STRATEGIC MANAGEMENT OF THE IS’S RESOURCES

Thomas A. Fotiadis*, George Haramis*, and Dimitrios Soubeniotis*
companies’ operations and the units of the companies as well. Namely, how adverse or positive these strategic effects of the already existing information system or future information systems will be. Depending on these estimations, companies or units are ranked into SUPPORT, FACTORY, TURNAROUND, and STRATEGIC. Each company unit must know its category since this category is responsible for the type of personnel, the organization and planning of its operations as well. That is, if for example a company belongs to the category: 1. SUPPORT, then the EDP STEERING BOARD should consist of executives. 2. STRATEGIC, then the EDP STEERING BOARD should consist of managers.

Abstract Information Systems’ (IS’s) Management Frameworks, the IS’s and the competitive Strategy of the corporation, the IS’s Technology / Value added, and the Computing Management along with the Management Overview of the IS’s are studied in this paper. An integration of the benefits enjoyed by the systemic approach of both the managerial information system and the viewpoint adopted by the strategic marketing management reveals the ways current organizations have to follow in order to remain competitive in the ever demanding business environment.

INTRODUCTION The structure of the information systems management depends on: 1. The change in the design environment of the information systems that are constantly formed, the constant development of technology, the new applications, the easier disposal to the market of computer technology services, the lack of specialized staff and the mass renovation of applications. 2. The change of terms that base the design such as the range of information systems technology and the phases of its assimilation, the strategic role of technology, the credo and principles of companies and the use of information systems as competition tools. In addition, it is also necessary to estimate the effect of information systems on the *University of Macedonia, fotiadis@uom.gr haramis@uom.gr, subedim@uom.gr .

I. COMPETITIVE STRATEGY A. Information and Strategy Systems Information Systems are regarded as means of supporting operations and decisions. Recently, it has been ascertained that Information Systems can be considered as true competition tools, mainly in DEREGULATED industries such as transportations and financial services. The application of Information Systems is considered of strategic importance when these can change the company’s competition ways. According to studies, five main competition forces exist: 1. The entrance of new competitors.

2. 3. 4. 5.

How intense the competition among competitors is. The pressure by replacement products. The buyers’ bargaining force. The suppliers’ bargaining force.

differentiation of the product specifications. There are many examples mentioned about companies that passed from one strategy to the other thanks to I.S’s.

The following questions should be posed (according to the aforementioned forces) in order to estimate the strategic effect of the Information Systems in a company. If there is a “yes”, then there is a “strategic chance” that should be examined closely. B. Can Information Systems block new competitors? At this point, we can refer to a company that installed terminals to its clients and connected them to its system for the order of various products. Later, after 2-3 years, competitors developed similar systems and suggested installing their own terminals, but clients gave a point-black refusal. According to this example, there are many benefits: 1. Client’s best service. 2. Barrier against competitors (clients are “hooked”). 3. Increasing sales and getting a bigger part of the market.

D. Can Information Systems create new products? Worth to mention here is a company that connected clients in its system with a relatively low cost in order to receive information from its data base which included econometric details and was developed for its own use. This, additional cost resulted in an important increase in the company’s incomes.

E. Can Information Systems create needs for additional expenses in case of a change in the system use? Repeatedly, clients using one company’s systems for their service are so much depended on them that it is impossible to address to other competitive companies even if they need a change. This happens because the time required for the change is very important and the expense as well. (Dependence on bank systems or on electronic systems by heavy machinery manufacturers: when this machinery has breakdowns, these are detected by the systems, which also manage the repairing procedures). F. Can Information Systems change the balance of powers regarding the relations with suppliers? Developing systems so that clients and suppliers are connected poses great effects : 1. On a financial level: for example, the possibility to supply fast raw materials, materials, etc., reduces greatly bulk stocks. 2. On a political level.

