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Information Systems Models: Nolan Stage Hypothesis, IS Strategic Grid, CSFs, Earl’s
Multiple Methodology, Wards Model, Soft Systems Methodology, Socio-Technical
Systems Approach
After stage 4, Nolan found that putting together all growth experience as one stage
was inadequate and he divided this into three stages and added control level.
Initiation is renumbered as stage zero.
It is simple.
Nolan’s stage model was proposed at the time when there was no Internet.
In Porter’s competitive forces model, the strategic position of the firm and its
strategies are determined not only by competition with its traditional direct
competitors but also by four forces in the industry’s environment: new market
entrants, substitute products, customers and suppliers.
Traditional Competition: All firms share market space with other competitors,
who are continuously devising new, more efficient ways to produce by introducing
new products and services, and attempting to attract new customers by developing
their brands and imposing switching costs on their customers.
New Market Entrants: In a free economy, new companies are always entering the
market place. In some industries there are very low barriers to entry; in some entry
is very difficult. New companies have several advantages. They are not locked into
old plants and equipment; they often hire younger workers who are less expensive
and perhaps more innovative. The new firms are not encumbered by old, worn out
brand names. These advantages are also their weaknesses. They depend upon
outside financing for new plants and equipment. They have little brand recognition.
Substitute products and services: In just about every industry, there are
substitutes that your customers might use if your prices become too high. New
technologies create substitute s all the time. There are several examples of
substitute products. The more substitute products and services are in your industry,
the less you can control pricing and the lower your profit margins.
Suppliers: The market power of suppliers can have a significant impact on firm’s
profits. The more different suppliers a firm has, the greater control it can exercise
over the suppliers in terms of price, quality, and delivery schedules.
What can a firm do when it is faced with all these forces? And how can the firm use
information systems to counteract some of these forces? There are four generic
strategies, each of which often is enables by using information technology and
systems: low-cost leadership, product differentiation, focus on market niche, and
strengthening customer and supplier intimacy.
Cost leadership: A firm has many avenues for pursuing this strategy, including
economies of scale, using or developing new technology and developing
preferential access to raw materials. Where competition has been sluggish,
becoming a cost leader may revolutionize the entire business.
i. Threat of new entrants: Can IT be used to build barriers against new entrants?
ii. Customers: Can IT be used to build switching costs (increase customer reliance
on systems)?
The strategic grid model is an IT specific model that can be used to assess the
nature of the projects that the IT organization has in its portfolio with the aim of
seeing how well that portfolio supports the operational and strategic interests of the
firm.
The CIO plots projects and systems from the IT organization’s portfolio on a two
dimensional graph. The X axis represents impact of the project on IT strategy. One
way of expressing what we mean by this is: what options does this project offer the
firm by way of affecting one of Porter’s five forces in our favor? Does it change the
nature of competition in our market, affect the bargaining power of buyers or
suppliers, raise or lower the barriers to entry into our market, or change switching
costs for our products and services? Does it enable us to offer completely new
products and services, or enable us to substitute one of ours for one of someone
else’s in the eyes of their customers?
The Y axis represents the impact of the project on IT operations. One way of
expressing this is to say that projects that are high on this axis improve the
efficiency or quality of our existing systems and business processes, or lower their
costs.
Support: low operational impact, low strategic impact. This quadrant is about local
process improvements for individual users.
Factory: high operational impact, low strategic impact. This quadrant is about
operational improvements that affect large portions of the firm, and are aimed at
improving performance or decreasing cost.
Turnaround: low operational impact, high strategic impact. This quadrant is about
exploiting new technologies to provide strategic opportunities.
The CIO can use the strategic grid to assess business/IT alignment, to assign
appropriate governance and oversight to individual projects, and to select projects
and systems for outsourcing.
After plotting all projects in the portfolio on the grid, the CIO assesses where the
bulk of them lay: that is how IT is being used in the organization. This will indicate
how well aligned IT strategy is to business strategy, and can be used as either a
confirmation that the IT org is doing what is expected of it by the business
organization, or as a wake up call. If the projects that the IT organization is working
on are not where the CIO expects them to be, then they can see what kind of
changes need to be made.
Thirdly, the CIO can use the position of a project in the grid to assess how good a
candidate it is for outsourcing. Support and factory projects are good candidates
for outsourcing largely due to economies of scale that outsourcing vendors might be
able to offer, access to skills and best practices that the IT org may not possess, and
increased time to market/implementation. Turnaround and strategic quadrant
projects should be outsourced with caution; the firm may choose to outsource such
project to access rare skills, resources or applications or to work around an out-of-
control IT organization.
