Chapter Six
Strategic Information
Management in Context
(SMEs and Public Sector)
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Learning Outcomes
• Understand the particular organizational contexts facing public
sector organizations and SMEs
• Understand the potential of public sector organizations and
SMEs to transform their processes through the use of IS/IT
• Analyse public sector IS/e-government initiatives using key
theoretical frameworks
• Identify the IS competencies required by SMEs
• Critically discuss the issues and challenges facing public sector
organizations and SMEs in their management and strategic use
of IS/IT
• Appreciate the differences and similarities faced by public
sector organizations and SMEs regarding the strategic
use of IS/IT
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
SIM and SMEs
Small and Medium-sized Enterprises
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
What is a ‘small business’?
• Turnover?
• Number of employees?
• Market share?
• Ownership?
• Small subsidiaries of larger partners?
• Vary with:
• Sector?
• Small newsagent vs small bank
• Legal practices in Scotland
• Country?
• Over time?
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
EU definition of SMEs
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by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Are SMEs important?
• SMEs in the UK make up
• 99.6% of businesses
• 55.1% of number of persons employed
• 50.2% of turnover
• 59.2% of value added
Figures for 2000 from Schmiemann, 2002
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
What is an SME? 1/3
• Structure
– Flat
– Multiple roles
– Informal communication
• Enterprise/dynamism
– Creativity, flexibility and dynamism
– Speedy response to market?
– Personal initiative/motivation
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
What is an SME? 2/3
• Resource Poverty
– Capital, external information and expertise
– Management, IT/IS/IM
– Reliance on external expertise?
– Informal networks?
• External Environment
– Price ‘takers’ – reactive rather than
proactive
– Closer relationships?
– Word-of-mouth/personal referrals
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
What is an SME? 3/3
• Strategy/Planning
– Formal planning - “intangible, invisible,
almost unconscious process” (Jennings and
Beaver, 1997, p.73)
– Are formal mechanisms needed?
– Experience/intuition not analysis
– At some point “management by instinct
alone will no longer be enough” (Pleitner,
1989, p. 72)?
– DIY or employ specialists?
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Owner/Managers in SMEs
• Key factors
• Owner(s) personality/personalities
• Quality of top management
• Goals – survival/profit/lifestyle?
• ‘Owner managers’
• May not be consistent over time
• More involved in day-to-day operations
than in larger firms
• Specialist staff?
• Jack-of-all-trades?
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Drivers for using IS/IT
(Levy and Powell, 2005)
• Reducing costs (operating, sales,
purchasing)
• Market share (increasing/avoiding loss of)
• Information gathering: market intelligence
and finding suppliers
• Improved range and quality of
products/services to customers
• Increased speed in dispatch of goods
• Improved trading relationships
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Inhibitors regarding IS/IT use
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
IS Competencies for SMEs (1/2)
Source: adapted from Cragg, 2008, Tables 2 & 3, pp32-33
Managerial Factors/IS Competencies
•Role of IT within the business i.e. the ability to …
•Ensure business strategy formulation identifies best uses of IS/IT.
•Ensure IS/organisational plans are integrated/aligned.
•Senior Management commitment i.e. the ability to …
•Explicitly identify and plan to realise benefits from IS investments.
•Make business/organisational changes to maximise the benefits without
detrimental impact on stakeholders.
Seeking new uses for IS/IT i.e. the ability to …
•Incorporate potential new/emerging technologies in long-term plans.
•Carry out relevant R & D into how IS/IT can create new business
models/products/services.
•Understand technology trends - recommendations for acquiring
technology.
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
IS Competencies for SMEs (2/2)
Source: adapted from Cragg, 2008, Tables 2 & 3, pp. 32-33
•Key technical practices and related IS competencies
•Customisation of new systems ie the ability to …
•Develop/acquire and implement IS/IT solutions that satisfy business needs.
•IS/IT Specialist ie the ability to …
•Recruit, train and deploy appropriate staff and ensure technical, business
and personal skills meet the needs of the organisation.
•IS/IT development skills ie the ability to …
•Deploy new/changed technology in the most cost effective mode to deliver
application benefits.
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
SISP for SMEs
• “[R]ecognizes the formality of the need to deal
with the competitive environment while
recognizing the informality of management
and organizations within SMEs”
– Levy and Powell, 2005, p. 113
• Three perspectives
– Business context
– Business process
– Strategic content
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
#1 Business Context
• Identify business strategy and objectives
– Implicit rather than explicit?
– Is firm looking beyond purely financial measures?
Eg CSFs or Balanced Scorecard
• Review business environment
– PESTEL, SWOT etc
– NB identify strategic opportunities from emerging
technologies
• Review competitive environment
– Porter’s Five Forces framework?
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
#2 Business Process
• Internal and external processes
– Where/how is value added?
– Porter’s value chain as starting point?
– SSM re information flows (link to value chain?) &
identify issues impeding value adding?
