Chapter 6

Determining the Business Information System Strategy

Agenda

• Strategic planning factors

• Strategic planning approach

• An framework to use the models and techniques

• Portfolio management in a multi-business unit Organization

Strategic Planning Model

• External long term: external business environment

• External short term: external IS/IT environment

• Internal long term: internal business environment

• Internal short term: internal IS/IT environment + current application portfolio

External Long TermExternal Business Environment

• State of the industry in terms of profitability, growth, and structure

• Capability of IS/IT to change products, markets, and interrelationships of the industry

External Short TermExternal IS/IT Environment

• Actual competitor usage of IS/IT and others for competitive edge

• IS/IT opportunities to change the competitive factors and influences on industry (existing value chain, new entrants, or products and services)

Internal Long TermInternal Business Environment

• New IS/IT effectively support or enhance the business strategy

• IS/IT enable business to adopt a appropriate strategy to suit the future business environment

Internal Short TermInternal IS/IT Environment

• The degree of existing IS supporting the business strategy and sustaining the business advantages

• The appropriateness of IS/IT management to the business strategy and the development of IS/IT industry

Strategic Planning Approach - I

• Input– External and internal business environment– External and internal IS/IT environment– Current application portfolio– Business portfolio analysis, competitive

analysis, resource life cycles, value chain analysis, strategic option generator, organizational modeling

Strategic Planning Approach - II

• Input– Mission, objectives, CSFs, process and

activities analysis, data flow analysis and modeling

– Informal/opportunistic creative thinking

• Output– Strategies to achieve application portfolio– The future application portfolio

An Framework to Use the Models and Techniques

• Objective– Identify the required applications and their

priorities and resources to achieve the business goals and strategies

• Three components– The existing application– The required application– The potential application

The Existing Application

• Appraisal of IS/IT for the business– Understand the industry structure and business

position in terms of SWOT– Analysis the external value chain and

information flow implications– Analysis the internal value chain and

organizational relationships– Assess the business of existing system in terms

of SEOT

The Required Application

• Assessing the need for immediate investment: short/medium term, 1-2 years, analytical– Interpret business objectives and strategy– Determine CSFs for the corporate and its

competitors, etc.– Identify critical business process and activities– Determine short-term focus for investment

The Potential Applications

• Identifying potential future investment:long term, 1-5 years, creative– Consider potential IS/IT impact on

product/market, etc.– Consider the strategic potential of IS/IT and its

effects on the value chain– Identify options for long-term IS/IT investment

and select most beneficial

Portfolio Management in a Multi-Business Unit Organization

• Coordination and coherent among corporate and business units

• For each business unit– High potential (communicate): share ideas and

results of evaluations and prototypes– Strategic (capitalize): evaluate how advantages

gained in one SBU can be obtained in others

Portfolio Management in a Multi-Business Unit Organization

• For each business unit– Key operational (control): transfer experience

in use of applications and technology across units, and reduce duplication of IS/IT effort

– Support (constrain): achieve economies by sharing non-critical systems and standardizing on technologies and resources used

Points to Remember

• Strategic planning factors

• Strategic planning approach

• An framework to use the models and techniques

• Portfolio management in a multi-business unit Organization

Question

• How do you plan or justify an e-business as a required strategic information system?