Design of a Model for Strategic Information...
Transcript of Design of a Model for Strategic Information...
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Chapter 2
Review of Literature
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Review of literature
1. Bennett (1987) suggested that the Decision support system task is not only to dictate a
particular decision in form of solution. Rather it can function in many ways:
I. They can organize information for decision situations
II. They can interact with decision maker
III. They expand the decision maker horizons in many aspects.
IV. They present information for decision makers understanding.
V. They may add structures to the decision to remove complexity.
VI. They use multiple criteria decision-making models.
The decision support system has been conceptualized as a process instead of a product.
The focus of the decision support system is on the decision maker‘s interaction with the
system and not one the output generated. It was also proposed that rather than creating its
own decision support system in the initial thrust it will be advisable to use a package of
interrelated hardware and software called Decision Support System generator. But after a
time gap every firm should create its own system.
2. Keen (1978) had forwarded the ―Decision Making Style‖. The decision making style
could be broadly classified into Analytical and the Traditional styles. In the analytical
decision making, the emphasis is on the scientific methods and the decisions are not left
over the discretion of an individual rather a process is designed in which step by step
procedures are clearly defined. The quantitative information is recorded and analyzed
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through various models and statistical tools, and thus the information is retrieved. But for
this sort of system timely and accurate information is needed along with a fast calculation
based retrieval system is needed. The traditional decision-making is more or less based
on the intuition of an individual. Like an intuition is based on some past experiences,
similarly in this the decisions are based upon the past experience of individual. This is the
fastest way of decision making, but the system is based on the hit and trial method.
According to him if the organization wants to be successful than analytical decision-
making is needed and with the growth of the organization it becomes impossible to run
organization with sheer intuition.
3. Nolan (1974) has designed a four-stage model through which the information system
of any company moves. According to him every information system has its own life
cycle and by closely monitoring them we can see that ―what is the standing of
information system in the organization‖
The different stages formulated by him are as such
I. First Stage or Initiation Stage: Under it the technology is introduced in the
system but none is there to use this technology.
II. Second Stage or Expansion Stage: There is huge and uncontrolled growth in
technology in this stage. Many people in organization assimilate themselves
with the new technology.
III. Third Stage or Control Stage: A strict control over the technology by the
management is put. Cost effective criteria is used, sometimes it crosses the
limits and becomes a barrier in attaining its maximum.
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IV. Fourth Stage or Maturity Stage: Under this finally the company gains a proper
control over the technology and starts harvesting the crop beard by
information system.
V. In the year 1979- The maturity stage was replaced by further three more
stages:
VI. Fourth Stage or Integration Stage: The benefits from the technology are on the
top and control is minimized. The major thrust is over the integration in the
system.
VII. Fifth Stage or Data Administration Stage: The controls are lowered to the last
and thus it helps organization in developing its strategic competence.
VIII. Sixth Stage or Maturity Stage: Stability comes into picture; the system starts
working smoothly at a constant pace. According to him the third and the last
stage shows a bend if we draw a graph keeping expenditure on Y axis and
administration on X-axis. This is due to the fact that in the third and the Sixth
stage proper control is administered.
Figure 2.1 Maturity Stage
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According to Richard by introducing the new technology the Maturity Stage can be
overpowered and a new cycle could be seen in the picture.
4. McFarlan and Mckenney (1983) forwarded broad guidelines for evaluating the current
and proposing the future need of information system he forwarded a strategic grid which
has following important components
I. Strategic: This part of activity is most critical because it is important both in
current situation and as well in future situation.
II. Factory: These activities are although the cornerstone of the current system
but may be an obsolete activity in the future system.
III. Support: These activities could be a support to the current operation. But they
are not the part of the critical operations and are not included as part of future
strategic direction.
IV. Turnaround: These activities have no relevance in the current situation but in
the coming time it could prove its utility because these activities play an
important role in the transition period.
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Figure2.2 Strategic Grid
5. Kalia, Goyal and Bansal (2002) have found that, for judging the requirement analysis
that out of Questionnaire, Interview, internal records, and onsite observation. The
interviews are best suited for studying the requirement analysis in both through the users
and the developers view point. The second rank goes to the internal records and the third
one to the onsite observation. The study emphasized that for system analysis tool high
variation was seen in the viewpoints of the developers and the users. In the developer‘s
viewpoint, the data dictionary, data flow diagrams, entity relationship diagram and flow
charts are more important whereas in user perspective, the flow charts, data flow
diagrams and organization chart are important. One more important point raised was that
according to developers the users are not clear about the problem themselves and user
approaches them frequently for modification even after the requirement phase is
completed.
6. Turkle (2003) says that in the 1980‘s the computer engineers used to be designers in
the computer field, but now for increasing specialization an individual from his own field
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will have to come forward so as to help its operation. The reason behind it is that only a
person working in a specific environment knows about the intricacies involved in that
environment and thus that person who can propose an effective information system. So if
an information system for hospitals is to be designed than Doctors should be one who
actively participates in that process.
7. Saini (2002) highlighted that keeping aside the operational level functions the Punjab
State Electricity Board is lagging behind in computerization. This is due to the financial
constraints and the employee‘s perception that computers could lead in the shunting of
employees in the organization. Many efforts has been started to computerize the working
in the organization but still that is only limited to the operational level. Moreover the
suggestion was forwarded that if the P.S.E.B. wants to improve its functioning than it
should allocate a separate fund for establishing computer based system. It will not only
improve the effectiveness but will bring the costs lower in the short span.
8. Malik (2001) says a model can applied to any organization using the following steps.
I. Identify the views and the sub views for which the information system
effectiveness needs to be evaluated. It is recommended that the first time
evaluation must be done for all the views defined for the model. However,
subsequent evaluations can be done on selective basis for the views and sub views
on which we have to focus for improvement.
II. Select the sample of respondents representing the population of the organization
under study.
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III. Get the responses as per the instruments defined for the views under
consideration.
IV. Evaluate the effectiveness as per the steps defined for evaluation for the related
instrument.
V. Take counter actions to improve the areas indicating low level of effectiveness.
VI. Repeat the steps 2nd to 5th till the desired level of effectiveness is achieved for
area of concern.
VII. Repeat steps 1st to 4th after a reasonable gap of time depending upon the
dynamics of the organization/ industry / environment.
9 Balasubramanian and Shankaranarayanan (2002) have opined that the organizations
collect and manage large volumes of data as a consequence of e-business and. its
supporting technologies. The strong push to gain business intelligence has increased in
the different ways the data is analyzed and the types of decision-tasks it is used for.
Decision-makers are forced to become more responsive and make quicker because of
having access to resources (data, models, etc.) anywhere, anytime (including real-time).
Decision-makers perform different decision tasks using models and share outcomes with
several other decision makers. This creates dynamic decision environments characterized
by high frequency and a large variety of decision tasks and multiple stakeholders (model
designers, model custodians, and consumers). Model management is an integral part of a
digital enterprise and in such environments efficient model management demands not
only providing access to the models but also providing access to the metadata (and
knowledge) associated with each.
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10. Alter (2002) forwarded a nine work system elements, which can improve the
Decision making in any organization. He has also proposed possible solutions to improve
that elements functioning. These are as such.
I. Business process: How changes in particular business process characteristics
(such as degree of structure, range of involvement, complexity, and so on)
affect the process efficiency and decision quality. The proposed suggestion for
it is: Possible variations in the sequence of steps or in the methods used for
performing particular steps.
II. Participants: How individual characteristics such as personality type, risk
aversion, gender, background, and status affect sense making and decision
making, both for isolated individuals and for individuals working in teams;
how to recognize and address significant differences concerning assumptions,
goals, and understanding related to a particular decision The solution for it is:
Better training, better skills and higher levels of commitment.
III. Information: How information can be used to minimize the effects of common
flaws in decision-making effects, effects, such as overconfidence, poor
probability estimation, and groupthink. The scope of improvement is through:
‗Better information quality, information availability, and information
presentation.
IV. Technology: How better tools can help people understand situations and deal
with information overload; continued development of established tools and
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techniques such as mathematical modeling, statistical methods, data mining,
etc. The solution is: Better data storage and retrieval, models, statistical or
graphical capabilities; better, computer interaction.
V. Product and services: How to evaluate the quality of decisions, especially as
part of the decision process rather than after the effect. Solution: Better ways
to evaluate potential decisions
VI. Customers: How to involve customers in the decision process and obtain
greater clarity about there needs and goals. Solution: Better ways to involve
the customers in the decision process and to obtain greater clarity about their
needs.
VII. Infrastructure: More effective ways to exploit shared infrastructure within
decision processes. Solution: More effective use of shared infrastructure might
lead to improvements.
VIII. Environment: How to visualize whether a possible decision might conflict
with the surrounding environment, and how to adjust the decision accordingly.
Solution: Better methods for incorporating concerns from the surrounding
environment.
IX. Strategy: How to assess and represent the extent to which a possible decision
is aligned with the corporate, departmental, and individual strategies.
Solution: A fundamentally different operational strategy for the work system.
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11. Parikh and Fazlollahi (2002) pointed that for the success of any system there are two
forces behind it namely System Use and the System Effectiveness. If one of them will be
missing then success of system is doubtful. The effectiveness of system depends upon the
factors like Decision Quality, User Learning, Decision Time, Cost benefit advantage,
System Reliability, and System Responsiveness. The system use depends upon the factor
that what is the intention to use and the actual use which further depends upon the factor
like system usefulness, ease of use, user confidence, information relevance, user training,
user experience and skills, user expectations, organizational support, user involvement
and responsiveness. Moreover the factor that could play havoc in this is the environment
impact on the users, team, organization, industry, economy, and society.
Figure 2.3 Factors for System Success
12. Liu and Schulz (2000) have discussed about the intelligent outage data processing
algorithm that provide more accurate outage information for the estimation of fault
locations by combining data from trouble call, AMR and distribution SCADA. The initial
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data validation is being developed to avoid non-outage notifications. A fuzzy logic
algorithm is then used to model uncertainty and to reconcile conflicting data. The filtered
outage data could be used for outage location determination and system restoration for
both non-storm and storm conditions.
13. Sridharan and Schulz (2001) have discussed the development of an intelligent
information filter for automated metering systems. The filter prevents false outage
notifications in addition to improving the quality of outage data. The nature of wireless
communication in the AMR system introduces uncertainty issues in the query process.
This uncertainty has been modeled using probabilistic and fuzzy engineering techniques.
The filter has also been tested using historical outage data.
14. Liu and Schulz (2002) outlined the research work to incorporate AMR information in
outage management. The first technique combines AMR data with SCADA and trouble
call data to identify an outage and then uses AMR polling to verify the outage and its
level. The second technique provides a way to use AMR to confirm restoration of all
customers below an outage device.
15. Liu et al (2002) outlined various efforts to incorporate intelligent system techniques
into distribution outage management. These efforts include using fuzzy logic to filter
multiple sources of information related to outages as well as a knowledge-based system
to identify the location of an outage and then verify the outage status using meter polling.
Such techniques allow users to process additional data providing more real-time analysis
techniques for distribution systems.
16. Dugas (2005) has stressed on the fact that global communications phenomenon has
clearly taken hold in the AMR industry. With the help of the AMR systems, utility
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companies have the potential to install systems that read meters from anywhere at any
time. Utility personnel and contractors can read individual meter data without leaving
office and can easily check up on network status and receive automatic alerts in case of a
anomalies such as leakage, tampering etc. Part of improvement in the AMR networks
chain comes from increased use of GSM-SMS-GPRS services. This new wireless (M2M)
technology complements wire line PSTN networks to get data from filed back to utility
office when using a fixed network topology.
17. Kumar and Rajput (2006) has pointed out the use of IT in metering started with the
advent of static energy meters. These meters were microprocessors based. Gradually the
new technology which various power utilities are implementing is the AMR. It is a
process of digitally noting the energy meter readings. This process eliminates the
traditional pen and paper and errors associated wit the manual reading. AMR also makes
the data recording fast and saves on time. AMR can be classified between meter reading
station and target meter. Firstly the local AMR wherein a meter man goes to read meter
with hand held device for collecting readings. Secondly Remote AMR in which the meter
is dialed from the central office using appropriate modems to collect the meter reading
from a distance. The second type is most widely used and is known as RMR.
18. Aggarwal, Mishra and Chandra (2008) have highlighted that power sector in country
sustains a loss of over 20%-30% because of pilferage of electricity. The weakest cog in
the wheel is the human element involved in the reading of the meters and also the easy
accessibility of meters to the customers, a large number of whom tamper with it. To
overcome this flaw, the East DISCOM in MP has taken initiative to implement AMR.
Previously meter reading activity of the HT customers in East DISCOM was undertaken
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manually. But there were cases of thefts and losses. To overcome this problem it was
decided that billing of HT consumers should be carried out through MRI downloads. But
it was observed that substantial amount of time and manpower was engaged in monthly
reading of HT consumers. In view of this DISCOM implemented Remote Metering so
that the valuable manpower involved in meter reading activity could be utilized in more
purposeful and result oriented activities.
19. Dass (2009) has highlighted how New Delhi Power Ltd (NDPL) has been benefited
from implementation of AMR. This technology has helped NDPL to streamline the
billing process and reduce thefts. Conventional method of billing used to send a meter
reader to the site where meter is installed and then that meter reader use to note the
reading of meter in notebook or sheet. After that an era came when meter reader use to go
with the hand held device (HHD). He used to punch the reading in the HHD. But in this
case there were chances of mistake as reading in HHD is punched by reader. This
problem was solved by Meter Reading Instrument (MRI). But in MRI reading of the
meter took more time and in case the meter box is sealed it has to be opened every time.
So the solution is provided by AMR.
20. Land (1982) has pointed out that the systems which have the capacity of adopting to
changing user requirement must be founded on accurate and perceptive models of the
organizations in which they have to function. A project is conceived, requirements are
analyzed, feasibility is established, a series of design are conceived and embodied in
specification and system is customized. The new system operates until it no longer
effectively meets the needs of the organization. A new system may take three years to
design, program, test and implement. Because it is very difficult to build a completely
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flexible system which is capable to accommodate any change, the system planners have
to define in some way the extent of change it is possible to accommodate. This is known
as forecasting horizon. Forecasting horizon will vary from organization to organization.
But one thing which is most important in the forecasting horizon is the expectation of
changed requirements from the system together with the uncertainty regarding these
changes. The other determinant is the extent to which the designer can build the
flexibility.
