Strategic use of information technology

Teacher: Hello, Student. What do you know about IT (IT)?

STUDENT: Well, I know most software is full of "bugs"! By the way, why are these errors in programs called "bugs"?

Teacher: Computer "bugs" have been around in 1945 Mark II were accused (gradually) of gravel fixed in exchange. Nowadays, the term refers to defects in programming – commands that fail to achieve the desired results. But I'm sure you need to know more about it than the fact that the programs have a bug!

Student: Recently, I read an interesting article written by John Diebold years ago. Allow me to quote it:

"Information technology … increasingly increases the key to macroeconomic welfare, affecting almost all industries and services. In order to monitor and respond to market demands or make informed decisions, information technology will change the world more permanently and significantly than any other technology found in history and will lead to transformation of civilization to match. "

Teacher: Interesting. There is no doubt that information technology is now high power with the possibility of influencing the number of organizations basically.

The impact of information technology on business operations has been high and will increase significantly.

There is no doubt that change from industrial economy to information-oriented service economy is under way; and no one knows when the process will slow down.

Basically, indicators and traditional sizes of time, space and mass will no longer be the building of information products. Unlike a standardized product created in the mass market of a industrial year, electronic banking services, for example, are independent and intangible, provide immediate service and are not tied to the bank's physical location.

Student: Online courses at AmbaiU are a good example! Students from all over the world can immediately approach the course. Growing growth in WWW service has traditionally been an important factor in the growth of information technology in general.

Teacher: True truly. Environmental developments such as globalization and increased international competition are accelerating the movement towards increased use of information by companies. Approvals worldwide harmonization of action and the need to respond quickly to global competition concerns have emphasized the importance of being in the current business context. Dramatic technology development in hardware, software, database and telecommunications has simultaneously pushed the use of information technology further.

Student: So is the sky limit for it?

Teacher: Not exactly. At the same time there are several factors that combat the rapid dissemination of information technology. While this is still slow development of a particular software, there are long-standing difficulties in measuring information technology in order to measure information technology (constraints of IT investments), database integration and lack of standards (for business relationships).

STUDENT: I ​​also think it has been "too investment" in information technology in the last decade of the 20th century. century and even at the beginning of the 21st century. And what about it and strategic management?

Teacher. True, we are primarily worried about the likely impact of information technology on the implementation of strategic management. The reason for adopting such an attitude reflects the fundamental importance that information technology can affect the core of business activities: choice of products, markets and technology (corporate orientation) and competitive practices within each product's market area (business plan).

Student: I assume that the role of information technology is becoming a leader than traditional information system (IS), and is becoming a general concern and challenge in management.

Teacher: Good observation. We will look at three links that link three important concepts, strategic management (SM), information technology (IT) and management of information systems (IS) functions.

* Link 1: Information Systems Management Information System

According to a traditional survey, IS service (such as accounting, human resources or employment) is committed to efficient data processing and management of reporting and monitoring systems. According to such considerations, systems are designed to accommodate information requirements for different administrative roles, and are analyzed using standard information on the requirements for information processing methods. As a result, systems are evaluated with criteria such as temporal, format quality and reliability, reflecting the technical capabilities of the system. The hypothesis is that IT's role was largely conceived as the technical core of MIS.

Therefore, the important features of this related hardware and software support for the information showcase and design flexibility to support minor settings in the information requirements or to respond to the fast-changing technical core of the hardware mechanism.

Strategic planning, following unorganized decision-making, gained minimal support from traditional ideology and shared definition of IS.

Link 2: Strategic Management with Information Systems

The description of Link 1 reflects the view that the IS activity charter was deducted directly from the information technology assessment and had no clear relation to strategic choice of business and business levels. This viewpoint was typical of the actual situation until the late 1960s and early 1970's, when the need to tailor the design of MIS with strategic orientation requirements became a currency. In 1968 McKinsey & Co. published. a report called Unlocking Profits of the PC that called for a formal link between design and implementation of MIS and plans and business goals. This version encouraged executives to visualize the role of computers in corporate organizations as something about data processing resources at the operational level of the organization and more as a system that supports its policies.

