As an instructor for IS, I am often asked what is computer information systems? Is it the same as Computer Science? The simple answer is no. However, the answer becomes trickier when you ask whether CIS, MIS, or IS are the same. The short answer is that they are very similar and used interchangeably. If you are interested in a deeper dive, please read more.

What is Computer Information Systems?

Computer Information Systems is the application of computers in business processes. Computing technology and business processes are two components of CIS. In order to bring them together, we have to use the third critical element of CIS, the people. Therefore, we can define Computer Information Systems as the application of computing and communication technology to record, process, store, analyze and interpret information to facilitate business processes. 

What does CIS consist of?

We can understand what computer information systems is, in terms of the six facets. These six facets of CIS are summarized below:

What computer information systems do?

The computer information systems help the firm in business processes. Firstly, they help in collection, storage, analysis and interpretation of data. Secondly, CIS helps improve the processes. Thirdly, it integrates discrete business areas through enterprise resource management. Fourthly, it helps us in managing customers through customer relationship management systems. Fifthly, it also helps us in managing human resources through the human resource management systems.

Career options in CIS

CIS offers career options at various different levels. If you are a relatively less experienced engineer or plan to graduate soon, you may look at profiles like development, testing, analysis. Mid-level technical profiles include positions such as enterprise architects and team leaders. If you are from managerial background then there are other options at the mid-level such as consultants, and project managers. However, the best paying jobs are those at the top level such as Chief Information Officer, VP of Technology, Chief Technology Officer, and Change Managers.

CIS jobs

How much do Computer Information Systems make?

The salary of a CIS professional varies wildly. It depends on job profile, education level, years of experience and organization. Even within the same organization, there could be different salaries. However, at the entry level, you may expect a starting salary of anywhere between $55k to $70k. Mid-level profiles may have salaries ranging from $110k to $170k. Nevertheless, you may expect a starting salary of around $150 onwards at the top-level job profiles. However, these jobs require around 15 to 25 years of experience.

Is CIS worth it?

It is difficult to answer that question as it would vary from individual to individual. Firstly, any job is worth when it satisfies at least two of the following criteria:

1. Job satisfaction
2. Wellbeing
3. Compensation
4. Career progression

Job satisfaction, wellbeing and compensation are dependent on a lot of factors. However, some aspects that you can control are: educational degree, education level, efforts at the job, personal development and soft skills.

Typically, CIS or MIS degree offer a higher upward mobility to the individual. In plain English, you have a higher chance of climbing the corporate ladder with a specialization in CIS compared to simple software engineering degree.

Does CIS require math?

Yes, CIS is primarily a technology-oriented work. Most job profiles require a specialization in CIS or MIS or an MBA. These programs may either directly have math courses of application of mathematical knowledge in some courses.  

Is CIS Degree hard?

Not any harder than regular computer science. It is more focused towards application of computing and communication technology from business perspective. CIS degree would be more suited towards individuals who see themselves as team players and managers. It is not suited for those who see themselves as individual workers or those who are interested only in coding. CIS degree can be hard for these individuals. Also working as CIS professionals may be hard for them.

IS CIS stem

CIS is considered to be techno-managerial role. It is indeed a STEM field. However, specific to your degree, it may or may not be classified as STEM in your country. For instance, if you do MBA then it may not be considered STEM as MBA is sometimes classified as social science degree not a science degree.

Education in CIS

Most of the top engineering schools offer specialization in CIS. Some may only offer elective courses. Your best bet is to complete a bachelors degree, gain some relevant work experience then go for MBA.

Where to study CIS?

You may check out some of the CIS or MIS programs from the list below. We have used the ranking of CIS programs as per the USNews website.

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The year was 2004. The United States Army entered a complicated combat. The combat was very different from any other. They were facing the terror organization Al Qaeda. What was different in this case? Why did the US Army find it so challenging to wage a war against ill-equipped and seemingly backward organization? Read this article to find out more about organizational structure. A comparison of centralized vs decentralized organization shows us that which type of structure is better in specific situations.

Centralized and Decentralized Organizational Structure

An organized set of individuals, teams and business units constitutes a firm. These entities come together in providing products and services for the customers. A firm’s activities create product and services for the customers. Moreover, these activities require some management of roles and responsibilities. An ‘organizational structure’ is like a diagram that shows how these activities are orchestrated.

A centralized organization is one where there is top down approach. The higher-ranking managers have higher control over the lower ones. The ideation, strategy and execution trickles down this hierarchy. This structure is similar to how the armies have been traditionally organized.

