A Strategic Information System (SIS) is a system to manage information and assist in strategic decision making. A strategic information system has been defined as, “The information system to support or change enterprise’s strategy.” Simply says, a Strategic Information System is a type of Information System that is aligned with business strategy and structure.
The alignment increases the capability to respond faster to environmental changes and thus creates a competitive advantage. An early example was the favorable position afforded American and United Airlines by their reservation systems, Sabre and Apollo. (American Airlines worked with IBM to develop an improved booking/reservation system, and the Airline Reservation Systems (ARS) and the Semi-Automatic Business Research System (SABRE) launched thereafter in 1960. The network completed set-up in 1964, and it was recognized as the largest data processing system in existence. United Airlines developed the Apollo Reservation System, and shortly after allowed travel agents access. The Apollo system was the foundation for many further developments, which spread from just US airlines to European airlines as well). For many years these two systems ensured that the two carriers’ flights appeared on the first screens observed by travel agents, thus increasing their bookings relative to competitors. A major source of controversy surrounding Strategic Information Systems are their sustainability.
Strategic Information Systems are different from other comparable management information systems as:
- They change the way the firm competes.
- They have an external (outward looking) focus.
- They are associated with higher project risk.
- They are innovative (and not easily copied).
It is mainly concerned with providing and organization and its members an assistance to perform the routine tasks efficiently and effectively. One of the major issue before any organization is the challenge of meeting its goals and objectives. Strategic IS enable such organization in realizing their goals. Strategic Information System (SIS) is a support to the existing system and helps in achieving a competitive advantage over the organizations competitors in terms of its objectives. This unit deals with the critical aspects of the strategic information system. This units indicates the theoretical concepts and the way in which the same are realized in practice. The flow of the unit is in such a way that it starts with the development of contemporary theory about strategic uses of corporations’ internal information systems leading to systems which transcend the boundaries of particular organizations. The process whereby strategic information systems are created or identified is then examined. A number of weaknesses in the existing body of theory are identified, and suggestions made as to directions in which knowledge is or may be progressing. A strategic information system is concerned with systems which contribute significantly to the achievement of an organization’s overall objectives. The body of knowledge is of recent origin and highly dynamic, and the area has an aura of excitement about it. The emergence of the key ideas, the process whereby strategic information systems come into being is assessed, areas of weakness are identified, and directions of current and future development suggested.
Information system is regarded as a tool to provide various services to different management functions. The tools have been developing year by year and the application of the tool has become more and more diverse. In management it is now a very power means to manage and control various activities and decision making process. The original idea of automating mechanical processes got quickly succeeded by the rationalization and integration of systems. In both of these forms, IS was regarded primarily as an operational support tool, and secondarily as a service to management. Subsequent to the development, it was during the last few years that an additional potential was discovered. It was found that, in some cases, information technology (IT) had been critical to the implementation of an organization’s strategy.
An organization’s strategy supported by information system fulfilling its business objectives came to be known as Strategic Information System. The strategic information system consists of functions that involved gathering, maintenance and analysis of data concerning internal resources, and intelligence about competitors, suppliers, customers, government and other relevant organizations.