Information Resource Management

1. In what respect does business strategy resemble military strategy? Obtaining an advantageous position on the opposition is a tactic that is similar in both business and military strategy.

2. Refer to Chapter 1's discussion of different types of information systems. Which types of ISs can gain strategic advantage and which cannot? Why? Transaction Processing systems are merely used for recording transactions and thus are not used for gaining strategic advantage. Customer Relationship Management systems can be used to improve customer service quality, thus making it a key strategic advantage tool. Supply Chain Management systems (or Enterprise Resource Planning systems) are used to gain strategic advantage because these are involved in all activities involving in producing and selling a good or service. Business Intelligence, Decision Support and Expert systems all can be used to gain strategic advantage, as all are key strategic tools used to make critical business decisions.

3. What should an information system achieve for an organization in order to be considered a strategic information system? A strategic information system is one that is built to seize opportunities. In order to be considered a strategic information system, the system must serve an organizational goal, not just provide data. A system must also work with managers of other functional units outside of IT to pursue the organizational goal.

4. What strategic goal can an IS attain that does not involve wresting market share from competitors? An Information system can create new products or new markets.

5. What condition must exist in an organization planning an SIS? Top management must be involved from initial consideration through development and implementation. It must be part of the overall organizational strategic plan.

6. Sometimes it is difficult to convince top management to commit funds to develop and implement an SIS. Why? Many members of top management are risk adverse. A SIS involves creating and inventing new ideas, products, and services. These can increase your customer base and financial situation. However there is also the chance that such an idea could tank.

7. An SIS often offers a corporation short-lived advantages. How so? Competitors won’t be far behind and they will be trying to create a better product or solution than you are making.

8. What is reengineering? Why is reengineering often mentioned along with IT? Reengineering is the process of elimination of old processes and implementing new ideas and systems from the ground up. IT is involved because reengineering often involves new computer systems.

9. Why have most reengineering projects failed? What has eventually affected reengineering in some companies? New systems force employees and managers to change their way of work.

10. Software developers have made great efforts to create a standard. What does creating a standard mean in the software industry, and why are companies doing it? Creating a standard is a means of locking in clients. This means creating something that no one else does or has. It is an effective way of capitalizing on a certain market.

11. What should an organization do to sustain the strategic benefits of an IS? The IS should be continually modified and enhanced. This will create a moving target for competitors.

12. Adobe encourages PC users to download its Acrobat Reader and Flash Player free of charge. How does this eventually help Adobe strategically? If they give the application away, how does their generosity help them make money? The more people that adopt Adobe as their program of choice for viewing that content, the more they will sell the software that actually creates the content.

13. Referring to the list of strategic moves, classify the initiatives of Jet Blue. JetBlue aimed to reduce costs, offer differentiating products and services, and enhance products and services.

14. What were the reasons for the failure of the original purpose of FordDirect.com? Who eventually gained from the system and what were the gains? The company didn't consider state laws and alliances with dealerships. Ultimately Ford dealerships won in the development of the system, since it now allows customers to locate them easily.

15. The executives of well-established airlines are not less smart than those at JetBlue, and yet, their larger airlines have not done what JetBlue has done. Why? JetBlue was willing to take risks that the other airlines were not willing to take, including the use of beta software in production environments. It is also likely that the other airlines have not reached a refresh cycle point in their system life and they were unwilling to pay substantial costs to “rip and replace”.

16. What does the term “first mover” mean? A “first mover” is an organization that is the first to offer a new product or service.

17. Can a late mover have any strategic advantage with IT? What is the risk that a late mover takes? Late movers can implement the latest technology and not be burdened with legacy systems. The risk is that a late mover may enter a market far too late to make any impact.

18. What does the term bleeding edge mean? When a business failure occurs because an organization tries to be on the technological leading edge, it is called “the bleeding edge.” This happens because a business implements and uses new technology that “bleeds” cash, leading to more costs than profits.