Chapter 1: The Information Systems Strategy Triangle
Overview
This chapter presents a very simple framework, the Information Systems Strategy
Triangle, which links business strategy with organizational strategy and information
strategy. The chapter describes this model, and builds on several other popular
strategy models and organizational models. The goal of this chapter is to make sure
every student has a basic understanding of both strategy and organizations. For
students familiar with business strategy and organizational behavior, this chapter is
a review of key points from those two fields.
Discussion Opener: Why should general managers have a broad
understanding of information systems? How can that knowledge be helpful in
their careers?
Key Points in Chapter
The Information Systems Strategy Triangle links business strategy with
organizational strategy and information strategy. The triangle is used to suggest
that all three points must be in balance in any organization to have optimal
efficiency and effectiveness. An imbalance can lead to organizational tension or
possibly a crisis. A company is out of “alignment” when its business strategy is not
supported by the IS. There are several implications from this model. First, business
strategy drives organizational and information strategy. Second, organizational
strategy must complement business strategy. Third, information strategy must
complement business strategy. Fourth, organizational and information strategy
should complement each other. Finally, if a change is made to one corner of the
triangle, it is necessary to evaluate the other two corners to ensure balance is
maintained. That means that if the business strategy is changed (i.e. such as
becoming a "bricks and clicks" company), then the manager must also consider a
redesign of both the organization (i.e. do we have people that can be successful in
this new strategy) and the information systems (i.e. do we have the capability to
process inquiries taken off of the Web).
,Strategy is defined and is tied to the mission of the organization. Examples of
mission statements are provided in the text (Figure 1.2), along with a discussion of
how Dell has creatively adjusted its business strategy to meet the rapidly changing
computer industry.
There are several ways to describe business strategy. This chapter summarizes
two well-accepted models: the Porter generic strategies framework and the D'Aveni
hypercompetition model. Current examples are offered to illustrate the models.
The Porter generic strategies framework (Differentiation, Cost Leadership, Focus)
has spawned many variants. A cost leadership focus means that the company
maintains above average performance by selling products that are comparable in
quality (i.e. the customer perceives relative value), but at a lower price in the
marketplace. Differentiation strategy involves uniqueness of the product in the
marketplace in some appreciable qualitative dimension. A focused strategy directs
products to meet the specific needs of a particular segment of the market, either
based on cost focus or differentiation focus. Hypercompetition models, and the
dynamic framework, focus on flexibility and rapid change in response to the
volatility in the marketplace. Competitive advantage is a moving target; companies
must be ready to adjust quickly to changes in the marketplace. In this environment,
agility becomes the competitive advantage. Chapter 2 discusses strategic use of
information resources, building on these and other models.
“Social Business Lens: Building a Social Business Strategy” – Variations on the Social
Business Strategy include collaboration (bringing people together to share ideas,
information, and expertise), engagement (increase perceived attachment through
increased interaction), and innovation (development of new ideas). Example:
National Instruments (ni.com) has created a ‘branded community’ to collect and
disseminate new ideas.
The chapter also summarizes several frameworks for describing organizational
strategy. Included are the business diamond and the managerial levers framework.
The business diamond links four key inter-related components of the
,organization’s plan: information/control, people, structure, and tasks (Figure 1.5).
The managerial levers model is somewhat more comprehensive, linking
organizational structure variables, control variables, and cultural variables. Decision
makers can manipulate the managerial levers to effect change within the
organization. Chapters 3, 4, and 5 discuss the managerial levers in greater detail and
apply the organizational strategy frameworks to assessing the impact of IS.
The IS strategy provides the plan for information services, and supports the
business strategy through needs fulfillment. Figure 1.8 provides a basic framework
showing the four components of the information system, the hardware, software,
networking and data, and the key managerial concerns for each: what, who, and
where.
Discussion Question: How can we recognize a misalignment between business
strategy and IS strategy? Do you have any examples from internships or work
experiences?
Illustrative Answers to Discussion Questions
This is a summary chapter of the key models for the information systems strategy
triangle, so discussion questions were provided to get students focused on and
thinking about using these models. Below are some sample answers, but expect
creative answers from your students that are not represented here. We encourage
you to post some of your best answers to the online community webpage and share
them with other instructors.
1. Why is it important for business strategy to drive organizational strategy and IS
strategy? What might happen if business strategy was not the driver?
