Information Systems Management the Measure

Information Systems Management

The measure of any information systems' value needs to progress beyond efficiency and time reductions measured on a per process level to focusing on how agile, disruptive and market-driven the business can become over time. Organizations that can keep business strategy, organizational strategy and information strategy synchronized with each other are inherently more disruptive and able to redefine markets as a result. Evidence of this is prevalent in studies of D'Aveni's hyper-competition framework (often called the seven S's) (D'Aveni, Canger, Doyle, 1995). This dynamic has also been seen in the studies completely by Dr. Michael Porter of his generic strategies framework that led to the development of value chains as a viable framework for planning business models (Porter, 1986). The Determinants of Competitive Advantage or as it is well-known as the Five Forces Model, also illustrates this dynamic of information becoming a catalyst of disruption in organizations and industries (Porter, 2008). The ability to have information systems function as the catalyst of increased business strategy and organization-wide performance can lead to knowledge itself becoming the competitive advantage over and above price or product alone (Dyer, Nobeoka, 2000). When an organization has created such a tight synchronization between their information systems, organizational and business strategies they become a force in their industries, often capable of disrupting long-held business models in the process. The 7S framework specifically shows how these factors can become so well coordinated within an organization that disruption from a customer-based innovation occurs (D'Aveni, Canger, Doyle, 1995). Start-ups across high tech industries, from software to mobile devices including tablet PCs, all are seeking to be a disruptive force in their industries to revolutionize the value chains of these businesses. Both organizations who are decades old and those that are start-ups both grow by winning new customers to the extent there are disruptive in their approach to defining unique value propositions and further strengthening the value chain to the benefit of customers (Porter, 1986). The intent of this analysis is to evaluate how organizations can create more effective differentiation through value-based selling of products and services by unleashing the value of information systems.

Disruptive Innovation and Value Chains: Why the Customer Must Win

The 7S Framework that compares stakeholder satisfaction, strategic soothsaying or forecasting, speed of market response, the use of surprise as a strategic element, and a redefining of rules in a market (also redefining the value chain) which are all essential competitive strategies for growth. The ability to use signaling, simultaneous and sequential strategies to gain competitive position (often called strategic thrusts) are also critical for translating product or service disruption into value for the customer. Without these elements working together the full value and influence of the disruptions' translation into exceptional customer value will not be attained (D'Aveni, Canger, Doyle, 1995).

The 7S's Framework then become a blueprint for how to create disruption that delivers exceptional value to a customer. Yet for disruption to have its maximum effect on any business, there must be the context of which generic strategy it is based on. The Porter generic strategies models of differentiation, cost leadership, or highly specific niche-based approaches all have varying results in terms of their delivery of Return on Invested Capital (ROIC) versus the innate strengths of the business model's value chain (Porter, 2008). Delineating the best possible and optimal mix of generic strategies, innate strengths from within the 7S's framework, and how these decisions clarify and strengthen the value chain of an industry all must be taken into account in seeking to create a disruptive business model that delivers exceptionally high value to the customer (Porter, 2008). Information technologies are the catalyst that unify these diverse areas of a business model together and have the potential to accelerate the business more quickly on key criterion including new product development, higher levels of customer satisfaction, and more efficiency in managing supply chains to forecast. The catalyst of any successful business model, whether being re-defined for business decades old, or a start-up that has just launched, is the need for using information technologies as a conduit for listening to the customer.

The paradox many businesses get caught up in when attempting to stay in step with their customers and stay relevant by investing heavily in information technology is the mistaken belief that standardization of tasks and processes will yield increasingly lower costs as a business moves down an experience curve (Porter, 1986). In previous economic cycles during the 20th century where mass production and efficiency was the approach to minimizing costs and competing on price, this strategy may have worked for a decade, yet is no longer effective today. The many studies of how potent values-based differentiation is using the 7S's framework makes this point clear (D'Aveni, Canger, Doyle, 1995).

Disruptive business models must be firmly anchored in the value chains of the industries they are part of, and seek to augment, strengthen and increase the focus on customer needs better than any other competitor (Porter, 1986). The Determinants of Competitive Advantage or the Five Forces Model provides insights into how best to approach each aspect of competitive dynamics that must be taken into account when a given industry's dynamics are going through a transition based upon innovation (Porter, 2008).

Dr. Porter relies heavily in his earlier research on the concept of personal productivity being the only competitive advantage any nation or organization can rely on for the long-term (Porter, 1986). The Five Forces Model takes into account efficiency and performance gains that can be attributable to the experience effect of productivity gains based on cumulative learning that the Boston Consulting Group has promoted for decades and Dr. Porter acknowledges in his research (Porter, 2008).