Critical Success Factors (CSF): The limited number of areas in which satisfactory
results will ensure competitive performance for the individual, department or
organization. These are the few key areas where “Things must go right” for the
business to flourish and the manager’s goals to be attained.
CSFs are time dependent. Examples of CSFs are shown in the table.
The main strengths of CSF analysis:
Source: L. P. Willcocks in
http://www.carig.co.uk/pages/userdata/carig/willcocksitevaluationchapter2003.pdf
1. Clarification of the business needs and strategy in IS terms ‐ what is the business
strategy and IS strategy?
1. Find out the quality and capacity of the IS applications (legacy systems)
currently being used in the organization.
2. Demonstrate to top management (the strength and the weakness of) the current
IS status of the organization.
INPUTS
The inputs to Ward and Peppard’s strategic planning framework are as follows:
• The external IT environment: technology trends and opportunities and the use
made of IT by others, especially customers, competitors, and suppliers.
Business IS IT Strategy
strategies
IS/IT Mgmt.
Strategy
Future Current
Applications Application
Portfolio Portfolio
Figure
The IS/IT strategic model.
(Source: Ward and Peppard, 2002)
OUTPUTS
• Business IS strategy: how each unit or function will deploy IT in achieving its
business objectives.
APPROACH
In any strategic process, some sort of structure to the approach and clear principles
are obviously necessary. Ward and Peppard (2002) have summarized the key
characteristics of the approach chosen:
• Emphasis on deliverables
• Clear checkpoints
Soft Systems Methodology attempts to foster learning and appreciation of the problem situation
between a group of stakeholders rather than set out to solve a pre-defined problem. The
complexity of many organizational/social problem situations defeats attempts at defining a
problem: in many such situations the problem is 'what is the problem?' SSM provides a
framework for tackling such situations.
There are two main modes within SSM, real world activities and systems thinking about the real
world. Initial work involves interviews and meetings to gain an understanding of the problem
situation, which is represented by the use of 'rich pictures'. Systems thinking use concepts of
hierarchy, communication, control, and emergent properties to identify 'relevant systems' which
may provide useful insights.
These relevant systems are logically defined by constructing 'root definitions' which are then
used to generate 'conceptual models' of the selected systems. Different conceptual models
representing different viewpoints are then used as the basis of a debate, which through an
'appreciative process' can lead to feasible and desirable change and then to action. Soft Systems
Methodology has been developed over twenty years by Peter Checkland of the Department of
Systems at Lancaster University, and others.
Problems do not exist independent of human beings, they are constructs of the
concerned mind, defined by individual world view; therefore look not at the problem
but at the situation.
CATWOE
Soft systems use the mnemonic "CATWOE" to list the perspectives of a situation that must be
considered:
Customers
Actors
Transformation process
Worldview
Owner
Environmental constraints.
Roles
An approach to the design of jobs focuses on the individual job. There are some
weaknesses to this type of approach.
While the job redesign techniques were being developed and implemented in the
USA, progress was being made, particularly in Europe and Scandinavia, on the
development of the socio-technical systems approach where the focus of attention
is at the level of the working group and the aim is to develop a match between the
needs of the group and the organization in relation to the technology.
This approach is based upon the concept of the organization as an open system
with the primary work group as a subsystem of the total organization. Organizations
can be compared to other living systems such as biological cells in that they are
engaged in active transactions with the environment
Raw materials or customers form the input to the organizational system and
finished goods or services form the output. The environment through competition,
the influence of suppliers, and customers and government legislation will all exert
pressure on the organization to comply with certain rules and organize in certain
ways. The changing economic situation, changing values in society, new alternative
products or services, and many other factors demand adaptation within the
organization if it is to survive.
Since these factors have an impact on the internal design and functioning of an
organization it is important that the organization be aware of environmental
changes when seeking an optimal design of its social and technical systems.
Guiding Principles
Motivation Factors
It has been suggested that four categories of job characteristic are significant in
terms of motivation and performance:
adaptability;
variety;
participation.
Limitations
The socio-technical systems approach is not without its limitations. While many
advantages can result from focusing on the work group rather than the individuals
and their jobs, autonomous group working does not seem to have widespread
appeal.
Certainly the roles of both supervision and specialist advisers are considerably
affected and in some cases eliminated.
Movement of personnel between work groups with high levels of autonomy may be
difficult, hence removing some of management's flexibility.
Alternative ways of organizing work are not always apparent where existing
technology has to be employed.
Management are often not prepared to take the risk of introducing radically
different approaches to organizing work alongside other changes which already
have a high element of disruption and associated risk.