Proficiency in systems analysis

Information Resources as Strategic Tools
Crafting a strategic advantage requires the general manager to cleverly combine all the firm’s resources, including financial, production, human, and information, and to consider external resources such as the Internet and
opportunities in the global arena. Information resources are more than just the infrastructure. This generic term,
information resources, is defined as the available data, technology, people, and processes within an organization
to be used by the manager to perform business processes and tasks. Information resources can either be assets or
capabilities. An IT asset is any thing, tangible or intangible, that can be used by a firm to create, produce, and/or
offer its products (goods or services). Examples of IT assets include a firm’s Web site, data files, or computer equipment. An IT capability is something that is learned or developed over time for the firm to create, produce, or offer
its products. An IT capability makes it possible for a firm to use its IT assets effectively.5
The ability and knowledge
to create a Web site, work with data files, and take advantage of IT equipment are examples of capabilities.
An IS infrastructure (a concept that is discussed in detail in Chapter 6) is an IT asset. It includes each of an
information resource’s constituent components (i.e., data, technology, people, and processes). The infrastructure
provides the foundation for the delivery of a firm’s products or services. Another IT asset is an information repository, which is logically related data captured, organized, and retrieved by the firm. Some information repositories
are filled with internally oriented information designed to improve the firm’s efficiency. Other repositories tap the
external environment and contain significant knowledge about the industry, the competitors, and the customers.
Although most firms have these types of information repositories, not all firms use them effectively.
In the continually expanding Web space, the view of IT assets is broadening to include potential resources that
are available to the firm but that are not necessarily owned by it. These additional information resources are often
available as a service rather than as a system to be procured and implemented internally. For example, Internet‐
based software (also called software as a service, or SAAS), such as SalesForce.com, offers managers the opportunity to find new ways to manage their customer information with an externally based IT resource. Social networking
systems such as Facebook and LinkedIn offer managers the opportunity to find expertise or an entire network of
individuals ready to participate in the corporate innovation processes using relatively little capital or expense.
The three major categories of IT capabilities are technical skills, IT management skills, and relationship skills.
Technical skills are applied to designing, developing, and implementing information systems. IT management skills
are critical for managing the IS department and IS projects. They include an understanding of business processes,
the ability to oversee the development and maintenance of systems to support these processes effectively, and the
ability to plan and work with the business units in undertaking change. Relationship skills can be focused either
externally or internally. An externally focused relationship skill includes the ability to respond to the firm’s market
and to work with customers and suppliers. The internal relationship between a firm’s IS managers and its business
managers is a spanning relationship skill and includes the ability of IS to manage partnerships with the business
units. Even though it focuses on relationships in the firm, it requires spanning beyond the IS department. Relationship skills develop over time and require mutual respect and trust. They, like the other information resources,
can create a unique advantage for a firm. Figure 2.2 summarizes the different types of information resources and
provides examples of each.
5
G. Piccoli and B. Ives, “IT‐Dependent Strategic Initiatives and Sustained Competitive Advantage: A Review and Synthesis of the Literature,” MIS
Quarterly 29, no. 4 (2003), 747–76.
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Copyright © 2016 John Wiley & Sons, Inc.
37 How Can Information Resources Be Used Strategically?
Information resources exist in a company alongside other resources. The general manager is responsible for
organizing all resources so that business goals are met. Understanding the nature of the resources at hand is a prerequisite to using them effectively. By aligning IS strategy with business strategy, the general manager maximizes
the company’s profit potential. To ensure that information resources being deployed for strategic advantage are used
wisely, the general manager must identify what makes the information resource valuable (and the Eras model may
provide some direction) and sustainable. Meanwhile, the firm’s competitors are working to do the same. In this
competitive environment, how should the information resources be organized and applied to enable the organization to compete most effectively?
How Can Information Resources Be Used Strategically?
The general manager confronts many elements that influence the competitive environment of his or her enterprise.
Overlooking a single element can bring about disastrous results for the firm. This slim tolerance for error requires
the manager to take multiple views of the strategic landscape. Three such views can help a general manager align
IS strategy with business strategy. The first view uses the five competitive forces model by Michael Porter to look
at the major influences on a firm’s competitive environment. Information resources should be directed strategically
to alter the competitive forces to benefit the firm’s position in the industry. The second view uses Porter’s value
chain model to assess the internal operations of the organization and partners in its supply chain. Information
resources should be directed at altering the value‐creating or value‐supporting activities of the firm. We extend this
view further to consider the value chain of an entire industry to identify opportunities for the organization to gain
competitive advantage. The third view specifically focuses on the types of IS resources needed to gain and sustain
competitive advantage. These three views provide a general manager with varied perspectives from which to identify strategic opportunities to apply the firm’s information resources.