Teacher: hello, a student. What do you know about Information Technology (IT)?
Student: Well, I know that most of the programs is full of "bugs"! By the way, why these errors in programs called "bugs"?
Teacher: The computer "bugs" have been around since the blame failures in the 1945 Mark II (jokingly) a butterfly trapped in the relay. At present, the term refers to -commands disadvantages of programs that do not achieve the desired result. But I am sure you must know more about it than the fact that the software has bugs!
student: Recently I read an interesting article written years before John Diebold. Let me quote him:
"IT ... do increasingly become the national key economic well-being, which affect nearly every industry and service one would be difficult, for example, does not work does not depend on the effective use information: to design products and services, to monitor and respond to the demands of the market, or to make informed decisions and information technology world constantly change and deeper than any technology seen so far in history. It will transform civilization to match "
teacher: interesting. There is no doubt that information technology is now a major force with the possibility that a group of organizations in fundamental ways affect.
The impact of information technology on the tremendous business processes, and will greatly increase.
There is no doubt that the shift from an industrial economy to a service-oriented information economy is underway. No one knows how long this process will slow down.
In essence, the traditional scope and dimensions of time and space, and the block will not be restrictions on products in the information age. Unlike a unified product to create a mass market of the industrial age, and electronic delivery of banking services, for example, is an independent and non-tangible scale, and provides instantaneous service, it must be the actual location of the bank.
student: AmbaiU online courses are a good example! Students from all over the world immediately can access the curriculum. The dramatic growth of the Internet WWW service normally and was an important factor in the growth of information technology in general.
Teacher: actually true. Environmental trends such as increasing globalization and international competition is accelerating the movement towards increasing the use of IT by businesses. He stressed that the requirements of coordination in worldwide operations and the need to respond quickly to global competitive threats on the importance of information technology in the context of current business. The tremendous technological developments in hardware, software and paid databases, and telecommunications at the same time take advantage of information technology as well as along.
Student: So, is the maximum of information technology heaven?
Teacher: Not exactly. At the same time, there are several factors that turned against the rapid spread of information technology. Among these is still slow development of appropriate software, and the difficulties in measuring the benefits of information technology (IT to justify the investment), database integration issues, and a lack of standards (for the purposes of the link between organizations) a long-term period.
Student: I also believe that there are "over-investment" in the field of information technology in the last decade of the 20th century and even at the beginning of 21. What about information technology and strategic management?
teacher. True, we are concerned primarily with the potential impact of information technology on the practice of strategic management. The reason for adopting this perspective reflects the fundamental belief that information technology can it affect the essence of corporate activities: relating to product choice, markets, and technologies (for corporate strategy level), as well as competitive methods in each of the product segments Market (on the business strategy level).
student: a job and I suppose this is the reason that the role of information technology has become wider than that of traditional information systems (IS), and become a source of concern to the public administration and challenge.
Teacher: Good observation. We will look at three links that connect the three -strategic task management concepts (SM) and information technology (IT), and management information systems (IS) function.
* Link 1: Management Information Systems with Information Technology
According to the destination of the traditional view, is is a function of the service (just as accounting, human resources or industrial relations) which is charged with the data processing task efficiently and management reporting and management control systems. According to these views, it was designed to meet the informational requirements of the various administrative roles systems, and they are determined using a unified assessment methodologies informational requirements. As a result, the systems using criteria such as timeliness and quality of shape, and reliability, which reflect the technical capacity of the evaluation system. This means that the role of information technology and was born to a large extent as the artistic essence of the function of management information systems.
As a result, the most important characteristics of this connectivity hardware and software support for the information architecture, and design flexibility to support minor adjustments in the information requirements or to respond to changing the underlying technology quickly of the system hardware.
level of strategic planning, by its very nature is structured in decision-making, has received minimal support from traditional perceptions and definitions of the role of IS.
Link 2: Strategic Management with information systems
described the link 1 reflects the view that the Charter is a function was derived directly from the evaluation of information resources and does not have clear links with options strategy at both companies and businessmen. This view was representative of the actual situation until the late 1960s and early 1970s, when the need to adapt the design of management information to the requirements of strategic organizational context Systems rose currency. In 1968, McKinsey & Co. published a report entitled the launch of the profit potential computer, called a formal link between the design and implementation of management information, strategies and objectives of corporate systems. This publication managers to visualize the role of computers in business organizations as something outside of the data processing at the operational level of the organization and more resource mechanism that supports its strategy urged.
