Information system with respect to Defenders, Prospectors and Analyzers
Submitted to
Mr. Ghulam Hussain (Lecturer)
Submitted by
Shafiq Ur Rehman MBA FA08/ 65
COMSATS Institute of Information Technology, Sahiwal
1. Introduction / Description about topic The impact of information systems and technology on business performance has increased clearly during the last decade. Business and IS strategies, especially focusing on the well established typology of business strategy, including Defenders, Analyzers, and Prospectors. This paper also describes the IS strategies appropriate for these three business strategies. [1] This paper has more focus on IS strategy integration with business strategy. HRIS is a good tool in the organization to combine all the players (defenders, analyzers and prospectus) in a one direction. A HRIS generally should provide the capability to more effectively plan, control and manage HR costs to achieve improved efficiency and quality in HR decision making and improve employee and managerial productivity and effectiveness. [2] In today's corporate world human resources has come to play a very critical role in a business. Whether it concerns the hiring and firing of employees or whether it concerns employee motivation, the Human Resources department of any organization now enjoys a very central role in not only formulating company policies, but also in streamlining the business process. [3] Before HR professionals can become more strategic they need to have a grasp on their organization. Managing employee data using an Information System serves as the foundation for more strategic activities. An effective IS should be able to provide and track all of the information a company needs on current and former employees. The right HRIS helps to reduce the workload of the HR staff, allowing them to be more productive and work more efficiently. The role of Information System is very critical in the organizational (business) strategy to achieve the overall goals and objectives. Over the past decade, IS researchers and practitioners have focused their attention on other important questions. First, what determines whether an organization adopts a strategic approach to business, and how is business strategy formulated? Of interest is which organizations are most likely to adopt a strategic approach to business. Finally research productivity in recent years has been committed to examining the relationship between IS strategy and business strategy and organizational performance. [4] Does IS strategy really matter? For organizational who are looking for ways to gain a competitive advantage, the implication of IS strategic choices for company performance is definitely the key factor. In competitive strategy there are different options available for organization to achieve the competitive advantage. A competitive strategy identifies how to build and strengthen the business long term competitive position in the market place. Organization is dealing different business unit at the same time so it is necessary for the organization to integrate the entire business unit in a single platform. [5] Cost leadership (defenders) In this specific competitive position the main focus of the organization on low cost or minimizes the cost of operational and functional activities. Dell has competitive advantage over rival in low cost by its internet based system mainly focusing the HRIS. Because it has reduced the all extra activities related the operations which become the expenses for the firm. Differentiation (prospectors) In this option firm compete on offering innovative and different products and services, in which employees are treated as assets of the organization because they have potential to compete on differentiation strategy. Focuser (analyzers) It is combination of defender and prospectus, in which firm has both strategy to compete the rival. [6] Importance of Information System IS strategy is directly used with business applications in the organization. IS strategy should be consequent from the business strategy, because top management support for IS projects [7] Differences in Defenders, Analyzers, and Prospectors in strategic IS management difficulty have been examined that there is need to link the IS planning process with business planning, so it is necessary to achieve the competitive advantage they must be linked. [8] Need of current study Information system has boosted the business and its all activities. There is no success business without the information system. This topic has inspired me to work on information system impact on business strategy. Some organizations have competitive advantage over rival on the basis of information system. It integrates the all business units, functional and operational activities in a one direction to achieve the organizational goals. Information system is a hot topic in these so I have chosen it to find out the importance in the business activities. 2. Literature review Different researchers and authors have defined the information system into three categories as IS strategy, IT strategy, and information management (IM) strategy. IS strategy focuses on systems or business process of IT, being concerned primarily with aligning them with business needs and using them to gain strategic benefits. [9] IT strategy is concerned mainly with technology policies including such aspects as architecture, technical standards, security levels, and risk attitudes. Finally, IM strategy is applicable with the structures and roles for the management of IS and IT, focusing on issues such as the relationships between the specialists and users, management responsibilities, performance measurement processes, and management controls. My main focus is on information strategy and its integration with business strategy. The IS strategy best integrate with each business strategy is examined in terms of four IS strategy attributes. Three of these are operational support systems, market information systems, and strategic decision support systems that reflect the traditional classification of information systems into transaction processing systems, management information systems, and decision support systems, respectively. [10] For a long time relationship between information system functions and corporate strategy was not of much interest to Top Management of firms. Information Systems were considered being identical with corporate data processing and treated as some reverse scope