C. Can the Information Systems change the competition basis? According to a Harvard professor’s analysis, there are three types of strategic competition with different basic rules: 1. The first is based on cost: when a company can produce in lower cost than its competitors (i.e. companies producing high tech products). 2. The second is based on the product differentiation: when a company can offer a different composition of the product specifications i.e. services and quality (airline companies offering tickets plus tourist packets). 3. The third is based on high specialization in a small market area and is characterized by the lower cost or the

2.1 The dependence on the supplier is limited. When suppliers install terminals to clients and these terminals are connected to the systems of many suppliers, then the client is in a favorable position and can impose his/ hers conditions. All studies about the aforementioned issues present the strategic importance of IS’s and are very useful in order to describe the existing applications and give quality criteria so as to estimate the new applications to be developed. However, these studies are not so helpful for the definition of new applications to be developed. This is the reason why there must be a prolific dialogue among computerization and users, and also imagination. This procedure becomes even more complex if one takes into account the fact that, while an IS can be of great strategic importance, it is difficult to define its benefits, sometimes subjective ones. Frequently, the placing which is based on the strict return of one investment, evaluates very specific and limited goals of the strategic IS’s that are difficult to be analyzed. Concluding, it is believed that, using a model that is developed based on the analysis of various phases of clients’ RESOURCE LIFE CYCLE, the supplier can define new applications in order to acquire competition ability. In order to create a new product or service, there must be a Product Life Cycle in order to be invented, manufactured, distributed, and finally called in. If a client wants to have it, he must pass through various phases of Life Cycle. According to the referred model there are 13 phases that the supplier can help client to manage them. With this action, the supplier can be differentiated from his competitors, offering important and unique services and ways to reduce the expenses.

G. Priority of means disposal for the development of Information Systems depending on the level of an industry’s strategic importance Developing, highly competitive 1 Rel/ly stable industry 1 Static or decaying industry 1 3

Machinery maintenance Research for 2 3 new technologies Achieving 2 2 competitive predominance Maintaining or 2 3 retrieving the competition equality Strictly justified 3 3 investment return Note: minor numbers are highly prioritized.

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II. INFORMATION SYSTEMS TECHNOLOGY/ VALUE ADDED Frequently, “alternative expenses” in IS’s should not be based only on cost but also on their capacity to grant “added value”. For example, an airline company can spend 1 million dollars in order to negotiate an additional tourist program that will increase its incomes the following year per 30-40 million dollars. Applications permitting “added values” can result in important effects on 4 major sectors: 1. New forms of accessing the market and the distribution channels. 2. Differentiation of the products and the company. 3. Change of the industry’s structures.

Getting to know the effects of Information Systems on competition powers (as mentioned in 2), and on a company’s powers, one can perform a detailed analysis in order to find chances for added values. This systematic analysis is not a simple task. The procedures that need to be followed are complex and time-consuming. In any case, each company should follow the development of computer technology in order to find new chances for values added. Companies that can trace down such chances are the ones with profits while the others are the ones, which lose. Positioning of Your Firm? Potential Systems Contribution High Low Beware Safe Low Attack Explore High

3. 4. 5.

To coordinate the company systems. To inform users for the developments of technology and its applications, and To support users so that they can be updated and receive information from data bases or mutual computerized files (Support End-user computing).

Total Value Added III. MANAGING PERSONAL COMPUTING Nowadays, computer environment is characterized by: 1. A trend for a spectacular cost reduction in the equipment and increase in the staff’s wages. 2. The increasing needs for information and the trend for reduction of the time for the service. 3. The reduction of the available experienced staff in relation to the widening of the research and applications field in computer science. Within the framework of this environment, the role of computerization is: 1. To manage and support with maintenance the company data bases. 2. To develop and maintain systems that pose strategic importance for the company.

Supporting users that will have terminals (End Users) means: 1. Informing users about the possibilities of the server, their connection with it, the possibilities of microcomputers when they operate separately or within an intranet, connected or not with the server. 2. Informing users about models and procedures of Software and Hardware and monitoring their status. 3. Training them in simple programming languages so that they will be able to handle information they want on their own. 4. Helping them in order to develop programs and operate the corresponding applications. 5. Helping them for the installation and renovation of the equipment. This support will aim at making the end users operatively independent but with the certainty that the information of databases will not be double-logged and will be ‘safe’ from destruction or alteration by non-authorized users. In addition, support will secure from the risk of buying and not using microcomputer terminals or ready-made packets and also from the time loss caused by the existence and operation of inadequate applications. In conclusion, it can be mentioned that the use of microcomputers or/ and terminals connected to the central computer (Personal Computing) offers important chances as the performance and efficiency of the company is concerned.

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REFERENCES

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