Student: even before the McKinsey report, William King suggested that "IS-range strategy (which consists of the goals is, limitations, and strategies for design) must be derived from the" organized group's strategy "(Composed organizational mission, goals and strategies )
teacher:.! you are a student a good read, in fact
student: can you remember that I come from and I "family of information technology." We hear complaints from relatives IT: while there is concern within the discipline of management information systems to ensure the MIS has been designed in accordance with the strategic contexts of the company, the link in the other direction, from the strategic context for companies to management information systems, still. largely ignored
teacher: true, but this situation also change quickly, many of the writers and called attention to the possibility of exploiting the information and information systems for strategic advantages as mentioned William King in a commentary editorial management. quarterly information systems, --- information (and iS) has the ability to be the main source of advantage (competitive) in the market rather than just a resource to be managed efficiently or service that is periodically turned on and off as needed.
Student: Are we then assume that many people believe that the relationship between strategic management, which today serves as a bi-directional interface, interconnected to each other, which shows the strategic role of Lehigh job?
Teacher: Sure, it was about time. The shift towards a strategic role, the objectives and tasks of the function of information systems are subject to a significant shift management. Systems are no longer considered in terms of information support for operational decision-making, but also in terms of achieving the strategic objectives of the organization, especially in achieving a competitive edge in the market.
calledInformation systems with the Charter to achieve a competitive edge "strategic information systems" and differentiated from MIS more practically focused. In fact, MIS has traditionally been concerned with the operational control of the decisions relatively Organization on the basis of available data systems easily, Interior. On the other hand, it is designed for strategic information systems, decision support is relatively structured, those that are intricately linked to the activities of the market in particular.
Student: I hear that such decisions usually require a combination of internal and external data as follows: It is not well organized and quite specific.
Teacher: Exactly. Although the demarcation of the border between the ideal of management information systems and strategic information systems can not always be carried out, and the conceptual distinction is important enough to be recognized as the conceptual distinction between strategic and operational decisions.
Let me mention some examples of strategic information that work in real companies systems:
American Airlines: Reservations Sabre -installed system in most travel agents to book reservations airlines, hotels and car rental.
American Hospital providing Poster: as soon as possible the system in more than 4,500 medical institutions to request kits online entry system installed. System internally threaded to several support systems
Citicorp expansion in the use of the ATM network and the global deal. Many of the systems that support their strategies of electronic banking services.
McKesson Corporation Economost -order input system that supports customers with inventory control and sales analysis.
United Airlines APOLLO- travel agency booking with many added services installed in about 7,700 agencies system.
student, you can think of specific strategic objectives of any of these companies have achieved through the IS?
Student: Well, I am confident that the SABRE provide American Airlines with the critical operating data that can be used for strategic decision-making. Travel agents hooked to Sabre likely to book in America more than other airlines.
Teacher: Yes, there are some so much so that the US government has stepped up in and put some limits on the tendency saber in favor of AA!
strategic information systems to achieve its objectives through several mechanisms, but two deserve special attention. These are: (1) restructure the flow of information within the organization to provide competitive advantages relative to competition, and / or (2) the development of joint systems between organizations that go beyond the traditional boundaries of the organization pivotal one.
Student: Are these patterns are incompatible with each other?
Teacher: No, but we will discuss independently.
reshape the flow of information
Let's look at the case of aviation, which use the data in a timely manner to increase the load factor and perhaps the single most important factor for success in the aviation industry. Through the development of strategic information system designed not only to constantly data from flight reservations to collect, but also to compare the current sales against historical patterns, the carrier could be tasked ticket agents own sale (as well as travel agents) to modify the number of seats discount available on a private plane, depending on the current level of reservations in advance.
Student: By the same token, I think that similar benefits can be achieved to a hotel, where the key determinant of competitive performance is the occupancy rate.
Teacher: It's true. The basic idea of modernity information can be extended from the context of the services sector to the manufacturing sector. Consider the case of the oil company that is able to communicate with dealers directly and immediately with the change of oil prices to ensure a minimum of delay between setting prices at the headquarters and its business in retail outlets.
Student: But in this illustrative IT fees do not affect the basic strategic options for action.
teacher. Right. However, to facilitate the implementation of these decisions through the organizational hierarchy and chain of channels through the use of information technology, leading to improved strategic results. Highlight
shared between the organizations shared systems between organizations, information technology applications the ability to achieve competitive success that goes beyond media flows within the organization to spread and exploit the links to information with the various actors in the market.
Student: You have used complex phrases instead today! In simple terms, it means that the system of strategic information between organizations is a system that extends beyond the boundaries of the Organization of pivotal one for connecting multiple organizations.
