TYPES, STRATEGIC ROLE

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INFORMATION SYSTEMS IN ORGANIZATIONS - II
TYPES, STRATEGIC ROLE IMPACT BY CHANDRA S.
AMARAVADI
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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 organizations characterized
?
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ENVIRONMENT OF AN ORGANIZATION
government
banks
general
bodies
supplier
customer
organi- zation
competition
trade groups
making
environment
policy
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ENVIRONMENT
Task environment
concerned with inputs and outputs (e.g.
customers, suppliers, competitors)
Institutional environment
governs rules of the game (e.g. banks, special
groups, government)
General environment concerned with socio economic
trends (e.g. cultural characteristics,
demographics etc.)
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ADAPTATION MECHANISMS
ENVIRONMENTAL CHANGE
Change Structure
Change Strategy
Change SOPs
How viable are these methods?
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ADAPTATION MECHANISMS..
How does a typical consumer products
company adapt, if a) 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?
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STRATEGY
Strategy is concerned with achieving a fit with
the 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?
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RELATIONSHIP BETWEEN ENV. ORGANIZATION STRATEGY
STRATEGIC CHANGES
ENVIRONMENTAL CHANGE
ORGANIZATION
TASK ENVIRONMENT
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THE ROLE OF IS
env. changes
ENVIRONMENT
ORGANIZATION
changes
influence
STRATEGY, SOPS..
The Role of IS/IT is mainly to support strategy
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
How can information systems support corporate
strategy?
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INFORMATION SYSTEMS AND BUSINESS STRATEGY

• Business level
• Value chain
• Supply chain management
• IT based products/services
• Industry level
• Information partnerships
• Competitive forces

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BUSINESS LEVEL STRATEGY

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

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VALUE CHAIN
Activities that add value to products,
services Contributes to product or service life
cycle

• PRIMARY Directly related to production
  distribution.
• SUPPORT Infrastructure, human resources,
  technology, procurement

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VALUE CHAIN..
PORTER Support value chain
Support activities accounting, HR
Purchasing, warehousing, production, distribution
Support activities finance
What is the value chain for a law firm?
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SUPPLY CHAIN MANAGEMENT ECR
Supply Chain
The collection of entities (manufacturing plants,
distribution centers, conveyances, retail
outlets, people, and information), which are
linked together into processes supplying goods
or services from source to consumption.
Supply Chain Management
Integration of supplier, distributor, and
customer logistics Requirements into one cohesive
process
Efficient Customer Response Systems
Systems linking customers needs to production and
distribution.
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IT BASED PRODUCTS/SERVICES
Those where information/IT is a major component
of the product.

• CBT
• Credit cards
• Financial products
• I2 example

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INDUSTRY-LEVEL STRATEGIES

• Information partnerships
• Competitive forces

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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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COMPETITIVE FORCES
NEW MARKET ENTRANTS
SUBSTITUTE PRODUCTS SERVICES
TRADITIONAL COMPETITION
THE FIRM
SUPPLIERS
CUSTOMERS
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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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ORGANIZATIONS INFORMATION TECHNOLOGY
MEDIATING FACTORS Environment
Culture Structure
Standard Procedures Politics
Management Decisions
INFORMATION TECHNOLOGY
ORGANIZATIONS
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IMPACT OF THE ORGANIZATION ON THE IT FUNCTION
Concerned with how the organization controls IT
department

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

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THE END