[ad_1]
Teacher: Hello, Student. What do you know about information technology (IT)?
STUDENT: Well, I know that most software is full of “bugs”! By the way, why are these errors in programs called “bug”?
Teacher Computer “bugs” have been around since the failures of the 1945 Mark II was taught (facetiously) the moth trapped in a relay. Nowadays, the term refers to a programming bug -commands not achieve the desired results. But I’m sure you must know more about it than the fact that the programs have bugs!
STUDENT: Recently I read an interesting article by John Diebold years. Allow me to quote from it :.
“… Information technology is becoming increasingly key to national economic well-being, affecting virtually every industry and service One would be hard-pressed to name the companies that do not depend on the effective use of information: to design products and services, to monitor and respond to market demands, or to make well-informed decisions Information technology will change the world more permanently deeper than any technology so far in history. and will bring about the transformation of civilization to match “
Teacher :. Interesting. There is no doubt that information technology is now a major force with the potential to affect a number of organizations basically.
The effect of information technology on business has been enormous and will grow significantly.
There is no doubt that the shift from industrial economy to a service economy data set is in progress; and no one knows when the process will slow down.
In fact, the scale and traditional issues time, space, and mass will no longer be restrictions on products in the information age. Unlike standard product created for the mass market industrial age, electronic delivery of banking services, for example, is a measure independent and intangible, provides immediate service, and is not bound by the physical location of the bank.
STUDENT: online courses AmbaiU are a good example! Students from all over the world can instantly access the courseware. The dramatic growth of the Internet WWW service has naturally been an important factor in the growth of IT in general.
Teacher: True indeed. Environmental trends like globalization and increased international competition are speeding the movement toward increased use of information technology by companies. Exigencies of global coordination and the need to respond quickly to global competition threats have stressed the importance of the current business context. Dramatic technological advances in hardware, software, databases, and communications simultaneously pushed further use of IT.
STUDENT: So is the sky the limit for IT?
Teacher: Not entirely. At the same time, there are several factors militating against rapid deployment of IT. These include the still-slow development of appropriate software, long difficulties in quantifying the benefits (to justify the investment), merging database issues, and lack of standards (in respect of inter-organizational relationships).
STUDENT: I also think that it would be “over-investment” in it in the last decade of the 20th century. century and even in the early 21 .. And what about it and Strategic Management?
TEACHER. True, we are primarily concerned about the likely impact of information technology on the implementation of strategic management. The reason for adopting such a perspective reflects a fundamental belief that information technology can potentially affect the essence of the business activities: Choices pertaining to products, markets, and technology (corporate policy level), as well as competitive methods within each product -Market part ( business strategy level).
STUDENT: I suppose this is why the role of information technology is becoming wider than traditional information systems (IS) function, and is becoming general management concern and challenge.
Teacher: Good observation. We will consider three links that interconnect the three important concepts -strategic management (SM), information technology (IT) and management information systems (IS) function.
* Link 1: management information systems with information technology
According to the traditional view, IS is a service function (such as accounting, human resources or industrial relations) that is charged with the task of efficient processing and use of management reporting and monitoring system. According to such views, systems are designed to meet the information requirements of different management roles and are defined in standard information requirements assessment methodology. Further, the system evaluated criteria such as timeliness, format, quality and reliability, which reflects the technical capabilities of the system. The implication is that her role was conceived primarily as a technical core MIS function.
Consequently, the essential characteristics of this connection were hardware and software support for information architecture and flexible design to support minor changes in data requirements or to respond to changing technology core hardware system.
The policy points, according to the unstructured nature of decision-making, received minimal support from the traditional understanding and role definitions EN.
Link 2: Strategic Management of Information Systems
Description Link 1. reflects the view that the Treaty is a function was derived directly from the data evaluation website and had no clear link with the strategic choice in the corporate and business levels. This view was representative of the actual situation in the late 1960s and early 1970s, when the need to tailor the design of MIS with the requirements of organizational strategic perspective gained currency. In 1968, McKinsey & Co. a report called lock in your profit potential that called for the formal relationship between the design and implementation of MIS and business strategies and objectives. This publication urged managers to visualize the role of computers in business organizations that any excess data processing resource at the operational organization and more hardware that supports their policies.