21. Earl and Hogwood (1994) pointed out that for both the researchers and managers
there is an increasing realization of the problems in information systems area. Many IS
specialist adopt a partial than idiosyncratic view of the role of the information processing
does and can serve in the organization. Indeed information systems are increasingly
operating in a rather isolated, albeit comfortable, organizational niche. That is not to say
that it lacks influence. Isolated though, it may sometimes be for more active processing
information in the organizations. But we should not overlook the fact that today‘s
organizations do contain a mix of vibrant and varied information flow and processes. The
routine co-exists with the non-routine and despite the massive investment in the formal IS
and the application of the limited information decisions concepts, the undercurrents of the
non-routine and unofficial have survived. For the routine decisions, information systems
are the key but for the non-routine decisions, managers have to rely on the other sources
of the information such as task forces, liaison roles and even the grapevine etc. Investing
heavily in the routine, official IS mangers often forget and excluding in investing in the
development of the competing counter-balancing overlapping and reinforcing
information flows and processes. Indeed, a vital taste of information management needs
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to be explication of a better framework processing in the organizations and an
understanding of routine and non routine information and its implications of the IS
analysis and design.
22. Galliers (1986)
puts forward an important point that how can companies ensure that
their investment in the information technology is reaping dividends? The evidence is that
comparatively few British organizations have successfully exploited information systems.
But at the same time one encouraging point emerge that the in present time great majority
of the firms are at least attempting to plan information system developments. When it
comes to stated outcomes of the IS planning process, there is a heavy emphasis on the
factors like identification the information needs of the organization. Similarly
identification of the resources required for the information systems are very important.
About the factors that are important for the success and failure of the IS, the author has
pointed out are commitment from the senior management, involvement of the senior
management and also the involvement of the middle level management is every
important. Similarly pitfalls in the IS planning are highlighted by the author which
include lack of the managing commitment, lack of the IS planning experience, lack of the
business plan.
23. King and Kraemer (1984) presented a comprehensive view of the Nolan‘s model
study. Richard Nolan‘s model first appeared in 1973. It had four stages i.e. Initiation
stage, Contagion Stage, Control Stage and Integration Stage. But this version does not
assert cause and effect relationship. This was borne out in the 1974 version of the model
which translated the descriptive model into a perspective tool to aid managers dealing in
information systems. The most important change was the new formulation of the maturity
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stage instead of the integration stage. In 1979 Nolan introduced two new stages. The new
model was formulated. In the stage I, few applications are installed, control is lax and
planning is non-existent. In the stage II, development is encouraged but lack of the
planning results in the poor quality of design. In the stage III, the problems from bad
design and rising costs create difficulties for the users and management, so control
becomes tighter. In the stage IV in which the costs continue to increase as computing use
increase. Database systems are brought in which helps in the resource management. In
the stage V focus of the computing management turns completely to data administration
in which the control of computing resources is tight but slack is maintained. In the stage
VI, maturity is achieved when the applications portfolio is complete and its structure
mirrors the organization and the information flows in the company.
24. Wiseman (1985) opined that firm with a powerful strategic information systems
vision zealously encourages the search for the application to use information systems to
gain the competitive edge. And when these are discovered, it marshals the proper
resources to support them. In some cases, a strategic information system develops into an
image of the future that top management uses to navigate the firms strategic path. The
paper presents two examples to support this fact. Firstly Dun and Bradstreet Corporation,
the first credit reporting firm in the US. By 1978, Dun and Bradstreet diversified into
information systems, publishing marketing services and broadcast. In 1984 Dun and
Bradstreet made two significant strategic moves, it acquired McCromack and Dodge a
software company and departed from the broadcasting industry by selling stations. It
reflects its strategic vision. Its management has executed strategic moves supported by
IS, move that serve to support or shape the company‘s long term objectives of
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concentrating its efforts and resources in the business service and information industry.
The second example is of the McKesson Corp., in 1984 it was nations largest distributor
of the ethical drugs, fragrances, wines and spirits. McKesson saw a direct connection
between its ability to gain competitive advantage and its use of IS to support and shape
strategies. Over the past 10 years, the company has introduced computer based services
to help it to gain an edge with its suppliers and customers, an edge that translated into
distinct advantage over its distributors.
25. Parsons (1983) forwarded the important point that the significant advances in the
technologies of the computers, telecom data access and storage devices have created a
wide spectrum of new applications for the businesses managers. The speed, cost, size and
capabilities of the new information technology continue to improve at the rapid pace. In
spite of the new wealth of the technological resources available to the business, however
the ability of the most of the business organizations to assimilate and apply IS to the best
lays far behind the available opportunities. At the highest level the IS changes the
fundamental nature of the industry within which the firm competes. In some industries IS
will alter the very nature of the industry product and service, geographic distribution
possibilities for the product and services will be expanded and the speed of the
distribution will be increased. Similarly the IS represents the competitive weapon for
reducing buyers power. By introducing the switching cost, IS makes it more costly for a
buyer to change supplier. Similarly IS provides a potential resource to motivate the
factors driving the suppliers power. Also the IS becomes important weapon to deal with
the new entrants both offensively and defensively. The quality of the service and ability
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to service to a worldwide customer base is built on the IS capabilities. The firms IS
represents a capital barrier and also supports a reputation barrier.
26. Cash (1985) pointed out that the most dramatic and influential contemporary
organizations involve a system that transcends company boundaries. These systems in
some cases dramatically change the balance of power in buyer supplier systems and in
some cases dramatically changes the balance of power in buyer- seller relationship,
provide entry and exit barriers in some industry segments and shift the competitive
position of the intra-industry rivals in the most instances. Firstly an Inter Organizational
Systems are an automated IS used by the two or more separate companies. It consists of
the computer and communications infrastructure that permits the participants to share the
execution of the applications. There is an increasing need for the fast, reliable,
information interchange between suppliers and buyers of rapidly changing product and
services. This trend has primarily based on significant shifts in three areas i.e. the world
economic order, increasing international competition and increasing commitment to the
greater deregulation and open competition by the regulatory biding.
27. Ives and Learmonth (1984) have argued that the information systems traditionally
been considered primarily in the terms of their effects on the individual organization.
Researchers have concentrated their efforts on delineating the nature of the information
systems functioning on operational support versus decision support, impact of IS on end
users and the importance of IS to organization as a whole. But more recently however,
the external use of the IS as competitive weapon is under consideration. This can be
attributed to the several factors including a decline in the cost of supporting information
technologies, structural changes in the economy is caused by the global competition and
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perhaps most importantly the deregulation of many industries. The authors have given a
model that can be used to explain use of IST (Information Systems Technology) in a
competitive strategic environment. This model considers a firms relationship with its
customers and how this relationship can be change or enhanced by the strategic
application of IS. To acquire the products offered by the organization the customer goes
through a resource life cycle. This frequently requires a considerable investment of the
time and effort. If the supplier can help the customer in managing this life cycle, then
supplier may be able to differentiate itself from the competitors. In that process the
supplier will introduce the switching cost for its customers. A customer resource life
cycle will be supported by the application of the IS, provided by the supplier.
28 Ward (1986) has stressed that since the 1950‘s when the computers were first used by
the commercial organizations, the overall objective has been to improve the
competitiveness of the enterprise. In the early days, in spite of the cost and risk involved,
computers were seen as a means of improving the efficiency of those operations where
the primary task was information processing. Many of the early applications merely used
computers as rapid, reliable calculator and data processing system. The benefits derived
were limited in nature. In the 1970‘s the computers had become a repository of
practically valuable management resource information. But unfortunately the information
had been stored to maximize efficiency rather than the ease of access. Also the tools and
techniques were not suitable for the ad-hoc enquiry and analysis. But only recently it has
been possible to overcome the problems generated by previous information systems.
Organizations now are gaining the competitive advantage from the IS. The rate of
improvement in IT, the integration of computing and communications technologies and
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the significant developments in the software capabilities have also opened up new
opportunities. Products and services can be directly modified or derived from the use of
the technology. The relationship between the organization and the environment can be
adjusted by the use of the IS. But to reap the benefits of the IS it is very much important
for the organizations to co-ordinate the IS with the key strategic planning process and
should focus on the key strategic areas.
29. Hartney (1994) highlighted the importance of the effective management of the IS
projects. The author conducted in depth interviews of IS project managers from the
varied fields which includes health care, petrochemical, banking and manufacturing. The
responses of 28 individuals were also taken who were observers of the performances of
selected managers. The incidents reported by the observers represented 16 major themes
classified into 5 clusters i.e. serve the customer, create the solution, drive the process,
master the unexpected and influence the players. It was found that perceptions of the
effectiveness of IS project managers varied somewhat among sub groups of respondents
and the output gave the signal that the management of IS projects is a complex activity
and there is no set rule that can ensure proper results from the information systems. It was
stressed by the authors that due diligence should be given by the management of any
organization to effectively manage the IS projects.
30. Rockert and Short (1989) brought out the fact that there are ample numbers of factors
for the development of information systems in any organization. They viewed at the
major factors like the organization‘s internal structure, power and hierarchy. Another area
of focus was the changing work groups. The study also points out that the organizations
are disintegrating their borders because of the decreasing cost of the electronic
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interconnection among the firm‘s suppliers and the customers. And the last but not the
least was the area of technical perceptive. It was proposed that today‘s technological
advances will lead to the systems integration within the business. The authors pointed out
that considering all these facts information systems are the most important player in
allowing the organizations to manage organizational interdependencies.
31. Hagel-III and Scely (2001) has highlighted that all the fortune 500 companies have
the presence on the web. They also emphasized on the importance of being present on the
web. But they also highlighted one of the most astonishing facts that only 25% exploit the
full range of internal capabilities of gaining market research data and utilizing the online
technology for marketing of their products. They also pointed out that online marketing
adds to the value of the product and this is the main reason that online ordering and
payment, online advertising and number of links to websites are increasing significantly
since 1997. All these facts are visible in the case of all the fortune 500 companies. The
authors also points out that in order to make sustainable business in present time the
organizations have to use all these tools to gain the competitive edge. The organizations
can not afford to neglect its customers and they have to present all the time for their
customer. To gain this type of competitiveness the organizations have to use the
information systems very innovatively.
32. Reneny (1996) highlighted the importance of information systems for organizations.
He also pointed out that various organizations are presently using the concept of
information systems for gaining the right information at the right time. But still there are
various blunders that the organizations are committing time and again. One of the main
mistakes is the inadequate funding in ITES. Still top management sometimes thinks that
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it is the waste of time to invest in IS. Sometimes companies do not have the adequate in-
house facilities for the development of the IS but they resist outsourcing. As a result there
are flaws in the IS developed internally and another mistake is that the organizations are
making is the paying less heed to the demands of the users. The IS should be designed by
taking into account the expectations of the users. By ignoring them, the organizations
cannot design appropriate information system for gaining the competitiveness.
33. Rackoff, Wiseman and Ullrich (1985) highlighted that Information Systems have
performed in the past for the operational and management support. But recently
companies have begun to use the IS strategically to reap the benefits of competitive
advantage. In the conventional view, the target of IS application was the organizational
planning and control processes. But in today‘s time this viewpoint is very much myopic.
Organizations are using IS as tool to gain competitive advantage but it is very much
important to plan the strategic information systems properly otherwise its benefits will
not be achieved. This study highlights the case of GTE. GTE is a telecom and electronics
company. GTE not only used IS as a tool to gain the strategic advantage but most
importantly GTE planned the implementation properly. In the first phase, information
management department introduced the strategic information systems concept to the GTE
president. In the second phase, strategic information systems idea was shared with the
middle level management and in the third phase, this idea was shared with the executives,
in the last phase, strategic information systems idea was communicated to the business
planners. So in the planned way response and suggestion from each level was taken and
then a system was designed for each and every strategic activity of the organization.
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34. Turban, Aronson and Peng (2005) concluded that strategic orientations of the
company have a high business impact, but their planning within the strategic information
system plan is relatively simple. Setting strategic orientations is not a task to be carried
out within strategic information system planning, but the key task of management. Thus
it is necessary to get information about these orientations within the project of strategic
information system planning, either through discussions or from written documents. The
acquired information should be organized for the needs of strategic plan
35. Galliers, Swatman and Swatman (1995) discussed on the relationship between the
Strategic Information Systems Planning (SISP) and Employee Data Interchange (EDI)
and suggests that SISP offers an appropriate framework for the organizations wishing to
take the strategic approach to the implementation of EDI as an infrastructure for the
business redesign. Initially SISP was considered to be primarily concerned with the
identification of a portfolio of IS application and necessary technology to support these
applications. Although still this concept persists, but the additional aspect that
organizations are seeking to provide with the SISP are
I. New or better product and services
II. An environment which provides platform for flexibility and change
III. As a means by which business processes may be re-engineered in line with the
opportunities provided by new IT and changed business imperatives
The authors also argued that continuous evaluation and review of system is very
important for successfully reaping the benefits of the IS. The authors have enlisted
various parameters to support their argument
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I. One of the prime reason for the slower than anticipated acceptance of EDI and
SIS is that the organizations are giving less importance to the IS department. They
usually think that information systems department is not contributing anything
substantial to the organizations overall growth.
II. EDI and SIS are often considered in isolation both from technological innovations
and from the changes in the business practice
These prevailing orientations in both EDI and SIS present an obstacle in the closer
integration of the IS with the business strategy and formulations
36. King and Teo (1996) conducted a field survey to determine key organizational factors
that facilitate or inhibit the development of the strategic application of IS in the business
firms. The authors have firstly utilized key organizational facilitators and inhibitors from
the past studies. Then a structured questionnaire was made. The results from the factor
analysis exhibited seven key dimensions. The stepwise discriminant analysis selected key
dimensions
I. Innovative needs
II. Competitive position
III. Environmental economies of scale
IV. Top management guidance
These are the most critical points which distinguishes between the facilitators SIS and
non SIS group. Similarly three key dimensions i.e. the lack of IT drivers, Lack of
economies of scale, lack of innovative needs are the key inhibitors that distinguishes
between SIS and non SIS groups. The organizations who want to implement SIS should
try to encourage facilitators and try to nullify inhibitors.
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37. Eardley, Avison and Powell (1997) looked at the changing nature of the strategy and
examines a framework that may enhance the strategic flexibility. A number of techniques
are presented to gain the strategic flexibility. The authors have pointed out that for the
development of the SIS three components should be present. Firstly, there should be a
framework that is capable of modeling or describing the firm‘s strategy. Second, analysis
techniques should exist for creating the mechanisms by which the strategy is carried out.
Thirdly, appropriate technology infrastructure should be available to put the mechanism
into place. Due to the changing nature of the organizations, the SIS needs to support
strategic flexibility or corporate agility rather than competitive positioning. The authors
have given various techniques for inculcating the concept of flexibility
I. Competition Analysis Technique
II. Impact Analysis
III. Application portfolio Management technique
IV. Scenario Modeling
The information system can be made by considering the internal aspects only, but the
organization has to consider all the external factors for making the appropriate
information system. The information systems should be flexible in nature to gain the
competitive advantage. The aforementioned techniques can be used to add flexibility.