On the other hand, decentralization is achieved when the decision-making authority is distributed to lower ranking managers. This gives them more autonomy to take decisions. Although, it helps in agility and increases innovation, there are some drawbacks as well. Decentralized organizations may increase the redundancy. There may also be miscommunication, conflicting objectives and inefficiencies.

Chart for Centralized vs Decentralized Organization

The above diagram shows the central organizational chart. The chart compares it to the decentralized organization. As you can see, the centralized organization has a central command of authority. On the other hand, the decentralized organization has a distributed command of authority.

Advantages of Centralized Organization

1. Centralized organizations are more efficient in terms of resource utilization
2. Higher coherence in terms of meeting organizational objectives. Employees are better aligned to the mission and vision.
3. Efficient structure of direction and authority. The decision making is centralized and it helps in staying focused due to a centralized chain of command.
4. Execution time is lower.
5. Reduced inefficiency in work, data and personnel.

The Disadvantages of a Centralized Organizational Structure

1. It reduces innovation in individuals.
2. Reduces the speed of response to external changes.
3. Higher tendency to please seniors rather than meet organizational objectives.
4. Inputs from lower level employees may never reach the top management.
5. May reduce the learning of low and mid-level managers. A major component of learning is through decision making and feedback. The autonomy for making decisions is lower in a centralized organization.

Advantages of Decentralized Organization

1. Increases creativity and innovation in individuals. Lesser control is shown to make people more creative.
2. Leads to higher motivation, job satisfaction and wellbeing in employees. Also, helps in training future leaders who are confident about their decisions.
3. This structure is very useful in tapping on to the expertise of individuals.
4. The perception of threat is faster. Decision making to combat the threats is also faster.
5. It frees the top managers from making smaller decisions. These small decisions may wear out the top management in a centralized organization. Therefore, they are free to focus all their energy on important decisions.

The Disadvantages of a Decentralized Organizational Structure

The disadvantages of a centralized organizational structure include the following:

1. Increased chances of miscommunication.
2. Possibility of conflicting objectives between different teams in the same organization.
3. Competition within teams inside the organization, leading to lower trust and information sharing between teams.
4. Duplicated projects, increasing redundancy.
5. Information silos, especially for tacit knowledge.

US Army vs Al Qaeda – a golden lesson in organizational design

The Al Qaeda was structured as a formidable force. Firstly, the organization was designed like a network of small teams. These teams defied the traditional army structure and hierarchy. This allowed them independence and spontaneity. As a whole, they were unpredictable bunch of guerrilla warriors. Extremely difficult for the allied forces to understand and fight. This type of organization is essentially a decentralized structure. It provides higher agility and ability to adapt better to the changes. It is relatively new way of looking at centralized vs decentralized organization.

Finally, the United States Army, adapted themselves into a new structure. They developed a hybrid approach. The book ‘Team of Teams’ talks about the history of this war and how this structure helped America register a victory against the formidable force. A team of teams is an organizational structure where organization works as a network of smaller, independent teams. They are connected with each other but function independently. This offers the middle ground between the centralization vs decentralized organization.

The Benefits of Team of Teams Structure

1. Higher trust in the individuals
2. Increased coherence towards the firm’s goals and objectives
3. Rapid decision making
4. Faster information dissemination
5. Higher adaptability

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Digital strategy can explain up to 73% of the variance in a firm’s profitability. Yet, only about 15% of the firms have digital strategy at the core of their businesses. Here, we take a look at digital strategy definition. Further, we shall see, how defining the digital strategy can help us visualize the objectives better.

Digital Strategy Meaning

Digital strategy is assessment, analysis and planning to use digital technology to meet the firm’s objectives. It helps us chalk out the roadmap for future. For instance, if your firm wants to adopt AI in your business processes, you may need to develop a roadmap for AI. Similarly, most businesses are developing elastic digital workplaces to reduce cost and increase employee wellbeing.

Defining digital strategy also helps in establishing a direction for your business. Strategy is like the rudder for a boat. Now, imagine a modern Yamaha motor powered boat, connected with GPS. Further, let us visualize that this boat is a smart boat. It has a navigation system. Now, do you see the difference in capabilities of the boat. On one hand, a manual rudder works in setting the direction of simple boat. On the other hand, a smart boat can offer better maneuverability. It can even have auto pilot. All thanks to the digital controls. A digital strategy for your business is analogous to this smart control, but for your firm.

