different way. ne are innovative in the sense that an entrepreneur is innovative. Not all business innovations succeed, just, as no all entrepreneurial startups succeed. '. And some strategic systems have failed. 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-controlled d | livery fleet for delivering documents in 7 an hour or so. The strategic thrust tha! ZapMail represented wš a very, expen: >. sive failure. If the American jin Sabre system; , for travel agents had failed, that would. < [ , have been disastrous for American Air: - lines. American spent $350 million to - |, build the system. It was taking a major ;.. business risk in the same way a startu; | tem isa business risk, the decision to ' o ote a kam kUjan Inles o o znati ve sloni "The deci: v top. — The strategic vision may be initiated by: a computer executive or chief informa — tion officer, but that vision must be ' passed to top ip inarnesemen who vili re-' fine it and take action. : The use of new Rosi to create an innovative business thrust; was sum- : marized in last week's column. Some of: —. these examples represented sweeping changes in the businesses discussed and .; resulted in a new mode of operations; for their industry. Most examples of ' strategic systems are less dramatic but ' of major importance, to, the por porakloti in guestion. ' ' de Charles Wiseman, in | his book "Strate- ;: i gy and Computers," classifies strategic'..' thrusts into five categories: differentia- :' ' ica cost, innovation, growth and alli-. ;;; For each o these ne rusi can be. either offensive or defensive. There is'''' thus a matrix of possibilities, as the ac- . companying figure shows. .. VEGE corporation can move to differentiate its product or services from those of its competition. The move to make a prod- uct stand out from its competition is an offensive strategy. A defensive strategy is designed to improve the product to . reduce the differentiation achieved by... competing products. As for the cost thrust, there are many types of thrusts to reduce the cost of a product. A company may also manipu-. maug bo žesandjh nju desa š PG WEEK PP ATION DEVELOPMENT ak ao j: In this, the sec- lat a are of faior (at odli | ond of five col: ]Y' raise the costs of competition. "7". ' umns on strate: ii — With innovation, there should bea gic systems, | /. ||, constant search for innovative ideas—to i James Martin. .'. improve products, services, production scusses the technigues and so on, Innovation may be used offensively to pre-empt competi- tion or defensively to lessen an advan- tage the competition has. Growth may be geographical expan- sion, expansion within an existing terri- tory; vertical expansion of a product, c: line or. diversification kino pes of dica Growth may be čin »offensively, or it may be done to protect V the sales from competing thrusts. Hi In the alliance strategy, a corporation may buy.or merge with another čorpo- ration or form a strategic partnership in , Order to expand its market or make its "| product line more complete or more use- 1, ful, This, again, may be an offensive .strategy to preempt competitjor, or it In the first case of differentiation, a ' 7, may be defensive to lesen dini idvantage achieved by the competition. b 'The technology that makes new stra- tegic thrusts possible i8 very different VU now from when Baron de Reuter or Bar- on de Rothsehild used carrier pigeons to / gain a competitive advantage. Today the technology keeps changing, constantly - opening up new possibilities, Types of technology that support ari information strategy are. listed in, was Nora sk vine , Chart. j Strategic systems vision considers competition, technology, suppliers, customers, industry trends— that facilitate new, competitive thrusts. jz One of the dangers of most, method- ologies used for strategic planning is 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- gies are derived from IBM's Business. ... Systems Planning (BSP). Methodologies with different names that are used by large consulting or accounting firms are often variants on BSP. The ideas of BSP have been taught in various forms in ; thousands of IBM training classes and are the basis of various IBM guides on Systems Planning. IBM's BSP manual states that its objective is "to provide an information systems plan that supports the business's short- and long-term in- formation needš and is integral with the business plan." ' 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. » Strategic systems vision is very much Pace 35 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 doji from traditional data-processirig (MIS) 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 or. Management-support systems were designed to satisty 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. il 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 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 funetions. They reguire a different type of creativ- 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 Productivity Sertes, an information service updated guar- terly, is available through High Pro- ductivity Software Inc., of Marbie- head, Mass. (617) 639:1958. For infor- mation on seminars, please contact (in the United States anil Canada.) Tech. nology Transfer Institute, 741 10th St., Santa Monica, Calif. 90402 (213) 394: 8305. In Europe, contact Savant, 2 New St., Carnforth, Lanes., LA5 "OBX United Kingdom (0524) 734 505.