Transcript IS447 Strategic Management of Information

IS715 – The Development,
Management and Exploitation of
Business Information Systems
Week 1 - Strategic Management
Information in Context
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Objectives:
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to introduce the concept of strategic
information
to understand the role of information in
organisations
to look at internal sources of strategic
information
to recognise the importance of external
sources
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What is Strategic Information
(SI)?
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Lecture Structure: Building
Blocks of Strategic Information
Requires awareness
of:
1 data, information,
knowledge
2 characteristics of
information
3 managerial activities
4 managerial decision
making
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management levels
information
requirements of
levels
systems to support
CBIS & competitive
advantage
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1. Data, Information,
Knowledge
What is this?
‘A slight inclination of the cranium
is as adequate as a spasmodic
movement of the optic to an
equine devoid of its visionary
capacity’
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What is this?
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Definitions
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‘Data, is the record of an event or fact.’
‘Information is data processed for a
purpose.’
G Curtis. Business Information Systems.
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More definitions...
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‘Data items are the raw materials for
producing information.’
‘Information is generally defined as data
that is meaningful or useful to the
recipient.’
Davis & Olsen. Management Information Systems
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Final definitions...
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‘Data refers to facts.’
‘When data are filtered through one or
more processors to that they take on
both meaning and value to a person,
they become information.’
Parker & Case. Management Information Systems.
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2. Characteristics of
Information
TIME
CONTENT
FORM
EXTRA
Timeliness Accuracy
Clarity
Confidence
Currency
Relevance
Detail
Reliability
Frequency
Completeness Order
Timeperiod Conciseness
Scope
Appropriate
PresentN
Audience
Media
Media used
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3. Managerial Activities
‘To manage is to forecast and plan, to
organise, to command, to co-ordinate and
control.’ Fayol 1916
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going to look at :
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information needs, levels of management,nature
of problems etc.
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What Does a Manager Do?
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operational process involving management
functions of : planning, organising, staffing,
directing, leading, controlling
increasingly complex resulting from:
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IT developments
globalisation
international economics - Twin towers
shrinking time frames - ‘chasing the sun’
social constraints - ‘green’ purchasing
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4. Managerial Decision Making
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what Information does a manager need ?
Information needs determined by
decisions that must be made
which are determined by set objectives
Objectives
Decisions
Info Needs
Info Needs
Decisions
Info Needs
Info Needs
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Model of Decision Making
Simon (1960)
Decision Stage
Search and
scanning
procedures
Formulate
model, search for
alternatives,
Predict/measure
outcomes
Select the best
or best
alternatives,
design a plan of
action
Intelligence
Develop awareness that
problem exists. Gather
information on the problem.
Design
Try to develop alternative
solutions. May require
additional info. at this stage
Choice
Heavily reliant on Design
stage being undertaken
properly. Should be straight
forward.
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Decision Making Model
STAGE
ACTIVITIES
Intelligence
Identify problem
Aware need decision
Identify possible solutions
Examine possible solutions
Examine implications of solutions
Select best solution
Design
Choice
Implementation Carry out 'best' solution
Evaluation
Evaluate effectiveness of decision
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Types of Decision
Unstructured (non-programmed)
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Based on judgement, evaluation,
insight, experience, learning and
knowledge
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Problem definition.
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Novel, important and non-routine
Semi-structured
Decisions with characteristics of
both the other two types
Structured (programmed)
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Repetitive, routine, and
prescriptive in nature
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Do not need to be treated
differently each time
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5. Management Levels
Unstructured
(non-programmable)
Strategic
Tactical
Operational
Structured
(programmable)
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Levels of Decision Making
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Strategic Decision Making
 involves establishing objectives
 outlining long-term plans to meet those objectives
Tactical Decision Making
 implementing decisions made at strategic level
 allocating resources needed to meet organisational
objectives
Operational Decision Making
 executing tasks
 ensure efficient, effective
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Nature of Decisions at
Management Levels
Decision
Mang. level
Decision
Strategic
Unstructured Long
Tactical
Operational
Structured
Timescale
Org. impact
Frequency
Large
Infrequent
Medium
Medium
Short
Small
Frequent
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6. Decision Levels and Info
Type
Info Attributes
Orientation
Operational
Tactical
primarily internal internal & external
Strategic
more external
Planning
Horizon
immediate/few
days
short /medium term
medium/long term
Performance
Focus
current activities
historical & current
predictive rather than
historical performance
Coverage
specific activities
dept/function
total organisation
Level of Detail
highly detailed
detailed &
summarised reports
typically highly
summarised
Uncertainty
low
degree of uncertainty high levels of uncertainty
Degree of
objectivity
objectively
measured
objective &
subjective data
higher proportion is
subjective
Level of
Accuracy
high accuracy
levels required
moderate accuracy
levels
accuracy less critical to
decisions at this level
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7. Computer Based Information
Systems (CBIS)
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What is an information system?
