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1University of Sunderland CIM03 Lecture 1

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John Wraith


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• We will be discussing methods of managing strategic information systems for the next six weeks.

• The format is a mixture of lectures and seminars during which you apply the theoretical material.


Learning ApproachLearning Approach

• You are expected to develop investigative skills, and the ability to critically evaluate different approaches to managerial and technical issues.

• Discussion in groups, and private study, will be the main activities needed to acquire this skill.


Learning ApproachLearning Approach• You therefore need to form study teams.

You decide on their size and makeup, but three to four is a good number.

• You should split the research so that the group gets good coverage of available references.


Individual LearningIndividual Learning

• There is no escape from individual effort.

• Group work is there to distil, stimulate, offer different points of view.

• Your personal ability to analyse, sift, and argue constructively will be tested the assignment which is worth 50%.


Defining TermsDefining Terms

What is This Thing Called Strategy?


What Is Strategy?What Is Strategy?

• ‘Strategy is the art of so moving or disposing troops or ships or aircraft as to impose upon the enemy the place and time and conditions for fighting preferred by oneself’ The Concise Oxford Dictionary 1982 7th Ed. Clarendon Press



• ‘Business strategy is the broad collection of decision rules and guidelines that define a business’ scope and growth direction.’ Ansoff, H.I. 1987, Corporate Strategy, Penguin



• ‘Strategy is the pattern of objectives, purposes or goals and major policies and plans for achieving those goals, stated in such a way as to define what business the company is in, or is to be in, and what kind of company it is, or is to be.’ Christensen, C.R. et al, 1982, Business Policy: Text and Cases, 5th Ed., Irwin



• ‘Strategy refers to the formulation of basic organisational missions, purposes and objectives; policies and program (sic) strategies to achieve them; and the methods needed to ensure that strategies are implemented to achieve organisational ends.’ Steiner, A. & Miner, J.B. 1977, Management Policy and Strategy: text, readings, and cases. Collier Macmillan, London



• ‘Strategy formulation involves the interpretation of the environment and the development of consistent patterns in streams of organisational decisions.’ Mintzberg, H. 1979, The Structuring of Organisations: a Synthesis of the Research, Prentice-Hall, London



• ‘Strategy is a broad based formula for how business is going to compete, what its goals should be, and what policies will be needed to carry out these goals.’ Porter, M. E. 1980, Competitive Strategy, Free Press.



• ‘Strategy is the pattern or plan that integrates an organisation’s major goals, policies and action sequences into a cohesive whole.’ Quinn, J. 1980, Strategies for Change: Logical Incrementalism, Irwin.



• ‘Strategic decisions are concerned with:-– Scope of an organisation’s activities– Matching of an organisation’s activities to its

resource capability– Allocation and reallocation of major resources

in an organisation– Direction in which an organisation will move in

the long term…’ Johnson, G. & Scholes, K. 1997, Exploring Corporate Strategy, 4th Ed., Prentice-Hall



• There is no single, universally accepted definition of strategy. There is no one best way to create strategy, nor is there one best form of organisation….No single model or theory can incorporate all the factors that influence major business decisions or all the possible combinations of these factors that could be faced.’ Quinn, Minzberg & James, 1991, The Strategy Process, Concepts, Contexts, Cases, 2nd Ed., Prentice-Hall.


Strategic Information Strategic Information SystemSystem

• ‘A strategic information system is (one) that supports the competitive strategy of the organisation, e.g.:-– To improve customer/supplier links– Facilitate product design– Improve productivity Ahituv, N., & Neumann, S. 1986,

Principles of Information Systems for Management, 2nd Ed., W.C. Brown, Iowa.


IS Strategy Should IS Strategy Should Be...Be...

• Business led.

• Demand orientated.

• Designed to offer competitive advantage.


Why Bother?Why Bother?

• Threats from others.

• Aligning IS spending to meet business needs.


Why Bother?Why Bother?

• Facilitating new opportunities.

• Getting a grip on IT function and spending.


Evolution of IS/IT Evolution of IS/IT OrganisationOrganisation

History


1960s1960s• Mainframe-based data processing function.

• Users kept distant & data preparation by key punch operators.

• Development, maintenance and operation all separate functions.


1960s1960s• Staff grouped into rigid compartments by

function.

• Most development done in house.

• Ponderous systems on basic business needs.

• 60s career paths.


1970s1970s

• Function now that of repository for data accessed remotely by users.

• Still mainframe based, often with very poor response.

• Batch runs still there, but remote data entry by users, running on centrally-held programmes. Dumb terminals.


Early 80sEarly 80s• Analysts and programmers merged into business

and functional groups: financial and production.

• Emphasised the business contribution of IS.

• End-user computing on the increase (PCs).

• Central computing function begin to wane.


Early 80sEarly 80s• Ad-hoc local systems development.

• Battles fought over the control of local computing.

• Aligned with supporting managerial decisions.

• Still provide Information: centre functions.

• Still generate systems in house for critical applications.


Early 90s: External Early 90s: External FocusFocus

• Now a true service organisation.

• Further goals of the company.

• Looks to supply productivity gains.

• Supports devolved computing/matrix management.


IS/IT Structure and PlaceIS/IT Structure and Place

Size Matters


Major Strategies Major Strategies TodayToday

• Horses for courses. Size and significance are a function of the part IS/IT plays in the real life of the business, and the company’s size.

• Decentralise. Pass IS resources to the business unit(s).


Major Strategies Major Strategies TodayToday

• Disperse. Spread IS staff into functional areas. This fragments and duplicates effort.

• Profit Centre. Sell services within the company.

• Hive Off. Set up as commercial firm.


DecentraliseDecentralise

• Certain functions might be retained:-– Telecomms.– Information architecture– Risk Management – Specialist skills (database, languages, real-

time)

• Business units would be free to develop, with central guidance. Usually preferred method for large corporations.


DisperseDisperse

• This approach diffuses the IS resource piecemeal into functional areas.

• Nowhere is there an effective critical mass.

• This is not a favoured option.


Profit CentreProfit Centre• The IS resource acts as an arms-length

supplier to company units.

• Time must be spent on selling and quoting.

• May compete with external suppliers.

• May lose...


Hive OffHive Off

• Breaks links with the parent.

• Profit considerations drive a further wedge.

• Need layer of sales, marketing, legal, admin.


Hive OffHive Off

• Sheffield Forgemasters set up their Group IT function as an independent company.

• It traded successfully as a computer bureau and software house/consultancy.

• Work from the parent formed a smaller and smaller proportion of the load.

• Forgemasters bought in what it needed.


ConclusionConclusion

• IT functions must enhance the effectiveness of their parent company.

• Support can be bought from many outlets: it does not have to be in-house.

• End-user computing disseminates small-scale development.

• Help-desk, guru functions, training: what else is left?


Overall ConclusionsOverall Conclusions

• Differing views of strategy.

• Developing a strategy is an art, not a science.

• I.S. strategy emerges from, and facilitates, the overall business strategy.


Overall ConclusionsOverall Conclusions

• IS/IT Department/function from the 1960s.

• Changes in hardware led to significant changes in the role and positioning of the in-house IS/IT function.

• Present-day attitudes to the use and ownership of IS/IT support functions.


Strategy PreparationStrategy Preparation• The argument for strategic planning of IT

systems.• Methods being covered:

– Earl’s Multiple Methodology: – Porter’s Five Forces: – Nolan’s Stage Model: – Personality Testing: – Group Dynamics:– McFarlan and McKenney Strategic Grid: – Competitive Advantage.

• Impact of a strategy on the organisation.

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