Ans: The primary point in this chapter is that in any well-run organization, the
business strategy drives the rest of the operational strategy, and information
systems are no different. The business strategy defines the goals and objectives
, based on the organizational capabilities and structure. Information systems are
intended to enable and facilitate successful realization of the goals and objectives.
Technology for its own sake is not usually a good investment. However, typically,
managers seem to think that changing or upgrading an information system (or even
a component of an information system) will only positively impact a business. This
is commonly referred to as the “Technological Imperative.” Quite the opposite, in
fact, is true. By making changes in organizational strategy or IT strategy first, the
triangle is "out of balance" and there will be consequences in the affected areas. For
example, building a virtual organization, but not changing the business strategy to
something like "ensuring our people are productive and have the widest possible
work place opportunities" can lead to significant disconnects between workers,
their managers, and their customers. And, worse, without supplying the virtual
worker with the appropriate information system (a computer at home, a laptop,
etc.) will lead to a decrease in productivity by the virtual worker, and a major
disruption of business operations. Therefore, allowing IS strategy to drive business
strategy could easily lead to poor implementations with disappointing outcomes
(i.e. wasted resources).
2. Suppose managers in an organization decided to hand out tablets (iPad) to all
salespeople without making any other formal changes in organizational strategy or
business strategy. What might be the outcome? What unintended consequences might
occur?
Ans: Salespeople might not use them, without training and modifications to their
jobs. They may be accustomed to a manual, paper system and resist moving to the
tablet devices. They might not appreciate the added benefits of the mobility,
choosing familiar business processes instead. If they do use the devices, there will
eventually be strain on the rest of the organization if it doesn't adapt to this new
technology. For example, messaging might become ineffective if salespeople use e-
mail on their tablets and voice mail. Where is the primary place or method to
contact them? When someone is urgently needed, it is a hindrance to have multiple
places to check. Likewise, if the tablets are used for order entry, but the order
process is not changed to accommodate the tablets, there will be problems. Lack of
integration could lead to unnecessary delays and frustrated customers. Support
systems must also be redesigned. It does a salesperson little good to have to bring a
tablet device into the office for repairs, especially if this involves a substantial
geographical distance. Many troubleshooting activities can be performed by the
Overview
This chapter presents a very simple framework, the Information Systems Strategy
Triangle, which links business strategy with organizational strategy and information
strategy. The chapter describes this model, and builds on several other popular
strategy models and organizational models. The goal of this chapter is to make sure
every student has a basic understanding of both strategy and organizations. For
students familiar with business strategy and organizational behavior, this chapter is
a review of key points from those two fields.
Discussion Opener: Why should general managers have a broad
understanding of information systems? How can that knowledge be helpful in
their careers?
Key Points in Chapter
The Information Systems Strategy Triangle links business strategy with
organizational strategy and information strategy. The triangle is used to suggest
that all three points must be in balance in any organization to have optimal
efficiency and effectiveness. An imbalance can lead to organizational tension or
possibly a crisis. A company is out of “alignment” when its business strategy is not
supported by the IS. There are several implications from this model. First, business
strategy drives organizational and information strategy. Second, organizational
strategy must complement business strategy. Third, information strategy must
complement business strategy. Fourth, organizational and information strategy
should complement each other. Finally, if a change is made to one corner of the
triangle, it is necessary to evaluate the other two corners to ensure balance is
maintained. That means that if the business strategy is changed (i.e. such as
becoming a "bricks and clicks" company), then the manager must also consider a
redesign of both the organization (i.e. do we have people that can be successful in
this new strategy) and the information systems (i.e. do we have the capability to
process inquiries taken off of the Web).
,Strategy is defined and is tied to the mission of the organization. Examples of
mission statements are provided in the text (Figure 1.2), along with a discussion of
how Dell has creatively adjusted its business strategy to meet the rapidly changing
computer industry.
There are several ways to describe business strategy. This chapter summarizes
two well-accepted models: the Porter generic strategies framework and the D'Aveni
hypercompetition model. Current examples are offered to illustrate the models.
