A successful corporate information strategy requires sufficient vision to identify the opportunities that can be achieved through more effective use of information. Management requires a clear vision of where the company is going and how it’s going to get there.
For example, how can information be used to gain a competitive advantage, support key decision makers, integrate all functions of the organization, and link the organization with external customers and suppliers?
The primary initiator of strategic systems is the chief information officer, or CIO.
The CIO should combine an excellent understanding of business and competition with a gut feeling for technology and what can be made to work.
The CIO should initiate the analysis of strategic systems opportunities and, in general, develop the strategic systems vision. He should help other planners and executives to think in strategic systems terms.
Model of the Future
A model of future technology and strategic opportunities should be maintained by the staff of the CIO and should be added to when new ideas arise.
The model will grow more comprehensive as it is successively updated, and periodic planning sessions should use it to examine the opportunities for strategic thrusts.
Sometimes, critical-success-factor (CSF) analysis is done without considering how new strategic thrusts might change the enterprise. In practice, succeeding in a pre-emptive strategic thrust might be one of the most important of the CSFs.
Strategic systems analysis might be done before critical-success-factor analysis (or before the latest update of the CSFs).
On the other hand, CSF analysis might focus attention on strategic system analysis for one aspect of the business.
The methodology used by top management for identifying strategic systems may be similar to Technology Impact Analysis, a business planning process. A model of future technology and strategic opportunities may be maintained in the form of detailed taxonomies.
One taxonomy would be used to summarize technological changes such as advances in integrated-circuit chips, computers, workstations, networks, databases, software, artificial intelligence, neurocomputers and so on.
A second taxonomy would be created of possible strategic business and management opportunities in areas such as production, supplies and inventory, engineering, marketing, sales, products, services, internal systems, decision-making, executive information systems and corporate structure.
Brainstorming sessions should then be held to explore the use of new technology to achieve the identified strategic opportunities and to plan possible strategic thrusts.
The taxonomy of new technology and the taxonomy of strategic thrusts have many cross-linkages. It is desirable to represent these taxonomies with software that enables the cross-linkages to be built and followed easily by using the stack-and-button techniques employed in HyperCard and hypertext software.
The model of possible strategic uses of technology is then refined, and the most likely examples are discussed in top-management workshops. When a strategic systems opportunity is found that appears to be a candidate for implementation, it needs to be examined in detail.
A business proposal should be created that spells out the advantages and risks of the systems.
There should be detailed discussion of how to maximize the advantages and minimize the risks. A detailed calculation should be done of the costs over time and the increased revenue that would result, tangible and intangible.
A discounted cash flow should be created for the system and its likely return on investment computed.
The definition of an effective information strategy requires high-level-management initiation and commitment. Identification of strategic systems opportunities may be facilitated through the use of top-management workshops that include participation by high-level IS managers who have a clear understanding of the business goals of the organization.
Specific outputs of the workshop might include the following:
— definition of a strategic-systems vision;
— critical success factor analysis;
— technology-impact analysis;
— information-planning strategy,
— strategy for use of AI tools
— application-planning strategy
— application-development strategy
— hardware/software standards; and
— enterprise network strategy.
Making a proposal for a strategic system is rather like going to venture capitalists and asking for money for a startup corporation. There are risks involved.
The venture capitalists have to be convinced that the risks are not too great, and that the eventual payoff justifies the risks.
The risks need to be spelled out in detail, and spreadsheets need to be generated showing the net return on investment for different scenarios.
The implementation of a corporate information strategy requires powerful tools that can integrate all aspects of information strategy planning, business area analysis, system design and system implementation. The tools need to view the enterprise as a whole, providing an integrated environment that supports the entire life-cycle process, including strategic planning, analysis, design and construction.
The most powerful technology available today for the implementation of strategic systems is information engineering.
Information engineering is an integrated life-cycle process that provides an interlocking set of computerized techniques designed to build enterprise models, data models and process models.
It includes specific procedures on both the data side and the process side to support each phase of the life-cycle process.
Typically, information engineering tools provide procedures for data planning, data analysis, data design and data construction, as well as separate procedures for process planning, process analysis, process design and process construction (in other words, code generation).
Unlike software-engineering tools, which are oriented toward project-level applications, information-engineering tools are appropriate for the implementation of enterprisewide applications.
They provide powerful facilities for enterprise strategy planning, information strategy planning, business area analysis, data modeling, process modeling, data structure design, procedure design, prototyping, database generation, code generation and documentation generation.
In order to remain competitive, it will be increasingly important for corporations to define and implement an aggressive information strategy. Corporations that have successfully used information as a strategic weapon have achieved major gains relative to their competitors.
This trend will accelerate in the future, as technologies such as information engineering are more widely used to implement an information strategy.
Next week we will evaluate how to develop an information strategy for competitive advantage.