord ination groups Technological leveling Use to supervise Use to reduce layer management remote workers and of management groups Key to coordinating work Electronic workflows Use where applicable units Crucial part of Crucial part of to restructure work strategy Coordinate production Production Use where applicable among work units automation Key to tions Communicate Potentially important Electronic customer/ esign supplier links Used extensively Used extensively
Virtual Negotiated organizations Traditional Vertically integrated conglomerates IT Design Variables and Four Prototypical Organizations Virtual components Electronic linking and communications Technological matrixing Technological leveling Electronic workflows Production automation Electronic customer/ supplier links Substitute electronic for physical componenets Essential part Participate in matrixed group Use to supervise remote workers and groups Crucial part of strategy NA Used extensively Substitute electronic for physical componenets Essential part Use for coordination NA Crucial part of strategy Communicate designs Used extensively Use to replace isolated components Optional Use for various groups Use to reduce layers of management Use where applicable to restructure work Use where applicable Potentially important Force components into electronic subsidiary Essential part Use for coordination and task forces Use to reduce layers of management Key to coordinating work units Coordinate production among work units Key to operations
