MBUS 0626 CH 1 Systems Strategy Triangle 1. Info Systems Strategy Triangle a.

. EX: BP failure highlighted need for proper alignment of biz strategy, info systems (IS), and org mechanisms & practices when designing the safety mechanisms of an oilrig i. Issues with org culture, process, and leadership b. GMs MUST take/play a role in decisions about IS; seek to understand consequences of using technologies relevant to the biz envoi c. GMs MUST ask questions when things are not clear d. GMs that leave IS decisions to IS professionals put Orgs and selves at a disadvantage/risk e. IS Strategy Triangle relates biz strategy with IS strategy and Org strategy f. Successful firms have an overriding biz strategy that drives both org strategy and IS strategy i. Decisions w/respect to structure, hiring, vendor policies, & other components of org strategy, decisions regarding applications, hardware, & other IS components = driven by bizs objectives, strategies, & tactics ii. MUST Balance three strategies to be successful iii. One strategy changes, the others must be adjusted as well, CONSTANTLY iv. Each decision has consequences, thus managers need to ensure that all strategies are considered when making an adjustment to just one v. Alignment can be fixed if issues arise; Alignment situation in which a companys current & emerging biz strategy is enabled, supported, and unconstrained by technology 1. Higher states = synchronization & convergence Orgs should strive a. Sync enables current biz strategy, anticipates future strategy b. Converg biz strategy & tech strategy are intertwined & managers operate interchangeably 2. Alignment means any of these states! g. Focus of Book = Ask the right questions, baseline framework to develop questions, and a basic understanding on how to answer those questions 2. Brief Overview of Business Strategy Frameworks a. Strategy = coordinated set of actions to fulfill objectives, purposes, & goals. i. Essence set limits on what to accomplish b. Mission starting point of strategy, = clear and compelling statement that unifies an orgs effort & describes what the firm is all about (Purpose) i. Set measurable objectives & performance targets c. Biz Strategy = plan articulating where a biz seeks to go & how it expects to get there; means by which it communicates its goals i. MGMT plan to respond to market forces, customer demands, and org capabilities 1. Market Forces create competitive context for biz 2. Customer demand wants/needs of IDV & companies who purchase products & services

MBUS 0626 3. Org capabilities skills & experience that give Org a currency that can add value in a marketplace 4. EX: Dell direct-to-customer model, no inventories, kept costs down d. The Generic Strategies Framework (Porter) basis of above-avg performance = sustainable competitive advantage; three strategies i. Cost leadership (IND Wide) org aims to be the lowest-cost producer in marketplace; minimize costs leads to above-avg performance; good quality to others; generally only one cost leader w/in industry; can lead to price war (WALMART) 1. Use of mass distro, economies of scale, & IS to generate efficiencies ii. Differentiation (IND Wide) uniqueness perceived by customer; qual dimensions important to customer and add value to one or more dimensions 1. Price charge by differentiator (Org) must seem fair to competitors price (PROGRESSIVE) iii. Focus (Segment Only) tailor offerings to a narrow group of customers 1. Cost focus cost adv w/in segment 2. Differentiation focus distinguish products w/in segment 3. Marriot / Ritz-Carlton a. M Kiosk & CRM b. RC Class system of CRM PAX use to improve current/future visits 4. JetBlue Low-cost coupled with unique customer experience iv. Application to IS 1. Understand which strategy is chosen by a firm is critical to choosing IS to complement the strategy e. Dynamic Environment Strategies orgs need to adapt instantly or they could fail i. Generic Strategy good for = Diagnostics, how biz seeks to profit, prescriptions, OR building new opportunities for adv 1. Balancing of countervailing competitive forces, substitute products & services = good tool for THINKING about strategy 2. Developed when rate of change was slow & manageable ii. Hyper-competition speed & aggressiveness of the moves & countermoves in any given market create an enviro in which adv are rapidly created & eroded 1. Value agility = competitive adv! 2. Build in components of Biz Intelligence; still focus on customer satisfaction, profit maximization, & other biz goal & beliefs a. Predict new opportunities, org designs that can sense & restructure & respond quickly; strategic signaling & actions that surprise & confuse competitors 3. Most striking in sectors that spend most on IT iii. Destroy your Biz (DYB) = Creative Destruction Jack Welch @ GE 1. Must recognize weakness, Act as competition to ID issues 2. Use Grow Your Biz (GYB) strategy to find fresh ways to reach new customers and serve current customers

MBUS 0626 a. Apple iPod leads to iPhone, mac leads to iPad b. Gillette Mach3 leads to Fusion iv. Application to IS 1. IS are critical to achieving the speed needed for moves and countermoves; IS are in a constant state of flux or development f. Why are Strategic Models Essential to Planning for Information Systems? Must be able to answer the following questions: i. What is the biz goal or obj? ii. What is the plan for achieving it? What is the role of IS in this plan? iii. Who are the crucial competitors & partners, and what is required of a successful player in this marketplace? iv. What are the industry forces in this marketplace? 3. Brief Overview of Organizational Strategies a. Org Strategy orgs design as well as the choices it makes to define, set up, coordinate, and control its work processes b. Answers Q: How will firm organize to achieve its goals and implement its biz strategy? i. Biz Diamond (Harold Leavitt) crucial components of an orgs plan; all interrelated; change one thing, need to realize how it affects other aspects of biz

1. Usefulness in IS using IS in Org will affect each of these components; use this framework to ID where these impacts are likely to occur ii. Managerial levers Model success of Orgs strategy is best combo of org, control, & cultural variables

iii. 1. Usefulness in IS more detailed than biz diamond, gives specific areas where IS can be used to manage Org & to change the Org iv. Understanding Org strategy means answering the following: 1. What are the important structures & reporting relationships w/in the Org? 2. Who holds the decision rights to critical decisions?

MBUS 0626 3. What are the important people-based networks (social & informational) & how can we use them to get work done better? 4. What are the characteristics, experiences, & skill levels of the people w/in the Org? 5. What are the key biz processes? 6. What control systems (MGMT & measurement systems) are in place? 7. What are the culture, values, & beliefs of the Org? 4. Social Business Lens: Building a Social Business Strategy a. SBS = plan of how the firm will use Social IT, aligned with orgs strategy and IS strategy. i. Vision of how the biz would operate if it seamlessly and thoroughly incorporate social & collaborative capabilities throughout the biz model b. Collaboration using social IT to extend reach of stakeholders; find/connect with each other to share ideas, info, and expertise c. Engagement involve stakeholders in traditional biz of enterprise; communities & blogs allow IDVs to join in conversations, crate new conversations, offer support for each other, create a deeper feeling of connection to Org, brand, enterprise d. Innovation ID, describe, prioritize, & create new ideas for the Org; offer super idea box, vote for favorite idea 5. Brief Overview of Info Systems Strategy a. IS Strategy plan an Org uses to provide information services i. Allows Org to implement its biz strategy ii. JB: define what biz needs, then go find technology to support that iii. Function of: 1. Competition What does the customer want & what does the competition do? 2. Positioning in what ways does the firm want to compete? 3. Capabilities - what can the firm do? iv. IS helps determine the Orgs capabilities

b. c. Above graph gives managers High-level view of relation between for IS infrastructure components & other resource considerations that are keys to IS strategy