Реферат: Strategic Information Systems Essay Research Paper The

Exhibit 5: Porter’s Industry Value-Chain

(Porter 1980)

An enterprise’s activities are subject to influence from:

? new technologies. These may alter the path of the value chain, eg. the invention of semiconductors forced many vacuum-tube producers out of business, and the printing and publishing industries are currently confronted by a major upheaval;

? new or shifting buyer needs. Customers are demanding the convenience and consistency offered by fast-food chains. This in turn influences related market segments;

? change in industry segmentation. The disappearance of old intermediaries and the emergence of new ones creates the potential to substantially reconfigure the value chain. Enterprises that fail to adjust will be forced out;

? shifts in the costs or availability of factors of production. Competitive advantage can be gained by optimising based on current conditions. On the other hand, enterprises saddled with assets and approaches tailored to outdated modes of operation suffer;

? change in government regulations. Changes in product standards, environmental controls, restrictions on entry to the market, and trade barriers all affect an enterprise’s performance.

Several developments in several different business disciplines have been associated with the value-chain concept. Activity-based costing (ABC – Johnson & Kaplan 1987) is one. Another is business process redesign / business process reengineering (Hammer 1990, Hammer & Champy 1993).

Key Elements of the Theory

As is commonly the case with emergent areas of study, conventional empirical research was not feasible during the early years. Most of the early literature was anecdotal, mentioning early examples of systems, but lacking references to authoritative papers or case studies. Indeed, details about many of the leading cases only became widely available many years later, e.g. American Airlines (Copeland & McKenney 1988), McKesson (Clemons & Row 1988), and American Hospital Supply [now Baxter] (Main & Short 1989, Venkatraman & Short 1990).

The early papers and books focussed on the ‘competitive advantage’ which IT could lead to, and were optimistic, even ‘upbeat’. It is certainly not contended that these sources were unquestioning, nor that they contained no seeds of the subsequent developments in the theory of strategic application of IT. They were, however, very positive in the tone in which they discussed IT’s contribution to corporate strategy.

During the period following 1985, as experience was gathered and deeper studies were reported on, the literature became somewhat more circumspect. The new materials focussed less on the opportunities than on the processes and the pitfalls. Progressively, a collection of qualifications arose to the initial, relatively ‘naive’ theory (Miron et al 1988, Karimi & Konsynski 1991, Galliers 1993, Kettinger et al 1994). Associated with this phase were new, and often more ambiguous, case studies, including Philadelphia National Bank (Clemons 1990), CALM (Clarke & Jenkins 1993), Minitel (Cats-Baril & Jelassi 1994) and MSAS Cargo (Ives & Jarvenpaa 1994).

One series of papers focussed not on companies which adopted a successful leadership role in the application of IT, but rather on those which followed. They recognised that where one corporation achieved a significant competitive advantage, it quickly became incumbent on its competitors to neutralise that advantage, and hence to avoid ‘competitive disadvantage’ (Vitale 1986, Warner 1987, Brousseau 1990). The notion of ‘competitive necessity’ was created to complement that of ‘competitive advantage’.

A special case was the phenomenon of ’second-mover advantage’, where the first-mover actually incurs a disadvantage. This may arise variously because the pioneer increases the knowledge available about the application (hence driving the risks down); establishes a level of volume (and hence overcomes resistance and drives average costs down); and/or becomes locked into a system which quickly becomes obsolescent (and hence is subject to being overtaken by a well-informed and unencumbered second-mover).

A distinction came to be drawn between ’sustainable’ and ‘contestable’ competitive advantage (Clemons 1986, Feeny & Ives 1989, Ciborra 1992). The thesis was that many kinds of advantage which can possibly be derived from innovative use of IT result only in ephemeral advantage, which is quickly neutralisable by second- and later-movers. A distinction needs to be made between the sustainability of the original advantage, and of any derived advantage (such as increased market share).

An enhancement to the Porter framework of competitive strategy was the notion of ‘alliance’ (Barrett & Konsynski 1982, Gummesson 1987, EDP Analyzer 1987, Johnston & Vitale 1988, Rockart & Short 1989, Wiseman 1989, Konsynski & McFarlan 1990, Ford 1990, Bowersox 1990). This referred to chains or clusters of organisations which collaborate in order to gain competitive advantage over other, similar organisations, or to neutralise the advantage of one or more competitor organisations.

A further idea which has emerged is that innovation in IT is of strategic importance only if it is compatible with, and preferably leverages upon the company’s existing characteristics and advantages (Beath & Ives 1986, Clemons & Row 1987, Ives & Vitale 1988, Hopper 1990). One particularly important facet of this is the notion of ’strategic alignment’ of IT policies and initiatives with the directions indicated by the corporation’s senior executives (Henderson & Venkatraman 1989, Earl 1989, Broadbent & Weill 1991).

An outline of factors that influence organisation’s strategic goals is summarised in Exhibit 6.

Exhibit 6: Scott Morton’s Five Forces Influencing the Organisation’s Objectives

(Scott Morton 1991)

Organisations are facing the reconceptualisation of the role of information technology in business. Scott Morton proposes five levels of complexity at which reconfiguration can be applied. Exhibit 7 reproduces his schematic:

? evolutionary levels:

o localised exploitation within individual business functions. The primary objectives addressed are local efficiency and effectiveness;

o internal integration between different systems and applications, generally involving not just automation, but also rationalisation, and using a common IT platform. Efficiency and effectiveness are enhanced by coordination and cooperation within the enterprise;

? revolutionary levels:

o business process redesign, involving more thorough re-evaluation of the enterprise value-chain and the production process, and more far-reaching change;

o business network redesign, the reconfiguration of the scope and tasks of the business network involved in the creation and delivery of products and services. Coordination and cooperation extend, selectively, beyond the enterprise’s boundaries; and

o business scope redefinition, involving migration of functions across the enterprise’s boundaries, to the extent of changing the organisation’s conception of the business it is in.

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