STUDENT: Even before the McKinsey report, William King suggested that “IS-strategy set (consisting of the objectives, is a constraint, and the design methods) must be reduced” organization policy set “(composed of organizational mission, goals and methods)
Teacher:.! You’re well-read student, actually
sTUDENT: You may remember that I come from and I “iT family.” hold hearing complaint from iT my relatives, while there is concern within the MIS discipline to ensure that MIS is designed in line with the context of the company, the link in the other direction, from the common strategic context of MIS, remains. largely ignored
Teacher: True, but this is changing rapidly, several authors also called attention to the opportunities to use information and computer systems for strategic advantages as William King noted in an editorial comment in the management information .. Systems Quarterly, — information ( and is) tends to be the primary source (competitive) advantage in the marketplace rather than solely as a means to efficiently manage or service that is regularly switched on and off as needed.
STUDENT: Can we assume then that many people see connections between strategic management and is today as a bi-directional, mutually interconnected links, which represents a strategic role for the fall?
Teacher: Certainly, it was about time. In the transition towards a policy role, undergo goal and task management information functions important transformation. The systems are no longer viewed in terms of information support operations decisions, but in terms of implementation of the strategic goals of the organization, especially a competitive advantage in the marketplace.
Information systems with a charter to achieve competitive advantage are called “strategic information” and distinguished from more operationally more effective MIS. Indeed, MIS has been traditionally concerned with the operation of the control system for relatively structured decisions based on readily available, internal data. On the other hand, are a strategic information system designed to support the relatively unstructured decisions, especially those that are intricately tied to the activities of the square.
STUDENT: I hear that such decisions usually require a combination of internal and external data, are neither structured nor completely specified.
Teacher: Exactly. Although perfect demarcation between management information and orientation information can not always be made, a conceptual distinction is important enough to be recognized as a conceptual distinction between strategic and operational decisions.
Let me mention some examples of strategic information systems operating in real companies
American Airlines, Sabre Reservation System -installed in most travel agencies for booking airline, hotel and rental car online.
American Hospital Supply Co :. ASAP-order entry systems installed in over 4500 medical establishments to order supplies on line. The system is interconnected to several internal support system
Citicorp Extensive use of automated teller machines and a global trading network. Several systems that support their plans for electronic banking.
McKesson Corp. Econo Most -Order entry system that supports customers with inventory control and analysis of sales.
United Airlines Apollo Travel reservation system with some maintenance services installed in about 7700 institutions.
Student, you can think of certain strategic objectives any of these companies have been achieved through the ER?
STUDENT: Well, I’m sure that SABRE provides American Airlines with important operating data that can be used for policy decisions; travel agents bent on Sabre are more likely to book on American more than other airlines.
Teacher: Yes, some so much that the US government has stepped in and set some limits on the potential Sabre pay AA!
Strategic information systems achieve their goals through several mechanisms, but two deserve special attention. These are: (1) the reconfiguration of the flow of information within the organization to provide competitive advantages compared to the competition and / or (2) the development of inter-organizational systems that go beyond the traditional boundaries of one focal organization.
STUDENT: Are these settings are mutually exclusive?
Teacher: No, but we will discuss them independently.
Reconfiguration of the information flow
Let’s consider the issue airline uses timely data to increase its load factor -perhaps one of the most critical factor for success in the airline industry. By developing a strategic information system designed not only to continuously collect data on the flight, but also to compare current sales against historical patterns airline may own Ticketing their agents (such as travel agents) to change the number of seats discounts available for limited flight by the current level of bookings in advance.
STUDENT: Similarly, I think that similar benefits can accrue to the hotel, where a key component of competitive success is the occupancy rate.
Teacher: Correct. And the basic concept of timeliness can be extended from the context of the services sector to the manufacturing sector. Consider the oil company that is able to communicate with their dealers directly and immediately oil change to ensure minimum delay between setting will be the headquarters and its implementation at stores.
STUDENT: In these illustrations, it does not affect the fundamental strategic business choice.
TEACHER. Right. However, the implementation of such decisions through the organizational hierarchy and swimming is easier using it, which leads to better policy outcomes.
Inter-organizational Systems Inter-organizational IT applications underline the potential to achieve competitive success, which reaches within-organization of information flows to apply and use information based relationships with diverse actors in the marketplace.
STUDENT: are using more complex sentences today! In short, what you mean is that the inter-organizational strategic information system is a system that extends beyond the boundaries of one focal organization to connect multiple organizations.
