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Digital Business Management

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Natalia Babinska

on 2 December 2015

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Transcript of Digital Business Management

Digital Business Management
Information Systems Strategy Triangle
Organizational Strategy
Business Strategy
Main types of strategic systems
1. Those that
information via technology-based systems with customers/ consumers and/or suppliers and change the nature of the relationship;
2. Those that
more effective integration of the use of information in the organization’s value-adding processes;
3. Those that
the organization to develop, produce, market and deliver new or enhanced products or services based on information;
4. Those that
executive management with information to support the development and implementation of strategy (in particular, where relevant external and internal information are integrated in analysis).

Why IS Strategic Planning is important?
Information Systems strategy matrix:
Strategic IS Planning
is the
of defining the
or direction, and deciding on
how to allocate
the resources to pursue this strategy
by using IT,
including the organization’s
capital and people.
Strategic IS planning should look

It ensures three factors influencing
competitive advantage:
- concentration
- turbulence
- performance
• To arrange the resource
more efficiently such as Financial, Facilities, Staff
• To ensure competitive advantage -
align I/S with the business and achieve operational excellence
• To identify needed applications
• To attain customer service
• To track progress -
to establish goals, schedules, and milestones in order

• To improve decision making
• To improve communication with management and customers

Five Competitive Strategies

IS importance within business
1. What are the important
reporting relationships
within the organization?
2. Who holds the
decision rights
to critical decisions?
3. What are the
, and
skill levels
of the
within the organization?
4. What are the key
business processes
5. What
control systems
are in place?
6. What is the
of the organization?

Information Strategy
Business Strategy (BS)
Frameworks for the Business Strategy
Porter’s Competitive Advantage
Porter's Five Forces
Porter’s Value Chain
Hypercompetition and D'Aveni's New 7 Ss Framework
Social Business Strategy
Business Diamond
Managerial Levers
Organizational Strategy
Summary of organizational strategy frameworks
Understanding organizational strategy...
...means answering the following questions:
The answers to these questions inform any assessment of the organization's use of IS
By means of these frameworks, the manager can review the current organization and carry out an assessment of which components might be missing and what options are available for the future.
between information technology and organizations is complex.
It is influenced by many
mediating factors
: organization's structure, business processes, politics, culture, surrounding environment, and management decisions.
Organizational strategy
includes organization's design as well as the choices it makes to define, set up, coordinate, and control its work processes.
Organizational strategy and information strategy must
each other.
They must be designed so that they
, rather than hinder each other.
Business diamond
is a simple framework that enables one to understand the design of an organization.
It identifies crucial components of an organization's plan: its
business processes
values and beliefs
management control systems
, and
tasks and structures

This framework suggests that the successful execution of a business's organizational strategy comprises a combination of
cultural variables
These variables are
managerial levers
used by decision makers to effect changes in the organization.

A business strategy is a comprehensive vision of where a business aiming and how it expects to get there.

Competitive advantage is achieved through
cost leadership
differentiation and

Understanding this strategy is critical to choosing IS to complement it.

Porter’s Generic Strategies Framework
Porter claims that the

“fundamental basis of above-average performance in the long run is sustainable competitive advantage”

These advantages derive from the company’s relative position in the market-place, and they depend on the strategies and tactics employed by competitors.

mission statement
communicates the vision of the business.

Together with business objectives, strategies, and tactics, it drives the structure, hiring practices, and other components of the BS as well as decisions regarding IS components.
BS which drives OS and IS
A business strategy that drives both the OS and IS strategy leads to a successful business that carefully balances these three strategies.

To create synergy the OS and IS strategies must complement the business strategy.

Strategic advantage is sustained by constant SWOT analysis, innovation and BS, IS and OS adjustments which lead to flexibility and agility of culture in the organisation.
An example of Mission Statements from computer companies.
Porter’s 5 Forces are useful for diagnostics, or understanding how a business seeks to profit from new opportunities for advantage.

Porter’s models were developed at a time when competitive advantage was sustainable because the rate of change in any given industry was relatively slow and manageable.

Since the late 1980s several newer models were developed to take into account the increasing competition, turbulence and velocity of the marketplace caused by technologic developments and globalization.

The marketing environment saw a paradigm shift from a transactional to relational style of marketing. Organizations were flattened empowering individuals, positioning for speed to cope with the aggressive competitive environment.
Porter’s Value Chain focuses on an organization’s internal supply chain and is the basis for IT/IS business alignment of the inbound to outbound flow of materials and information.
It can be used for
designing new organizations
and for
diagnosing organizational problems
It is relevant with regards to
implementation of IS
in the organization, as such implementation
will affect each of these components
(to implement change, all components must be changed simultaneously).
example can be used to illustrate Business Diamond.
Hypercompetition models suggest that speed and
aggressiveness of moves and countermoves
in any given market create an environment in which advantages are
“rapidly created and eroded.”
The 7 Ss identify and align different aspects of a
assessing competitors strengths and weaknesses in a turbulent environment.
D’Aveni’s four arenas to achieve competitive advantage:
- cost/quality, - timing/know-how, - strongholds, -deep pockets.

... the organization’s plan to provide information systems and services.
Tactics for Disruption
GE’s Jack Welch’s strategy ‘destroy your business’ (DYB) suggested that a BS must continuously redefine in order to be successful. The Grow Your Business (GYB) strategy, finds ways to reach new customers and better serve existing ones.
Destroy Your Business (DYB)

Web 2.0 IT provides no/low cost intelligence instantly. Social IT, aligned with OS and IS creates engaging collaboration, extending reach to stakeholders. Close connection to the organization or brand is created with shared ideas, information and expertise.

The IS Strategy Triangle promotes efficient management of the supply chain, sense and response to customers and facilitates
“Value Webs”.

Understanding the BS is imperative in choosing effective IS that will propel business.

Strategic models that influence the implementation of IS within organizations using concepts of competitive pressure theory and contexts as a foundation for the later strategic and IS elements will be explained through the

Systems Strategy Triangle -
Business Strategy (BS), Organizational Strategy (OS) and Information Systems Strategy (IS).

The IS Strategy Triangle explains the relationship between the Business Strategy, Organizational Strategy and Information Systems Strategy. All Strategies drive and support each other creating synergy and alignment.
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