The Porter generic strategies framework (Differentiation, Cost Leadership, Focus)
has spawned many variants. A cost leadership focus means that the company
maintains above average performance by selling products that are comparable in
quality (i.e. the customer perceives relative value), but at a lower price in the
marketplace. Differentiation strategy involves uniqueness of the product in the
marketplace in some appreciable qualitative dimension. A focused strategy directs
products to meet the specific needs of a particular segment of the market, either
based on cost focus or differentiation focus. Hypercompetition models, and the
dynamic framework, focus on flexibility and rapid change in response to the
volatility in the marketplace. Competitive advantage is a moving target; companies
must be ready to adjust quickly to changes in the marketplace. In this environment,
agility becomes the competitive advantage. Chapter 2 discusses strategic use of
information resources, building on these and other models.
“Social Business Lens: Building a Social Business Strategy” – Variations on the Social
Business Strategy include collaboration (bringing people together to share ideas,
information, and expertise), engagement (increase perceived attachment through
increased interaction), and innovation (development of new ideas). Example:
National Instruments (ni.com) has created a ‘branded community’ to collect and
disseminate new ideas.
The chapter also summarizes several frameworks for describing organizational
strategy. Included are the business diamond and the managerial levers framework.
The business diamond links four key inter-related components of the
,organization’s plan: information/control, people, structure, and tasks (Figure 1.5).
The managerial levers model is somewhat more comprehensive, linking
organizational structure variables, control variables, and cultural variables. Decision
makers can manipulate the managerial levers to effect change within the
organization. Chapters 3, 4, and 5 discuss the managerial levers in greater detail and
apply the organizational strategy frameworks to assessing the impact of IS.
The IS strategy provides the plan for information services, and supports the
business strategy through needs fulfillment. Figure 1.8 provides a basic framework
showing the four components of the information system, the hardware, software,
networking and data, and the key managerial concerns for each: what, who, and
where.
Discussion Question: How can we recognize a misalignment between business
strategy and IS strategy? Do you have any examples from internships or work
experiences?
Illustrative Answers to Discussion Questions
This is a summary chapter of the key models for the information systems strategy
triangle, so discussion questions were provided to get students focused on and
thinking about using these models. Below are some sample answers, but expect
creative answers from your students that are not represented here. We encourage
you to post some of your best answers to the online community webpage and share
them with other instructors.
1. Why is it important for business strategy to drive organizational strategy and IS
strategy? What might happen if business strategy was not the driver?
Ans: The primary point in this chapter is that in any well-run organization, the
business strategy drives the rest of the operational strategy, and information
systems are no different. The business strategy defines the goals and objectives
, based on the organizational capabilities and structure. Information systems are
intended to enable and facilitate successful realization of the goals and objectives.
Technology for its own sake is not usually a good investment. However, typically,
managers seem to think that changing or upgrading an information system (or even
a component of an information system) will only positively impact a business. This
is commonly referred to as the “Technological Imperative.” Quite the opposite, in
fact, is true. By making changes in organizational strategy or IT strategy first, the
triangle is "out of balance" and there will be consequences in the affected areas. For
example, building a virtual organization, but not changing the business strategy to
something like "ensuring our people are productive and have the widest possible
work place opportunities" can lead to significant disconnects between workers,
their managers, and their customers. And, worse, without supplying the virtual
worker with the appropriate information system (a computer at home, a laptop,
etc.) will lead to a decrease in productivity by the virtual worker, and a major
disruption of business operations. Therefore, allowing IS strategy to drive business
strategy could easily lead to poor implementations with disappointing outcomes
(i.e. wasted resources).
2. Suppose managers in an organization decided to hand out tablets (iPad) to all
salespeople without making any other formal changes in organizational strategy or
business strategy. What might be the outcome? What unintended consequences might
occur?
Ans: Salespeople might not use them, without training and modifications to their
jobs. They may be accustomed to a manual, paper system and resist moving to the
tablet devices. They might not appreciate the added benefits of the mobility,
choosing familiar business processes instead. If they do use the devices, there will
eventually be strain on the rest of the organization if it doesn't adapt to this new
technology. For example, messaging might become ineffective if salespeople use e-
mail on their tablets and voice mail. Where is the primary place or method to
contact them? When someone is urgently needed, it is a hindrance to have multiple
places to check. Likewise, if the tablets are used for order entry, but the order
process is not changed to accommodate the tablets, there will be problems. Lack of
integration could lead to unnecessary delays and frustrated customers. Support
systems must also be redesigned. It does a salesperson little good to have to bring a
tablet device into the office for repairs, especially if this involves a substantial
geographical distance. Many troubleshooting activities can be performed by the