Teacher: Glad to see that you deserve! The potential todevelop such links (and consequently benefits to achieve competitive advantage) is perhaps the single most important reason, increased attention to the information system of strategic management point of view.
The railway industry, which has one of the highest levels of “penetration” in electronic data interchange (EDI) in all sectors, displays some level inter-organizational systems use. And relatively new industries, such as couriers (FedEx, UPS, etc.) are good examples too.
Let me also mention McKesson Drug Company. In the case of McKesson is often cited as one of the most successful example of transformation of the company with information technology capabilities. McKesson is the US national pharmaceutical distributor that gets close to 100 percent of its orders electronically from pharmacies through Econo Most systems. A customer orders by making one to go through the store with hand-held order entry devices, enter the product identifier or use the bar code scanner. Rearrange amount is shown on shelf tags. Once completed the order has been entered, it is sent to the data-processing services.
McKesson clearly achieved efficiency advantages to improve its profitability. Although the company does not seem to get a share at the main distributor of competition, it achieved significant strategic benefits in sales and market share gains at the higher competition. The system also achieved “increased tie the customer to McKesson” a significant strategic advantage. In addition, McKesson offers a number of other services based on the data gets from the Order Entry system.
The company also provides other companies in the health care business with specialized orientation system. The following message is an example:
In May 2003, McKesson Corporation announced that Liberty Health in Jersey City, New Jersey, signed an eight-year, $ 47 million agreement for products and services designed to change the use of clinical information to support patient care system in his hospital three. Liberty Health Clinic agreed Horizon (TM) Suite is McKesson (programs) to enhance patient safety, reduce administration and increase patient referrals by providing physicians and other caregivers better access to information.
“We have a once-in-a-lifetime opportunity to reinvent use it to support patient care and increase quality as we open our new hospital,” says Dr. Jonathan Metsch, Liberty Health’s president and chief executive officer. “To create the best environment care, given that we have to provide the latest medical equipment. But just as important, we must provide advanced clinical IT solutions to support 900 physicians and nurses as they provide health care for this community. Of 600,000 people that is why we have partnered with McKesson – we get an excellent, advanced clinical applications “
Link 3 :. Strategic Management of Information Technology
in recent years, several new and powerful forces in the technological and market environment forcing one to recognize the relationship between strategic management and information technology in terms of the fundamental role of IT in influencing the policy formulation solid rather than just to support its implementation.
The potential for innovative competition mode as well as new products and services possible through it provides managers with an entirely different spectrum of opportunities and threats. Given the general explosion of computing power and communications capabilities (integrated voice and data network), some new business applications can be (and have been) developed in those areas that directly enhance the efficiency and effectiveness of the square.
Examples: policy Merrill Lynch Merrill Lynch shows the potential offered by ICT to develop better substitute products (or services) as well as change the definition and domains of business operations. The introduction of Cash Management Account (CMA) of Merrill Lynch represented a revolution in terms of redefining the concept of financial market that was dominated by traditional banking institutions. The new business was built around integrating different financial instruments under the common practice so that individual investors are able to enjoy the convenience of transferring money over them as well as benefit from the “float” that banks traditionally enjoyed. This account allows integration of four basic services to investors: (1) automatic investment of cash and dividends in money market account, (2) credit through normal margin account, (3) cash withdrawal by check or debit card, and (4) investment in management and diversify account.
The policy could not be implemented without the use of information technology, it requires daily swaps across different accounts to send credit card charges, checks, securities and deposits, as well as developing daily updated credit limit for each account holder . This complex processing operation is not incidental but business is essential to the conceptualization and operation. The importance of information technology in this strategy is perhaps best underlined by the fact that Merrill Lynch received a patent for a cash account management system. The annual fee generated by this product for Merrill Lynch was quite significant.
Several variants (circurnventing of patent protection) of this basic concept have appeared in recent years, no one has so far approved product success Merrill Lynch.
Other companies that have utilized it to break down traditional industry boundaries in the service of Sears, now integrated the financial services provider; Citicorp, now investment and real estate companies as well as banks; and American Express, always strong in tourism, now making a play in international banking, insurance, and securities, as well as of financial and information supermarket. Indeed, the entire industry is transformed for similar but related forces: freedom and technology.
[ad_2]
Source by Nicole Bobbin