STRATEGIC INFORMATION SYSTEMS AND REORGANIZATION

Strategic information systems (SISs) support or shape competitive strategy. They can be outward (customers) or inward (organization) oriented. They provide an organization with a competitive edge in its industry.

Porter's model of competitive industry forces is frequently used to explain how companies can increase their competitiveness. It lists five forces that shape competition. Response strategies and related SIS cab be used to lessen these forces. To counter the forces one can use strategies such as cost leadership, differentiation, and focus, which can be facilitated by SIS.

SIS can be used by both suppliers of goods and suppliers of services. A variety of companies use SIS to complete in their respective industries in cost leadership, quality, speed, growth, innovation, internal efficiency, and customers orientation. An SIS may provide support for more than one strategy. Today companies use the Internet, intranets, EDI, global ISDN networks, decision support systems, and intelligent systems to increase quality, productivity, and speed.

Continual incremental improvements in business processes are necessary but are frequently insufficient to deal with today's business pressures. One reason is that hierarchical organizations tend to be bureaucratic and inflexible and have difficulty in responding to cross-functional needs. BPR is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements. IT is the major enabler of BPR.

The trend is for organizations that are reengineered to behave like networks and operate in an online, real-time, empowered mode of operation. BPR applications include: (a) mass customization, which enables production of customized goods by methods of mass production at a low cost; (b) cycle time reduction, which is an essential part of many BPR projects and is usually attainable only by IT support; (c) self-directed teams, which can be permanent and are then dissolved; (d) empowerment of employees, which is done by providing them with IT-supported information and knowledge so they can work autonomously to make the necessary decisions.

One of the innovative BPR strategies is the creation of business alliances and virtual corporations. A virtual corporation is an organization composed of several business partners sharing costs and resources for the purpose of producing a product or service. The VC can be temporary or it can be permanent. It is supported by telecommunications, extranets, EDI, and groupware software.

 

INFORMATION SYSTEMS DEVELOPMENT

Information systems planning begins with the strategic plan of the organization, which states the firm's overall mission, the goals that follow from the mission, and the board steps necessary to reach these goals. The organizational strategic plan and the existing IT architecture provide the inputs in developing the information systems strategic plan. The IS strategic plan is a set of long-range goals that describe the IT architecture and major IS initiatives needed to achieve the goals of the organization. The IS strategic plan states the mission of the IS department, which defines its underlying purpose. The IS strategic plan may require a new IT architecture, or the existing IT architecture may be sufficient. In either case, the IS strategic plan leads to the IS operational plan, which is a clever set of projects that will be executed by the IS/IT department and by functional area managers in support of the IS strategic plan.

The systems development life cycle is the traditional systems development method used by most organizations today. The SDLC is a structured framework that consists of distinct sequential processes: systems investigation, systems analysis, systems design, programming, testing, implementation, operation, and maintenance. These processes, in turn, consist of well-defined tasks. Some of these tasks are present in most projects, while others are present in only certain types of projects. That is, smaller development projects may require only a subset of the tasks, and large projects typically require all tasks.

Development managers who must develop large applications find it useful to mix and match development methods and tools in order to reduce development time, costs, and complexity. Also, they may switch from one methodology to another for different parts of a large system, depending on a variety of considerations. Manager's Checklist 14.1 summarizes the specific advantages and disadvantages of the various alternative methods of systems development.

The advantages of CASE tools are that they can produce systems with a longer effective operational life that more closely m3eet user requirements, can speed up, the development process and result in systems that are flexible and adaptable to changing business conditions, and can produce systems with excellent documentation. The disadvantages are that CASE tools can produce initial systems that are more expensive to build and maintain, require more extensive and accurate definition of user needs and requirements, are difficult to customize, and may be difficult to use with existing systems.

In-house systems development requires highly skilled employees to undertake a complex process, which result in a backlog in application development and a relatively high failure rate. Organizations may sometimes find it preferable to purchase already-existing applications packages than to develop them. The three main methods for developing systems outside the information systems department are end-user development, external acquisition, and outsourcing. In addition, application service providers (ASPs) are becoming popular.

Internet and intranet development uses Web browsers with open, nonproprietary standards, making it easy to adapt to any any operating system and to any personal computer hardware. Web browsers are nearly universal and the interface is easy to learn to use, so applications can be developed rapidly. The simplicity of the browser and the HTML language reduce the risks of failure in development, so most organizations do not use the SDLC approach for Internet/intranet development. But they should have specialized Webmasters to operate and maintain Web sites, and these sites must have adequate security. Internet and intranet development often uses the Java programming language and applets.