Third, information technology can provide value-added services which create differentiation. For example, both Citicorp and American Express outdistance their competitors in the use of information technologies. In other words, application-based, customized software systems become extremely critical—unlike the hardware configurations of a typical mainframe computer company or an office equipment vendor. Protecting information ensures that data are reliably and consistently retrievable in a usable format by authorized users, but no one else. Organisations also need to tailor their marketing strategies to a specific audience. But we can affirm that with more relevant information available, discussions in the boardroom on issues affecting the choices and alternatives can now be better controlled and rational decision-making is thus facilitated. Second, it improves product or service quality by providing quality assurance.
Decision Making Speed and accuracy are at the heart of making right decision for your business. Stakeholder Integration Stakeholder integration is another important objective of information technology. This requires distributed processing, memory, switching and signaling capabilities to enable professionals across independent organizations to work together, communicate and coordinate their activities. Most of multinational companies Microsoft, Google, Amazon, McDonalds etc in the world use these cloud based solutions to manage their virtual or physical offices and staff worldwide. Do you have any of the other components of performance management listed above in place? Chapter 17: Managing Information Explain the strategic importance of information.
This requires a highly centralized, integrated, and dedicated on-line information system which is secure, accurate and reliable. This is even though it guides who to market to, and where to market. From innovations in microprocessors to efficient drug delivery systems, information technology helps businesses respond quickly to changing customer requirements. Harvard Business Review, 74, no. Organizations use decision support systems and expert systems to capture and share specialized knowledge with nonexpert employees. The outcome is the list of priority, executable strategies for growth. Competitive Advantage Cost savings, rapid product development and process improvements help companies gain and maintain a competitive advantage in the marketplace.
The functional managers are informed about the progress, achievements and shortfalls in the activity and the targets. When going through the budget process remember that the budget is a tool. A number of books have been written in recent years that discuss specific case histories. The last category of application of information technologies is more recent and emergent. Another role of strategic management is to keep a continuous eye on the goals and objectives of the organization. For example, manufacturing is driven less by parts and materials and more by customer demand. Incorporating both perspectives within the framework of strategic planning provides the best opportunity for success.
The manager is recocnized as a holder of organization by his knowledge and art. There are six reasons or objectives why businesses use information system: 1. We have accordingly seen an explosion in local area networks, metro area networks and global networks to fully exploit the capabilities of affordable information technologies. Using the strategic plan for performance management Once you have defined the change agenda, you must manage the journey to get there. They need to be both effective as well as efficient. It fulfills the needs of blood supply to human body in normal course and also in crisis. For internal analysis, companies can apply the industry evolution model, which identifies takeoff technology, product quality, and product performance features , rapid growth driving costs down and pursuing product innovation , early maturity and slowing growth cost reduction, value services, and aggressive tactics to maintain or gain market share , market saturation elimination of marginal products and continuous improvement of value-chain activities , and stagnation or decline redirection to fastest-growing market segments and efforts to be a low-cost industry leader.
Where marketing attempts previously were limited, in the modern business climate there are untold means by which companies can successfully deliver their message. While the focus is on the centralized, single location displacement of professional staff, it is important to note that it is not hardware architecture but software capabilities that are key to this application of information technologies. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry. The digital age continues to have huge impact on the effective management of marketing strategies. The more a business engage its suppliers, the better the suppliers can provide vital inputs. Undoubtedly, a comprehensive and effective marketing strategy is something businesses must employ irrespective of their size.
We found that executives that follow a rational approach collect and use ample information in a structured decision-making process passing through a number of distinct phases in time. As such, effective marketing strategies are comprised of numerous facets that companies must consider at all times. Integration of all types of information on a common network with worldwide standards is the hopeful evolution of digital networks and terminals, and it seems to be nearing reality sooner than what we expected. Would you like to talk to an experienced facilitator? This is summarized below in Figure 5. Product Development Information technology can speed up the time it takes new products to reach the market. Information systems and technologies have become a vital component of successful businesses and organizations.
One of the major role of strategic management is to incorporate various functional areas of the organization completely, as well as, to ensure these functional areas harmonize and get together well. Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales, and higher profits. The performance of individuals clearly impacts organizational performance and vice versa. The second part discusses four major forces which are responsible for this changing rote. As its name implies, an information system exists to manage information. This has led to the role of finance in the strategic planning process becoming more relevant than ever. Identify issues quickly and create a plan for immediate resolution.