Information Technology for Strategic Management

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Information Technology for Strategic
Management

• Mahmoud Anbar
• Executive Director
• NOSSTIA

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The problem

• There is a huge gap between the vision and
  strategy developed at the top and the things
  people down in the organization, at the
  frontline, are doing.

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Global business environment

• Natural selection
• Survival of the fittest
• c-commerce ( Collaborative commerce)
• Interoperability (applications, business
  processes, and data )
• Demand identified is demand realized, in a matter
  of nanoseconds

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Business and technology

• Technology is considered to be an integral part
  of an organizations core-competency and a key
  evaluation factor used by investors and industry
  analysts

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Information or industry view

• a company may acquire a competitive edge by
  viewing itself as an information business instead
  of taking the traditional industryor
  verticalview

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Supermarket chain

• ?a business that sells food
• or
• is it a business that exploits knowledge about
• Customer preferences
• Geographical biases
• Supply chain logistics
• Product lifecycle
• competitive sales information to optimize its
  delivery,
• Inventory, pricing, and product placement as a
  way to increase margin for each item sold

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Strategic decisions

• Acquire another company
• Enter a new geographic area.
• Launch or discontinue a product line.
• How do we optimally allocate resources to ensure
  profitability and growth targets?
• What factors or combinations of factors are
  directly impacting marketing campaigns?

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Tactical decisions

• Should we extend credit to a particular customer?
• Which customers are likely to become profitable,
  when and to what extent?
• Who are our best suppliers or most profitable
  customers?
• Close someone's credit card account due to
  suspected fraudulent activity.

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Data management and profitability

• Companies that manage their data as a strategic
  resource and invest in its quality are already
  pulling ahead in terms of reputation and
  profitability.
• PricewaterhouseCoopers

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Information Strategy

• The part of the business strategy that describes
  how the firm will leverage information to create
  value in a dynamic business environment.

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IT Strategy
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IT Strategic role

• Strategy and execution are the ultimate drivers
  of business performance.
• While technology does not actually deliver
  business strategy, it enables alignment and solid
  execution.

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Operational data usage

• Data is the fuel driving the automation of a
  business operation.
• Without the operational use of information a
  business could not survive

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Strategic Data usage

• Strategic (forward-looking view )
• How to improve the business
• Strategic knowledge is embedded in the collection
  of a companys data and that extracting
  actionable knowledge will help a company improve
  its business.

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Key Management Tools

• ERP Enterprise Resource Planning
• SCM Supply Chain Management
• CRM Customer Relationship Management
  -------------------------------------------------
  ---
• BPM Business Process Management
• BI Business Intelligence
• PM Performance Management

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Agile enterprises

• If you cannot change a plan, you cannot
  effectively manage performance.
• Performance-oriented enterprise planning
  activities require a degree of flexibility that
  enables an organization to be responsive to
  changes in customer demand, competitors new
  offerings, margin-friendly supply opportunities,
  or other important shifts that occur during the
  course of business.

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Agile control mechanism

• understanding what is happening within your
  organisation, at a detailed level, and having an
  agile control mechanism that allows you to
  constantly improve these processes, and when
  necessary, change or advance your strategy to
  keep one step ahead of the competition

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The Management Cycle
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Business analytics software

• Enables organizations to monitor, capture and
  analyze the vast amounts of data generated by
  transaction-processing systems (ERP, CRM, SCM )
• provide management and staff at all levels with
  tools necessary to optimize these processes
  through strategic and tactical decisions.

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Performance Indicators

• plans and strategies can be defined and
  communicated as a set of interconnected
  performance indicators that are presented as
  dynamic scorecards that people can drill into
  to analyze whats behind a result thats not
  performing as it should be.

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The Intelligence Dashboard

• provide a visualization dashboard that reflects
  those KPI measurements, presented in a form for
  management review
• It provides visibility into what needs to be
  fixed

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Balanced Scorecard

• You cannot control what you cannot measure.
• A technique in strategic management, provides a
  comprehensive set of measures used to communicate
  and evaluate achievement of an organizations
  mission and strategy

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BSC- concept
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Performance control

• The Balanced Scorecard complements financial
  measures of past performance with measures of the
  drivers of future performance.
• Balanced Scorecard is a new concept mainly
  designed to translate a company's vision and
  actions into a consistent set of measures

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From Strategy to execution

• A Scorecard is essentially a carefully selected
  set of measures derived from an organization's
  strategy.
• It's a tool for leaders to communicate to
  employees and external stakeholders the outcomes
  and performance drivers by which the organization
  will achieve its strategic objectives.
• The Scorecard provides the link that translates
  strategy into action across the enterprise,
  aligning long-term strategy with coordinated,
  cohesive business activities.

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BSC measures

• Financial Perspective
• Customer Perspective
• Internal Business Process
• Learning Process and Growth Perspective

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BSC
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Practical case

• Vision Incorporating our core VALUES we will
  be the acknowledged industry leader for the
  supply of INNOVATIVE custom-engineered products
  of EXCEPTIONAL value.
• Mission To create value by DELIGHTING our
  customers by ENHANCING the capabilities of the
  entire company.

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Core Values

• We are a manufacturing company with the
  following core values uncompromising
  INTEGRITY, exceptional customer
  SERVICE,continuous IMPROVEMENT in all we do,
  andrecognize the contributions of our
  employees.

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Key words

• Values
• Innovative
• Exceptional
• Delighting
• Enhancing
• Integrity
• Service
• Improvement

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From output to outcome
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Linking Scorecard Components
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Balanced Scorecard
Vision and Strategy
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• Balanced Scorecard makes strategy everyones job