Digital Strategy Definition Mckinsey

McKinsey developed the definition of business strategy as “an integrated set of action designed to create a sustainable advantage over competitors.” Further, they have emphasized that the definition is valid for digital strategy as well. A recent Mckinsey  Quarterly article suggested the following steps to defining the business strategy:

1. Assess the current situation
2. Ascertain the future scenario for business
3. Develop the pathways that will ensure success in these predicted scenarios

Digital Strategy Examples

Managers had a common misconception earlier. They thought that digital strategy was only for firms that had business model that was based on digital goods. However, digital strategy helps not just companies dealing with dealing goods or digital platform. It can be one of the competitive advantage for traditional companies as well

Domino’s Pizza

Dominos has nothing to do with ‘digital business’ per say. However, they are one of the pioneers of digital strategy. They developed their digital strategy definition way in 2008. Since then they have kept digital at the core of their transformation. Firstly, they focused on leveraging the website as point of sale.

Secondly, they heavily invested in transforming to an app-based food ordering service. Consequently, they launched a comprehensive iPhone app in 2011. The app-based ordering system was an instant success. This is where competitors like Pizza Hut lacked behind. Finally, they also surprised the world with first drone delivery of pizza in 2016.

Renault

The auto giant Renault is another excellent example of how to develop digital strategy definition. They were able to get an increase of 25% in their EBIT through digital transformation. In an interview to BCG, the Chief Information Officer Frédéric Vincent shared the details about the process.

Firstly, the company assessed the options they had with digital projects. Subsequently, they devised their digital strategy. They realized that they had data scattered over a large number of applications. In the first step, they consolidated the data and created a centralized data mart. Secondly, they worked towards improving their business processes. Consequently, they were able to achieve a lift of 50% in productivity.

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In the most general sense, conflict of interest arises when you(as an individual or organization) face a scenario where one decision that may be beneficial to you, may not be beneficial to another entity that relies on your decision.

For example: visualize that you are the reception of a hospital. You are having intense pain in your upper abdomen, along with an irregular pulse. The doctors at the emergency room, conduct their tests. They realize that there is a minor probability of serious heart condition and a major probability of it being a simple acid-reflux in your stomach. However, if they let you leave, the organization(hospital) stands to make a very small amount for providing emergency services. On the other hand, if they inform you that you may be having a heart condition, and they need to keep you in the hospital for 48 hours under observation. In this case, they stand to make significantly more money from you. This situation is a conflict of interest for the doctor. She should keep your interest in mind while making any decision. However, if she decides to present a more gloomy picture, she would be rewarded monetarily.  

What does the law say?

As per the law, when you enter a contract with your client, you are enshrined with certain ‘fiduciary responsibilities.’ Therefore, you are obligated to act under a sense of loyalty or duty towards your clients. Any action that is undertaken voluntarily that may disregard the benefit of your client may be liable. This liability may not be always legal. However, at times, it may be ethically wrong to act in a way that does not benefit your client. If there is a clear case of malpractice or intention to harm, then it may even lead to legal ramifications.

Personal vs professional conflict of interest

On the other hand, there may be cases where you have a conflict between your personal and professional spheres. What does conflict of interest mean in this case? It simply means that you have a dilemma where you have to make a choice between acting to favor your family member, friend, an acquaintance in a way that jeopardizes your professional ethics. For example, consider the situation that you are the mayor of a city. You get tenders for some construction work. Among the bidders, is your brother-in-law. No one in your office knows that you both are related.

However, you know that it is a conflict of interest situation. Even if you act ethically and evaluate all the tenders for their merit and choose the best tender, you will still be liable in the future if someone finds out. You may be incriminated if you pass the tender in favor of your brother-in-law. Even if he is the best candidate. In this situation, the best option is to declare it a competent authority in your office, that you are having a conflict of interest situation. You may ask to step aside from the decision process citing this reason and ask the task to be delegated to someone else.  

This type of transparent approach is not just ethical, it also safeguards you against any allegations in the future. Therefore, it is important to understand what is a conflict of interest situation and how you need to act in these cases. Even if there is the probability of entering into a conflict of interest situation, you should be transparent about it.

3 Steps to resolve conflict of interest

1. Understand the situation – if there is a conflict between your personal interest and professional/organizational/client interest, it is a conflict of interest. Even if there is a chance of getting into such a situation it is a ‘potential conflict of interest situation.
2. Be transparent about it – You should inform a competent authority or superior about your conflict of interest. If you believe you can walk away or delegate the responsibility then you may do it.
3. If in doubt, seek advice – It may not always be possible for individuals to understand what may constitute a conflict. In these cases, you may seek help from superiors or from the legal team in your organization.

If you are a senior manager, you may take these steps. You may ensure that you empower your employees. Consequently, it will enable them to feel confident. Therefore, they may come forward, when they find themselves in such tricky situations.

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The COVID-19 pandemic has been a scary experience for many of us. Job losses and layoffs have been the order of the day. When companies are undergoing economic stresses, they are bound to let go. However, if you are caught between this crossfire then furloughed leave maybe a middle ground between unemployment and employment. 