STUDENT: Even before the McKinsey report, William King suggested that the IS policy be compiled (set of IS, IS constraints and IS design plans) should be obtained from the organization's "organization" organization, objectives and methods) .

Teacher: You are a well-read student, definitely!

STUDENT: You may remember I'm from "Your Family." And I also hear a complaint from my IT relatives: while concern is in an MIS discipline to ensure that MIS is designed according to the company's strategic concepts, the link in the other direction, from a strategic context to MIS, is still heavily ignored.

Teacher: True, but this changes fast. Also, some authors have emphasized the possibility of using an information and information system for strategic planning. As William King noted in the editorial board of Management Information Systems quarterly, — Information (and IS) tend to be the primary source (competitive) option in the marketplace rather than merely as a resource for managing performance or service that is regularly switched on and off After needs.

Student: Can we assume that many see the relationship between policy management and IS today as a two-way, parallel link, which includes the strategic role of the IS Fortress?

Teacher: Certainly, and it was about time. In the transition towards a strategic role, the goals and tasks of the management of the information system are important transformations. The systems are no longer reviewed in terms of information support for operational decisions, but in terms of implementing the strategic direction of the company, in particular achieving competitiveness in the market.

Lease agreement information system to achieve competitiveness is called a "strategic information system" and different from that which is more action-oriented to MIS. Indeed, MIS has been a traditional concern with operational management systems for relatively structured decisions based on available internal data. However, a strategic information system is designed to support reliable undeveloped decisions, especially those closely linked to the operation of the marketplace.

Student: I hear that such decisions usually require a mixture of internal and external data that: are either well organized or not fully specified.

Teacher: Exactly. While not always possible to fully define management information systems and strategic information systems, the ideological distinction is high enough to be recognized as an ideological distinction between policy and operational decisions.

Let me mention a few examples of strategic information systems working with real companies:

American Airlines: SABER Booking System-Set in most travel agencies to book airline, hotel and car rental.

American Hospital Supply Co.: ASAP-series entry system-put in over 4500 clinics to order supplies online. The system is interconnected with some support systems

Citicorp High usage of automated teller machines and international trading systems. Some systems that support their electronic banking services.

McKesson Corp. Economost-Order entry system that supports customers with inventory and analysis of sales.

United Airlines APOLLO-tour reservation system with several augmented services installed in about 7700 organizations.

Student, can you think of certain strategic goals that any of these companies have achieved through IS?

STUDENT: Well, I'm sure SABER provides American Airlines with critical operational data that can be used for strategic decisions; Travel agencies that are fond of SABER are more likely to book on American more than other carriers.

Teacher: Yes, much so the US government has entered and set many goals on SABER's propensity to support AA!

Strategic Information Systems achieve their goals by a few methods, while two have particular attention. These are: (1) information restructuring flows within an organization to provide competitive edge in competition and / or (2) the development of organizational systems that extend beyond the traditional boundaries of a single nongovernmental organization.

Student: Are these settings exclusively excluded?

Teacher: No, but we will discuss them independently.

Information Flow Management

Let's consider discussing an airline that uses timely data to increase the charging factor. Perhaps one of the most important factors to be successful in airline operations. By developing a strategic information system designed not only to continuously collect airline data but also to compare current sales against historical patterns, the airline can teach its own broker (as well as travel agency) to change the number of coupons available on a particular flight after current level of pre-bookings.

Student: Similarly, I think similar benefits can accumulate in a hotel, where key features of a competitive position are occupancy rates.

Teacher: Right. And basic notifications of temporary information can be extended from the context of service industries to production. Consider the case of an oil company that is able to communicate with its dealers immediately and promptly as oil prices change to ensure minimal delays between prices at headquarters and its implementation in stores.

Student: But in these pictures, it does not affect the fundamental strategic business.

Teacher. Right. However, implementation of such decisions through organizational structures and channels is facilitated by the use of information technology, leading to better strategic results.

Communication Technology Communication Technologies potentially communicate to achieve competitive results that extend beyond the organization of information flows for the distribution and utilization of information-related relationships with more diverse parties in the market.

STUDENT: You are using rather complex sentences today! In simple terms, what is meant by the fact that a strategic information system between organizations is a system beyond the reach of one of the organizations that connect with many organizations.