• Existing IS needs versus business objectives
– Application portfolio matrix
• Current IT
– Effective supporting IS/business needs?
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
#3 Strategic Content
• “[E]mbodies the vision for change from
the owner and the practicality of its
introduction”
– Levy and Powell, 2005, p. 114
• Compare requirement of business with
analysis of organisation/environment
– Identify IS/IT required
– Prioritise and evaluate
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Emerging technologies
• Cloud computing/ASPs
• Web 2.0
• SCM
• ………
• Open to all?
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Public Sector
•More services
•Better service
•Faster decisions
•Informed decisions
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
What is the ‘public sector’?
• Central government
• Local government
• Public institutional systems, funded
through taxation but separate from
local/central government eg NHS
• Public business enterprises
Eg HM Inland Revenue; Scottish Parliament; Glasgow City
Council; SFR; Loch Lomond and The Trossachs National Park
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Facts and Figures
• Scotland (2 nd
Quarter 2005)
– 577,000 employed in public sector
– 23.6% of employment in Scotland
• NHS in Scotland (Sept 2004)
– 150,000 employed
• Public sector accounts for 55% of UK
spending in the IT sector
• UK govt spends £2.3 billion per annum on IT
– Equivalent to 16% of total govt procurement
expenditure
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Information’s Role
• Government largest collector, user,
holder and producer of information
– “In pursuing the democratic/political
process, in managing resources, executing
functions, measuring performance and in
service delivery, information is the basic
ingredient” (Isaac-Henry, 1997: 132 cited in
Heeks, 2006, p. 16)
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
But something unusual about Public Sector
Guy [2000] states:
• Public agencies usually have a larger number of
competing goals
• Public agencies operate under public scrutiny
• Public managers operate under fragmented
authority structures
• Public organisations have more legal restrictions on
their actions
• Public organisations have more restrictions on their
staffing
– They cannot hire, fire, or promote as flexibly
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Issues
• Service not ‘profit’ agenda
• Strategic relevance/impact
• Organisational culture
• Contingency
• Assimilating emerging technologies
– Technology transfer
– Integrating Changing Technology Platforms
• Sourcing policies
• Application development process
• Partnership of IT team, users, and
general management
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
New Public Management
• Disaggregation
– Construction of wider, flatter organizational hierarchies
– Changes in practices/systems (including IS/IT) to facilitate
more effective operations
• Competition
– Increasing competition in relation to resourcing requirements
via ‘internal markets’ and external tendering
• Incentivization
– Greater emphasis on financial, and specific, performance
measures
Dunleavy et al, 2006
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
E-Gov/Digital Gov
• Digital government
– “the application of information technology to government
processes in order to improve services to constituents” (Chen
et al, 2008, p xvii)
• “To understand e-government, we must therefore
understand IT. What does IT do: it handles data to
produce information. The next step to understanding
e-government then, is to understand that e-
government systems are information systems” (Heeks,
2006b, p. 4; emphasis in original)
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
A Global Phenomenon
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by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Categories of e-govt
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by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
National e-govt strategies
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
National eHealth/ IM&T Strategy (2004)
• “Our goal is to deliver an Integrated Care Record
jointly managed by patients and professional NHS
staff with in-built security of access governed by
patient consent.”
• Benefits:
• Greater patient involvement in their own care
• Service redesign
• Quicker exchange of information between professionals
• Quicker access to patient records (with built-in patient
confidentiality)
• Continuous improvement via routine monitoring of
quality
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
National eHealth/ IM&T Strategy (2004)
Inter-dependence and sequence of key elements ‘building
blocks’
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
An uneasy relationship?
• “Central civil government spends £2.3
billion per annum on IT, equivalent to 16%
of total procurement expenditure, yet this
Committee has reported on a
succession of IT programmes and
projects characterised by delay,
overspends, poor performance and
abandonment.”
– UK Public Accounts Committee 2005
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Competition
• “In 2002–03 five companies accounted for 60%
of the value of government IT contracts, while 11
suppliers now account for 80% of the market.
This limited field potentially restricts competition
and may discourage innovative new entrants.
Commercial Directors in departments should
select procurement routes that do not present
barriers to entry for a more suitable, flexible or
innovative solution which could better meet the
Department’s requirements.”
– UK Public Accounts Committee, 2005
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
E-merging technologies
• M-government
– Eg text appointments/flood warning
– NB Mobile phones owned by all?
• Web 2.0 aka Gov 2.0
– Online Town Hall with President Obama
– 104k questions; 3.6mil ‘votes’ online
– The White House Blog at
[Link]
-Up-Open-for-Questions/
• E-reverse auctions - procurement
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning
Reflection
Issues and challenges concerning IS/IT in the
Public Sector and SMEs - Similar or different?
For use with Strategic Information Systems Management
by Kevin Grant, Ray Hackney and David Edgar
1408007932 © 2010 Cengage Learning