izo Developing James Martin discusses the building strate- | tems often re: MARTIN REAEU UENNNRNNEIE ME EN different way. "They are innovative in the sense tha! an entrepreneur is innovative. Not all business innovations succeed, just aš 1 all entrepreneurial startups sučceed. And some strategic systems have failedii' Federal Express, for example, reaped great benefits from the innovations that' led to its basic business, but it failed " when it attempted to innovate ZapMail. ZapMail was a system for using elec: tronic transmission combined with the Federal Express computer-controlj livery fleet for delivering documents € an hour or so. The strategic thrust thai ZapMail represented was a very expen ' sive failure (8/8 € IE the American Airlines Sabre for travel agents had failed, that would , have been disastrous for Ameri "company takes a business risk: But! payoff justified the risk handsome! ing £ ie eli Jal first case of differentiation, a dei corporation can move to differentiate its ' product or services from those of its competition. 'The move to make a prod: | uet stand out from its competition is an"! C sive strategy. A defensive strategy | Is designed to improve the product to .//: reduce the differentiation achieved by... ea products. ; "As for the cost thrust, there are many types of thrusts to reduce the cost of a . product. A company may also manipu- € the sales from competing thrusts. hi -In the alljance strategy, a corporation — strategy are listed in the a chat. peta 4 V late a varlety of factors that would. , " raise the costš of competition. PRov "With innovation, there should be a ' constant search for innovative ideas—to i: sl ; V improve products, services, production technigues and so on. Innovation may tuisiness risks of. be used offensively to preempt competi: tion or defensively to lessen an advan: gic information | tage the competition has. ja systems. Growth may be geographical expan- Strategic sys- 4 sion, expansion within an existing terri- paj tory, systems ci types of products. Growth may be done offensively, or,it may be done to | may buy.or merge with another corpo- may be defensive to lessen dn 'achleved by the competition. h The technology that makes new stra- | tegic thrusts possible is very different now from when Baron de Reuter or Bar- on de Rothschild used carrier pigeons to gain a competitive advantage. Today the technology keeps changing, constantly "opening up new possibilities. Types of technology that support dn | PC WEEKNAPPLIGATION DEVELOPMENT APPLIED INTELLIGENCE vertical expansioh of a product; € Mne.or diversificationi by adding new/://' technology, suppliers, customers, industry trends — One of the dangers of most method- | ologjes used for strategic planning is IV that they tend to prevent their users from seeing the strategic-systems Oppor" tunities. The reason is that they are con: cerned with automating today's corpo- rate functions. Strategic-systems vision is concerned with changing the corpo- rate functions or building new activities in the corporation. Many strategic planning methodolo- ples are derived from IBMs Business Systems Planning (BSP). Methodologies with different names that are used by V large consulting or accounting firms are "often variants on BSP. The ideas of BSP have been taught in various forms in usands of IBM training classes and basis of various IBM guides on Syi Planning. IBM's BSP manual — information systems plan that supports the business's short- and long-term in: formation n 8 and is integral with the BSP defines "environment" as those things that lie outside the scope of the ' planning study: the economy, govern- ment regulations, labor, consumerism, competition, industry position, industry trends, suppliers and technology. The. BSP manuals instruct planners to ignore — these environmental factors when con- ,ducting the BSP study. iin |» Strategic systems Vision is very much Hi tates that its objective is "to provide an Pace 35 a Strategic Vision for Business concerned with competition, technology, suppliers, customers, industry trends and, in general, factors that facilitate new, competitive thrusts. Rather than use a planning method which excludes these factors, it is desirable to specifical- ly focus on them. In general, it is desir- able strategically to focus on how the enterprise might be changed, rather than to solely examine and model what exists today. Wiseman observes that the use of computers in corporations evolved from traditional data-processing ) sys- tems to management-support systems (MSS) and now needs to evolve to stra- tegic information systems (SIS). Tradi- tional data processing systems processed predefined transactions to produce predefined results. They included pay- roll, invoicing, purchasing, inventory control, accounts payable, accounts re- ceivable and so on. Management-support systems were designed to satisfy the in- formation needs of managers and assist in the decision-making process. They provided guery facilities, "what-if" capa- bilities, spreadsheets and decision-sup- port tools. Wiseman says that many traditional data-processing veterans resisted the emergence of MSS, refusing to admit their existence. Others argued that they were merely extensions of existing MIS systems. Similarly, many of today's sys- tems planners are ignoring strategic-in- formation systems and concentrating solely on the functions of today's enter: prise. i MSS systems were often built, by peo- ple who differed culturally from those who built traditional MIS systems. MIS developers learned to observe what was happening, to draw charts of it and to design systems to replace existing proce- dures. MSS developers, on the other hand, had to satisfy information needs of managers and professionals, which were not observable and not expressed with precision. Some MSS systems were built by end users or planning staff in ' an information-center environment. Wiseman suggests that strategic-infor- . mation systems should be conceived and designed by a different. group in a cor- poration than that which designs MIS or MSS. Strategic information systems are not designed by observing existing func- tions but by inventing new functions. They reguire a different, type of ereativ- ity and business acumen. People good at conceiving SIS differ culturally from most of the people who design tradition- al MIS or MSS. Once specified, SIS might be constructed by the professionals who construct other systems. Next week, we'll look at strategic ap- plications of personal computers. 8 The James Martin Prodtuctivity Series, an information service updated guar- terly, is available through High Pro- ductivity Software Inc., of Marble- head, Mass. (617) 639:1958. For infor- mation on seminars, please contact (in the United States and Canada) Tech- nology Transfer Institute, 741 10th St., Santa Monica, Calif. 90402 (213) 394: 8305. In Europe, contact Savant, 2 New St., Carnforth, Lancs., LA5 9BX United Kingdom (0524) 734 505.