What is Furloughed Leave? 

One of the easiest ways to understand furloughed leave is to consider it to be the opposite of temporary employment. Temporary employment means that the company seeks the work of individuals on a short term basis.  On the other hand, furlough means that the company is seeking the temporary unemployment of an employee. It is also called an extended leave of absence. 

During the tenure of the furloughed leave. The employee remains on the rolls of the firm.  Put all practical purposes, the employees considered being a part of the organization. However, there is no work expected and usually, the leave is unpaid in nature.  However, in the case of certain government employees furlough can be paid. 

 What are the advantages of furloughed leaves? 

1.  First and foremost, the person retains the job. Being retained even at no salary is better than being fired.
   

2.  Secondly, the employee is not considered to have taken a break.  In this situation that the furlough extends more than a year, it can have an impact on the resume of the person. This is taken care of by the furlough. The person shows continuous employment with a firm. 

3.  Furlough schemes are protected by government laws in some countries.  This means that the employees are protected from being exploited by a firm. However, in case of coronavirus or COVID-19 pandemic, things have not been that clear.  

4.  It is applicable to all kinds of employees. You are covered if you are a full time or a part time employee. Additionally, it also covers certain agents working for a firm. 

The situation regarding furloughed leave in different geographies

United Kingdom 

Currently, in the United Kingdom, the government is paying about 60% of the salary to furloughed employees. This comes under the coronavirus job retention scheme or CJRS.  This scheme has been extended till 31st of March 2021.  The conditions for claiming furlough in the United Kingdom are: 

1.You must be a part of the pay as you earn or PEYE system. 

2.  Your job must have been started before 31^st of October 2020. 

3.  You must have a bank account with the Channel Island Bank, UK bank or the Isle of Man Bank to claim the benefits. 

United States 

On the other hand, United States is not new to the concept of furlough. Previously there have been furloughs during government shutdowns as well as during the recession. Certain companies in the United States have announced that although they are not paying for the furlough, employees will get other benefits.  Typically some of the benefits that are retained are health benefits and tax benefits. Sometimes the pension fund is also contributed by the employer. You need to check with the specifics with your HR team regarding this.  Certain rules regarding the furloughed leaves in United States: 

1.  The employees who are undergoing furlough, may claim the unemployment benefits. 

2.  Most of the workers can get dollars 600 per week for their unemployment benefit. 

Paid time offs are not counted within the gambit of the furlough period.  However, the employees continue to accrue whatever leaves they are entitled to.  For example, if you are entitled to 10 days of leave for six months. Then you would have accumulated that by being furloughed for six months. When you join back, you are entitled to take 10 days off as PTO.   

India 

There is a provision for furlough in some Indian Government departments. The officers of the defense forces can take a furlough.  They have sanctioned a pay that is roughly half of their original salary.  However, this entitlement is only for 20 days per year. However, in the private sector, there is still uncertainty in terms of the laws regarding the furlough. While on one hand, many companies have offered a haircut to the salaries of the working employees. On the other hand, some of the companies have asked employees to go on a furloughed leave until further notice.  

The Chief Human Resources Officer of Titan Limited, Raj Narayan said that it is the ideal solution for times when a company struggles with the cash flow.  Alternatively, another technique used by some of the other firms is to as for partial employment.  Employees are called for 50% of the days and they are paid accordingly.  This kind of arrangement is working in certain manufacturing companies.  

 European Union 

European Union is known for its extensive social policies. The governments that come under the EU have granted furlough for over 18 million people.  The respective governments are bearing the unemployment benefits. This could not be feasible for the very long term. However, owing to the recovery in many sectors, many people are returning to work.  Overall, the performance of the job market has been better in Europe compared to the United States.  The unemployment rate at the end of June was around 10% in the European zone. On the other hand, it was around 17.5% in the United States.  

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Machine Learning is a technology that enables computer programs to learn a skill akin to humans. Although machine learning has been the domain of highly skilled computer engineers, things have changed a lot in the last decade. It has become the topic of discussion in boardrooms. This necessitates most contemporary managers to know about basic machine learning buzzwords. 

Top 10 Machine Learning Buzzwords

1. Machine Learning 
   Machine learning (ML) is an algorithm that can be trained to solve specific problems. AI is an umbrella term for technologies that can mimic human skills like pattern recognition and prediction. ML is therefore a part of AI.  

2. Algorithm 
   The algorithm word comes from an Arabic mathematician, Al-Khwarizmi who was a master of mathematics? The term signifies the use of a set of rules and logic to solve a problem. A real-world problem is solved in smaller steps. These steps define an algorithm. Subsequently, these steps become computer programs. 

