The Strategic Issues Which Are Associated with Information Systems - Essay Example

What is 'Strategic Information Management' (SIM) and why is it an important organisational activity "We sit on the edge of a cliff, where radical new technology is rising up to us with a force so powerful that it will transform our landscape. The rules of commerce are shifting rapidly, with explosive new business models taking shape by the minute. Almost every day we are astounded by the latest innovation in communications, computers, and biotech. Technology is behind key transitions in the very foundations of our society." James Canton, Futurist.1 This essay defines and appreciates the strategic and organisational issues which are associated with information systems. SIM is an essential part of the emerging business landscape which is pretty much inundated by rapidly changing technology with each passing day. SIM is important because information tends to become vague and complicated and very often it can be Organisational Activity can demonstrate a lack of quality in the information.2 A Strategic Information System (SIS) aligns itself with the management strategy and the structure of a Firm and allows the timely response to changes recurring in the business environment and competition issues.3 Wiseman (1985) has defined the strategic information system (SIS) as, "The information system to support or change enterprise's strategy."4 The general perspective of Information management involves a reference to the management of any kind of information .This may involve document management, electronic document management records management, document imaging, process automation and digital asset management.(Wiseman 1985) Background of SIM and SIS Historically information management was subject to the nuances of bureaucratic procedures and had a limited role in management decisions.(Galliers 1991).The potential of profit by information management systems has only emerged in the recent decades and the modern businesses view information as a weapon against competition and a strategic resource. (Galliers 1991).The former attitude changed radically in the mid-sixties when organisations started viewing information as a tool for general management support. Until the decade of the eighties however information management was limited to weekly financial and management reporting and accounts of inventory and arrears.(Galliers 1991) During the early nineties these information systems emerged as serving a special purpose. At this point information systems like decision-support systems (DSS)5 and executive support systems (ESS)6 became popular with the main aim of support and the fast expedition of the decision-making process of organisations (managers and executives). (Swatman 1995). Prominent examples of Strategic information systems have included the use of SABRE and APOLLO by the US Airlines in the past for the increase in travel bookings of these Carriers by making sure their names appeared on the first screens of the travel agents.7 In the recent times Information has emerged as a strategic resource to gain competitive advantage, as well as to defeat and frustrate the competition. (Porter 1985).An important example quoted by Porter (1985) of information management is the Paperwork Reduction Act of 1980 the philosophy behind which was to manage information by requiring federal government agencies to develop an information resource officer's role. Such systems being an integral part of SIM ensure the organisations survival in the fast track corporate world. Porter(1985) has also identified a value chain model to help identify problem areas in information systems in order to supply a strategic advantage. Porter (1980) has also identified the competitive forces model which describes a number of external threats and opportunities which can be countered by competitive strategies. See below for a model diagram of both these concepts. The potential of information systems is immense as it can be developed to not only defeat rivals but also to counter the pressure from competing substitutes and an increasingly demanding consumer base. The value chain model above ( Porter 1985) shows certain activities in the business where competitive strategies can be applied for a successful strategic impact on the business management. The model presents how the firm involves in a chain of activities to add the required margin of value to a firm's products or services. The way ahead for organisational success Thus SIM has become a critical factor to any organisation's success and the success of contemporary organisations and involves a medley of business philosophy and alignment of business policy and culture to facilitate the means by which ways information can benefit businesses. As a critical, integrated part of a general management framework it remains a vital lens through which all major management decisions can be viewed.8SIM systems involve the definition and foundation of business missions based on the consumer demand, during the establishment of the core processes for the successful accomplishment of these missions. Furthermore the decisions based on the SIM system will be the ones which guide mission delivery processes. The awareness of intellectual property rights and increased litigation together with the advent of information ecology, enterprise portals, security and privacy has led to highly developed SIM systems.9Information technology has encouraged the development of SIM and has heavily influenced organizational activity. The Modern Organisation faces more competition today than almost two decades ago. Today the key to the success of any successful enterprise relies heavily upon the right mixture of organisational resources brought together to achieve an edge in the marketing of the products and information is an essential ingredient in this regard.