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320 Part 2 Strategy and applications

how a relatively new technology such as workflow management software (Chapter 11,
p. 609) can be used to improve efficiency and customer service.
Debate 5.2
The business-impacting approach can be achieved through the use of
The influence of IS managers value chain analysis or re-engineering where an organization, through an
‘Board-level representation for IS analysis of the potential for the use of IS within and between value chain
managers is essential in the elements, may seek to identify strategic IS opportunities. Perhaps the ulti-
e-business era.’ mate expression of using IS to impact business performance is through
business process re-engineering, which is considered in Chapter 10.
The application of an impacting or aligning strategy with respect to IS and business strat-
egy is dependent on the importance attached to IS within an organization.

Elements of IS strategy

Developing an IS strategy for e-business involves many different perspectives, rather than a
single perspective such as hardware technologies or applications to deploy. Ward and Grif-
fiths (1996) suggest an IS strategy plan contains three elements:
1 Business information strategy. How information will support the business. This will include
applications to manage particular types of business.
2 IS functionality strategy. Which services are provided?
3 IS/IT strategy. Earlier in this book we have referred to providing a suitable technological,
applications and process infrastructure (Chapter 3).
The advent of e-business clearly increases the strategic importance of information systems
resources of an organization. However, developing an IS strategy to achieve e-business goals
is complex because it can be viewed from many different perspectives (Table 5.12). This table
is essentially a checklist of different aspects of IS strategy that have to be implemented by an
IS manager in the e-business. Many of these aspects are solutions to business and technical
problems that are described in Parts 2 and 3 of this book as summarized in the table.
We will now consider one of the most important issues facing IS managers in more detail.

Investment appraisal

In the e-business context, investment appraisal can refer to:
1 Overall levels of spending on information systems to support e-business.

2 Decisions about which business applications to invest in (portfolio analysis).
3 Assessment of the cost/benefit for individual applications.

Decisions about which business applications to invest in

A portfolio analysis such as that illustrated for a B2B company in Figure 5.7 can also be used
to decide priorities for application by selecting those that fall within the strategic and turn-
around categories for further investment. Relative priorities and the amount of investment
in different applications can also be assisted if priorities for e-business objectives have been
assigned, as is the case with Table 5.4.
Traditionally investments in information systems have been categorized according to
their importance and contribution to the organization. For example, Robson (1997)
describes four types of BIS investment:
1 Operational value investment. These investments are in systems that are key to the day-to-
day running of the organization, such as transaction processing systems for processing
orders received by phone or a workflow system for managing booking staff training and
leave. Such systems are often valuable in increasing efficiency or reducing costs, but they
do not contribute directly to the performance of the business.