The competition analysis technique can be used to identify the competitors in the market
and by knowing the competitors the organization can make better information system.
The impact analysis technique tells about the possible impact of the information system
on the organization‘s key activities. The application portfolio management technique
helps the organizations to segregate their key activities from support activities. And with
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this application the organization can make the use of information system considering
these application areas individually. Also the organizations can make the information
system considering various scenarios prevalent in the market.
38. Brady and Targett (1995) have opined that the financial sector has gone through
various stages in its adoption of IT. In the first stage, the IT was used to automate routine
transactions. The first stage involved the use of computers for the batch processing of
data. In the second stage IT was used to improve the effectiveness. In this stage, use of
computers extended beyond the back office to front office. In the third stage IT is used to
cerate new services and products. In this stage, financial sector realized that IT provided
the possibility of offering the new products and services. These include electronic cash
management, ATM‘s etc. Banks realized IT offered a means of cutting cost, at the same
time enhancing the services and expanding the products and services. More recently the
fourth stage came into play in which the IT is being used as the marketing of new
products and services. But due to the intensive competition, the rules of game have
changed. As mangers had accustomed to in the past of using the IT to solve their
problems, but now found IT as a part of problem. Because the very product that they
were offering was now all IT based and they are easily reproducible or copied. Achieving
sustainable competitive advantage is very difficult. So the authors rightly summed up
their paper by putting across this fact that financial sector should not blindly go for
achieving the competitive advantage rather banks should be very cautious in
implementing the IS for competitive advantage.
39 Scarbrough (1997) has taken a very unique factor that is important for the
development and implementation of information systems in an organization. The study
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focuses on the social constructs in an organization. The success of any information
system is not only dependant on the technical aspects but a major role is played by the
social aspects i.e. acceptance from the various departments of the organization. This
study draws on the findings from a sample of large Scottish based financial institution to
examine the development and impact of innovative SIS. The author has pointed out that
there are factors which cause some IS projects to be classified as strategic and others not.
It has both theoretical and empirical elements. The theoretical element involves viewing
the strategic IS as socially constructed outcome of the interaction between IS expertise
and wider organization. This paper then empirically tests this approach on the Scottish
financial service sector. Evidence from these cases supports the view that the attribution
of the strategic status is primarily a social construct, involving interactions between
expert groups in the IS, accounting and general management areas. Social constructs
addresses the way social actors construct the realties that confront them. The main aim of
this approach is to examine the social structures and processes which produced strategic
IS as a powerful organizing principle.
40. Hamilton (1999) is concerned with the portfolio-level planning and implementation
of integration of information systems structures driven by the development of
information architectures. The study indicates the importance of information system
architecture in planning of information systems. The research was based on a longitudinal
case study of the IS integration practice in the telecommunications organization, Telestra.
Feedback from the participants was analyzed with a view to isolate some of the key
issues involved, which were then utilized in the development of process model. The
model reflects a major shift in the perspective, based on the idea that IS architecture
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development and management should be decoupled from the system development and
implementation processes. In this view, the IS architecture‘s role would be that of a
knowledge structure, valuable for representing the structural impacts of individuals IS
decisions, and as an aid in conceptualizing systems planning objectives. The author then
gave a model in which the key element is the IS architecture development and
maintenance activities are decoupled from the application and database processing. In
this understanding, the architecture is an information asset, which can be used both to
asses the impact of new system and as the impact of new system as well as source for
specific constraints on implemented application structures.
41. Lathan (1998) pointed out that for any organization wishing to make changes their
processes by incorporating IT into their activities, a strategy is an essential part of
management of that change. Schools are prime examples of businesses where IT is still in
its infancy. In order to function effectively it is necessary to have a long term directional
plan, defining how IT resources and technologies will be developed. IT can provide
support and solutions in the area of administration, curriculum management and
curriculum delivery and is increasingly useful in providing access to knowledge bases.
Since 1980‘s there has been considerable change in the way that the public services are
managed and these changes have a significant effect on the educational system. Most of
the literature also assumes that one of the prime aims of strategy is to develop a portfolio
of applications to satisfy business needs. The goal of commercial organization tends to be
making profits. The goal of schools is not primarily market driven. Yet there are
similarities. Both have organizational goals and both need to manage their resources
effectively, so schools need to frame two broad categories of strategies. First is the IS
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strategy, this is concerned with developing an appropriate application portfolio. Schools
need to consider what type of information system is to be developed in present structure.
A school needs to pay attention to the choice of technical platform and decide how
applications are to be delivered. And the second is the Information Management strategy
concerns the day to day management of IT. Schools must schedule their resources and
co-ordinate IT across subject areas to develop the training plan.
42. Segars and Grover (1999) have stressed that strategic planning has been a
fundamental activity of the top management. This activity is undertaken to reduce
uncertainty, co-ordinate the efforts of the organizational members, establish dialogue and
lines of communication among various organizational sub-groups and proactively search
for business opportunities within comparative domain. For SIS planning there are various
dimensions which characterize the activity of the strategic planning. The most important
one are
I. Comprehensiveness- The extent to which an organizations attempts to be
meticulous in decision making and integrating strategic decisions.
II. Formalization- It refers to the existence of structures, techniques, written
procedures and policies that guide the planning process.
III. Focus- It refers to the balance between creativity and control orientations inherent
within the process structure of the strategic planning.
IV. Flow- Based on the locus of activity or devolution of responsibilities for the
strategic planning, flow is typically described as top- down from top management
to the lower management and bottom-up from lower levels to the higher levels.
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V. Participation- Whereas planning flow is concerned with the vertical orientation of
the planning system; participation captures the breadth of involvement in the
strategic planning.
VI. Consistency- It is characterized by a continuous planning process with frequent
meetings, constant combination among the planning participants and frequent
assessment and revision of strategic direction.
The study stressed that all these activities should be taken into consideration before going
for the designing of strategic information systems.
43. Levy, Powell and Yelton (2011) highlighted that strategically IS are used to either
lower the cost of production and transactions or to add value to the product or service.
Even the SME‘s have begun to exploit the benefit of IS. This paper presents a model of
IS for SME‘s. The model which is termed as focus-dominance model proposes that an
SME‘s strategic content, is defined by its strategic focus i.e. cost reduction versus value
addition and its market positioning. Twenty- seven firms are analyzed in order to validate
the model. IS have long been used for automating transactions processes as a means of
cost reduction in order to improve operational efficiency.
Low
Customer Dominance
High
Cost Value Added
Strategic Focus
Figure 2.4 Model of IS for SME
Co-ordination Innovation
Efficiency Collaboration
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The model has two dimensions of strategic focus and customer dominance. The various
strategies that are available for the organization are efficiency, co-ordination,
collaboration and innovation.
44. Acur and Englyst (2006) have stressed on the fact that the environment conditions
that firms face have changed rapidly. Today‘s global competitive environment is
complex, dynamic and largely unpredictable. To deal with the unpredictable level of
change, a lot of thinking has gone into the issue of how strategies are to be formulated.
Strategic management is about managing the future and effective strategy formulation is
crucial. Four generic approaches are identified namely goal centered, comparative,
normative and improvement approach. The authors pointed out that to shape the future
for business, management can no longer create a strategy by focusing internally. It is
necessary to ensure that the changes in the external environment are monitored and
reflected in strategy of organization. The strategy formulation process should gather
necessary information and if necessary also redesign strategic issues. The study also
added that in today‘s dynamic environment firms can not only rely on the corporate
strategies but also on their financial, R&D and manufacturing strategies. Being aware of
these relationships can help the organizations to manipulate operational and market
attributes as well as it leads all levels to share same strategic objectives.
45. Furey (1991) has observed that, information technology is the key factor in the
present era of the globalized world. Now a days there is more focus on the service
industry. For the service industry it is very important that the customer should get proper
attention and proper service otherwise the organization can loose that customer. Service
organizations are innovatively adding various capabilities to ensure that the customers do
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get the right service. The study opines that the IT based service options may directly or
indirectly improve customer service, as this type of service provides the means for
gathering customer data, which can be useful in improving operational efficiency and
service quality. By securing the vital piece of information regarding the customer, the
organization can get the insight into the mind of the customer. With this information the
organizations can deliver a more relevant and more prompt service according to the
demand of the customer. The problem lies in collecting the relevant and important
information. The IT based service can help to collect and process this information for the
service organizations.
46. Ahmed (2004) indicated that there are adequate funds for buying and installing IT
hardware but there are changes expected in long term. He identified a significant
problem; the severe lack of in-house IT expertise to solve even minor problems. There is
an acute shortage of staff across even the leading Indian states in the provision of e-
governance. Problems also lie in the planning processes, and the type of technology
platforms that are required to be utilized. Standardizing programs across the board is
another prominent issue that crops up as different departments use different programs.
Thus, more time and resources are expended on the unnecessary duplication of databases
in government departments.
47. NASSCOM (2003) says that research has indicated that the three Indian states leading
in e-governance provision are Andhra Pradesh, Karnataka and Tamil Nadu, while the
states of Kerala, Gujarat, Maharashtra, Madhya Pradesh, West Bengal and Rajasthan are
not far behind. There has been a tremendous increase in the automated work flow within
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the notoriously bureaucratic Indian government departments, and e-governance seems to
be a promising development.
48. Asgarkhani (2005) said that e-Technology has become a catalyst for enabling more
effective government through better access to services and the democratic process. As
public interest in the Internet and e-Technology solutions continues to grow, there is an
increasing expectation that they will be utilized in national and local governments for not
only more efficient governance but also improving public access to information and
services.
49. Dawes and Rowley (1998) observed that the service experience and perceptions of
service quality can be fundamentally affected by the use of information technology.
Increased use of IT by the service providers has changed the nature of service delivery
system. Their study indicated that IT based services had a positive impact on overall
service quality and customer satisfaction in consumer banking sector.
50. Nordby (2003) indicated that numerous other factors can hinder the successful the
introduction of e-Government and e-Service initiatives including:
I. Lack of ICT skills;
II. Inadequate resources;
III. Too many initiatives;
IV. Resistance to change;
V. Low take-up;
VI. Lack of public access;
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The study points out that these factors are inhibitor to the growth of the e-governance.
The author has suggested that these factors should be checked and controlled for the
better and effective implementation of the e-governance initiatives.
51. Nord, Horn and Nord (1995) pointed out that ESS is the computer based systems that
provide top managers with the capability to attain easy access to the information which is
relevant for strategic decisions. It was also pointed out that ESS are increasingly gaining
in importance are growing at a very fast rate. The paper then elucidates following points
to support this fact
I. The ESS has the capability to access internal as well as external information
II. It has the capability to communicate and confront problems electronically
III. It has the capability to report information with a combination of graphics and
tables
IV. Scheduling agenda, setting and follow-up capabilities are present in the
systems
V. The capability to integrate with other software‘s
VI. Statistical and drill down capabilities
VII. Functionality for decision support and what if analysis
VIII. Easy to use
The study also highlights one more important point that ESS is not only for the top
management but is applicable for each and every level of management considering the
kind of diverse roles that each and every level performs. The author going further on the
ability of ESS and gives following points to show how important ESS are-
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I. With the help of ESS, managers are able access and understand the situation
quickly
II. ESS guides the managers to confront the multiple problems together
III. ESS helps the managers to set agendas
IV. ESS helps to maintain the corporate view
V. Maintains an industry perspective
The study then empirically proves this fact by taking the case of selected fortune 500
companies and it was concluded that ESS helps the top companies in various ways for
example the 50% of the organizations are using the ESS for decision making, 43.8% of
the organizations are using ESS for electronic mail, 37.5% organizations are using the
ESS for electronic briefing and 31.3% of the organizations are utilizing the concept of
ESS for the follow-up procedures.
52. Rogerdson and Fidler (1994) have pointed out that there is growing number of
importance given to information in today‘s scenario and how organizations are
attempting to develop IS/IT strategies which interrelate with their business strategies
which together support corporate missions. Today Strategic Information System
Planning (SISP) has become an integral part of overall corporate strategic planning
process. An SISP technique provides a structured approach to perform an activity. An
SISP is considered to be purposely built set of techniques that cover all aspects of SISP
process. An SIS planning is an abstract systems which converts the inputs (current IS,
Business IS, Organizational influences and Society influences) to the output (Strategic
plan). The framework for classifying SISP methodologies involves evaluation on two
dimensions
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I. Structural
II. Application
Then the paper in detail points out the criteria that should be taken into account in case of
structural complexity which includes
I. Ability of methodology to adapt with the requirements
II. Number of possible ways technology can interrelate
III. Number of techniques within the methodology
IV. The potential of ambiguity with regard to the terminology used
Application dimension includes
I. The evolution rate of methodology
II. The objectives of the participants
III. The planning policies of the organization
IV. The number of participants involved
53. Kavan, Frohlich and Samli (1994) have pointed out that the goal of any service
organization is to become the leader in their industry. Service originations exists within
particular environment, these entities must gather information on
I. How will the inputs from the resources are converted to the outputs
II. How will the outputs are received by environment
So it is very important to make a system that will develop a model depicting a balance
between internal and external information. The authors then gave a model depicting the
relationship between the internal and external information. The model includes two vital
parameters i.e. internal information and external information. And between these two
parameters the IS can take four possible stances
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I. Internal Skewed Systems- This type of system lay more emphasis on internal
information and lacks on external information
II. External Skewed Systems- This type of system is one that has sufficient
external information but lacks on internal information for decision process.
III. Information Under load Systems- this type of system lacks on both fronts i.e.
internal as well as external information
IV. Balanced Systems- This type of system provides optimum outcome because in
this system there is perfect balance between the internal and external
environment.
The paper concluded by giving stress on the fact that service organizations should try to
develop balanced systems to become market leader
54. Bai and Lee have quoted that Information System Strategic Planning (ISSP) is very
essential in integrating IT into an organization to increase a firm‘s strategic competitive
advantage. In fact ISSP is one of the top ten issues facing the corporate general managers
and IS executives. ISSP process involves a long range planning horizon for funds, human
services, technology, expertise, hardware and software capabilities. The study is
conducted on 1000 corporate manufacturing and service companies in Taiwan. The
empirical study shows that co-operative factors plays significant role in ISSP. The also
indicated that unsuccessful IT results from the conflict from CEO‘s. In fact it is the duty
of CEO to understand the advantage of the IS/IT and must be willing to take advantage of
IS/IT opportunities. Study also reveled that there is strong relationship between ISSP and
successful organizations. And in the end the study points out that as the centralization
increases the quality of ISSP starts worsening. Strategic IS plan will face problem in
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achieving internal consistency and badly effect the implementation if organizational
decision making is overly centralized.