3. Machine Discovery 
   Essentially, we use an algorithm to find patterns in data. Machine discovery is the verb that is used to describe the act of using a machine learning algorithm. This term is used interchangeably with knowledge discovery. However, we should use knowledge discovery for data mining. On the other hand, machine discovery is more about the insights that we get from data like images, video, or text. 

4. Neural Network and Artificial Neural Network(ANN) 
   In the traditional sense, neural networks and artificial neural networks are two different things. However, in contemporary usage, they are quite interchangeable. Neural network traditionally refers to the network of neurons inside the human brain. On the other hand, an artificial neural network is a technology that attempts to recreate the functionality of a real neural network using artificial neurons. 

5. Convoluted Neural Network 
   It is an Ann that consists of multiple layers of neurons. This enables the specific convoluted neural network to process and find patterns in media like images, audio, and video. For instance, Adobe Artificial Intelligence uses CNN. It enables features like the removal of unwanted objects in a video frame. 
   
   

6. Deel Learning 
   Deep learning is the use of advanced ANNs like Convoluted Neural Network to find patterns in data. Regular neural networks work only with textual or numeric data. On the other hand, CNN uses multi-layer NN to find patterns in multimedia.

7. Artificial General Intelligence or Strong AI 
   Artificial general intelligence is one of the important machines learning buzzwords. It signifies a technology that can mimic human-like intelligence.  

8. Chatbots 
   An application of AI to help solve common queries. It was found that most of the questions asked by the customers were repetitive and basic. For instance, a banking customer may call up the call center to ask about the steps to create a new deposit account. This could be done by the chatbot since the query is simple. Once the chatbot is given the feedback that it is not able to solve the problem, the query is redirected to a human responder. 

9. Supervised Learning 
   It is a type of machine learning where the program is fed with the right solution to a lot of problems. The program learns from this supplied data; hence it is called supervised learning. On the other hand, when a machine learning algorithm does not need a correct solution to train itself, then it is unsupervised learning. For example, let us consider that you are doing a marketing mix modeling. In that case, you already have the data for recency, frequency, and monetary value of the transactions. You can use unsupervised learning to segment customers. 

10. Weak Intelligence 
    Typically, contemporary AI is called weak AI. Weak AI can only do very specific tasks like finding grammatical errors. On the other hand, a strong AI would be able to do multiple tasks. 

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Expensing vs capitalizing is one of the key financial decisions for a firm. Whenever we spend money, it can either be shown as an expense or towards the capital. Nevertheless, there are some basic guiding rules that can help us understand why and how one should be selected over another. 

What is an expense? 

An expense is a cost of running any business. We have to shell out some money to run the operations of the firm. Expenses are like inputs to the business which in turn helps us run the operations. Finally, business operations provide us with a stream of revenue. However, not all expenses are operating expenses. Some expenses that do not directly contribute to running the business are also incurred. These are called non-operating expenses. 

Some common expenses: 

• Cost of raw materials 
• Cost of other supplies 
• Salary of staff 
• Depreciation 
• License fees  

Benefit of expenses:  

Although, expenses may seem evil. They are also tools to maneuver financial management. Here are some of the benefits of expenses: 

• Some expenses are tax deductible. This means that from the taxable income, we can deduct these expenses. Therefore, our taxable income becomes lesser.  
• Typically, easier to manage than capitalization.  

 There are two ways to record the expenses: 

1. Cash basis 

2. Accrual basis 

The cash basis is a simpler method. Here, we record the expenses as and when they occur. On the other hand, the accrued expenses are recorded when billed. For example, let us consider your firm purchased a three-year subscription of Adobe software suite billed annually at $600. This means that the monthly subscription cost is $50. If you expense it out monthly then you will have an expense of $50 every month on your income statement. On the other hand, if you put it down as a one-time cost of $600 then you are using the accrual cost basis. 

What is capitalization? 

The capitalization method is essentially recording the cost as the value of the asset. For example, if you spend $40000 to repair a machine, it can be recorded not as an expense but as a restoration cost. If the original cost of the machine was $200,000 then the balance sheet will record it as $240,000.  

This cost expensed through the life of the asset. Typically, the smaller purchases like office stationaries may be recorded as an expense while the purchase of expensive machines may be recorded as capitalization. These large assets are also called fixed assets. However, we need to match the cost to the accounting period. Therefore, we amortize the asset over a period of time. For example, our expense of $40000 extends the useful life of our machine by 5 years. Therefore, we can amortize it as $8000 every year. 

