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The Strategic Management of Information Systems


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Table of Contents

Preface to the Fourth Edition ix About the Authors xvii 1 The Evolving Role of Information Systems and Technology in Organizations: A Strategic Perspective 1 Information Systems (IS), Information Technology (IT) and `Digital' 2 `Digital Disruption': The Impact of IS/IT 7 A Three ]era Model of Evolving IT Application in Organizations 15 A Classification of the Strategic Uses of IS/IT 17 Success Factors in Strategic Information Systems 25 A Portfolio Management Perspective on IS/IT Investments 27 What Is an IS/IT or Digital Strategy? 29 From Strategic Alignment to Strategy Co ]evolution 35 Digital Strategies for the 21st Century: Building a Dynamic Capability to Leverage IS/IT 39 Summary 43 Endnotes 44 2 An Overview of Strategic Management and the IS/IT Strategy Implications 49 The Evolving Nature of Strategic Management in Organizations 50 Scope of Strategy Development 54 A Framework for Strategy Formulation 55 Where to Compete 57 How to Gain an Advantage 60 What Assets do We Have? What Assets are Required? 77 How to Change - the Need for Dynamic Capabilities 81 Strategy Implementation 82 Summary 83 Endnotes 84 3 Establishing an Effective Process for Developing Information Systems and Technology (or Digital) Strategies 87 Some Definitional Clarity 88 The Evolution of the IS/IT Strategy Process: From Technology Deployment to Strategic Focus 89 The Business Context for Developing and Managing the Strategy 94 Establishing an Effective Process: Continuous and Flexible 97 Setting the Scope for the Strategy 104 A Framework for IS/IT Strategy Formulation 108 Other Deliverables from the IS/IT Strategy Process 119 Summary 122 Endnotes 123 4 IS/IT Strategic Analysis: Achieving Alignment with Business Operations and Strategy 125 Understanding the Current Situation 126 The Business Operating Model: Processes, Activities and Key Entities 130 Organizational Environment 136 Examining the Existing IS/IT Environment 139 Information and Systems to Meet Current Business Objectives: the Use of Balanced Scorecards and Critical Success Factors 146 Process Analysis 153 Redesigning Processes 158 Evaluating the Gap between Existing and Required IS/IT Environments 161 Summary 162 Endnotes 163 5 Innovating with Technology, Systems and Information 165 Understanding What It Means to Innovate with IT 166 The Process of Digital Business Innovation 168 The `push' and `pull' of Innovating with IS/IT 173 Getting Management Attention for Ideas and Innovations 177 Joining the Dots: the Search for Ideas 180 Innovating by Leveraging Information: Exploration and Exploitation 184 The Big Data Challenge 188 Discovering Strategic IS/IT Opportunities from Information 191 Building an Analytic Capability 198 Summary 201 Endnotes 202 6 Exploiting Information Systems for Strategic Advantage 207 Achieving and Sustaining Advantages across the Value Disciplines 208 Exploring New Value Propositions: Informating Products and Services 210 Analysis of Competitive Forces to Identify IS/IT Opportunities and Threats 216 Value Chain Analysis 220 Customer Life ]cycle Management and the Value Chain 228 From Value Chain to Value Network 235 The Internal Value Chain 239 The Uses of Value Chain Analysis 244 Summary 247 Endnotes 248 7 Determining the Business Information Systems Strategy 251 Business Strategy and IS/IT 252 Tools for IS/IT Strategy Formulation and Their Relationships 256 A Framework for Using the Tools and Techniques Effectively 258 Identifying how IS/IT Could Impact the Business Strategy 260 Establishing the Relative Priorities for IS/IT Investments 265 Large Organizations, Multiple SBUs and Strategy Consolidation 270 Summary 272 Endnote 272 8 Managing the Portfolio of Business Applications 273 Conclusions from Various Portfolio Models 275 Classifying the Applications in the Portfolio 277 Reconciling Demand and Supply Issues in the Portfolio 280 Generic Application Management Strategies 282 Portfolio Management Principles Applied to the Application Portfolio 291 Aligning Development Approaches to the Portfolio Segments 298 The `Special Case' of Enterprise Systems 304 Managing Application Portfolios in Multi ]unit Organizations 306 Summary 309 Endnotes 309 9 Justifying and Managing Information Systems and Technology Investments 311 Investment and Priority Setting Policies 313 Justifying and Evaluating IS/IT Investments 314 Justifying Business Applications 322 Justifying Infrastructure Investments 326 Assessing and Managing Investment Risks 332 Managing the Portfolio of Investments 336 Setting Priorities amongst IS/IT Investments 338 Organizational IS/IT Portfolio and Investment Management Maturities 344 Summary 349 Endnotes 350 10 An Organizing Framework for the Strategic Management of IS/IT 353 The Strategic Management Requirement 354 Positioning and Managing IS/IT in an Organization 356 From a Functional View of IS/IT to an Organization ]wide Perspective - Capability and Competences 359 IS/IT Governance and Why It is Important 366 What Decisions Need to be Governed? 371 Creating the Organizing Framework for IS/IT Decision Making 374 Instruments of Governance 375 Summary 391 Endnotes 392 11 Strategic Management of IS/IT Services and IT Infrastructure 395 Creating and Sustaining Business Change: Projects and Services 396 The Need for the Strategic Management of IS/IT Services and IT Infrastructure 397 IS/IT Service Categories 400 Managing Operational and Value ]enabling Services 410 Strategies for Managing IT Infrastructure and Infrastructure Services 414 Understanding and Managing IT Risks 420 Sourcing of IS/IT Resources and Services 423 Business Process Outsourcing 434 Innovation and Outsourcing 436 Back ]sourcing and Switching Suppliers 438 Summary 440 Endnotes 441 12 The Strategic Management of Information Systems: Quo Vadis? 445 The Evolution of IS/IT Strategy in Theory and Practice 447 A Brief Resume of some Core Ideas 452 Building an IS/IT or Digital Capability 455 From Creating IS/IT Assets to Improving Organizational Performance: Joining the Means to the Ends 458 Achieving Alignment: a Multi ]themed Perspective 459 The Co ]evolution of Business and Digital Strategies 463 The Opportunity for CIOs to Have a Key Strategic Role 466 Conclusion 468 Endnotes 469 Index 475

About the Author

Joe Peppard is a Professor at the European School of Management and Technology, Berlin, Germany and an adjunct professor at the University of South Australia. The focus of his research, teaching and consulting is in the areas of leadership, strategy, innovation, organization design and business value realization in the context of digital technologies. Findings from his research have been widely published in aca-demic and general business and management journals, including the prestigious Harvard Business Review, and he regularly presents his work at international confer-ences. Professor Peppard is also a Director of IT Alliance Group, an outsourcing and managed service provider, and a member of Ireland's eHealth Committee. John Ward is Emeritus Professor at Cranfield University, School of Management. He was previously Professor of Strategic Information Systems and was Director of Cranfield's IS Research Centre from 1993-2004. He has published many papers in leading academic and business journals and is also co-author of Benefits Management: How to Increase the Business Value of your IT Projects, published by John Wiley. Prior to joining Cranfield he worked in industry for 15 years and he has acted as a consultant to a range of major international corporations and public sector organisations. He is a Fellow of the Chartered Institute of Management Accountants and served two terms as President of the UK Academy for Information Systems.

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