55. Daniels (1998) pointed out that Information Systems (IS) have traveled a long
journey. Initially role of IS was to automate the basic operations. In the next stage of IS
became the single separate systems. But still the role of IS was to support the basic
operations. But now in the present time the IS are being used to get strategic edge. Author
pointed out that ―Intelligent Companies‖ are fast realizing the need of SIS. They also
understand the environment in which they are operating and thus can best evaluate the
potential benefits of SIS. But if the organizations have to use IS at the strategic level then
there are various policy issues that need to be assessed which cut across the entire range
of local, generic, functional and organizational level. Taking a coherent view of the
organization, IS would permit the organizations to have an easier interface between the
disparate levels and is financially viable.
56. Roberts and Wood (2002) focused on implementing the IS at the strategic level for
the micro enterprise. The use of information systems is considered strategic because
competitive advantage is achieved by using the information systems. This competitive
advantage can be achieved through improving the relationship between suppliers and
customers. In this study the author has taken the case study of Lanzarote first. Lanzarote
first was established as a specialist holiday service for holiday tour operator. Author has
divided the use of IS into three parts
I. Efficiency
II. Effectiveness
III. Strategic
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Out of these three uses, the strategic use of information system is very important and it is
the deciding factor for the organization. Strategic benefits change the organizations
product or the way in which the organization operates and competes. The Lanzarote first
identified these benefits and implemented SIS. The spreadsheet they made by using the
IS provides a useful information regarding availability of the villas. It gives the accurate
information. Lanzarote first made a complete list of the clients which helped to keep the
track of their customers. Similarly information regarding cash flow and liquidity improve
the financial performance of the organization. Lanzarote first also developed their
website and with the help of web site perspective clients can get the instant information.
The study has well documented the fact that the IS should not only used to automate
operational processes but also be used at the strategic level.
57. Markxu (1999) conducted the research on 55 UK firms and have tried to evaluate the
application of the IS at the strategic level. IS have been increasingly used in marketing
since 1980‘s. But still the information systems are being used at the rudimentary level.
The study reveled that marketing managers perceive marketing as a strategic function.
Then the study tried to find out the extent to which IS are used to support the marketing
as the strategic function. The result reveled that 67.5% of IS are used for managing the
sales and sales promotion and support for the strategic function is rather limited in
marketing segmentation and targeting which is 47.3% and competition analysis is 45.5%.
But the organizations which are using the IS for their critical activities are very satisfied
with the results of the IS. The study also attempted to explore the manager‘s views on the
barriers of implementing the IS. The results were that
I. Lack of a strategic sense and vision by some of marketing managers
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II. Failure to understand the benefits of SIS
III. Lack of strategic marketing culture
IV. Organizational support
The study also reveled that the currently IS do not have functionality to support the
marketing strategic activities. As one of the key feature of strategic oriented marketing is
the interaction with the external environment. Systemically gaining the understanding of
the changes in market place can enable a company to promptly adjust its market position
and strategy. This suggests that the IS needs to be embodied with the market environment
scanning function through which an external orientation is maintained. The systems
should be designed to systematically collect, filter, decode and transmit market
information throughout the organization.
58. Karababas and Cather (1994) have researched to develop the IS planning for Small
and Medium Enterprise (ISP-SME)
The objective of the ISP-SME is to
I. Analyze how better use of IS in long term can give the competitive edge
II. Establish the vision and initiate the mission statement for the IS department
III. Propose, plan and prioritize IS for the short and long term development
IV. Establish IS that will assist management to perform their task better
The paper presents four stage procedures to achieve these objectives
I. Initiation Phase- This phase starts with the setting up of the directions for the
use of ISP-SME
II. The second phase comes which is the data collection. It is concerned with the
gathering of the data, identifying of business goals, and future plans
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collecting, technical information. This phase is followed by the top- down
analyses, operational analysis and examination of the existing information
system.
III. The next stage comes of the strategy formulation. This phase is concerned
with the preparation of IS strategic plan. It includes mission statement, generic
strategy directions and IS requirement determination.
IV. The last stage comes in the form of the IS selection. It is concerned with the
defining and planning the IS. It includes
i. IT Specification- In this sub part, each of the long term IS objective should
be specified
ii. Cost and Benefit Analysis- At this juncture cost and benefit analysis of the
IS is done to know the future costing and benefits accounting from it
iii. Priorities Setting- This Stage is concerned with the setting up of the
priorities which are very much important for the implementation of the
proposed IS.
59. Bharati and Berg (2003) summarized that service organizations are continuously
endeavoring to improve the quality of the service provided. This is the prime reason for
their investment in the IS. It has been observed that information systems are the main
reason for the improved quality of the service industry. But still most of the companies
encounter the major problem in evaluating the impact of IS on the service quality. That is
why it is very much important to understand how information system impacts the service
quality. The authors have given a conceptual model that elucidates relationship between
the various factors that comprise the IS and service quality. Service quality means
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systems quality, information quality, technology support and employee IS characteristics
that affect service quality directly. The systems quality includes the tangibles, reliability,
responsiveness and assurance of the information system.
Figure 2.5 Service Quality
The employee IS characteristics include the perception of IS as a key factor in
determining the performance of the employees. Attitudes and feelings of the employee
towards IS, the experience they have had in IS and training they had in IS. The technical
support visualizes the kind of technical support that organization provides for the
fostering of information systems. The technical support has an impact on the service
quality, especially when the information system is critical to the performance of the firm.
Information quality means the information provided by IS which plays a pivotal role in
service organization
60. Fletcher and Donaghy (1994) pointed out that business world is an arena of
competition yet the management understanding of their competitors is often minimal or
even inaccurate. It was stressed that even if organizations which realize the importance of
knowing about the competitors, many fail to convert information in a systematic fashion.
Service Quality
Systems Quality
Information Quality
Technology Support
Employee IS
Characteristics
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The information which is collected remains at the top or held in huge volumes of paper,
such as company‘s accounts, customer records. As a result this information is not
available at the time of need. Considering all these reasons the organizations need
Competitor Information Systems. It is that type of IS which gathers competitor data from
the various sources both inside and outside the organization, transforming the information
into meaningful information and holding it within well structured systems. This
competitor information can then be readily available as an aid to strategic decision
making. The paper then gives the detailed account of stages required to develop the CIS.
I. Stage I- In this stage the identification of the main competitor is done. For this
the management can use the technique of questionnaires and can utilize the
market statistics data.
II. Stage II- Having identified the key competitors the next step is to identify
strategic issues company face
III. Stage III -Here the identification of potential users of system and their needs
is done
By considering all these issues an overall system is developed which can counter the
competitors in the market and also help the organizations to develop information systems
by considering various players in the market.
61 Krebs, Holden, Williams, Basualdo, Spence (2007) pointed out that increasingly
groups and communities are working together to address various social issues and
improving the public services. In an information based society, knowledge is regarded as
a crucial resource, and harnessing this resource is of paramount concern. With the
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assistance of information systems, knowledge management has evolved as a total system
that allows collaboration of agencies to share, exchange and build on existing knowledge.
The study presents new type of system known as Community action plan information
system (CAPIS) which will inform the agencies to direct resources towards the
advancement of society welfare issues termed as Quality of Life (QOL). The potential
benefits of CAPIS are
I. It will inform that who is engaged in QOL activities
II. What is being done, and at what level of engagement?
III. What are the patterns in QOL initiatives that help in understanding the
present and future focus of enhancing the QOL in community?
IV. The identification, interpretation and mapping of the QOL actions and
QOL recommendations provide the new insights into QOL enchantments
activities and priorities
62. Leen and Bumyong (2001) pointed out that as the companies face enormous
challenge, the IT plays an important role in gaining opportunities and taking
competitiveness advantage. But in this situation every organization needs the structured
plan to manage and implement information strategic planning (ISP) which has gained
considerable interest in recent past. So failure to conduct ISP effectively can cause
incompatible systems and wastage of resources. Authors in this paper have tried to make
a system which can make IT projects more efficient and effective. Due to ever changing
IT and business environment, traditional ISP methodology often fails to produce expected
results. In order to generate new ISP methodology, eleven critical factors are to be
ensured in ISP
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I. Alignment of business strategy with the information strategy
II. Top manager‘s commitment
III. User commitment
IV. Supporting the analysis of current model
V. Supporting for developing improved model
VI. Education on IS/IT
VII. Qualitative analysis of IS effect
VIII. Supporting decision making
IX. Embodying implementation plan
X. Supporting analysis technique
XI. CASE tool support
The information systems should be designed in the following way. Firstly the project
team identifies internal strategic information needs and analyzes the technical
environment. Then the external and internal environment is scanned. The next step
should be analysis of the functional structure, data structure, organizational and technical
architecture of the current enterprise by modeling and conceptualization. Then the
improved models are generated on the basis of the improved process. After that
evaluation of the model is done and in the end the project team finally gains the approval
from the top management. In the end the maintenance of the ISP is developed. The paper
also presents procedures for evaluating ISP, which includes four dimensions i.e.
Completeness, Validity, Consistency and Feasibility.
63. Yasin and Quigley (1994) pointed out that today business organizations operates as
an open system that utilizes sophisticated technologies to compete in an efficiently and
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effectiveness oriented global business environment. The architecture of a strategic
competitive advantage in such an environment requires the input process and the output
sub systems of the business. Organizations have to work in independently and
synergistically in responding effectively to a dynamic environment. IS are basic
infrastructure of the modern organization, they co-ordinate the resource and activities of
input, process and output sub systems of the organization. In addition IS can be use to
scan the external environment and internal operations continuously to ensure the
organization effectiveness is achieved. The paper also presents a model that illustrates the
organizations role of IS in the light of environmental and technological developments as
they relate to the inputs, process and output sub systems. The critical issues involved are
I. The input subsystems of the business organizations have gone through
some dramatic changes in the past. The products are being made according
to the wishes of the customers. Gathering such a voluminous data
manually is an impossible task, also the taste and preferences of the
customers are fast changing. The organizations have to keep abreast with
these changes. The modern input subsystems relies heavily on the IS in
order to function effectively and effectively
II. The process sub systems of the business organizations have undergone an
automation revolution. IS are the backbone of these automations
III. Output sub systems of the business organizations have changed due to the
customer‘s demand for high quality and environmentally sound products.
64. Flitman (1996) stressed that common complaint about strategic plans is that once
developed, they tend to be largely forgotten until the next planning cycle. What is
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needed is a reporting tool i.e. Strategic Control Reporting (SCR) that actively tracks
the progress towards the strategic goal and motivates employees and managers to
strategic success. SCR is not only concerned with the formulation of a strategy but
also with its communication to all the levels and its adherence to the strategic
objectives. The study presents the methodology for implementing SCR
I. Strategic Programming- This results in the definition of the strategic
direction
II. Measure Definition- This step develops the measures or yardstick to
form a balanced view of the strategic performance.
III. Report design and prototype production – This produces a simulated
report and it is used to find the data requirements specification as well
as that for the user requirement
IV. Model development and production procedures- This provides the
transition from the simulated to real report
V. Live report implementation- It will facilitate the streamlining of
procedures.
65. Salazar, Hackney and Howells (2003) conceptualized the strategic impact of the new
internet technology in biotechnology and pharmaceutical firms. It argues that the
competitiveness of the modern business depend on their ability to create and
commercialize new knowledge as much as their ability to produce new products. The
authors have suggested that Knowledge management (KM) plays a key role in
determining organizational performance levels and value creation. KM refers to not only
to the technologies for processing information and distributing knowledge, but also to
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enhance the organizational structures for the strategic fit. The internet is seen as core
technology enabling the creation of organizational networks. The pharmaceutical industry
is a high value and knowledge intensive sector. With the help of the new internet
technology a radical change in people perception of what is near and far has occurred.
Companies can obtain access to customers globally. Whole new markets can potentially
are opened. Internet technology enables the organizations to distribute a new product
within tightly controlled order and delivery. E-commerce offers a tremendously wide
variety of electronic business tools and opportunities. It may include trading of physical
goods and intangible. It also covers the virtual collaboration of company and research
team. But the implementation of e-commerce in context to distributed innovation
processes will not be effective without redefining the ways the individuals, teams and
firms share, use and transform information into knowledge to compete effectively.
66. Dong, Fang and Jian (2007) pointed out that IS planning (ISP) is a critical concern for
the top executives and chief information officers of the enterprise. This paper summarizes
the process dimensions of ISP and proposes a descriptive model to describe these
dimensions and their relationship with the planning effectiveness. The research model is
empirically tested by the data collected from 125 clients of Chinese organizations. ISP is
a process of defining objectives for the organizational computing and identifying the
suitable potential information systems on business performance. This study presents a
model to describe the current Chinese enterprise structure of ISP, which exhibits strong
relationship between the process dimensions and the effectiveness of the planning
process. To study the relationship between the process dimensions and the effectiveness
of the planning process, the first thing that is needed is to identify the process dimensions
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and the defining of planning effectiveness. The result of the empirical study indicates two
major findings. First planning flow has a direct influence on process dimension,
participation, control, formalization and comprehensiveness. Second participation and
control influence planning effectiveness while formalization and comprehensiveness has
no effect. According to the process model, ISP should be initiated by the top management
so that the ISP can get enough resources. Meanwhile, the relationship between the
process dimensions and the effectiveness of the planning process imply that during the
analysis, ISP should involve participants from different areas and process should be
controlled or monitored to ensure that the collected information is correct.
67 Martinsons and Chong (1999) stressed that despite remarkable advances in the
information technology many computers based IS still fall short of the performance
expectations. A growing share of these implementation failures are due to non technical
factors. As the authors have rightly noted that the role of IS in industry has rapidly risen
during the past half century. Effective IS adoption typically require both the
technological and organizational change. This study identifies the range of human factor
issues that may arise during the planning, development and implementation of IS.
Inadequate consideration and poor management of human factors can hinder the use and
effectiveness of IS. The characteristics of individual users and their work environment
can influence IS performance. A single configuration of hardware, software, database and
procedures is most unlikely to suit everyone in the organization. The HR specialist plays
important role in the implementation of IS in any organization. They provide input on the
relative appropriateness of different technologies, the best approach for introducing,
integrating, institutionalizing, motivating and control measures that will encourage
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desired results. However the HR specialist must encourage and understand the human
factors associated with the IS. These issues may be divided into two categories
I. Those associated directly with the process
II. Those associated with the consequences of the process
The HR expert may be helpful in IT phobic workforce. The consequence issues also need
HR attention. Even when the changes directly imposed by the technology are well
managed, the psychological transition to a new system may be problematic. HR
specialists can recommend an appropriate sequence of change activities based on the
sound behavioral principles.