operation in support of day to day dull tasks. [11] Integration between the three business strategy and the three IS strategy, several authors emphasize the importance of this integration. It is perfectly believed that the integration between business and IS strategies helps improve performance. Greater integration between an organization’s business strategy and IS strategy indicates that the system is focusing to improve the performance. [12] Organizations with greater integration between business strategy and IS strategy are also use IS for a competitive advantage. [13] Defenders, Prospectors, and Analyzers The Defender is the most constant of the three. It seals off a stable and conventional but narrow niche in its industry by offering high quality (but standard) products or services at low prices. Stressing operational efficiency and economies of scale, it employs a mechanistic organization structure. It has greater fixed asset strength than the other, with investments in extremely cost efficient but few core technologies, the Defender does not tend to search outside its domain for new opportunities, and seldom makes major adjustments in its structure or technology. The Prospector is very different and innovators. They continuously seek new product/market opportunities, and are the creator of change in its market. Prospector invests a lot in product R&D and environmental scanning. The Analyzers share some characteristics with each of the other two strategies. Combining the strengths of the other two types, it seeks at the same time minimize risk while maximizing opportunities for growth. It does not usually start new products but follows the Prospector by very rapidly introducing competitive, and rarely better, products. Defenders, Analyzers and Prospectors are high, medium and low in operational efficiency respectively. [14] Defenders, Analyzers, and Prospectors were considered high, high, and low in risk aversion, respectively. The Defender plays it safe by operating in a narrow stable field, whereas the Prospector frequently takes risks with new products. The Analyzer is also highly risk averse it looks for opportunities to grow, but it only adds new products/services. Increased use of IS for operational support would generally be expected to facilitate operational efficiency. Market information and business strategy Market information systems are related to management information systems but with a better focus on the company’s markets and product sales. It has been argued, and empirically found, that Prospectors more closely observe their product/market trends and have larger marketing expenditures than Defenders. [15] The Prospector’s administrative system is well matched to keep elasticity. On the other hand is the Defender, for which the primary risk is that of being not capable to respond to a major change in the market environment. Finally, Analyzers also rank high in terms of the use of market information systems. They watch the market keenly and respond very quickly to market changes. [16] Strategic decision support systems play a major role in all three configurations. In Defenders, these systems give to the long term planning, or futurity, which is a key characteristic of that configuration. In Prospectors, they give to proactive by helping the organization to make strategic decisions rapidly and effectively. [17] 3. Conclusion Information has emerged as a driving force of integration and the enabler of new competitiveness for today’s enterprise in the global marketplace. An integration of planning with development and management through enterprise information resources which capture and characterize the enterprise will shorten the response cycle and even allow for economic evaluation of information system investment. Information based enterprises must be planned in an integrated way all stages of the business strategy are engaged to bring about agility, quality, and productivity. The three types look like to be equally successful. This conforms to Miles and Snow’s view of the three strategies as equally feasible according to their resources, information and products/ services. The integration between the business strategy and information system is very essential to achieve the desire result or goals of the organization. Prospectors has more information as compare to Defenders because they have main focus on standards products but Prospectors have innovative and different product market. But both can not achieve the desire goals without the integration of business strategy and information system. 4. References [1] Miles and Snow’s strategic types: A comprehensive assessment of reliability and validity. Acad. Management J. 33(4) 817–832. [2] http://www.dresserassociates.com/what-is-a-hris.asp viewed at 6/6/2010 [3] http://www.smallbusinessbible.org/advantages_human_information.html viewed at 6/6/2010 [4] Kamoche, K. (1996). Strategic human resource management within a resource capability view of the firm. Journal of Management Studies, 33(2), 213–33. [5] Dessler (Human resource management 11th edition pp=82) [6] Dessler (Human resource management 11th edition pp=82) [7] King, W. R. 1978. Strategic planning for management information systems. MIS Quart. 2(1) 27–37. [8] Gupta, Y. P., J. Karimi, T. M. Somers. 1997. Intigration of a firm’s competitive strategy and information technology management sophistication: Themissing link. IEEE Trans. Engrg.Management 44(4) 400–413 [9] Earl, M. J. 1989. Management Strategies for Information Technology. Prentice Hall, Englewood Cliffs, NJ. [10] Anthony, R. N. 1965. Planning and Control: A Framework for Analysis. Harvard University Press, Boston, MA. [11] Rockart, J.F., “Chief Executives Define Their Own Information Needs,” Harvard Business Review, March-April 1979. [12] Cash, J. I., F. W. McFarlan, J. L. McKenney, M. R. Vitale. 1988. Corporate Information Systems Management: Text and Cases. Irwin, Homewood, IL. [13] Johnston, H. R., S. R. Carrico. 1988. Developing capabilities to use information strategically. MIS Quart. 12(1) 37–48. [14] Segev’s classification of business strategy in respect of efficiency. [15] Hambrick, D. C. 1981. Environment, strategy, and power within top management teams. Admin. Sci. Quart. 26 253–276. [16] 1983. Some tests of the effectiveness and functional attributes of Miles and Snow’s strategic types. Acad. Management J. 26(1) 5–26. [17] Zajac’s (1990) strategic decisions quickly and effectively report 10(3) 23.