IS/IT Strategic Analysis: Determining the Future Potential

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IS/IT Strategic Analysis Determining the Future
Potential

• Presented by Benny Sia

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Table of Contents

• Objectives
• Analytical tools
• Value Chain Analysis
• Internal and external analysis
• Conclusions
• References

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Objectives

• Understand the current situation
• The use of analytical tools
• Linkage of each systems
• To what extent these systems enable separate
  activities to perform harmoniously.
• Strategic thinking

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Analytical tools

• Application portfolio
• Porters 5 Forces
• Value Chain models
• SWOT
• One problem which to use and when?
• Neuman1 recognizes that theyre a means of
  helping the thinking process, not a recipe for
  identified of strategic systems.

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Application Portfolio

• Each tools will be considered as part of the
  process for developing IS/IT strategies.
• However, high potential possibilities need for
  further investigation.
• Provide current situation which would help in the
  IS/IT integration.

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Competency analysis

• To gain competitive advantage.
• Example, bank develop excellent mortgage product
  for younger people, good relationships with other
  banks, but why the sales are so poor? Reasons
  slowness and unreliable application process using
  older system. The process could not deliver the
  service promise inherent with product and
  customer.
• Identify how priority IS investment are essential
  to competitive disadvantage.

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Value Chain Analysis

• Value chain of the business unit is only one part
  of a larger set of value-adding activities in an
  industry.
• The actions of other parties customers,
  suppliers and competitors will have a
  significant impact on what the firm does and how
  it does it.
• Peoples output can be your input.
• External an Internal value chain

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External Value Chain

• Maximize its value-added and minimize its costs
  on how well the demand and supply information are
  matched at all stages.
• Poor information means resources are wasted will
  increase cost without increase revenue.
• Non-profit industries such as government, health
  care and charities always matching of supply and
  demand to achieve break-even.

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External value chain

• Strategic thinking
• What information is available?
• Who are they?
• How they can be influenced?
• Key of information flow can be examined to see
  how the process be improved in terms of accuracy,
  speed, cost or timeliness
• Many information exchanges cannot easily be
  improved without willing cooperation of trading
  partners.

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External value chain

• Example on reduction of intercompany cost due to
  better information exchange.
• Thomas Holiday case
• Introduce Top system
• Enable travel agents to book holiday via their
  system
• Immediate reduced double-handling cost and speed
  up the process
• Save time and money for both parties

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Internal value chain

• Assessing and improving how company operates
• What the company does rather how it does it
  look at the activities it performs to contribute
  to the value-adding process
• 2 types of business activities primary and
  support activities

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The use of value chain analysis

• Information flow throughout the industry, when
  and where the information is available, who has
  it and how to turn that into advantage. Example,
  fashion goods demand information is critical
  factor.
• Information exchange with customers and suppliers
  throughout the chain to improve the performance.
  Example, EDI

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• How effectively the information flows through the
  primary processes
• Within each activity to optimize performance
• Linking activities together to avoid unnecessary
  cost and missed opportunities
• Enable support activities to contribute to the
  value-adding

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Conclusion

• Value chain analysis should extent their context
  ( industry value chain) in order to achieve
  maximum leverage IS/IT investment.
• Future planning IS/IT should identify the
  business opportunities and threats presented by
  developing use of IS/IT in the industry.

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References

1. Neumann, S., (1994), Strategic Information
   Systems, Macmillan, London.
2. Porter, M.E, (1985), Competitive Advantage
   Creating and sustaining Superior Performance,
   Free Press, New York.
3. Strategy value chain analysis, (2003),
   Online, Available http//www.tutor2u.net/busines
   s/strategy/value_chain_analysis.htm 17 August
   2004.
4. Ward, J. Peppard, J., (2002), Strategic
   Planning for Information Systems, 3rd Edition, p.
   237 275, Wiley Son, UK.