68. Phadke and Ranjan (2003) in their research had worked on prospective of electricity
reforms in India. Their research suggested that success of electricity reforms in India
depend critically upon the existence of sort of restraining or disciplining mechanism in
the sector, in the absence of which the current efforts will likely result in a transition from
the inefficient public ownership to the profit-gouging monopolies or oligarchies. In
principle, such a mechanism could be strong, independent and effective regulatory
oversight over the public or private monopolies or significant competition among the
large number of public and private entities. They also stressed that it is important to
examine without bias, and as thorough as possible, the feasibility and effectiveness of
both these sector disciplining mechanisms before making any claims regarding the
desirability of privatization. The authors also argued that the issues related to protecting
the environment, extending access to the poor and other off-grid populations and strategic
concerns to import dependence and foreign private ownership needed to be addressed up-
front in order for reforms to be broader public interest.
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69. Bajaj and Sharma (2007) in their research viewed that India faces endemic electrical
energy and peaking shortages; the Power Sector is plagued with the mounting
commercial losses due to various inefficiencies, colossal commercial and technical losses
and increasing subsidy burden on the states. These shortages have had a very detrimental
effect on the overall economic growth of the country. In order to re-vitalize the sector and
improve the techno-economic performance, the Government of India initiated the reform
process in 1991. This paper analyzed the pre-reform era and identified the key concerns
which led to the initiation of the reforms. It also analyzed the likely impact of the major
policy and regulatory initiatives that have been undertaken since 1991 including the
provisions of the new enhancements which have come to force eventually in the form of
the Electricity Act, 2003. This paper detailed out the key feature of the Act and its likely
impact on the Indian electricity industry in the merging scenario. The paper also
discussed major issues like role of regulatory in the new regime, issue of open access,
power trading, introduction of power markets and the role of Appellate Tribunal for
Electricity in harmonizing the orders of various regulators.
70. Tongia (2003) in his project discussed the existing reforms and suggested new ones in
the power sector in India. He identified that Electricity Regulatory Commissions are the
key to reforms. Moreover, the author stated the most restructuring would come through
unbundling and corporatization of SEB‘s, and quoted the examples of Orissa, Andhra
Pradesh and Delhi. The researcher also identified that grid design; IT and innovation in
electricity sector are the key pointers to future growth and for research. Also the study
revealed that India only focused on the quantity and not on the quality of power. Also, the
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system should focus on the theft detection, real time systems, forecasting and advanced
communications.
71. Zhang, Parker and Kirkpatrick
(2002) in the study provided an econometric
assessment of the effects of privatization, competition and regulation on the performance
of electricity generation industry of 51 developing countries, over the period of 1985 to
2000. The study identified the impact of these reforms on generating capacity, labour
productivity, capability utilization and industrial and residential user prices. The paper
concluded that competition appeared to bring favorable results for service penetration,
capacity expansion, labour efficiency etc. the co-existence of the reforms of privatization
and competition correlated with greater electricity availability, more generations capacity
and higher labour productivity.
72. Yadav, Roy, Khaparde and Pentayya (2005) this paper described the efforts of the
Indian government to upgrade its power systems to account for the increasing
interconnections due to the rapid regional development. These include the unibus act
(EA2003), which address the issue of public sector monopoly and opens up the field for
competition, private participation and reforms, and the implementation of the ABT to the
intrastate level. The reforms and restructuring policies of the government have assured as
adequate rate of return to investors. The study also started that the electricity policy
implementation is expected to fulfill the aim of meeting more demand at a higher security
level.
73. Singh and Sood (2008) stated that the global demand is expected to increase
considerably during the next decade at the same time environmental pollution is also
increasing with the development of conventional energy source. Every country intends to
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meet the additional demand of energy in part by renewable energy (RES). To meet the
global energy demand various support schemes and policies for promotion of renewable
energy sources in restructured power sector were discussed in this paper. These support
policies for renewable energies encouraged the economic viability of electrical power
generation from renewable sources. These policies reduced one or more key barriers in
the development path of renewable energy. The paper took a close look at the regulatory
policies for the promotion of electricity generation from renewable energy sources, which
are currently at the centre of global discussion.
74. Saxena, Bhatnagar and Saxena (2003) points out that an electrical distribution
systems transfer‘s electrical energy received at sub-station to domestic, industrial,
agricultural and commercial customers. All the customers expect electrical energy to be
always available. But there are problems in accurate supply because of electrical losses.
Electrical loss is defined as the difference between energy available at the customer level
and the energy effectively produced by different electrical utilities. The study then
highlights two types of losses in the distribution network. There are technical and non
technical losses. The technical losses are inherent to the efficiency of the system to
transport the energy to the ultimate customer. This includes resistive loss in the copper
and aluminum of the transformer windings and lines and core losses
The second group, classified as non technical losses, which include
I. Theft and pilferage:. Possible means of theft and pilferage are by bypassing
the neutral from the meter and using the phase and earth connection, by
tampering with the connections, and by taking supply directly from the mains.
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II. Metering problems: Metering problems also cause revenue losses. These
problems include using unmetered power supply by bypassing the meters
completely, submitting incorrect meter readings, tampering with meters, and
defective meters.
III. Management inefficiency: Poor planning of load management, poor
maintenance of substations, and improper communications with the consumer
lead to heavy loss, poor power demand management, non distributed
electricity bills, manipulated readings, mismanagement of unpaid bills, fewer
payments by customers, customer payment difficulties, connivance by staff,
illegal connections, and subsidized supply to the customer.
IV. Inherent system losses (which are technical in nature): The following losses
are basically technical in nature: corona loss, copper losses in the line, feeder,
and transformer, iron loss in the transformer, auxiliary supply loss, loss due to
low power factor operation of certain equipment, loss due to reactive power
flow in lines, weak transmission and distribution system, overloaded lines,
unbalanced loads, and incorrect voltage levels.
The study then presents a Loss Management Model to assess the loss and rectify that loss.
The essence of Loss Management is integration of human and other resources in a
manner that leads to effective performance. The Loss Management policies aim at
making the best use of available resources for providing effective, efficient, and low-cost
solutions to Loss Management. Loss Management problem of the Electric Distribution
System in India is a multi-factorial, multi-dimensional, and multi-criteria problem. The
Loss Management model, which is based on MCFDM (Multi-Criteria Futuristic Decision
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Making) methodology, projects a plausible future with a proposal to reach a desirable
future for different time horizons. MCFDM methodology provides one with a
comprehensive framework for solving the basic multi-criteria futuristic problems of
decision making to choose the best one in a set of competing futuristic alternatives. These
are evaluated under conflicting criteria and enable one to make multi-criteria and multi-
actor futuristic decisions to cope with the intuitive, the rational and irrational, all at the
same time.
75 Sagar, Ramana, Prasad, Kukde and Eisendrath (2004) highlights that the distribution
reforms in India began in the mid- 90s, and followed the World Bank‘s model of
privatization. This goal required intermediate steps of unbundling and corporatisation of
vertically integrated state utilities. So far, Orissa and Delhi have already privatized their
distribution companies, while Karnataka and Andhra Pradesh have undertaken aggressive
steps in the same direction. The study gives the insight into these reforms done by various
states. The reform process began with the enactment of the Orissa Electricity Reform Act
in 1995. Orissa was the first state to initiate the reform process. The Act was designed to
address the fundamental issues responsible for the poor performance of the industry in
the state. The new legislation was enacted for the purpose of restructuring the electricity
industry, for taking measures conducive to increasing the efficiency of each activity i.e.
generation, transmission, and distribution of electricity, for opening avenues for private
participation and for establishing the Regulatory Commission. Similarly the study
presents the cases of the Delhi, Karnataka and Andhra Pradesh. The study also highlights
various key issues that need to be addressed before going for any type of reform. These
are
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I. There is a need for full and sustained political, administrative and financial
support to the distribution companies in their efforts to improve and run
the electricity distribution business.
II. This support would enable them to disconnect illegal consumers, reduce
theft and improve collection efficiency.
III. Baseline data was required to be reasonably correct.
IV. Multi-year regulation was called for to reduce regulatory risk and
uncertainty.
V. Government commitment and sustained support
VI. Improved base-line data on loss levels.
VII. Full and continuing involvement of the Regulatory Agency
VIII. Rational and fair valuation of assets – valuation based on revenue stream
IX. Clean balance-sheets assured to discoms
X. Material stocks, loans to personnel to be based on actual after audit
XI. Capital support from government via Accelerated Power Development
and Reform Programme (APDRP), and from Power Finance Corporation
(PFC).
XII. Model structure assures returns which in turn makes entity creditworthy.
76. Hattori, Jamasb and Pollitt (2005) highlights that the Electricity sector reforms are
transforming the structure and operating environment of the industry across many
different countries throughout the world. Although the main purpose of these reforms is
to introduce competition and market the mechanisms into electricity generation and
supply, there is a growing interest in regulatory reforms to improve the efficiency of the
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natural monopoly activities of distribution and transmission networks. The electricity
supply industry and its regulation in UK and Japan are somewhat similar utilities.
Utilities are in private ownership in both countries; the UK firms were privatized in 1990
but the Japanese electricity supply industry has been privately owned since 1951. The
industry in Japan is dominated by 10 Electric Power Companies (EPCOs) responsible for
generation, transmission, distribution, and supply of electricity to final customers. There
is no independent regulator in Japan but the Ministry of Economy, Trade, and Industry
(METI) acts as regulator. Thus, in both UK and Japan, one regulator (OFGEM in UK and
METI in Japan) regulates a similar number of distribution utilities. However, the
structure of the industry differs between the two countries. In Japan, the electricity
distribution function is undertaken in vertically integrated electric utilities while in the
UK regional distribution companies perform this task. The UK distribution companies are
legally separate from other parts of the electricity supply chain though they may be part
of a larger company that includes generation and/or retail assets. Another difference
between the two countries is the regulatory regime. The UK introduced price cap
regulation at privatization in order to control the distribution tariff while Japan relied on
rate-of-return (ROR) regulation to control the final prices of electricity. Although it
would be difficult to separate the effect of a different regulatory regime from other
country-specific factors, with a long panel data set to investigate changes in efficiency
over time, it might be possible to isolate the effect of regime changes. This paper
examines relative performance of electricity distribution in the UK and Japan between
1985 and 1998. The results of our comparative efficiency analyses indicate that the
productivity gain in UK electricity distribution utilities has been larger than that of the
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Japanese electricity distribution. It also suggests that efficiency scores are generally
higher for UK utilities.
77. Ranganathan and Rao (2004) points out that the Electricity reforms in India formally
started along with economic liberalization in 1991-92. Despite aggressive reform policies
in the 90s, private sector participation was moderate at best, and the financial losses and
cash flows of State Electricity Boards (SEBs) reached crisis proportions. In June 2003, a
few months following the workshop on Power Sector Reforms in India, held at the Indian
Institute of Management Bangalore, the Electricity Act came into effect, spurring a rapid
succession of rule promulgations by the Central Electricity Regulatory Commission
(CERC) on open access, transmission pricing and trading. The implementation of the Act
and the CERC rules almost immediately generated market activity. New trade licensees
were registered, and bilateral and regional trade increased. This paper takes stock of the
reform efforts leading up to the Electricity Act and raises many salient concerns that
merit attention in the next phase of reforms. The number and reach of the policy changes
introduced by the Electricity Act of June 2003 are unprecedented in the history of Indian
power sector development. They aim to provide customers with alternatives to
government supply of electricity, in all elements of the value chain, and make the sector
financially viable. The initial steps have been progressive, but there is still lot to be done.
Given that the financial viability of the state utilities has hardly improved, and that the
Electricity Act has given full freedom to set up power plants for wholesale and retail
sales, the logical short-term outcome is likely to be a selective growth of the system for
lucrative (most likely industrial) customers. Also little in the Act addresses organizational
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inefficiencies within the SEBs. Cross subsidies are to be eliminated – but how? These are
some prominent issues in today‘s scenario
78. King (1978) reveals that the modern view of an IS as an organizational decision
support system is inconsistent with the design/development approaches which are
appropriate for data processing. The organization's operating efficiency is but one aspect
for consideration in management decision making. The achievement of greater
organizational effectiveness is the paramount consideration in most of the management
decisions which the IS is to support; it also must be of paramount importance in the
design of the IS. There is an intrinsic linkage of the decision supporting IS to the
organization's purpose, objectives, and strategy. This article describes an operationally
feasible approach for identifying and utilizing the elements of the organization's "strategy
set" to plan for the IS strategy set.
Organizational Strategy Set IS Strategy Set
Figure 2.6 Organizational Strategy Set
Above figure abstractly shows the overall process for performing IS strategic planning.
This figure shows an "IS Strategic Planning" process which transforms an
"Organizational Strategy Set," made up of organizational mission, objectives, strategy,
and other strategic organizational attributes, into an "IS Strategy Set," consists of system
objectives, constraints, and design principles. Figure describes an information-based
approach to strategic planning for the IS in that it identifies an information set — the "IS
Mission
Objectives
Strategy
Other Strategic
Organizational
Attributes
System Objectives
System Constraints
System Design Strategies
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Strategy Set" — which will guide the design and development of the IS. While the
elements of this IS Strategy Set — system objectives, constraints, and design principles
are generally recognized to be the guiding considerations in developing the IS design.
Figure shows the IS Strategy Set as emanating directly from another information set, the
"Organizational Strategy Set."
79. Bergeron (1991) puts in the picture that the information systems can be used
strategically by an organization in order to secure gains over its competitors. Information
systems for competitive advantage are defined as information systems that drive or
formulate the organization's competitive strategy in order to provide it with (or to
maintain) a competitive advantage. Such systems reflect the fundamental objectives of
the firm and may have a significant impact on its success. Information technology may be
used to help the organization produce at lower cost, to differentiate itself from its
competitors, or to identify and concentrate on a particular market segment. These three
strategies may be achieved by using information technology to raise entry barriers,
increase negotiating power with suppliers, create new dependencies for clients, offer new
products or substitutes, and even change the grounds for competition or the nature of the
stakes. To provide a competitive advantage, information technology must modify the
structure of the industry, improve the position of the firm, or create new business
opportunities. Basically, a competitive advantage is created when a firm Increases its
comparative efficiency or its bargaining power. Any competitive strategy should aim at a
durable competitive advantage. Such advantage is accomplished when differentiation
affects the consumer's perceptions favorably, when the firm has the capacity to maintain
this differentiation over the competition, and when it endures. Gaining a competitive
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advantage should result in a long-term added financial return for the organization even if,
at times, benefits are difficult to quantify. There are, however, different view points on
the actual meaning of competitive advantage. One the one hand, from an economics of
innovation point of view, a firm has a competitive advantage if it is able to obtain a return
on its investment that is better than normal in a given industry and if this advantage is
sufficiently long lived to be considered as altering industry structure. More precisely,
information systems for competitive advantage should reduce costs, add value and entail
substantial switching costs for customers and users, and also provide sufficient time for
the innovating firm to reap the benefits before it is imitated by its competitors.