Teacher: Glad to see that you understand! Todevelop the possibility of such links (and benefits of achieving competitive advantage) it is probably the only reason for the most important, a growing interest in information systems from the viewpoint of strategic management of the show.
rail industry, which has one of the highest levels of "breakthrough" electronic data interchange (EDI) among all industries, and offers several levels of shared systems between organizations use. The relatively new industries such as couriers (FedEx, UPS, etc.) are very good examples.
Let me also mention McKesson Drug Company. Often it echoes the case of McKesson as one of the most successful examples of business transformation using information technology capabilities. McKesson is a national distributor of pharmaceuticals to the United States, which receives nearly 100 percent of their orders electronically from pharmacies through systems Economost her. And customers' demands by making a single pass through the shop with a hand-held device to enter the system, keying in the product ID or by using a barcode scanner. It referred to reorder quantities on the shelf cards. When the full introduction of the system, it is transmitted to the data processing service.
McKesson clearly realized the benefits of operational efficiency to improve profitability. Although the company did not seem to gain a stake in proportion to the basic competition distributor, and realizing the benefits of a great strategy in sales and profits relative market share to compete with larger ones. The system also achieved "increase customer connecting to McKesson," a great strategic advantage. In addition, McKesson offers a number of other services based on the data that you get from order entry system.
The company also provides other companies in the field of health care with specialized strategic systems. The following announcement is a good example:
in May 03, McKesson announced that LibertyHealth in Jersey City, New Jersey, signed an eight-year, 47 million $ deal of products and services designed to transform the clinical use of information in support of health care for patients in a triple system her hospital. LibertyHealth contracted wing McKesson in sight Clinicals (TM) (programs) to enhance patient safety, reduce medical errors and increase the referral of patients by providing physicians and other care providers with improved access to information.
"We have one chance in a lifetime to reinvent the use of information technology to support patient care and improve the quality and we are opening a new hospital we have," said Dr. Jonathan Metsch, president and CEO of LibertyHealth officer he said. "To create a better care environment, it's because we have the latest medical equipment to provide. But, equally important, we must provide advanced clinical information technology solutions to support our 00 doctors and nurses because they provide health care to this community. 0,000 people for this reason that we held partnership with McKesson - we get wonderful, advanced clinical applications "
link 3: strategic management with information Technology
and over the past years, several new and powerful forces in the technological environment and the market is forcing one to recognize the link between strategic management and information technology in terms of the fundamental role played by information technology in influencing the formulation of a strategy for the company rather than just support their implementation.
The potential for innovative modes of competition as well as new products and services that have been achieved through information technology provides managers with a completely different spectrum of opportunities and threats. Because of the explosion in the capabilities of computers and communications (integrated voice, data, and Internet), it can be many new business applications will be (has been) placed in those areas that directly promote efficiency and effectiveness in the market.
Example: it illustrates Merrill Lynch Merrill Lynch strategic potential of information technology to the development of alternative products that superior (or services), as well as change the definition and scope of business operations. The introduction of Cash Management Account (CMA) by Merrill Lynch represents a revolution in the field of re-defining the concept of financial services in the market which is dominated by traditional banking institutions. The concept of building the new work on the integration of a variety of financial tools under one common umbrella, such that the individual investor is able to enjoy the convenience of money transfers across them, as well as take advantage of the "float" that banks have traditionally enjoyed. This account allows the integration of four basic services to investors: (1) automatic investment of cash and profits at the expense of money market, (2) credit through the standard margin account, and (3) cash withdrawals by check or debit card, and (4) investment advice in management and diversification account.
could not be performed without the strategic use of information technology, it requires daily trade-offs across different accounts to add credit checks, fees and card stock, and time deposits, as well as for the development of credit updated daily limit for each account holder. This process complex data processing is not incidental to the business concept, but is essential to visualize the process. Perhaps it was best underscored the importance of information technology in this strategy by the fact that Merrill Lynch received a patent for a system of cash management account. The annual fees resulting from this product to Merrill Lynch very large.
Although many variations (circurnventing patent protection) of this basic concept emerged in recent years, nothing has matched up now Product Merrill Lynch's success.
other companies that may use information technology to break the boundaries of traditional industry in the service sector, including Sears, now a provider of integrated financial services. Citicorp, now investment and real estate company, as well as the bank. And American Express, always strong in the travel and tourism sector, which now makes a play in the international banking sector, insurance, securities, In addition, the supermarket to become the financial and information. In fact, it is converted the entire industry because of the forces parallel but related: deregulation and technology.
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