STRATEGIC MANAGEMENT OF THE IS’S

RESOURCES
Thomas A. Fotiadis*, George Haramis*, and Dimitrios Soubeniotis*

companies’ operations and the units of the

Abstract companies as well. Namely, how adverse or
positive these strategic effects of the already
Information Systems’ (IS’s) Management existing information system or future
Frameworks, the IS’s and the competitive information systems will be.
Strategy of the corporation, the IS’s Technology /
Value added, and the Computing Management Depending on these estimations, companies
along with the Management Overview of the IS’s or units are ranked into SUPPORT, FACTORY,
are studied in this paper. An integration of the
TURNAROUND, and STRATEGIC.
benefits enjoyed by the systemic approach of both
the managerial information system and the
viewpoint adopted by the strategic marketing Each company unit must know its category
management reveals the ways current since this category is responsible for the type
organizations have to follow in order to remain of personnel, the organization and planning of
competitive in the ever demanding business its operations as well. That is, if for example a
environment. company belongs to the category:
1. SUPPORT, then the EDP STEERING BOARD
INTRODUCTION should consist of executives.
2. STRATEGIC, then the EDP STEERING BOARD
The structure of the information systems should consist of managers.
management depends on:
1. The change in the design environment of
the information systems that are I. COMPETITIVE STRATEGY
constantly formed, the constant
development of technology, the new A. Information and Strategy Systems
applications, the easier disposal to the
market of computer technology services,
Information Systems are regarded as means
the lack of specialized staff and the mass
of supporting operations and decisions.
renovation of applications.
Recently, it has been ascertained that
2. The change of terms that base the design
Information Systems can be considered as
such as the range of information systems
true competition tools, mainly in DEREGULATED
technology and the phases of its
industries such as transportations and
assimilation, the strategic role of
financial services.
technology, the credo and principles of
companies and the use of information
The application of Information Systems is
systems as competition tools.
considered of strategic importance when these
can change the company’s competition ways.
In addition, it is also necessary to estimate the
effect of information systems on the
According to studies, five main competition
forces exist:
*University of Macedonia, fotiadis@uom.gr
haramis@uom.gr, subedim@uom.gr . 1. The entrance of new competitors.
2. How intense the competition among
competitors is.
3. The pressure by replacement products.
4. The buyers’ bargaining force.
5. The suppliers’ bargaining force.
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.
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
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.
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.
2.1 The dependence on the supplier is
limited. When suppliers install terminals G. Priority of means disposal for the
to clients and these terminals are development of Information Systems
connected to the systems of many depending on the level of an industry’s
suppliers, then the client is in a favorable strategic importance
position and can impose his/ hers
conditions. Developing, Rel/ly Static or
highly stable decaying
All studies about the aforementioned issues competitive industry industry
present the strategic importance of IS’s and Machinery 1 1 1
are very useful in order to describe the maintenance
existing applications and give quality criteria Research for 2 3 3
so as to estimate the new applications to be new
developed. However, these studies are not so technologies
helpful for the definition of new applications Achieving 2 2 3
to be developed. This is the reason why there competitive
must be a prolific dialogue among predominance
computerization and users, and also Maintaining or 2 3 4
imagination. This procedure becomes even retrieving the
more complex if one takes into account the competition
fact that, while an IS can be of great strategic equality
importance, it is difficult to define its Strictly justified 3 3 4
benefits, sometimes subjective ones. investment
Frequently, the placing which is based on the return
strict return of one investment, evaluates very Note: minor numbers are highly prioritized.
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.
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
High Beware Attack
Systems
Contribution
Low Safe Explore
Low High
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.
3. To coordinate the company systems.
4. To inform users for the developments of
technology and its applications, and
5. To support users so that they can be
updated and receive information from
data bases or mutual computerized files
(Support End-user computing).
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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