80. Kettlnger (1994) informs that the sustainability of competitive advantage may be
achieved by leveraging unique firm attributes with information technology to realize
long-term performance gains. Competitive advantage is dependent upon unique
characteristics that enable a firm to maintain a dominant position within its respective
industry. Sustainability of competitive advantage, or the ability to maintain an initial gain
in business performance from strategic viewpoint, is a concept that has grown in
importance. Information systems that facilitate competitiveness in both the short and long
run have a premium value to the firms. Conversely, systems that cannot sustain their
business impact have only transient value or offer negative value if they lead to a "bigger
and better" response from competitors. The paper then lists various factors facilitating
sustainable competitive advantage. In general, three sets of factors are observed. These
factors should be considered before going for the design of the information systems that
are used for gaining the competitive advantage.
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I. Environmental Factors—Factors that reflect environmental and unique
situations that could affect sustainability (i.e., unique industry
characteristics, changes in regulatory environment, political changes, etc.);
II. Foundation Factors—Factors that exist by virtue of the firm's
infrastructure and that have evolved over time; and,
III. Action Strategies—Factors that require definitive actions/strategies by the
initiating firm to leverage the foundation factors through the strategic IS
application to create sustainable competitive advantage.
81. Emery (1990) pointed out that the concept of an SIS, as it is sometimes promulgated,
has inherent flaws that can lead management to make some serious errors. Two of the
more misconceptions about SIS are
I. The SIS is a thing apart from the organization's management information
systems
II. An SIS can be implemented through a deliberate effort to build an
information system aimed specifically at meeting strategic objectives.
Almost all of the information systems that have a legitimate claim to be strategic have
roots in an effective transaction processing system. Consider American Airline's Sabre
system, which provides one of the few examples of a system that has had an indisputably
strategic impact on the business. Much of Sabre's strategy value comes from the way it
thoroughly permeates many aspects of the airline's activities. Sabre supports external
relationships with travel agents and frequent flyers, but it also has critical links with a
wide variety of internal applications dealing with such detailed matters as yield
management, scheduling crews and aircraft maintenance, and meal planning.
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Furthermore, the initial version of Sabre was installed nearly three decades ago with the
relatively limited goal of improving the efficiency and accuracy of handling a growing
volume of reservation traffic. The system has evolved to its present state only through a
continued massive investment aimed at achieving constant improvements and added
functionality. It is inconceivable that Sabre could ever have been implemented initially as
the strategic information system that it subsequently has become. Rather, Sabre provides
an adaptive platform that enables American Airlines to build on its strengths as an
aggressive and well-managed airline. The advantages that American Airlines has been
able to sustain over a long period of time have come only through an enormous effort that
presents a formidable moving target to its competitors. There are some valuable lessons
here regarding the nature of strategic information systems:
I. Strategic advantages come often—"almost always" is perhaps too strong a
term—from major enhancements in the efficiency and effectiveness at the
operational level
II. Strategic systems come through a long-term adaptive process, rather than
through a major breakthrough that brings quick rewards.
The study stresses that we cannot set out to develop an SIS; we can only develop an
effective MIS. This proposition does not rest merely on an academic exercise in
semantics. Rather, it goes to the heart of the process of developing information systems
that have strategic relevance. It is critical for an organization to focus the design of its
information systems on strategic objectives, but it is a delusion to think that these
objectives can be met through an independent SIS. A quest for such an SIS diverts
attention from the very difficult, but far more rewarding, task of making continual
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improvements in the MIS in order to adapt to the changing strategic needs of the
organization. Information technology offers a variety of ways in which the MIS can
contribute to the strategic objectives of the enterprise. Embedding greater "intelligence"
within a transaction processing system offers one of the more attractive avenues. Product
customization and the reduction of delivery time can also have important strategic
effects. Clearly, information technology can play an essential part in making such
improvements. In searching for strategic opportunities, it is important to take a realistic
view of what can be accomplished through strategic systems
82. Lemay (1986) examined the way in which motor carrier managers gather, process,
and use information to create strategy. When faced with a strategic question, where does
the manager get data for making a decision? What parts of the carrier's environment are
important? What variables are used to monitor the internal working of the firm and the
external forces which present both threats and opportunities? What role does the
computer play in these decisions? Drawing from theory in both strategic management and
information systems, interviews were conducted with motor carrier strategists and
managers. The results of these interviews provide insights into the strategic thinking of
top managers in the industry. Also, using the data gathered in this study, a model of the
strategic information system was developed. To conduct this research, sixty-three
managers and executives from a convenience sample of twenty-two LTL motor carriers
were interviewed. The model consists of environmental and process factors. In the
environment of the SIS are the strategic decisions making process, the human and
technological inputs to the system, and the internal and external environments of the firm.
As a special case, the model also shows the strategic informants. Strategic informants are
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individuals with special knowledge which relates to the environment, the firm, or the
process of designing systems and making decisions. A special role was reserved in the
model for these individuals because they are capable of providing an extraordinarily rich
and specific kind of data or information. The four processes of scanning, filtering,
analysis, and synthesis remain at the heart of the SIS, along with adaptation, which serves
to fit the system into the decision making environment. In scanning, the areas and factors
of interest are identified. Filtering reduces the data, eliminating unnecessary data to
produce information relevant to decisions. Analysis structures the data for particular
decisions. In synthesis, all of the data relevant to a particular decision are assembled and
made cohesive. Through the adaptation process, in the model as a series of feedback
loops, the SIS processes continually interact with the organizational data base. If new
requirements are discovered during the analysis and synthesis of data, the system returns
to the databases to collect additional information now deemed important.
83. Brown, Gatian and Hicks (1995) stressed that Investment in strategic information
systems (SIS) is advocated by numerous authors as an important way for firms to seek
competitive advantage. Yet there is still little empirical evidence that implementation of
SIS results in long-term competitive advantages. This is primarily due to the difficulty of
isolating economic benefits attributable to SIS implementation. In this research, thirty-
five sample firms who have successfully implemented SIS are analyzed for evidence of
long-term financial success. This analysis is conducted over a thirteen-year period,
centered around the year in which firms were identified for employment of SIS to either
support growth, control costs, form alliances, differentiate products, or provide
innovation of products/processes. Results show that the superior performance by firms
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investing in SIS. The sample firms, firms identified as SIS leaders, tended to perform
better than their industries and individual companies within their industries with respect
to all the measures tested except sales per employee. The degree of better performance
differed for each variable. The measure of performance showing the greatest difference
between sample and control firms was return on assets (ROA). ROA is a comprehensive
measure and is arguably the most important measure used in the study. Further evidence
of superior performance by SIS firms is provided by the significant average excess return
corresponding to the date that the investing public became aware that the sample firms
were employing SIS for competitive advantage. The significant excess return implies that
the market assessed the investment in SIS as value-relevant. Direct evidence of greater
than industry growth for sample firms was found primarily in the early part of the sample
period. It is particularly interesting that the superior performance in return on assets,
return on sales (ROS) (profitability), and income per employee occurred during the post-
zero-year period. Of further interest is that ROA performance tended to be better whether
the control was the industry or the firm. ROS and income productivity were only
significantly better in the firm comparisons. All other measures, when significant, tended
to be significant in the industry comparisons. It is also important that all the statistically
significant tests in this research showed SIS firms to be performing better than their
respective industry or companies within their industry. In only two cases—accounts
receivable turnover in years did a statistically significant test show SIS firms to be
performing below the level of their industry or peers. When a large number of t-tests are
performed, as in this research, one would expect some spurious significant differences.
However, if SIS firms are performing no differently than their industry, then spurious
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significance differences should be distributed such that SIS firms would also be
spuriously performing worse than their industry. Thus, the overall pattern across all t-
tests in this research supports the theory that SIS firms do outperform their industry as a
whole and companies within their industry. Specifically, these findings provide general
support for the belief that strategic investments in innovative technology may in fact
result in measurable financial benefits which further translates into a period of
competitive advantage for investing firms. This finding should be very interesting to
CEOs considering investment in SIS. It should also be interesting to researchers involved
in theory development around these issues.
84. Earl (1993) revealed that the Strategic information systems planning (SISP) remains a
top concern of many organizations. Accordingly, researchers have investigated SISP
practices. This study examines SISP experience in 27 companies; all were large
companies that were among the leaders in the banking, insurance, transport, retailing,
electronics, IT, automobile, aerospace, oil, chemical, services, and food and drink
industries. Annual revenues averaged £4.5 biilion. They were all headquartered in the
U.K. or had significant national or regional IS functions within multi-national companies
headquartered elsewhere. Their experience with formal SISP activities ranged from one
to 20 years. The scope of SISP could be either at the business unit level, the corporate
level, or both. By adopting this broader perspective, the investigation reveals companies
were using five different SISP approaches: Business-Led, Method-Driven,
Administrative, Technological, and Organizational. Each approach has different
characteristics and, therefore, a different likelihood of success. The business led approach
has "assumption" of this approach is that current business direction or plans are the only
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basis upon which IS plans can be built and that, therefore, business planning should drive
SISP. The emphasis is on the business leading IS and not the other way around. The
Method-Driven Approach assumes that SISP is enhanced by, or depends on, use of a
formal technique or method. The IS director may believe that management will not think
about IS needs and opportunities without the use of a formal method or the intervention
of consultants. The Administrative Approach emphasized on resource planning. The
wider management planning and control procedures were expected to achieve the aims of
SISP through formal procedures for allocating IS resources The Technological Approach
is based on the assumption that an information systems-oriented model of the business is
a necessary outcome of SISP and. therefore, that the analytical modeling methods are
appropriate. The Organizational Approach has an assumption which is quite different. It
is that the SISP is not a special or neat and tidy endeavor but is based on IS decisions
being made through continuous integration between the IS function and the organization.
The way IT applications are identified and selected is described in much more multi-
dimensional and subtle language. The approach is not without method, but methods are
employed as required and to fit a particular purpose. The study points out that the
organizational Approach is the most effective.
85. Lederer and Sethi (1992) pointed out that the strategic information system planning is
the process of creating a long-range plan of computer-based applications to enable an
organization to achieve its goals. Previous research has shown that many problems can
potentially impede information systems planners as they carry out the process. The study
uses a survey of eighty information systems planners to investigate a causal relationship
among the problems Impact of Organization Problems (Fl) on Implementation Problems
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(F2).To be considered for implementation, a strategic information systems plan must be
based on top management's perspective. The plan must therefore assess organizational
goals and strategies. The failure to consider these goals and strategies sufficiently will
cause top management to doubt that the plan is consistent with its needs and expectations.
The failure to consider the organization's goals and objectives sufficiently can cause the
final document to be not very useful. Then the study points out the Impact of Hardware
Problems on Implementation Problems. The lack of a hardware plan leads to
incompatible systems and thus weakens management's resolve to implement it. Without a
comprehensive hardware and data communications plan the final output document will
not be very useful .The next focus is the Impact of Cost Problems on Implementation
Problems .SISP can be very time-consuming and expensive The excessive cost of the
planning process can deter management from implementing the plan. The extended
duration and increased cost can result in a plan that is out of date too soon. The duration
and cost, along with the outdated plan, may not be in accordance with top management's
expectations. Top management may be unwilling to support implementation if the SISP
process requires its excessive involvement, especially in tedious tasks (such as defining
strategic or other business issues in minute detail) or technical tasks (such as evaluating
detailed data models and dataflow diagrams). Hence, top management may be
incredulous about the plan and reluctant to implement it .In the paper presents the impact
of Database Problems on Implementation Problems. The lack of data adversely affects
the implementation of information systems. In fact, the most common product of SISP is
a set of subject area databases; without this there may be nothing to implement .Hence,
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the failure to sufficiently provide priorities for specific databases within overall data
architecture with adequate Data Administration personnel to install and maintain them
will result in a plan that is not very useful.
86. Sabherwal and King (1995) throws light on strategic decision making process
involving eight attributes, four of which represent activities and four represent key
influences. The major findings of the paper are:-
I. The planned decision making process involves high levels of planning and top
management influences and low level of politics.
II. The provincial decision making process involving a high level of IS and top
management influence. It involves a high level of politics and low level of
planning. The IS function is mature enough to play a leading role.
III. The incremental decision making process encounters considerable
incrementalism and internal influence. It is associated with low level of
planning and top management influence but a high level of politics. The
process is associated with least successful IS application.
IV. The fluid decision making process involves little planning and top
management influence and is primarily used for inter organizational system.
The process is associated with most successful IS application.
V. The political decision making process encounters high levels of politics,
internal influence and top management influence but a low level of IS
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influence. The small organization size and a less formalized structure seem to
facilitate this process..
The major limitation of the study include only senior IS executives were used to obtain
the data for this study. Despite this the paper suggests to managers deciding on
potentially strategic systems that no one process should be considered universally
applicable.
87. Szewczak (1988) stressed on the the usefulness of the strategic information system.
The concept can be defined with the help of five factors namely, strategic relevance,
factual overload, quantitative inefficiency, verifiable uniformity and timely accuracy. The
first factor captures the consistency of information with what is expected in a strategic
context. The ability of the management to focus on important information appears to be
fundamental to the success of environmental scanning efforts. The second factor suggests
that the data can be evaluated to produce facts and that facts can be further evaluated so
as to their importance in strategic decision making. The third factor deals with
quantitative information, information scarcity and information support in decision
making. The quantitative data alone is not sufficient for making strategic decisions but
must be supplemented by qualitative data. The fourth dimension suggests that strategic
information is at least verifiable. The last factor says that strategic information is biased
in a particular direction since the evaluator of data for use in strategic management
context is not impartial but instead wishes to see certain organizational mission and
objectives realized. The study supports the claim that SSP is probably preferable to more
traditional approaches to providing useful information to strategic decision makers,
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where the usefulness of the information is determined by the decision makers themselves
during SSP process.
88. Henderson, Rockart, and Sifonis (1987) examined the critical assumptions underlying
the CSFS and to identity opportunities for investment in management information
systems (MIS), decision support systems (DSS), and executive support systems (ESS).
The investment in these management support systems will directly impact the investment
in the large transactions in the infrastructure of the firm. There is a need for planning
methodology that can achieve the following goals;
I. Provide a linkage between the strategic business plan and the strategic
information systems plan;
II. provide a means to coordinate the investment in a range of management
support systems' that are responsive to management needs; and
III. Provide a common foundation for integrating management support systems
into the technological infrastructure of the firm.
