Marchands framework and Strategic Management of Information Systems Free Essay Example, 1000 words

Managers who have ample information would not invest the resources in a situation where many competitors are present as there may be market risks present. The second element of Marchand’s (2000) theory is the reduction of the costs. As Amprimo (2008) asserts the reduction of the costs is closely related to the management of risks. Firm and business owners try their best to reduce their cost of production. Reduced costs may mean that the businesses are able to enjoy better profit margins and so are better off. It is important that the managers are aware of the costs involved in each of the operating activities of the firm. This can help them to do a cost and benefit analysis before entering into an agreement with another company or investing in some kind of product. If the managers are aware of the fact that the production of even one or two more units of output can lead to a reduction in the cost rate, they would invest more of the limited resources in such a business. Even a one unit increase in the output can help the firms to achieve economies of scale and operate at the minimum cost level. We will write a custom essay sampl e on Marchand's framework and Strategic Management of Information Systems or any topic specifically for you Only $17.96 $11.86/pageorder now The third element of Marchand’s (2000) framework involves the addition of the value to the businesses. It is important that value is added to businesses in terms of increased number of markets and customers. Today, increased Globalization has led to a demand for increased flexibility (so that a large number of markets can be targeted). The flexibility, as Oliff (1991) relates, can only be raised if Marchand’s framework is followed. This is because the interaction of the information systems with the information management can lead to the making of better designs that can increase the number of customers. Managers, even if they have limited resources, if are knowledgeable about the organizational information, for example costs and risks, can achieve value addition as Amprimo (2008) relates. Limited resources may be a hindrance to an increased variety of customers and markets so it is important that managers invest efficiently. If the manager is able to handle the relevan t information, the business can expand through the consequent business strategies. The fourth and the last element of Marchand’s (2000) framework is linked a lot to the third one as it is the creation of new reality. The creation of new reality refers to the introduction of new products, new services, new technologies and new business ideas etc. According to Curley (2007), business value can be used by managers in order to create product differentiation that can lead to the creation of new businesses and services.