(Kirk 1999) SIM will thus involve the identification and effective utilisation of information to play a large role in an organization's achievement of competitive advantage. Effective gathering, processing, and dissemination of information allows for massive business success for an organisation.(Kirk 1999). The diagram10 below shows how organisations can strategically manage information resources to gain a deeper insight into the benefits that can be derived from SIM .Highly developed SIM systems have led to more technologically literate organisations leading to management success.(Kirk 1999) The modern business manager's task has been made easy by the utilisation of the informational content of records. This can in turn help decision making and there is no longer a need for managers to concentrate on the evidential qualities of the information records (Wiseman 1995).However the SIS have found little hospitality amongst the unprepared segments of organisation (for example records managers) as the advent of these new form of management has led to a re-evaluation of the organisational roles and structures. This is mainly because the conventional management of static information resources is being replaced by the new found "information in motion". However the advent of ICT into management is not entirely without its downside as it has give rise to preservation and access issues as observed by Burk and Horton(1991). Burk and Horton (1991) have also identified five main stages in the history of information management which show the shifting focus of information work towards an increased strategic use and application of the information itself. These stages are paperwork management, management of corporate automated technologies ,management of corporate information resources ,business competitor analysis and intelligence ,strategic information management. As evident from this model ,the modern developing theory is the last stage i.e. SIM which places great emphasis on the quality of decision making and the utilisation of information to emphasize the quality of decision making. The aim would be to provide a linkage to the functional business strategies like manufacturing, research, and development and thus it becomes a top-management, strategic function. Burk and Horton (1991). The problems associated with the role of SIM in organisational activity Information Systems Management is not without its own set of problems and has often caused a failure to communicate between managers and technologists. Comprehensive knowledge of technology for organisational managers has become imperative to be able to exploit the benefits of SIM systems and to be able to build upon the analysis and application of information in different organisational contexts. The concept of SIM is still pretty much embryonic and it has emerged along with records and information management (RIM) and knowledge management (KM) while the at times nerving and complicated implications of digital information technology still pester organisations and their management. Earl (1996) has made some interesting observations about the SIM and SIS. He acknowledges the recent spur of IT companies and management consultants for the development of methods and techniques for identifying and agreeing investment in information systems which support business strategy and even create new strategic options. (Earl 1996).However in practical terms, Earl (1996) comments "Business strategies often prove to be a weak foundation upon which to build IS plans, planning methodologies turn out to be too complex or time-consuming or the official IS strategies are not implemented." He goes on to define the "Five Common Approaches and their Pitfalls" which are identified in terms of Business led approach where he says that business strategy should not always lead Information Systems Strategy. For him the business led approach can fail if the business strategy is ambiguous in itself.(Earl 1996).The Method driven approach can be useful in identifying the gaps in business strategy but may offend the senior management of an Organisation who might feel that the IS strategy is over shadowing the business decisions.(Earl 1996).The Architectural approach which utilises analytical modelling and tools (e.g. computer-aided software engineering) to produce IS plans in the form of blueprints) has been criticised by Earl (1996) as taking large amounts of resources, including management time, and money. The Administrative approach involves the adoption of this approach to utilise their normal resource allocation procedures e.g. financial planning or capital budgeting but may still demonstrate gaps in administration. Last but not the least there is the Organisational approach which allows companies that adopt this approach to "accept that IS planning is not a neat and tidy endeavour, but instead requires a true partnership between the IS function and the organisation. One could call it the "themes-with-teams'' approach, since the firms focus on a limited number of themes with clear deliverables and then use teams to identify business change projects and IT applications." Earl (1996) has endorsed the last approach (Organisational Approach) and believes that "strategy analysis techniques to discover IT applications that will yield a competitive advantage; using formal planning methods and information engineering techniques; and assiduously following resource-planning and project-control procedures." Many proponents of the SIM have emphasised upon the creative use of information rather than the technology to create, transmit, and present that