This paper discusses an extension to the critical success factor (CSF) planning
methodology as one means to achieve these goals. The CSF methodology has proven an
effective approach for introducing a top management perspective and, hence, strategic
direction into information systems planning.
The approach provides a framework with which to build and refine a strategic data model
for the firm. This data model illustrates the classes of data and indicates how they directly
or indirectly affect a support system. The role of information technology in the
competitive advantage of the firm is rapidly increasing. However, the opportunity for
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competitive advantages cannot be fully exploited until management can coordinate its
investments in professional and management support systems to ensure that they will
impact the strategic issues of the firm. This study supports the notion that these
investments can be coordinated in an efficient and effective manner.
89. Montgomery & Weinberg (1979) have highlighted the dramatic increase in the use of
strategic planning tools in the past decade. The quality of strategic planning is greatly
impacted by the quality of the information inputs, thus, increasing attention should be
paid to the systematic development of strategic intelligence systems. A strategic plan can
be no better than the information on which it is based. There has been little focus on
strategic intelligence systems, the selection, gathering, and analysis of information
needed for strategic planning. The construction of viable strategic intelligence systems is
exceedingly complex because of the unstructured nature of strategic decisions, the
difficulty of separating out important and relevant information from the vast amounts of
data accessible to the manager, and the reliance of managers on personal information
sources. For a strategic intelligence system to be useful, a company must have a real
commitment to strategic planning. Otherwise, the planning process, if carried out at all,
becomes only an exercise and managers appear to place limited effort towards gathering
and communicating accurate, relevant intelligence. There are a number of different
organizational policies which can be utilized to promote the transformation of data into
information and the utilization of this information. Information systems are a means to an
end— decision making which leads to more profitable results.
90. Teubner (2007) carried out in a German financial services company (FSC) over a
period of five months in summer 2003. During this time, the enterprise situation and the
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information system (IS) practices situation of FSC were studied with respect to the SISP
approach in place. The findings confirm the hypothesis that practitioners largely ignore
academic literature and do not use it in support of their SISP endeavors. This is all the
more striking since FSC extensively used guidance from IS research in other fields such
as systems analysis and software development. The case study examines in detail two
possible explanations for the gap: firstly a lacking transfer of academic knowledge to
practice, and secondly deficiencies in the academic knowledge base itself. The
observations highlight disconnect between academic discussion and practical conduct. It
was found that FSC's CIO basically perceives her role as that of a service provider to
business. While the different perceptions might be due to idiosyncrasies of FSC, related
research provided additional empirical support for the conjecture of misleading academic
assumptions about the role of IT management in practice.
91. Rishi and Goyal (2009) indicated the clear gaps existing in the development of
strategic information systems (SIS) in general and particular in the Public Sector
Undertakings (PSUs) in India. Thus, this study has been undertaken in Indian PSUs. Data
has been collected from 164 managers who were working at different levels of
management. Five critical success factors, namely, corporate planning; regular upkeep of
the machinery; fire and safety audits; quality control; quality assurance have been found
as critical success factors for the selected organizations. In particular and the other
organizations in general based on the findings of the study, it is recommended that the
organizations must take care of these critical success factors so as to develop SIS which
are successful information system and thus enable the organization to get a sustainable
competitive advantage.
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92. Segars and Grover (2005) have provided two important aspects which have always
been under emphasized - the first is the planning process or how planning is
accomplished and the second is planning evolution or how planning evolves as a learning
system. Both perspectives can provide practical guidance on how organizations will
change their planning process over time in an attempt to improve their effectiveness as
well as leverage their investment in SISP. This paper identifies key dimensions of SISP
and its effectiveness. The evolution of these dimensions is studied as a three-stage model.
The results provide an interesting insight into how planning evolves as organizations
reconcile seemingly contradictory and dimensions of planning. This balanced approach to
planning is shown to be more effective, providing strong implications for both research
and practice.
93. Pollalis and Dimitriou (2008) examined the development of a systemic multi-
methodology for knowledge management in virtual enterprises. The main objective is the
strategic management of information for the acquisition of competitive advantage and the
advance of networked corporate agreements (i.e., Virtual Enterprise Projects) in order to
maintain business flexibility and innovation. Making use of systemic methodologies,
emphasis is given on the creation and the sustenance of knowledge coming from both the
internal and the external business environment, instead of directly intervening to the
operational characteristics of the modern enterprise. We present an approach to
knowledge management supported by four systemic methodologies namely the total
systems intervention (TSI), the strategic assumption surfacing and testing (SAST), the
viable systems model (VSM) and the problem structuring methodology (PSM). The
composition of systemic methodologies can result in powerful multi-methodologies that
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effectively compensate complexity, combine different mental pictures and perspectives
and handle diversity in a creative and innovative manner. Information systems, especially
those involving multiple stakeholders, profoundly limit the capability of traditional
generic methods of analysis to develop and utilize interventions. In this paper, we
demonstrate the effectiveness of a multi-methodology designed to facilitate the creation
of a knowledge exchange business network in the field of consulting companies that
provide an ideal practice field for the verification and testing of the results of our study.
94. Chen, Mocker, Preston and Teubner (2010) pointed out that the Information systems
strategy is of central importance to IS practice and research. Our extensive review of the
literature suggests that the concept of IS strategy is a term that is used readily; however, it
is also a term that is not fully understood. In this study, we follow a perspective paradigm
based on the strategic management literature to define IS strategy as an organizational
perspective on the investment in, deployment, use, and management of IS. Through a
systematic literature search, we identify the following three conceptions of IS strategy
employed implicitly in 48 articles published in leading IS journals that focus on the
construct of IS strategy: (1) IS strategy as the use of IS to support business strategy; (2)
IS strategy as the master plan of the IS function; and (3) IS strategy as the shared view of
the IS role within the organization. We find the third conception best fits our definition of
IS strategy. As such, we consequently propose to operationalize IS strategy as the degree
to which the organization has a shared perspective to seek innovation through IS.
Specifically, our proposed IS strategic typology suggests an organization's IS strategy
falls into one of the two defined categories (i.e., IS innovator or IS conservative) or is
simply undefined. We also develop measures for this new typology. We argue that the
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proposed instrument, which was cross-validated across both chief information officers
and senior business executives, has the potential to serve as a diagnostic tool through
which the organization can directly assess its IS strategy. We contend that our
reconceptualization and operationalization of IS strategy provides theoretical and
practical implications that advance the current level of understanding of IS strategy from
extant studies within three predominant literature streams: strategic IS planning,
IS/business strategic alignment, and competitive use of IS.
95. Kim, Shin and Grover (2010) stressed that the use of formative measurement in the
field of Information Systems has increased, arguably due to statistical tools that can test
such models. However, in the literature, there exist two contradictory views on the
potential deficiency of formative measurement. While opponents who are critical of
formative measurement argue that there are native weaknesses of the formative approach
in model estimation, proponents who are in favor of using formative measurement
counter that opponents' research methods in measurement model specification are flawed.
The goal of this work is to empirically test these opposing views on whether the alleged
estimation instability of formative measurement is due to measurement model
misspecification or simply the shortcoming of formative measurement. To assess the
integrity of arguments of both parties, we adopt a research design in which four different
cases are tested in terms of interpretational confounding and external consistency. We
find that regardless of whether there is a specification issue, formative measures can lead
to misleading outcomes. Based on the results, we offer guidelines that researchers may
adopt in planning and executing data analysis with structural equation modeling. Given
that the use of formative measurement is at a critical juncture in the IS field, we believe
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that the guidelines in this research note are important to promote appropriate use of the
approach rather than relegate it to a bandwagon effect.
96. Pun, Sankat and Yiu (2010) pointed out that the Strategic Information Systems (SIS)
are computerized information systems that align the use of Information Systems (IS) and
Information Technology (IT) strategically with corporate strategies in organizations. This
paper reviews the linkage of Strategic Information Systems Planning (SISP) to corporate
the strategy formulation and performance measures, incorporating empirical findings
acquired from an exploratory study of IS/IT practitioners in Hong Kong. The findings
constitute the essential ingredients of the design and building of a generic SISP model
and a series of implementation guidelines. Besides, useful data, information, rules and
experiences acquired were incorporated into building a knowledge base for a prototype
expert system, Expert Strategic Planner (ESP). The prototype system was developed to
demonstrate how user organizations could redefine their businesses and leverage
performance in the context of SISP. The 'Human/ESP' comparison on strategy choices of
a selected firm was presented along with a discussion on the applicability of the SISP
model and the possible directions for further research.
97. Newkirk and Lederer (2006) have suggested that more extensive strategic information
systems planning (SISP) in an uncertain environment produces greater planning success.
Managers must decide whether, and if so when, to perform such SISP. Our study tested
the effect of SISP phases on planning success in more and less uncertain environments. A
questionnaire assessed SISP in terms of strategic awareness, situation analysis, strategy
conception, strategy formulation, and strategy implementation planning phases. It
inquired about environmental uncertainty as dynamism, heterogeneity, and hostility.
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Finally, it measured SISP success as a composite of alignment, analysis, cooperation, and
capabilities. One hundred and sixty-one IS executives provided data in a postal survey.
More extensive strategy formulation uniformly predicted successful planning in more
uncertain environments, whereas strategic awareness generally predicted it in less
uncertain ones. Strategy conception predicted it in neither more nor less uncertain
environments. More extensive planning is thus not uniformly successful in either
environment but depends on the nature of the uncertainty.
98. Newkirk, Lederer and Johnson (2008) tested the impact of business and information
technology (IT) change on strategic information systems planning (SISP) horizon, of
horizon on the planning itself, and of the planning on the alignment of IS strategy and
business strategy. A questionnaire defined business change, IT change, and alignment as
multi-item scaled questions, and planning horizon as a single, non scaled one. It defined a
multi-item scaled SISP measure as both a second-order construct and as single-order
constructs for its individual phases. A postal survey collected data from 161 IS
executives. Constructs were extensively validated. The analysis used structural equation
modeling, and surprisingly found that business change predicted longer SISP horizons,
but IT change predicted neither longer nor shorter ones. Planning horizon predicted SISP
itself (as a second-order construct and as all of its phases), and such planning (as a
second-order construct, and as strategic awareness and strategy conception phases)
predicted alignment of IS strategy and business strategy. These findings suggest that
practitioners more carefully assess their own degree of caution in setting planning
horizons in response to business and IT change. In fact, the findings suggest it may not be
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necessary for practitioners to shorten planning horizons in a rapidly changing
environment.
99. Battaglia (1991) argues that SISP is the analysis of a corporation‘s information and
processes using business information models together with the evaluation of risk, current
needs and requirements. The result is an action plan showing the desired course of events
necessary to align information use and needs with the strategic direction of the company.
The same article emphasizes the need to note that SISP is a management function and not
a technical one. This is consistent with the earlier distinction between the older data
processing views and the modern strategic importance view of Information Systems.
SISP thus is used to identify the best targets for purchasing and installing new
management information systems and help an organization maximize the return on its
information technology investment. A portfolio of computer-based applications is
identified that will assist an organization in executing its business plans and realize its
business goals. There is a growing realization that the application of information
technology (IT) to a firm‘s strategic activities has been one of the most common and
effective ways to improve business performance.
100. Vitale, Ives and Beath (1986) emphasized that the task of strategic information
systems planning is difficult and often time organizations do not know how to do it.
Strategic information systems planning is a major change for organizations, from
planning for information systems based on user‘s demands to those based on business
strategy. Also strategic information systems planning change the planning characteristics
in major ways. For example, the time horizon for planning changes from 1 year to 3 years
or more and development plans are driven by current and future business needs rather
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than incremental user needs. Increase in the time horizon is a factor which results in poor
response from the top management to the strategic information systems planning process
as it is difficult to hold their attention for such a long period. Other questions associated
with strategic information systems planning are related to the scope of the planning study,
the focus of the planning exercise – corporate organization vs. strategic business unit,
number of studies and their sequence, choosing a strategic information systems planning
methodology or developing one if none is suitable, targets of planning process and
deliverables. Because of the complexity of the strategic information systems planning
process and uniqueness of each organization, there is no one best way to tackle it. They
also classify SISP methodologies into two categories: impact and alignment. Impact
methodologies help create and justify new uses of IT, while the methodologies in the
―alignment‖ category align IS objectives with organizational goals.
101. Brynjolfsson and Mendelson (1993) argued that Information is a vital ingredient for
management information system is designed to both reduce the costs and increase the
capabilities of organizational information processing. Information systems support the
operations and effective managing of major functions in an organization. Online
operations facilitate user machine, dialogue, interactive analysis, planning, and decision
making. Information systems may be viewed as a substantial extension of the concepts of
managerial accounting, operation research, and organizational theories related to
management and decision making.
102. Kasat and Joshi (2007) argued that Information systems call for analysis of a
business, management views and policies, organizational cultures and management
styles. An open system of information system offers an ability of continues changes and
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adjustments or corrections in the system inline with environmental changes in which it
works. An understanding of the effective and responsible use of management of
information systems and technologies is important for managers, business professional
and other knowledge workers in today‘s internet work enterprises. They emphasise that
Information system plays a vital role in e-business and e-commerce operations, enterprise
collaborations and strategic success of business. An information system like any other
system receives inputs of data, and instructions, processes the data according to these
instructions and produces outputs. This information-processing model can be used to
depict an information system. The major purpose of an information system is to convert
data into valuable information.
103. Watson Sr. pointed out that implementing e-business application such as Enterprise
Resource Management or Customer Relationship Management (CRM) requires a
reengineering of core business process internally and with supply chain partners, thus
forcing a company to model and implement business practices being implemented by
leading firms in their industry. Of course, any major new business and initiatives can
enable a company to redefine its core lines of business and precipitate dramatic changes
within the entire inter-enterprise value chain of a business. Implementing new
business/IT strategies require managing the effects of major changes in key
organizational dimensions such as business processes, organizational structures,
managerial roles, employee work assignments, and stakeholder relationships that arise
from the deployment of new business information systems. Induction of Electronic Data
Interchange as part of an organization‘s infrastructure, while providing many benefits
cans also result in resistance to change that is brought about by the new ways of working.
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IBM is a real world example that demonstrates the challenges of implementing major
business/ IT strategies and applications, and the change management challenges that
confront management.
104. Watson Jr. concluded that IBM embraces customer relationship management (CRM)
as a primary key for e-business applications. It is designed to implement a business
strategy of using IT to support a total customer care focus for all areas of the company.
Business challenges also include aggregating business functions and information to drive
greater efficiency and responsiveness, automating processes for managing data to
improve quality, efficiency and reduce costs, utilizing actionable information to enable
better business decision-making, adhering to regulatory requirements, and improving data
storage and distribution processes to increase efficiency and reduce overall costs, and
lastly, enabling brand new business functions and processes through better access to data
and diverse applications. IBM‘s high level industry expertise and global investment in
diverse application platforms and application skills helps to provide a strong foundation
for leadership in application design, development, implementation, and management.
