INFORMATION SYSTEMS INVESTMENT

Information Systems Investment

Information Systems Investment

Introduction

Information systems can support a company's competitive positioning. One distinguishes here four levels of analysis. The supports of help in the piloting of the chain of internal value. They are the most recent, the most pragmatic and are within the reach of the manager. They are the solutions of reductions of costs and management of the performance. One indicates them under the name of " Business Workflow Analysis " (BWA) or of " Business Management Systems p2p ". Tools networks, they assure the control of the piloting of the set of the functions of the company, the mastery in real time of the costs of dysfunctions cause distances from accounts, evaluation and reporting of accounting results articulated in the evaluation and in the reporting of results quality. (Salmela, Spil, 2002, 72-123)

All successful companies have one (or two) business functions that they do better than the competition. These are called core competencies. If a company's core competency gives it a long term advantage in the marketplace, it is referred to as a sustainable competitive advantage. For a core competency to become a sustainable competitive advantage it must be difficult to mimic, unique, sustainable, superior to the competition, and applicable to multiple situations. Examples of company characteristics that could constitute a sustainablecompetitive advantage include: superior product quality, extensive distribution contracts, accumulated brand equity and positive company reputation, low cost production techniques, patents and copyrights, government protected monopoly, and superior employees and management team. The list of potential sustainable competitive advantage characteristics is very long. However there are some commentators that claim that in a fast changing competitive world, none of these advantages can be sustained in the long run. They claim that the only truly sustainable competitive advantage is to build an organization that is so alert and so agile that it will always be able to find an advantage, no matter what changes occur. (Salmela, Spil, 2002, 72-123)

Explanation

Information systems often support and occasionally constitute these competitive advantages. The rapid speed of change has made access to timely and current information critical in a competitive environment.Information systems, like business environmental scanning systems, support almost all sustainable competitive advantages. Occasionally, the information system itself is the competitive advantage. One example is Wal-Mart. They used an extranet to integrate their whole supply chain. This use of information systems gave Sam Walton a competitive advantage for two decades. (Salmela, Spil, 2002, 72-123)

4 The performance monitoring role

MIS are not just statistics and data analysis. They have to be used as a MBO / Management by objectives tool. They help:

to establish relevant and measurable objectives

to monitor results and performances (reach ratios)

to send alerts, in some cases daily, to managers at each level of the organisation, on all deviations between results and prestablished objectives and budgets.

MIS as a barrier to entry

An important strategic advantage is "barriers to entry". There are numerous ways that a company, that has invested in information technology, can lever this investment to create, ...