Strategic Business Objectives of MIS
Strategic planning for an organization involves long-term policy decisions, like location of a new plant, a new product, diversification etc.
Strategic planning is mostly influenced by:
- Decision of diversification i.e., expansion or integration of business
- Market dynamics, demand and supply
- Technological changes
- Competitive forces
- Various other threats, challenges and opportunities
Strategic planning sets targets for the workings and references for taking such long-term policy decisions and transforms the business objectives into functional and operational units. Strategic planning generally follows one of the four-way paths:
- Overall Company Strategy
- Growth orientation
- Product orientation
- Market orientation
In this chapter, let us discuss the Strategic Business Objectives of MIS with regards to the following aspects of a business:
- Operational Excellence
- New Products, Services and Business Models
- Services and Business Models
- Customer and Supplier Intimacy
- Improved Decision-making
- Competitive Advantage, and Survival
Operational Excellence
This relates to achieving excellence in business in operations to achieve higher profitability. For example, a consumer goods manufacturer may decide upon using a wide distribution network to get maximum reach to the customers and exposure.
A manufacturing company may pursue a strategy of aggressive marketing and mass production.
New Products, Services, and Business Models
This is part of growth strategy of an organization. A new product or a new service introduced, with a very fast growth potential provides a mean for steady growth business turnover.
With the help of information technology, a company might even opt for an entirely new business model, which will allow it to establish, consolidate and maintain a leadership in the existing market as well as provide a competitive edge in the industry.
For example, a company selling low priced detergent may opt for producing higher range detergents for washing machines, washing soaps, and bath soaps.
It involves market strategies also that includes planning for distribution, advertisement, market research and other related aspects.
Customer and Supplier Intimacy
When a Business really knows their Customers and serves them well, ‘the way they want to be served’, the Customers generally respond by returning and buying more from the firm. It raises revenues and profits.
Likewise with Suppliers, the more a Business engages its Suppliers, the better the Suppliers can provide vital information. This will lower the cost and bring huge improvements in the supply-chain management.
Improved Decision Making
A very important pre-requisite of strategic planning is to provide the right information at the right time to the right person, for making an informed decision.
Well planned Information Systems and technologies make it possible for the decision makers to use real-time data from the marketplace when making informed decisions.
Competitive Advantage and Survival
The following list illustrates some of the strategic planning that provides competitive advantage and survival:
- Planning for an overall growth for the company.
- Thorough market research to understand the market dynamics involving demandsupply.
- Various policies that will dominate the course and movement of business.
- Expansion and diversification to conquer new markets.
- Choosing a perfect product strategy that involves either expanding a family of products or an associated product.
- Strategies for choosing the market, distribution, pricing, advertising, packing, and other market-oriented strategies.
- Strategies driven by industry-level changes or Government regulations.
- Strategies for change management.
System Development Life Cycle (SDLC)
Like any other product development, system development requires careful analysis and design before implementation. System development generally has the following phases:
Planning and Requirement Analysis
The project planning part involves the following steps:
- Reviewing various project requests
- Prioritizing the project requests
- Allocating the resources
- Identifying the project development team
The techniques used in information system planning are:
- Critical Success Factor
- Business System Planning
- End/Mean Analysis
The requirement analysis part involves understanding the goals, processes and the constraints of the system for which the information system is being designed.
It is basically an iterative process involving systematic investigation of the processes and requirements. The analyst creates a blueprint of the entire system in minute details, using various diagramming techniques like:
- Data flow diagrams
- Context diagrams
Requirement analysis has the following sub-processes:
- Conducting preliminary investigation
- Performing detailed analysis activities
- Studying current system
- Determining user requirements
- Recommending a solution
Defining Requirements
The requirement analysis stage generally completes by creation of a ‘Feasibility Report’. This report contains:
- A preamble
- A goal statement
- A brief description of the present system
- Proposed alternatives in details
The feasibility report and the proposed alternatives help in preparing the costs and benefits study.
Based on the costs and benefits, and considering all problems that may be encountered due to human, organizational or technological bottlenecks, the best alternative is chosen by the end-users of the system.
Designing System Architecture
System design specifies how the system will accomplish this objective. System design consists of both logical design and physical design activity, which produces ‘system specification’ satisfying system requirements developed in the system analysis stage.
In this stage, the following documents are prepared:
- Detailed specification
- Hardware/software plan
Building or Developing the System
The most creative and challenging phase of the system life cycle is system design, which refers to the technical specifications that will be applied in implementing the candidate system. It also includes the construction of programmers and program testing.
It has the following stages:
- Acquiring hardware and software, if necessary
- Database design
- Developing system processes
- Coding and testing each module
The final report prior to implementation phase includes procedural flowcharts, record layout, report layout and plan for implementing the candidate system. Information on personnel, money, hardware, facility and their estimated cost must also be available. At this point projected cost must be close to actual cost of implementation.
Testing the System
System testing requires a test plan that consists of several key activities and steps for programs, strings, system, and user acceptance testing. The system performance criteria deals with turnaround time,backup,file protection and the human factors.
Testing process focuses on both:
- The internal logic of the system/software, ensuring that all statements have been tested;
- The external functions, by conducting tests to find errors and ensuring that the defined input will actually produce the required results.
In some cases, a ‘parallel run’ of the new system is performed, where both the current and the proposed system are run in parallel for a specified time period and the current system is used to validate the proposed system.
Deployment of the System
At this stage, system is put into production to be used by the end users. Sometime, we put system into a Beta stage where users’ feedback is received and based on the feedback, the system is corrected or improved before a final release or official release of the system.
System Evaluation and Maintenance
Maintenance is necessary to eliminate the errors in the working system during its working life and to tune the system to any variation in its working environment. Often small system deficiencies are found, as system is brought into operation and changes are made to remove them. System planner must always plan for resources availability to carry on these maintenance functions.