2184: Information Systems Management
- Chapter 3
Information systems strategies - correct answer-The information systems strategy can be
implemented at three different levels, namely the firm, the business and the industry level.
Firm-level strategy and information technology - correct answer-As the firm may be viewed
as a bundle of exchanges between its various business units, management might opt for an
information systems strategy at firm level that promotes more efficient and effective
exchanges across business units whenever synergies are present.
In other words, synergies make the exchanges between business units more valuable
because they tie together the operations of various business units so that they can exploit
economies of scale and scope, making the combined production of the units involved greater
than the sum of their individual production. In these situations, ICTs are designed to integrate
activities across an organisation and to build synergies that enable greater exploitation of
economies of scope and scale, and hence increase the organisation's competitiveness.
When deploying these strategies, it is very important that the different units of the
organisations can and want to cooperate. To deploy e-technology that allows cooperation is
not enough to guarantee cooperation between units. Organisational, cultural and political
barriers might impinge on the effective deployment of integrated practices across the
organisation and hence on the effective deployment of firm-level information systems
strategies (Garrison et al., 2015).
Business-level strategy and the value chain model - correct answer-The information systems
strategy can also be implemented at a business level. As business activities often take place
between business partners rather than business units, we might envisage the firm's activities
as structured in a sequence of relationships in the value chain. This model views the firm as
a structured network of relationships between different activities that add a margin of value
to the firm's products or services. The crucial concept is that technology creates synergies
between business partners that foster the frequency of relationships between them to the
point of creating a value chain - a chain of partners that are closely tied together because
they all benefit from each other. These synergies can be exploited to increase the value
created by the network. For instance, the use of interorganisational information systems can
eliminate the need for the firm's inventories because the supplier is able to replenish the
firm's stocks in virtual time as soon as its distributors and/or customers buy the goods. In this
situation, the design and implementation of the interorganisational information system can
result in a strategic solution to help the organisation outperform its competitors.
However, to implement this strategy, the firm needs an information systems infrastructure
that makes customer and supply chain data flow seamlessly between the business partners.
To achieve a seamless data flow within a firm and across firms is not simple. It requires
unique managerial skills and planning, as is described in the following chapters.
- Chapter 3
Information systems strategies - correct answer-The information systems strategy can be
implemented at three different levels, namely the firm, the business and the industry level.
Firm-level strategy and information technology - correct answer-As the firm may be viewed
as a bundle of exchanges between its various business units, management might opt for an
information systems strategy at firm level that promotes more efficient and effective
exchanges across business units whenever synergies are present.
In other words, synergies make the exchanges between business units more valuable
because they tie together the operations of various business units so that they can exploit
economies of scale and scope, making the combined production of the units involved greater
than the sum of their individual production. In these situations, ICTs are designed to integrate
activities across an organisation and to build synergies that enable greater exploitation of
economies of scope and scale, and hence increase the organisation's competitiveness.
When deploying these strategies, it is very important that the different units of the
organisations can and want to cooperate. To deploy e-technology that allows cooperation is
not enough to guarantee cooperation between units. Organisational, cultural and political
barriers might impinge on the effective deployment of integrated practices across the
organisation and hence on the effective deployment of firm-level information systems
strategies (Garrison et al., 2015).
Business-level strategy and the value chain model - correct answer-The information systems
strategy can also be implemented at a business level. As business activities often take place
between business partners rather than business units, we might envisage the firm's activities
as structured in a sequence of relationships in the value chain. This model views the firm as
a structured network of relationships between different activities that add a margin of value
to the firm's products or services. The crucial concept is that technology creates synergies
between business partners that foster the frequency of relationships between them to the
point of creating a value chain - a chain of partners that are closely tied together because
they all benefit from each other. These synergies can be exploited to increase the value
created by the network. For instance, the use of interorganisational information systems can
eliminate the need for the firm's inventories because the supplier is able to replenish the
firm's stocks in virtual time as soon as its distributors and/or customers buy the goods. In this
situation, the design and implementation of the interorganisational information system can
result in a strategic solution to help the organisation outperform its competitors.
However, to implement this strategy, the firm needs an information systems infrastructure
that makes customer and supply chain data flow seamlessly between the business partners.
To achieve a seamless data flow within a firm and across firms is not simple. It requires
unique managerial skills and planning, as is described in the following chapters.