information. One of the most positive aspect of sound strategic management concerns its flexibility to new challenges. Kirk(1999) has suggested that since the work of managers in small and medium-sized enterprises is very information-intensive and the environment in which it is done is very information rich it should not be overlooked whether this wealth of material is being fully utilised to its potential. Information needs strategic management to fully realise its potential and improve business potential. Kirk(1999) has further noted that the solution to such organisational blocks is in " clarifying the context of the practice of information management by exploring aspects of organisations and managerial work and in exploring the nature of information at the level of the organisation and the individual manager." The modern concept of SIM has encompassed the strategic uses and the use of information for competitive advantage by drawing upon internal and external information resources. Advantages of SIM have also been noted to include the increase in productivity and creativity of the people who handle this knowledge as well as an increasingly effective use of information resources within organizations .Academics have also noted that SIM facilitates the development of policies which maximize the benefits resulting from the widespread use of these sources. Central to the SIM philosophy is the understanding of the limitations of ICT and effective communication of information, along with the recognition of the importance of managing various pieces of corporate information like records and financial systems. Furthermore what is essential is the timely identification of internal information sources for better business strategies. What should be understood is how other people will perceive the same information and process it and what will infact limit their search. Thus the success of SIM is crucial upon the perception of information as an important resource and allocation and devotion of competitive parts of the organisation to the SIM function to avoid neglect. On a more practical level the SIM personnel will be involved in the identification and coordination of information resources throughout the corporation and will be able to identify the gaps and deficiencies in the information. Conclusion Still in its embryonic stage, the concept of SIM requires some development along with other emerging management trends and is a concept pretty much worthy of continuing attention and development. Presently the term only encompasses the imaginative, systematic management and the use of information to achieve objectives which that are clearly aligned with and contribute to the aims of the organisation. However there is ample potential for this concept to go far in the development of organisational development in the future. The concept is said to have played a major role in thwarting terrorist activities by SIM based treatment of Intelligence sources and information. However it should be borne in mind that the too much information can obscure the real picture and hinder the Managers from truly capitalising upon the relevant information. (Kirk 1999).This is likely to happen in the hastened processing of large chunks of information in highly competitive settings.SIM addresses the issue of too much information by its proper management and to gain or conceal information during actual physical interaction of organisational entities. Last but not the least Strategic information systems contribute to the enhancement of managerial understanding (Kirk 1999) in the context of organisational development and profitability. More so they assist in timely business decisions and in the formulation of financially prudent strategic plans. In reality the SIM is actually a consequence of many modules with different functions and the proper integration of these modules to form a coherent and unified system is an essential task for the effective SIM application. References 1. Currie, W.L. and Galliers, R. (1999). Rethinking Management Information Systems, Oxford University Press. 2. Downes, L. and C. Mui (1998). Unleashing the Killer App: Digital Strategies for Market Dominance. Boston MA, Harvard Business School Press. 3. Earl, M. (1989). Management Strategies for Information Technology, Prentice Hall. 4. Galliers, R. D. and D. E. Leidner (2003). Strategic Information Management:Challenges and Strategies in Managing Information Systems, Butterworth Heinemann. 5. McKeen, J.D. and Smith, H.A. (2003) Making IT Happen: Critical Issues in IT Management. John Wiley & Sons, Chicester. 6. Robson, W. (1997). Strategic Management and Information Systems. London, Pitman Publishing. 7. Galliers, R.D., Sutherland, A.R. (1991), "Information systems management and strategy formulation: 'the stages of growth' model revisited", Journal of Information Systems, No.1, pp.89-114. 8. Galliers, R.D., Swatman, P.M.C., Swatman, P.A. (1995), "Strategic information systems planning: deriving comparative advantage from ED", Journal of Information Technology, Vol. 10. 9. M. Tagliavini , J. Moro , A. Ravarini , T. Guimaraes, Important CIO features for successfully managing IS sub-functions, Strategies for managing IS/IT personnel, Idea Group Publishing, Hershey, PA, 2004 10. Alan Eardley , Hanifa Shah , June Lazander-Reed, Methods for developing flexible strategic information systems: is the answer already out there, Adaptive evolutionary information systems, Idea Group Publishing, Hershey, PA, 2003 11. Jonas Hedman , Thomas Kalling, The business model concept: theoretical underpinnings and empirical illustrations, European Journal of Information Systems, v.12 n.1, p.49-59, March 2003 12. 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