9 - Strategic context of IS investment

Abstract

The focus-dominance model of information systems (IS) proposes that small- and medium-sized enterprises (SMEs') investment is strongly influenced by their strategic context defined by its strategic focus, either cost reduction or value added, and its market positioning defined by customer dependence. In this model investment is a function of the SME's strategy, and its market position. The model provides an analytical framework to explore the role of IS in SMEs within the strategic context of the business. The categories of production systems, management support, and customer relations can be used to align the IS to the business strategy in each quadrant of the focus-dominance model. Word processing systems and accounting packages are used by all SMEs to control costs with a focus on efficiency, and are categorized under management support. Customer databases fall within Earl's customer relations category. Materials requirements planning and electronic data interchange (EDI) systems form part of Earl's category of production, supporting planning, and communications with customers.