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The relationship between information system functions and corporate strategy.

Extracts from this document...

Introduction

1 INTRODUCTION 15 years ago, the relationship between information system functions and corporate strategy was not of much interest to Top Management of firms. Information Systems (IS) Technology was only concerned with automating functions at the operational level of organisations such as transaction processing. Because they were only concerned with making functions more efficient, it was easy to assess and justify the value of purchasing or upgrading the system. Evaluation was generally aimed at the identification and quantification of costs and benefits. As technology evolved, IS began to take on many more roles in an organisation such as management information systems (MIS), and data communication systems. MIS help the people concerned with organisation's Strategy to make better decisions via means of various analyses from collected facts and figures. Data communication systems were brought about due to integration of telecommunication with IS functions and helps the people inside the organisation to communicate more effectively between themselves and to others (suppliers and customers). World Wide Web, the Internet, and ubiquitous personal computing and communication devices have already changed the way people throughout the world gain access to information and interact with one another. These systems however turned out to be both complex and difficult to measure the benefits of because such processes were deeply embedded in business processes. These systems catered to the strategic demands of organizations, i.e., serving the business goals and creating competitive advantage as well as meeting their data processing and MIS needs. Organisations began to realise Information systems not merely as tools for cutting costs but as means to adding value. With all these new roles, it was inevitable that Information Systems became a key element involved for a successful organisation. Ernst & Young state that the linkage of business, Information systems, and Human Resources is crucial to the well being of an organisation. The strategic tree shows that when Information System Strategy is aligned correctly with Human Resource Strategy, this will result in adding organisational effectiveness as well as the traditional efficiency gains (automation of tasks). ...read more.

Middle

The Board of Members who had no experience in IT thought the change was to automate previously manual processes for added efficiency. This idea, as discussed before, was fitting till the 70s and perhaps 80s. Nowadays, due to the increased power of computers, IS has emerged as an agent of integration and the enabler of new competitiveness for today's enterprise in the global marketplace. It is important that your IS strategy is linked closely to your Organisation, and Human Resource strategy in order for your organisation to prosper. The board viewed the IS as a technical system separable from its organisational context, history, and infrastructure. They thought that once the system was built, it would just automatically be implemented without any problems. This might have happened had the IS been a simple system. However, the IS that Symons were implementing was a Strategic Information System. In other words, it was an important system that affects the organisational performance but is also directly linked to the organisational strategy. The list of areas where the system was to be implemented shows that the system was anything but simple. * Sales order processing * Production planning * Shop floor production control * Finished Goods stock control * Packaging stock control * Purchasing * Production Statistics This wasn't the case for AA. They had clear Organisational vision and views set out from the beginning. Their reason for the new system was to improve the standards of customer service for customer loyalty and to reduce their cost which is their organisational strategy. This resulted in three main business requirements for the new IS. - Development of a nationally-based system - Separation of the functions - The provision of a base for new products or services AA's system was definitely a business-led system. They had the idea for AAHELP long before technology caught up enough for the system to be implemented. ...read more.

Conclusion

Besides their lack of experience with SISP, absence of a comprehensive, structured, easy to use methodology may also be a main reason for it. A comprehensive methodology for SISP will need to incorporate both the `impact' and the `align' views. Method/1 incorporates Value Chain Analysis. IE supports Critical Success Factors Analysis. Even BSP is now incorporating CSFs. Since it is difficult to find a team leader who meets the criteria specified in SISP methodologies, it is proposed that detailed guidelines on how to perform a SISP study by way of an automated tool will help. Such a tool will make the task more structured and less leader-critical. Based on the case studies and a careful study of the current methodologies, certain generic steps in a typical SISP formulation can be identified. Study Internal Business Environment This is to determine the business IS needs. The internal business environment is comprised of mission of the organization, its objectives, strategies and plans, business activities, the organizational environment, core competencies, its critical success factors and the internal value chain. Study external business environment This helps an organization focus attention on the forces and pressure groups it encounters. These external forces exert a very strong influence on the business strategy of an organization. Factors to be considered here are the industry that the organization is in and that industry's critical success factors, competitive position of the organization in the industry, relationship with major buyers and suppliers. Study internal IS/IT environment This is mainly comprised of the current and planned applications portfolio that supports the business. Other aspects to be considered here are the present IS organization, skills and attitudes of people in the organization, IT environment and the IS/IT budgets. External IS/IT Environment This consists of scanning the environment for available and emerging technologies and their business implications. An important aspect of this is to understand how the competitors are using information technology. ADD A CONCLUSION 1 Strategic Management Support Systems pg 219 2 AA CASE STUDY pg 30 3 Symons Case Study pg 7 4 AA Case Study pg 21 ?? ?? ?? ?? ...read more.

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