| The impact that Information Technology (IT) has on | | | | a report titled Unlocking the Computer's Profit |
| the ways businesses are conducted is undeniably | | | | Potential in 1968. The report recognised the |
| gigantic in proportions. With the advent of the | | | | importance of this relationship, thus urging managers |
| Internet, conventional methods of doing businesses | | | | to have a renewed perspective on the role of |
| have been altered to a great extent as evidenced by | | | | computers such that they should not be regarded as |
| the emergence of e-commerce. In addition, the ever | | | | merely data processing resources. Instead, they |
| pervasive use of World Wide Web for a myriad of | | | | ought to be viewed as providing the means towards |
| applications also triggers the growth in IT. Boundaries | | | | supporting the organization's strategies. |
| of time and space are transcended and "the world is | | | | This gives rise to the distinction between Strategic |
| flat" now. Globalisation ensues and a corollary that | | | | Information System and the more operationally |
| follows is even more intense competition among | | | | inclined Management Information System. Some |
| business entities. Such is the eloquent testimony of | | | | examples of Strategic Information Systems operating |
| the power of IT to transform businesses! | | | | at real companies include SABRE reservation system |
| With the awareness of such enormous influence of | | | | (American Airlines), ASAP-order entry system |
| IT on businesses, this naturally calls for a greater | | | | (American Hospital Supply Co), Economost order |
| need to focus on a firm's IT and strategic | | | | entry system (McKesson Corp.) and APOLLO-travel |
| management. Of particular concern is the use of IT | | | | agency reservation system (United Airlines). |
| on strategic management. In view of this, the role of | | | | Essentially, Strategic Information System achieves its |
| Information Technology has expanded, changing its | | | | objectives through a number of mechanisms. Two |
| role as a traditional information system function to | | | | mechanisms of particular interest are reconfiguration |
| one that is increasingly a general management | | | | of the information flows within an organization and |
| concern. Three important concepts related to this | | | | development of inter-organizational systems that |
| observation should be given attention. These are | | | | extend beyond the traditional standalone information |
| strategic management, Information Technology (IT) | | | | system at each organization. |
| and Management Information System (MIS). The | | | | One basic concept behind reconfiguration of |
| descriptions that follow explain the relationship | | | | information flow is that of timeliness of information. |
| between these concepts. | | | | This implies that the flow of information is structured |
| The first relationship is that between Information | | | | such that data are available when they are required. |
| Technology and Management Information System. | | | | Consider the case of a strategic information system |
| The traditional view of Information Technology is | | | | designed to collect data on flight bookings whereby |
| such that Information Technology is seen as a | | | | the information is exchanged between the airline |
| function through which data are processed. In this | | | | organization and its partnering ticketing agents and |
| perspective, systems merely serve the information | | | | travel agents. By virtue of this information flow, the |
| needs of various managerial roles. Hardware and | | | | airline can inform the relevant ticketing agents and |
| software support are accordingly important for this | | | | travel agents to modify the number of discounted |
| function. Strategic planning involves making decisions | | | | seats available based on the current level of ticket |
| that are unstructured. Consequently, this renders the | | | | sales. As for inter-organizational systems, this is |
| use of information systems for such decisions | | | | basically self-explanatory. |
| impossible as the data then are only suitable for | | | | The third relationship is that between strategic |
| making decisions that are structured in nature. | | | | management and Information Technology. This |
| The second relationship is that between strategic | | | | relationship serves to emphasize the role of |
| management and Management Information System. | | | | Information Technology as one that influences the |
| In reference to the aforesaid relationship explained | | | | formulation of a firm's strategy rather than merely |
| above, it is noted that this relationship was prevalent | | | | supporting its operations. This is exemplified by Merrill |
| until the late 1960s and early 1970s. It was at this | | | | Lynch as its strategy demonstrates that IT has the |
| juncture of time that the need to tailor the | | | | capability to enable the development of superior |
| information system to that of the organizational | | | | substitute products or services. Its Cash Management |
| strategic planning arose. The implication is a new | | | | Account (CMA) system shows that IT has the ability |
| perspective devoted to strategic management and | | | | to alter the way businesses are conducted in the |
| Management Information System. One proponent of | | | | financial industry. |
| this relationship is McKinsey & Co, who published | | | | |