‘An information system is a group of
interrelated components that work collectively
to carry out input, processing, output,
storage and control actions in order to
convert data into information products that
can be used to support forecasting, planning,
control, co-ordination, decision making and
operational activities in an organisation.’Business
Information Systems (Bocij 1999)
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What are the Resources?
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people - users of the system (designers etc.)
hardware - all machinery
software - includes manuals, company
documentation
communication - intranets, extranets
data - all data access regardless of form
information technology - the technology
computer based information systems (CBIS)
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What are the CBIS’s
Executive Support System
(or Exec Information System)
IS at strategic level of the organisation designed to
address unstructured decision making, through advanced
graphics and communications
Decision Support System
Information system at management level that combines
data and sophisticated analytical models to support semistructured and unstructured decision making
Management Information System
Information system at management level of an
organisation that serves the functions of planning,
controlling and decision making by providing routine
summary and exception reports
Transaction Processing System
Computerised system that performs and records the daily
routine transactions necessary to conduct the business
of the organisation
Office Automation Systems
Computer systems designed to increase the productivity
of information workers in the office
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Transaction Processing
Systems (TPS)
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basis of business
operations
recording and
processing basic
data
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sales, purchases etc.
batch or online
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online - banking
batch - bill
processing
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main activities
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data capture
data validation
processing
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classification
sorting
data retrieval
calculation
summarising
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outputs from TPS
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transaction
documents
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action documents ie.
airline tickets, picking
slips to identify
warehouse products
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query responses/reports
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transaction logs
error (edit) reports
detail reports
summary reports
information
documents
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confirmation - list of
credit card charges
etc.
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Strategic Use of TPS
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underestimated as purely technically
oriented
can provide strategic advantage by
focusing on internal and customer
interfaces
airlines - TPS systems provide strategic
information i.e. Platform Thomas Cook
allows horizontal & vertical integration
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Exploitation of TPS for
Strategic Decision Making
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tracking systems
locational systems
asset management systems
growing area
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electronic market place - securities,
software, ideas, goods, services on the
Internet
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Office Automation Systems
(OAS)
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applying IT to
common office tasks
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word processing
spreadsheets
fax machines
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Management Information
Systems (MIS)
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designed to produce information
needed for successful management of
process, department or business
support recurring decisions, where
information needs have been
determined in advance
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Management Information
Systems alternative views
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MIS - includes operational systems and
TPS that only used indirectly by
managers
BIS - business information systems used to describe all types of IS used in
business ie. DSS, OIS and more
appropriate than MIS
MIS taken to include DSS, EIS, ES
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Decision Support Systems
(DSS)
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provide information to support semi or
unstructured decisions
provide information when needed
users interact with the system
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identify, retrieve information to support decision,
solve problem
‘what if’ problems
next phase - group decision support systems
aimed middle and lower management
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Executive Information Systems
(EIS)
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internal, external information highly
summarised form
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spot opportunity, problem or trend
identify course of action to solution
can have forecasting capabilities
represent strategic planning tool
serve control needs of high level
management
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EIS Characteristics
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immediate, easy access
to information
user friendly interface,
graphic etc. no middle
user
access to int/ext.
databases through
standard interface
includes future &
current data
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easily tailored to
specific mangers
‘drill down’ capacity see the detail behind
the summaries
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Expert Systems
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apply human knowledge & experience to
range of problems
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knowledge base
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represents knowledge, experience of experts in
given area
rules
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comprises knowledge base controlled by rules
organise knowledge base, allow interrogation
examples : choosing computer system,
performing medical diagnosis
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8. CBIS & Competitive
Advantage
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Porter - 5 competitive forces
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threat new entrants
bargaining power of suppliers
bargaining power of customers
threat of substitute products or services
rivalry amongst competitors
competitive strategies to address
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cost leadership
product differentiation
innovation
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Using CBIS for Strategic
Advantage
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improving operational efficiency
raising barriers to entry
locking in customers and suppliers American Airlines, SABRE
promoting business innovation
increasing switching costs
leverage
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