Lecture 2 - Information Systems Strategy (Strategic Role of Information Systems)

Learning and Application of Theory:

Information Technology Vs Information Systems

In companion to Rainer & Cegielski (2012) Information Technology (IT) relates to any computer based tool that people use to work with information and to support the information and information processing needs of an organization where as an information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose. Simply the Information Technology (IT) is the core foundation of Information Systems (IS) and its bridge the gap between Hardware and Software. Without any Information Technology platform Information System doesn't exist. To gain return on investment (ROI) after implementing (IS) there should be a great compatibility between IS and IT.     

Before developing or implementing an Information system its better to identify companies background and their aims since every single component in information system need to align with company scope. Any business exist in order to make profit and those profits can made on various ways by proper planing after defining organizational strategic planning process as shown in Figure 1. 

Figure 1: Organizational Strategic Planning Process Hierarchy

To drive the business in right direction normal businesses come up with their own Vision and Mission statements where it further describes in objectives and goals to go head with established dream with their own stakeholders.

Figure 2: Microsoft's Vision and Mission Statement (Juiceboxdirect, 2011)

Vision Statement reflects the dream of the company and it shows where the company heading for in long run. In Microsoft's Vision statement they expected to have at least one Microsoft Software running on a personal computer in every home which some what not practical though but up to certain extend that could be achievable. From the Microsoft's Mission Statement clearly states that they wanted to help people and organizations to outcome their full potentiality by involving technology aspect which quite true because I write this blog using a Microsoft made operating platform.

Strategies that made need to tune up with companies Vision and Mission. The Strategies need to allocate with available resources and need to use it effectively and wisely in short term goals. Organizations should always focus on utilizing its resources and implementing strategies efficiently to achieve the goals. Achieving goals would mean that the company is on its way to reach its Vision and Mission statement ultimately where they end what they dreamt.

When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. The goal of much of business strategy is to achieve a sustainable competitive advantage. The formation of strategies is to make profits in long run by achieving competitive advantage. As per Porter (1985) there are three types of Generic Competitive Strategies. They are,

Cost Leadership - Increasing profits by reducing costs along with charging lower price.

Differentiation - Offering products or services with new features, functionality and durability than industrial competitors. 

Focus - Identify niche market dynamic requirements and develop unique Cost Leadership (Cost Focus) and Differentiation (Differentiation Focus) products or services to customers.
     

The main purpose of Information System is to convert Data into Information and communicate to relevant parties and storing in a some kind of format for future use in order to make decisions as denoted in 5 C's method of Information Systems. As mentioned by Rainer & Cegielski (2012) to operates the 5 C method seamlessly it requires 6 main components of Information system as shown in Figure 3 which act as unique segment in each 5 C's.

Figure 3: 5 C's and 6 Components of an Information System 

Application:

Samsung Mobile Phones Vs Apple iPhone

Table 1: Top Five Worldwide Smartphone Vendors, Shipments, and Market Share, Q1 2012 Units in Millions (IDC, 2012) 

As reflected in Table 1 Samsung owns a 29.1% of market share along with 42.2 Million shipments in Quoter 1 of 2012 where as Apple owns only 24.2% of Market Share. The main reason for this Samsung's superintendent in the industry due to Lower Cost (Affordable Products), Product Differentiation (Many features Packed) and Many Different products for many Market Segments that satisfies unique needs and wants.

Reality of the Lecture:

For any information systems strategy to exist there should be great linkage between Information Technology and Information System. As a simple example to get the best outcome from a system there is a need of proper Hardware and Network Architecture to accumulate its functions. Organizational Strategic Planning Process can be interpret as just lines of statements, however it helps the organization to keep on tack in every single movement in organization activities that they perform to ensure the satisfaction of their stakeholders. The formation of Strategic Planning Process basically established to make profits by keeping the company in the edge of competitiveness. Sustainability of the organization solely dependent on how the company deliver its products or services to the customer at a lower cost, in different features and quick time to market. Information System 6 Components were there to provide necessities in each stage of the 5 C's of Information Systems to cater human needs by allowing them to take more accurate decisions based on the axiom of simpler information extensionality.  

Reference:

Rainer, R. K. & Cegielski, C. G. (2012). Introduction to Information Systems: Enabling and Transforming Business. [Online] New York: John Wiley & Sons. Available from: http://proquestcombo.safaribooksonline.com/book/-/9781118063347/chapter-1-introduction-to-information-systems/navpoint-19?query=%28%28Information+technology+%28IT%29+relates+to+any+computer-based+tool+that+people+use+to+work+with%29%29#X2ludGVybmFsX0ZsYXNoUmVhZGVyP3htbGlkPTk3ODExMTgwNjMzNDclMkZuYXZQb2ludC0xMw== . [Accessed: 1/11/2012]

Juiceboxdirect (2011). Microsoft's Vision and Mission Statement. [Online]. Available from: http://www.juiceboxdirect.com/uploads/2/9/3/4/2934884/6207366.png [Accessed: 1st November 2012]

Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. [Online] New York: The Free Press. Available from: http://books.google.lk/books?id=H9ReAijCK8cC&printsec=frontcover#v=onepage&q&f=false . [Accessed: 1/11/2012]

Idc (2011). Top Five Worldwide Smartphone Vendors, Shipments, and Market Share. [Online]. Available from: http://www.idc.com/getdoc.jsp?containerId=prUS23455612 [Accessed: 1st November 2012]