105. White (2001) argues that people are a major focus of organizational change
management. This includes activities such as developing innovative ways to measure,
motivate and reward performance. So is designing programs to recruit and train
employees in the core competencies required in a changing work place. Change
management also involves analyzing and defining all changes facing the organization,
and developing programs to reduce the risks and costs and to maximize the benefits of
the change. For example, implementing a new e-business process like customer
relationship management, might involve developing a change action plan, assigning
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selected managers as change sponsor, developing employee change teams and
encouraging open communications and feedbacks about organizational changes. Some
key tactics change experts recommend include; involve as many people as possible in E-
business planning and application development, make constant change in expected part of
the culture, tell everyone as much as possible about everything as often as possible,
preferably in person, make liberal use of financial incentives and recognition, and lastly,
work within the company culture and not around it. E-business vision created in the
strategy planning phase should be communicated in compelling change story to the
people in the organization. Evaluating the readiness for the e-business changes within an
organization, developing change strategies, choosing and training change leaders and
champions based on that assessment could be the next steps in managing organizational
changes.
106. Drake (2003) emphasized that Enterprise Resource Planning system provides a
holistic view of the enterprise and is devised to draw benefits from IT. It works around
the core activities of the organization, and facilitates seamless flow of information across
departmental barriers. ERP systems optimally plan and manage all the resources of the
organization, and hence cover the techniques and concepts employed for the integrated
management of businesses as a whole, from the viewpoint of the effective usage of
management resources to improve the efficiency of an enterprise. Direct benefits of ERP
include improved efficiency, information integration for better-decision making, and
faster response time to customer queries. However, the indirect advantages of ERP
include better corporate image, improved customer goodwill, and customer satisfaction.
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107. Sethi (2009) argues that superior organizational performance is not a matter of
luck. It is determined by the choices managers make. Top executives use strategic
management to define an overall direction for the organization, which is the firm‘s
grand strategy. Grand strategy is the general plan of major action by which a firm
intends to achieve its long term goals. Within the overall grand strategy of an
organization executives define an explicit strategy, which is the plan of action that
describes resource allocation and activities for dealing with the environment and
attending the organization goals. The essence of strategy is choosing to perform
different activities or to execute activities differently than competitors do. Strategy
necessarily changes over time to fit environmental conditions but to remain
competitive; companies develop strategies that focus on core competencies, develop
synergy, and create value for customers.
108. Jungfalk (2009) argues that like other business activity, planning also has a
process and methodology. In the very beginning of the planning process it is necessary
to decide the purpose of the organization for which it works. Many organizations call it
mission. The mission or aim of the organization is a broad statement of the
organization‘s existence, which sets the direction of the organization and decides the
scope and the boundaries of the business. The task after deciding the mission of the aim
is to set the goal(s) for the organization. The goal is more specific and has a time scale
of three to five years. It is described in the quantitative terms in the form of a ratio, a
norm of a level of certain business aspects, such as the largest share leader in the
industry dominant in certain product, quality, reach and distribution, etc. the goals
become reference for the top management in planning the business activities. After
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determining the mission and the goals, the next task is to set various objectives for the
organization.
109. United States General Accounting Office (2011) concludes that the objectives are
described in terms of business results to be achieved in a short duration of a year or
two. They are measurable and can be monitored with the help of the business tools and
technologies. Objectives may be the profitability, the sales, the quality standards, the
capacity utilization, etc. When achieved, the objectives will be contributing to the
accomplishment of the goals and the subsequently the mission. The next step in the
planning process is to targets for more detailed working and reference. The objective of
the business is to be translated in terms of functional and operational units for easy
communication and decision making. The targets may be monthly for the sales,
production, inventory, and so on. The targets will be the direct descendents of the
objective(s). The success in achieving the goals and objective is directly dependent on
the management‘s business strategy.
110. Robertson (2005) concludes that the Information management is a set of activities
that travels along the logical succession of interdependent stages of organization
development. Information management strategies involve harnessing information
resources and information capabilities, to enable the organization to learn and adapt to
its changing environment. In other words, information management centers on
effectively managing and controlling the use of information with respect to
coordination and control, strategic decision making and tactical problem solving.
Information system strategy is a classic model of representing decision making
processes in information systems. Information systems strategy is the plan and steps of
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execution taken by the organization in providing information systems and services.
Improvising information management is a key focus for many firms and organizations.
This is driven by an array of various factors that also include a need to improve the
efficiency business processes, the desire to deliver new services, and the demands of
compliance regulations. In most of the cases, information management involves
deploying new technology solutions, like portal applications, content or document
management systems or data warehousing.
111. Schlögl (2005) suggests that only those companies that create new knowledge and
disseminate it widely throughout the organization and quickly embody it in the new
technologies and products will survive in today‘s competitive world. Additionally,
knowledge management strategies are developed to effectively implement a range of
policies and practices that the organization uses to create, develop, identify, represent,
distribute, and enable adoption of experiences and valuable insights. Such experiences
and insights comprise knowledge that are either embedded in organizational practices
or processes, or are embodied in individuals. Knowledge management strategies are
derived from information management as a discipline. The value of information-as-
knowledge and knowledge management essentially lies in the conversion of tacit
information resources to manageable information products, and the resulting expansion
of the organization‘s information resource base. Furthermore, KM strategies are aimed
at facilitating individual as well organizational learning and focuses on efficiency gains
of the organization.
112. The Antonine Education (2009) concludes that information ecology and
organizational culture are most important with respect to knowledge management.
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Strategies for knowledge demand that successful knowledge management is achieved
as an outcome of willingness among organizational members and staff to share their
insights and expertise, in enhancing the organizational activities thereby increasing the
chances of achievement of desired goals and targets. Knowledge management has thus
become one of the major strategic uses of information technology. Another factor on
which information management, knowledge management and information system
strategies depend on, is information acquisition. This key factor is essential in
identifying market trends, environmental risks, opportunities, customer preferences,
internal process inefficiencies, demand patterns and an array of other information
resources that are leveraged to create challenging outcomes and competitive
advantages. Enterprise content management (ECM) is the strategies, tools and methods,
used in the context of knowledge management, to capture, store, manage, preserve, and
distribute and deliver documents and content related to organizational processes.
113. Abdisalam, Munir, Khalid and Muhammad (2010) argue that using information
systems effectively requires an understanding of the organization, management, and the
technology shaping the systems. All information systems can be described as
organizational and management solutions to challenges posed by the environment. The
advances in information systems have affect on our day-to day lives. As the technology
is evolving immensely so are the opportunities in a healthy way to prepare the
organization in the competitive advantage environment. In order to manage the IS/IT
based systems; it is important to have an appropriate strategy that defines the systems
and provide means to manage them. Strategic Information Systems Alignment (SISA)
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is an effective way of developing and maintaining the IS/IT systems that support the
business operations.
114. King and. Teo (1997) suggested that Information Systems planning is becoming
important as the ―organizations attempt to leverage IS applications to improve
efficiency, reengineer business processes, gain competitive advantage, and compete
more effectively‖. It was interesting to know that there was no particular strategy being
used for the development of plans. Teo and King reported that there is no actual model
or theory available for developing the IS plan, but we have to keep abreast with the new
technologies, along with the business needs and requirements.
115. Krcmar and Lucas concluded that there are two paths to the discovery of a
strategic system. First top management engages in top-down scanning. Managers scan
the environment looking for competitive threats and opportunities; such a scan may
suggest a new strategy for the firm, a strategy which relies on information technology
and its use. Another route to the strategic use of the technology is bottom-up inventing.
An individual who is not part of senior management develops a system to meet a
perceived need. The focus here may not be strategic or competitive until someone else
points out the potential of the invention. Many firms have found strategic products
through a senior manager searching the organization to find a bottom-up invention.
116. Robson (1997) suggested that many headings can be used to categorize techniques
that could support strategic planning. These are techniques that follow the model of
planning or the decision-making process; their nature of attention, such as
opportunities; their identifying origin; their perspective view; and current business
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problems. Another possibility in grouping these techniques is meeting the goal of
efficiency, effectiveness, competitiveness, business alignment, or impaction on
business. The techniques can also be grouped according to awareness, opportunity, or
positioning framework. Generally, all of these techniques are grouped according to a
judgment of their use, because their purposes intermingle, and they are applied in many
ways. Therefore, care should be taken in choosing them for applications.
117. Willcocks, Feeny and Islei (1997) suggested that IS can obtain competitive
advantage through some key factors. The availability of the technique applications to
use IS strategically is one example. Another is the knowledge of the extent to which the
business environment has been affected by the information revolution—understanding
IS strategic (ISS) planning process in terms of generating, solidifying, implementing,
and planning. If the ISS planning is treated as a system that includes input, process, and
output, the techniques are as important as input and output, in order to reach new
approaches to planning through applications of the process. This may be useful in an
unstable environment that needs to act effectively and efficiently to face any changes in
the environment. With this in mind, this work considers the adaptability of applying
strategic techniques in the ISS planning to develop a framework for evaluation of these
techniques. This framework may also be used as a tool to support the planning team
through the IS planning process.
118. Turban, Rainer and Potter (2005) concluded that the importance of the techniques
of strategic planning in the role of IS/IT is increasing. These techniques may help to
build the business model of the organization, which would support managers by
simulating a situation or providing the problem‘s solution in many ways, such as
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decreasing the cost of experimentation to lower than it is in real life; simulating time in
seconds as opposed to real-life, which may require years; changing the variables of the
model in the experiment, easier than changing them in real life; and finally, using the
models to deal with uncertainty, by including ―what-if‖ roles or risk calculations.
119. Cashman and Holt (1980) noted that cooperation between team members in a
software engineering environment requires more than a simple message system, and
they argue that a means for structuring project communication is needed. They describe
a protocol-driven, computer-based message system called MONSTR, implemented
under the National Software Works project, a distributed operating system for the
Arpanet internet. In this system a manager defines the rules of communication,
including the allowable paths of communication, the meaning of messages sent over
each path, and a description of the project structure.
120. Ackoff (1979) argues that the principal benefit of planning comes from engaging
in it, and that there is a need for workers to participate directly in the planning process.
Ackoff's concept of interactive planning" emphasizes three points. First is the
importance of direct participation where workers can plan for themselves. Second,
planning should be a continuous process. Third, planning should be holistic so that
units at the same level of an organization should be planned for simultaneously and
interpedently and every level of the system should be involved in a multi-level system.
These ideas identify planning as a group activity, with decisions being made at the
lowest appropriate level and with communication and coordination between groups.
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121. Anthony (1965) suggested that top management is responsible of the development
and implementation of an organization's strategy. Since information systems can have a
significant strategic impact in the manner suggested by a growing number of authors,
top management also needs to take responsibility for fostering information systems
with the potential to provide this impact. The concept of democratic planning rests on
the belief that participation in the preparation and carrying through of plans should be
spread among all members of a system, and they all should have the same amount of
resources to influence planning. Many techniques can be used in the strategic planning
processes, and it becomes clear that a business needs frameworks, which require an
understanding of different methods, techniques, and tools.
122. Wiseman C (1985) noted that information systems affecting internal operations or
traditional products and services will only have strategic impact if they support the
"strategic thrusts" of the organization. These strategic thrusts include Porter's
differentiation and cost, along with innovation, growth, and alliance, all of which
influence relationships with customers, suppliers, and competitors.
123. Selig (1982) looked at a broad set of issues associated with multinational is
management. Though focusing primarily on planning and strategy, Selig's studies
highlight the differences between managing in domestic and in international
environments. He emphasizes the increased complexity that arises from a need to deal
with multiple languages, cultures, business philosophies, governments and regulations,
non-uniform vendor support, variations in available technologies, and relative
weaknesses in external and internal is standards and protocol.
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124. Natek and Lesjak (2005) stressed that the use of information technology for the
support of company‘s strategic orientation and for the support of value chains
substantially increased the complexity of the information system and has forced many
companies into strategic planning of information systems. Unfortunately, many
strategic plans were just vast documents that contained attractive business and
information models and were filled with unreasonable goals and assessments of future
investments into information technology. Thus companies became extremely cautious
and seldom decided to prepare a strategic plan. They preferred to prepare concrete
plans for the implementation of already selected information solutions, which could not
substitute strategic plans.
125. Kovaÿiÿ, Jakliÿ, Indihar and Groznik (2004) stressed that the development of
information technology and a wide supply of information solutions did not only bring
about a much better functionality, integrity, reliability and efficiency of information
support, but also increased investments in information development of companies. Such
investments increase both in absolute values and the relative share of enterprise‘s
turnover. Therefore the management should not transfer responsibility regarding these
decisions to information specialists. Once it starts taking decisions regarding strategic
development of the information system, the management should be interested in how
such investments could be perceived as sound by the shareholders and how to insure
their long term effectiveness.
126. Clemons and Row (1988) forwarded the fact that there has been considerable
attention paid to competitive and strategic information systems. Few cases, however,
have been studied and presented in detail. McKesson's order entry and distribution
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system, Economost, is one of the most widely cited strategic information systems, with
wide acceptance; nearly 100% of McKesson's orders are entered electronically by
customers. Impact on customers, and on McKesson's costs, has been favorable and
dramatic. Similar systems are now widely available from major competitors; the effect
of such systems on the industry, and on industry consolidation, has also been significant
Clearly, Economost has produced numerous benefits for McKesson. Some of the key
benefits are-
I. Economost supports rapid, reliable, and cost-effective customer order entry.
The number of order entry clerks employed by McKesson has been cut from
700 to 15.
II. Sales personnel are no longer principally order takers. They can be used
actively, as business consultants to the retailers. Additionally, the number of
sales personnel has been cut in half, while orders have increased six fold.
III. Since orders are captured in machine-readable form, Economost provides a
platform for providing services for the retail pharmacist, from price tags for
shelf stock through sophisticated management reports.
IV. An additional use of machine-readable information is the optimization of
McKesson's daily warehouse operations. Productivity of warehouse staff has
increased at a rate of 17%, compounded annually, for the decade 1975 through
1985, yielding almost a fivefold increase.
V. Purchasing has been rationalized. Fewer purchasing agents, and the resulting
power of the consolidated orders they place, give McKesson considerable
bargaining power.
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VI. Perhaps the most visible benefit is the increased tying of the customer to
McKesson, resulting in a larger share of the customer's business. This allows
increased sales and increased operating margins for McKesson, since order
processing and delivery costs are spread over larger orders. The total impact
of these factors on McKesson has been dramatic. From 1975 to 1987,
McKesson drug's sales have increased 424%, from $922 million to over $4.8
billion, while operating expenses have increased only 86%.