Teacher: Happy to see you understand! The potential structure of such links (and, consequently, the benefits of achieving competitive advantage) is perhaps one of the most important reasons for the increased concern of information systems from a strategic management perspective.

The rail industry, which has one of the highest levels of "penetration" of electronic data transmission (EDI) of all industries, shows some levels of system-based systems. And relatively new industries like messengers (FedEx, UPS, etc.) are good examples too.

Also mention me McKesson Drug Company. The case of McKesson is often cited as one of the most successful examples of conversion transformation using information technology capabilities. McKesson is a US pharmaceutical company in the country, covering 100 percent of its orders electronically through pharmacies through the economy. A customer orders by making a single ship through the store with a handheld ordering device, enter a product identifier or a barcode scanner. Restructuring volume is specified on the storage label. Once the total cost has been entered, it is sent to the data processing service.

McKesson clearly realized the efficiency to improve its profitability. Despite the fact that the company had no share in comparison with the main distributor competition, it achieved significant strategic benefits in sales and market share compared with larger competition. The system also achieved "increased customer relationship with McKesson", which is fundamental to strategic planning. In addition, McKesson offers a host of other services based on data received from the order number.

The company also provides other healthcare providers with specialized strategic schemes. The following announcement is a good example:

In May 2003, McKesson Corporation announced that LibertyHealth in Jersey City, NJ, signed an eight-year $ 47 million for products and services designed to transform the use of clinical information to support patient care in the three hospital care . LibertyHealth joined the McKesson's Horizon Clinical (TM) suite (of applications) to enhance patient safety, reduce drug defects, and increase patient alertings by providing physicians and other caregivers with better access to information.

"We have the opportunity to reinvest the use of information technology to support patient care and strength when we open our new hospital," said Dr. Jonathan Metsch, President and Chief of Liberty Health. manager. "To create the best environment care, it says we need to provide the latest medical devices, but we also need to provide an advanced clinical solution to support our 900 doctors and nurses as they provide healthcare for this community of 600,000 people. Because we agree with McKesson, we get great, sophisticated clinical applications. "

Link 3: Strategic Management with Information Technology

In recent years, several new and powerful forces in the technical and market environment need to know the relationship between policy management and information technology in terms of the fact that IT influences the formulation of business strategy rather than supporting only its implementation.

Possible innovative methods of competitiveness and new products and services that can be provided by providing managers with different possibilities and threats. In view of the general explosions of electricity and telecommunications technology (integrated voice and data, the Internet), some new business applications can be (and have been) developed in areas that directly increase efficiency and efficiency in the market.

Example: Merrill Lynch Merrill Lynch's policy shows the potential of information technology to develop a better deputy (or service) and change the definition and domain of business. The introduction of Cash Management Account (CMA) by Merrill Lynch was a revolution in order to redefine the concept of financial services in the market characterized by traditional banking institutions. A new business concept was built to integrate diverse financial instruments under one common umbrella so that an individual investor can benefit from transferring money over them and benefiting from the "float" that the banks would have liked to enjoy. This account allowed the integration of four basic services to investors: (1) Automatic investment money and money market income, (2) Credit through a standard account account, (3) ATM or debit card cancellation, and 4) Investment advice for managing and distributing the account.

The policy was intended not to be implemented without using IT because it requires daily swaps across different bills to send credit card costs, controls, securities and deposits, as well as developing daily updated credit ratings for each account holder . This complex data processing operation is not related to the business concept, but it is fundamental to ideology and its operation. The importance of information technology in this policy is perhaps best highlighted by the fact that Merrill Lynch got a patent for cash management billing. The amounts generated by this product for Merrill Lynch were quite significant.

Although several patents (coverage of patent protection) have revealed this basic concept in recent years, nobody has the other to match the success of Merrill Lynch's product.

Other companies that have used information technology to break down traditional barriers to industry in the service sector are Sears, which is now integrated financial services. Citicorp, now investment and realtor and bank; and American Express, who is always strong at the travel agency, currently playing international banking, collateral and securities, as well as becoming a financial and information provider. Indeed, the entire industry is transformed because of parallel but related forces: abolition and technology.


Leave a Reply

Your email address will not be published. Required fields are marked *