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TYPES, STRATEGIC ROLE & IMPACT

BY

CHANDRA S. AMARAVADI

INFORMATION SYSTEMS IN ORGANIZATIONS - II

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IN THIS PRESENTATION

Definition of organization Type of organizations and defining features An overview of the different functional areas The different types of information systems TP, “MIS”, DSS, OIS, ESS

The firm and its environment IT and business strategy Impact of information systems

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INFORMATION SYSTEMS AND THE ENVIRONMENT

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THE ENVIRONMENT

What is the business environment? What property/properties does it exhibit?

From this point of view, how are organizationscharacterized?

organi-zation

competition

supplier

cust

omer

government

bankstrade

groups

policy

mak

ing

bodi

es

ENVIRONMENT OF AN ORGANIZATION

gener

al

envi

ronm

ent

ENVIRONMENT

concerned with inputs and outputs (e.g. customers, suppliers, competitors)

governs rules of the game(e.g. banks, special groups, government)

General environmentconcerned with socio economic trends(e.g. cultural characteristics, demographics etc.)

Task environment

Institutional environment

Change Structure

Change Strategy

Change SOPs

How viable are these methods?

ENVIRONMENTAL CHANGE

ADAPTATION MECHANISMS

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ADAPTATION MECHANISMS..

How does a typical consumer products companyadapt, ifa) gas prices increase?b) one of its products misses a sales target?c) there are tax laws that favor business expansion?d) there are permanent, industry-wide labor shortages?e) if it has to market globally instead of locally?

Strategy is concerned with achieving a fit with Strategy is concerned with achieving a fit with the environmentthe environment

Business level -- What products should the firm offer? -- “Product mix”, What markets?

Industry level -- How should the firm compete? by marketing? by raising prices?

How is strategic planning carried out?

STRATEGY

TASK ENVIRONMENT

ENVIRONMENTALCHANGE

STRATEGICCHANGES

ORGANIZATION

RELATIONSHIP BETWEEN ENV. ORGANIZATION & STRATEGY

Competitor

Customer

Competitor

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THE ROLE OF IS

ENVIRONMENT

STRATEGY,SOPS..

ORGANIZATION

The Role of IS/IT is mainly to support strategy

env. changes

changesinfluence

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INFORMATION SYSTEMS AND BUSINESS STRATEGY

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How can information systems supportcorporate strategy?

INFORMATION SYSTEMS AND BUSINESS STRATEGY

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INFORMATION SYSTEMS AND BUSINESS STRATEGY

Business levelValue chainSupply chain managementIT based products/services

Industry levelInformation partnershipsCompetitive forces

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Value chain IT-based products and services Supply Chain management & ECR

BUSINESS LEVEL STRATEGY

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PRIMARY: Directly related to production & distribution.

SUPPORT: Infrastructure, human resources, technology, procurement

VALUE CHAIN

Activities that add value to products, services

Contributes to product or service life cycle

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PORTER – Support value chain

Purchasing, warehousing, production, distribution

Support activities: accounting, HR

Support activities: finance

VALUE CHAIN..

What is the value chain for a law firm?

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SUPPLY CHAIN MANAGEMENT & ECR

Integration of supplier, distributor, and customer logisticsRequirements into one cohesive process

Supply Chain Management

The collection of entities (manufacturing plants, distributioncenters, conveyances, retail outlets, people, and information),which are linked together into processes supplying goods orservices from source to consumption.

Supply Chain

Systems linking customers needs to production and distribution.Efficient Customer Response Systems

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IT BASED PRODUCTS/SERVICES

CBT Credit cards Financial products I2 example

Those where information/IT is a major component of the product.

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Information partnerships Competitive forces

INDUSTRY-LEVEL STRATEGIES

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INFORMATION PARTNERSHIPS

Industry level collaborations Involves information sharing A limited collaboration

Credit cards and frequent flier programs Code sharing?

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THE FIRM

TRADITIONAL COMPETITION

NEW MARKET ENTRANTS

SUPPLIERS CUSTOMERS

SUBSTITUTE PRODUCTS & SERVICES

COMPETITIVE FORCES

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COMPETITIVE FORCES MODEL..

Compete by raising entry-barriers Discourage switching to substitutes Use IT-supported standards Tie-in customers using IT products

Examples?

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IMPACT OF INFORMATION SYSTEMS

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ORGANIZATIONS & INFORMATION TECHNOLOGY

Impact of information systems on the organization Strategic (already discussed)

Impact of the organization on the IS

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MEDIATING FACTORS: MEDIATING FACTORS: Environment Environment CultureCultureStructure Structure Standard Procedures Standard Procedures Politics Politics Management DecisionsManagement Decisions

ORGANIZATIONSORGANIZATIONSINFORMATION INFORMATION TECHNOLOGYTECHNOLOGY

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IMPACT OF THE ORGANIZATION ON THE IT FUNCTION

Organization of IS (how IT is organized) Decides role of IS (what IT will do for the org.)

Concerned with how the organization controls IT department

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THE END