The RAB thumb rule 

One of the thumb rules for capitalization is RAB. The cost incured in the following may be considered as capitalization: 

1. Restoration costs 

2. Adaptation costs 

3. Betterment costs  

Benefit of capitalization 

Capitalization has a direct impact on the balance sheet. However, it also has an indirect impact on the income statement. When we capitalize on it, it helps us in reducing the variability in the income statement. One of the reasons for the same is that expenses are less predictable than capital costs. Consequently, there could be a year on year difference in the expenses. When it is capitalized, it projects a more steady income. This helps in signaling investors and may enhance confidence.  

Difference between expensing vs capitalizing

It may appear from the discussion, that any cost can be easily manipulated as an expense or capitalization. However, that is far from the truth. In fact, we need to work withing certain several frameworks regarding expensing vs capitalizing. Firstly, and most importantly, firms in each country have to follow the national accounting standards. For instance, accounting standards mandates leases longer than certain periods be recorded as assets. Secondly, the governance guidelines of a firm also dictate these terms. A firm may set that any expense higher than $20000 is considered as capitalization. Thirdly, it is also dependent on geography/industry-specific practices.  

Expenses can help maintain the balance sheet as it appears in the income statement. The same expense can be also capitalized and therefore would be shown in the balance sheet. However, accounting honesty is critical for the going concern of a firm. Ethical businesses that are transparent have higher returns.

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Knowledge management is not a new concept but it is often overlooked in the world of Management.  However, we have seen that knowledge management has gained a lot of traction. Here we look at different knowledge management quotes. 

Knowledge management quotes by professionals

“Knowledge management is a bit like travel insurance- you only wish you had it when it is too late” – (O’Neill, 2009)

“There is less to fear from outside competition then from inside inefficiency, miscalculation, lack of knowledge. Beat your competitors with the knowledge edge! Train your staff! – Anonymous

“Knowledge Is power, but has little value unless it can be easily accessed and put into practice” – Melany Gallant

“In today’s environment, hoarding knowledge ultimately erodes your power. If you know something very important, the way to get power is by actually sharing it.” Joseph Badaracco

“Knowledge management is something many companies are sure they need, if only they knew what it was.” –Mary Lisbeth D’Amico

“An investment in knowledge pays the best interest”-Benjamin Franklin

“knowledge itself is power” –  Sir Francis Bacon

“knowledge management is a means, not an end” -Bill Gates

“Too often, people think of knowledge management as a noun. They’re mistaken: KM is a verb, a way of getting work done.” –Jeff Angus

“Knowledge is in groups — not individuals.” – Larry Prusak

“In short, knowledge management is retrieving the right information, for the right people, at the right time.” –John Yuva

“Put knowledge where people trip over it” – Carla O’Dell

Quotes on KM by academicians

“Embodiment of knowledge in our daily lives and activities as well as active

“Management of knowledge resources not limited to IT support” (Zhang, 2008)

“understand, focus on and manage systematic, explicit and deliberate knowledge building, renewal and application – (Wiig, 1997)

Knowledge management leads to innovation which in turn leads to firm performance – (Turulja & Bajgorić, 2018)

“Explicit and systematic management of vital knowledge and its associated processes of creating, gathering, organizing, diffusion, use and exploitation which requires turning personal knowledge into corporate knowledge”  (Skyrme & Amidon, 1997)

“Knowledge … had always been seen as applying to being …almost overnight came to be applied to doing… and became a resource and a utility” (Drucker, 1993)

“Knowledge has become the resource, rather than a resource” (Drucker, 1993)

“Value creation from upcoming Technologies like I will come either from application of knowledge or development of knowledge” (Mishra & Pani, 2020)

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SWOT is a management analysis tool. It is used to get an overview of the situation. This overview can help us diagnose managerial problems or they can help in planning. We will discuss SWOT analysis with example to illustrate how to use it effectively.

What is SWOT analysis?

SWOT is a planning tool. The word is made of four words Strength, Weakness, Opportunities and Threats. Let us discuss each of these words and their significance in detail:

We shall discuss all of these four elements of SWOT analysis in detail. However, let us first check out why we need it in the first place. We should also be very clear about the need for conducting this analysis. Then, we shall proceed to SWOT analysis with example.

Specific examples of using SWOT

1. Starting a new business: SWOT analysis can help you ascertain whether it makes sense to go ahead with the business or not.
2. Feasibility analysis of a project: A feasibility analysis is done before starting a new project. SWOT can help us determine whether it makes sense to pursue an idea or drop it.
3. Assessing corporate stand: Sometimes, we may not have a clear picture of where we stand. SWOT can help us get a snapshot of our situation. This can help in strategic planning.
4. Personal planning: SWOT is not limited to corporate usage. You can use it to get a better understanding of your personal assessment. It can help you explain better at job interviews. Also, it can help you with personal development.
5. Brainstorming: SWOT can be a useful tool to analyze brainstorming ideas. It can help in benchmarking ideas. There are 3 types of brainstorming and SWOT can be used with all three.

SWOT Analysis with Example

Example: a multinational bank

Consider a multinational bank, Abracadabra Finance & Banking Corporation, or AFBC. The bank has a presence in 105 countries with over 23,000 branches worldwide. It wants to enter the mobile payments market. You are hired as a consultant to conduct the feasibility analysis of the project. You decide to start with SWOT analysis. How should you go about it?

Step 1: Evaluation of Internal Factors: Strengths and Weaknesses

The strengths and weaknesses are internal factors. It means that you find out about your strengths and weaknesses Always remember that these are relative assessments. Assess your strength with respect to your rivals.

What are strengths and weaknesses?

The strengths and weaknesses for your firm are identified by some common criteria:

• They are external with respect to the firm( not part of organizational resources, competencies and functional areas)
• These factors are uncontrollable
• They usually occur in the environment ( natural, geo-political, etc)
• They can also come from rivals
• Enhance or deplete a firm’s performance

How to identify your strengths?

• Think about the different functional areas of your firm/project. What areas have better resources? It can be either measured independently or with respect to your competitors.
• What are the core competencies? Is there something you are strong at? These should be enlisted in the strengths.
• Think like Prof Porter: what are the barriers to entry that you can put up against a new entrant? A patent or trademark or even a trade agreement can be your strength.

How to identify your sweaknesses?

• What are the areas where you are not as strong as your competitors? It could be competency, resource, or capability.
• It is not just about having ownership but also access to resources. For example, both you and your rival have similar suppliers. However, you can get a specific part made 25% slower then it will become your weakness.
• Most importantly, culture is a type of hidden attribute. Usually, people neglect culture when thinking about a firm. This can be a mistake. In fact, in post mergers and acquisitions, culture is seen as a major weakness. Therefore when you are doing a SWOT for acquisition, never miss assessing the cultural synergy between both organizations.

Analysis of internal forces for our SWOT example:

Step 2: Develop the Transition Strategy

Once you have the list of your strengths and weaknesses, you can develop a strategy to work on them.

• Nurture your strengths.
• Develop competencies, resources, and capital.
• Acquire the resources to eliminate weaknesses. For instance, AFBC bank may acquire some software provider or build an in-house team to remove the dependency on external software vendors.
• Brainstorm with the executives to find potential solutions to the weaknesses. Develop strategies to eliminate the weaknesses based on these solutions.

Step 3: Evaluation of External Factors: Opportunities and Threats

There is a reason why we have kept the external factors as the second step. One of the most powerful theories in management is Prospect Theory. Daniel Kahneman got the Nobel prize for developing this theory along with Amos Tversky. This theory says that we are more affected by loss than by gain. This stems from human nature to focus on the risks rather than the potential gains. When we talk about management strategy, similar rules apply. People have an inherent bias towards analyzing the risks or threats. However, we need to look at the “negative risks” or opportunities with a similar zeal.

How to ascertain threats and opportunities?

• Technological trends: this one is extremely important. Firms have closed down because of not picking up on tech trends. Also, startups have become unicorns by picking up on a tech trend.
• Market forces: the markets are highly dynamic. Always. Watch out for the market forces when doing your external analysis for SWOT.
• Competitor’s arsenal: A thorough analysis of your competitor can give you some of their secrets. Sometimes, there may be just one of two factors that contribute majorly to their success. List them as your unmet opportunities. Try to find a gap in the approach of your rivals.
• New entrants: new entrants in the market are hungry for growth. Any firm in your domain with a high Year-on-Year growth rate can point towards a potential threat. You can use any metric like sales, market share, revenues, PAT, or ROCE to assess the new entrants. A deep dive into their value chain will tell you how they can become threats to your business some time down the line.
• Consumer patterns: consumption patterns change over time. This can be both a threat as well as an opportunity. It depends on how you prepare for them.

We are doing SWOT Analysis with example of our company, AFBC. Let us see how our SWOT chart looks like:

Step 4: Turning Threats into Opportunities

The final step is to develop strategies to convert threats into opportunities. It is easier said than done. However, there are some approaches.

1. Threats are highly beneficial sources of organizational change. It is like the creative destruction of old into a new firm.
2. Look at the threats from a new lens. Observe how the competitors reacted to the threats. Also, look at firms that have complementary strengths. How are they doing things differently?
3. Think out of the box, be creative in findings potential solutions. Again you can build a team for managing this transformation project. Use the power of the team for brainstorming in project management.
4. Think of small changes that eliminate threats in the long run rather than radical ones. Embrace the concept of Kaizen.

FAQs on SWOT Analysis

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The word strategy is quite common in our daily language. However, it is an important business concept. Therefore, we have compiled the list of definitions of strategy. Subsequently, we have provided a simple explanation of what strategy means.

Origins: what strategy means for the military

Strategy as a concept originated in the military. The word comes from ‘stratēgia‘ which means ‘generalship.’ Most importantly, the success of military conquests depends heavily on the approach of attack or defense. Similarly, corporate strategy in the simplest of terms is how you compete and thrive against competing firms.

Most notably, great thinkers like Sun Tzu and Kautilya wrote war treaties. They described policies, ploys, and tactics to win battles. There are some similarities between competing against an enemy and a business rival. Therefore, some scholars have transposed many of these concepts to business context. However, there are some key differences between the military and business use of the word:

How is military strategy different from corporate strategy?

Definition of strategy

Corporate strategy is defined as an approach developed by a firm to create a competitive advantage.

Broadly speaking, a strategy is an action plan that links our objectives to the ways of achieving it. When we devise the strategy, we should include vision. Vision is a clearly defined long term goal. Vision is the guide for developing missions for the firms. Thereafter, we work on the mission through well-coordinated actions.

There are many different definitions of strategy. We have enlisted some of them below:

Strategy as a long-term goal: Chandler

“Strategy is the determination of the basic long-term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals” — Chandler 1962

Managers in the early 1960s started using the strategy as a management term. Alfred D. Chandler wrote the book ‘Strategy and Structure’ in 1962. In this book, he described the success process of companies like General Motors and Dupont. He attributed their success to their ‘strategy.’ Though he used this term, he did not define it clearly as to what strategy means for the firms.

Strategy as means to an end: Liddell Hart

The art of distributing and applying military means to fulfill the ends of policy — Liddell Hart 1967

Here we have included the definition of strategy by Lidell Hart. He was one of the most famous historians who worked on strategy. Some of his concepts can be transposed into the management strategy. Most importantly, he tried to unify the concept of strategy from military as well as a political perspective.

Strategy as decision making: Kenneth Andrews

“Strategy is the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals” —Kenneth Andrews, 1971

Kenneth Andrews was also a professor at Harvard Business School. He was one of the founders of Strategy. His first book was The Concept of Corporate Strategy, which came out in 1971. He opined that strategy aligned the decision making with the firm’s objectives. Thereby, he propagated the case-based method of teaching. In this method, the students learn by getting into the shoes of the decision-maker. It is also interesting to note that he published widely and holds a second PhD in English.

Vision driven strategy: Steiner & Miner

“Strategy is the formulation of missions, purposes, and basic organizational goals, policies, and programs to meet them, and the methods needed to ensure that strategies are implemented to achieve organizational objectives.” — Steiner & Miner, 1977

Steiner and Miner published an important book ‘Management policy and strategy’ in 1977. They provided new directions to this field in this book. Firstly, they presented a number of relevant cases and readings. Secondly, the book was also important as a textbook covering the fundamentals of strategy.

He has not just defined what strategy means but also provided with a roadmap. A roadmap that discusses the process of understanding how to advance towards the objectives of the organization.

Strategy is about differentiation: Michael Porter

“It means deliberately choosing a different set of activities to deliver a unique mix of value“ —Michael Porter, 1996

Michael Porter is one of the most prolific academics. Most notable for Porter’s 5 forces. However, this definition comes from his essay ‘What is strategy?’. He published it in 1996. Wherein, he proposed two ways to stay competitive.

Firstly, firms can do something different from their competitors.

Secondly, firms can do things differently than their competitors.

A firm needs to perform activities differently than others. The firm sets a unique position in this way. As a result, it can remain competitive. However, there is mounting criticism of this approach of defining strategy. The pursuit of one perfect competitive position may a narrow way of defining strategy.

What strategy means for firms today

We have looked at various definitions of strategy. Finally, can we summarize what the strategy means for the firms?

Modern academics define strategy into one or more of the three broad areas:

1. Differentiating from the competition
2. Exploring ways to improve your value proposition
3. Emergent approach where you adapt to the environment

Michael Porter is the father of the differentiation approach of strategy. Above all, he proposed the concept of being a cost leader or a differentiator. Firms can achieve this through various mechanisms.

Secondly, firms can explore new ways to delivering value. The advent of Industry 4.0 presents new opportunities. Firms must be proactive in assessing how they can leverage it.

Thirdly, emergent approach proposed by Prof Henry Mintzberg. He opined that strategy is more about how we adapt to changing set of internal and external variables.

FAQs on definitions of strategy

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