34
1 IT STRATEGY: SETTING A DIRECTION FOR INFORMATION RESOURCES
1
IT STRATEGY:SETTING A DIRECTION FOR INFORMATION RESOURCES
2
WHY SET A DIRECTION FOR INFORMATION RESOURCES?
Page 559
• To share information among diverse parts of the organization • To communicate the future to others • To provide a consistent rationale for making individual decisions• Planning discussions help business managers and IS professionals
in making decisions about how the “business” of IS will be conducted
3
THE OUTPUTS OF THE DIRECTION-SETTING PROCESS
Page 560
Information Resources Assessment
Information resources assessment – includes inventorying and critically evaluating these resources in terms of how well they are meeting the organization’s business needs
4
OUTPUTS OF THE DIRECTION-SETTING PROCESS
Page 560
Information Vision and Architecture
• Is an ideal view of the future• Not the plan on how to get there• Must be flexible enough to provide policy guidelines for individual decisions• More than just fluff• Must focus on the long term
5
OUTPUTS OF THE DIRECTION-SETTING PROCESS
Page 560
Information Vision and Architecture
Information vision – a written expression of the desired future about how information will be used and managed in the organization
6
OUTPUTS OF THE DIRECTION-SETTING PROCESS
Page 560
Information Vision and Architecture
Information vision – a written expression of the desired future about how information will be used and managed in the organization
Information technology architecture – depicts the way an organization’s information resources will be deployed to deliver that vision
7
OUTPUTS OF THE DIRECTION-SETTING PROCESS
Page 560
Information Resources Plans
Strategic IS plan – contains a set of longer-term objectives that represent measurable movement toward the information vision and technology architecture and a set of associated major initiatives that must be undertaken to achieve these objectives
8Page 560
Strategic IS plan – contains a set of longer-term objectives that represent measurable movement toward the information vision and technology architecture and a set of associated major initiatives that must be undertaken to achieve these objectivesOperational IS plan – is a precise set of shorter-term goals and associated projects that will be executed by the IS department and by business managers in support of the strategic IS plan
OUTPUTS OF THE DIRECTION-SETTING PROCESSInformation Resources Plans
9
THE PROCESS OF SETTING DIRECTION
• Assessment• Vision• Strategic Planning• Operational Planning
Page 561 Figure 14.1 The Information Resources Planning Process
10
THE PROCESS OF SETTING DIRECTION
• Strategic Planning – the process of constructing a viable fit between the organization’s objectives and resources and its changing market and technological opportunities
Page 561 Figure 14.1 The Information Resources Planning Process
11
THE PROCESS OF SETTING DIRECTION
• Operational Planning – lays out the major actions the organization needs to carry out in the shorter term to activate its strategic initiatives
Page 561 Figure 14.1 The Information Resources Planning Process
12
Business Plan vs. Strategy
Page 560
Chesbrough and Rosenbloom (2003)
• Creating value vs. capturing value - the business model focus is on value creation. While the business model also addresses how that value will be captured by the firm, strategy goes further by focusing on building a sustainable competitive advantage.
• Business value vs. shareholder value - the business model is an architecture for converting innovation to economic value for the business. However, the business model does not focus on delivering that business value to the shareholder. For example, financing methods are not considered by the business model but nonetheless impact shareholder value.
• Assumed knowledge levels - the business model assumes a limited environmental knowledge, whereas strategy depends on a more complex analysis that requires more certainty in the knowledge of the environment.
13
THE PROCESS OF SETTING DIRECTION
Page 562
• Needs-based IS planning or project-oriented IS planning:– Bottom-up, immediate approach to information resources planning– Used when a specific, urgent business need called for a new system– Emphasis on project planning rather than overall organizational
planning
Traditional Planning in the IS Organization
14
ASSESSING CURRENT INFORMATION RESOURCES
Page 563
• Information resources assessment:– Must measure current levels of information resources use within the
organization and compare it to a set of standards
• Standards can come from:– Past performance– Technical benchmarks– Industry norms– “Best of class” estimates from other companies
Measuring IS Use and Attitudes
15
ASSESSING CURRENT INFORMATION RESOURCES
Page 563
• IS mission statement: Sets forth the fundamental rationale (or reason to exist) for activities of the IS department
Reviewing the IS Organizational Mission
16Page 565
Reviewing the IS Organizational Mission
Figure 14.3 IS-Prepared Mission Statement Example
Example IS Mission Statement
17
ASSESSING CURRENT INFORMATION RESOURCES
Page 565
• Traditional goal: – Reduce cost by increasing operating efficiencies
• Scope of IS goals has expanded to include:– Systems to assist in decision making– Ways to help with competitive advantage
Assessing Performance versus Goals
19Page 566
Information Vision:• Represents how senior management wants information to be used and managed in
the future• Starts with speculation on how the business’s competitive environment will change
and how the company should take advantage of it• Business vision is specified and written• Implications for information use are outlined
CREATING AN INFORMATION VISION
20Page 567
DESIGNING THE ARCHITECTURE
IT architecture – specifies how the technological and human assets and the IS organization should be deployed in the future to meet the information vision
21Page 568
DESIGNING THE ARCHITECTUREComponents of Architecture
Figure 14.5 Elements of an Information Technology Architecture
22Page 569-570
THE STRATEGIC IS PLAN
Strategic IS Plan – statement of the major objectives and initiatives that the IS organization and business managers must accomplish over some time period in order to:
• move toward the information vision• fit the business strategic plan
23Page 570
THE STRATEGIC IS PLANThe Strategic IS Planning Process
The planning process includes:• Setting objectives• Conducting internal and external analyses• Establishing strategic initiatives
24Page 572-573
• Critical success factors• Analysis of Competitive Forces• Value Chain Analysis
THE STRATEGIC IS PLANTools for Identifying IT Strategic Opportunities
25Page 575
Value Chain Analysis
Figure 14.11 Strategic Information Systems Opportunities in the Value Chain
26Page 576
• After the strategic plan, initiatives must be:– Identified– Translated into a set of defined IS projects with:
• Precise expected results• Due dates• Priorities• Responsibilities
THE OPERATIONAL IS PLAN
27Page 576
• Developed for a 3-to-5 year time period• Focuses on project definition, selection,
and prioritization
THE OPERATIONAL IS PLAN
The Long-Term Operational IS Plan
28Page 576
THE OPERATIONAL IS PLANThe Long-Term Operational IS Plan
Table 14.2 IS Long-Range Operational Plan Project Portfolio
29Page 576
THE OPERATIONAL IS PLAN
Table 14.3 Sample 2004 Operational IS Plan
30Page 577
THE OPERATIONAL IS PLANThe Short-Term Operational IS Plan
• Developed for a 1-year time period• Focuses on specific tasks to be completed
on projects that are currently underway or ready to be started
31Page 577-578
1. Early clarification of the purpose of the planning process2. Planning effort should be iterative3. Plan should reflect realistic expectations4. Process of setting expectations should involve business management5. Plans should integrate all applications of IT6. Plan will take into consideration the barriers and constraints facing all
organizations
GUIDELINES FOR EFFECTIVE PLANNING
32Page 578-579
• Better IS resource allocation• Communicating with top management• Helping vendors• Creating a context for decisions• Achieving integration and decentralization• Evaluating options• Meeting expectations of management
BENEFITS OF INFORMATION RESOURCES PLANNING
33Page 579
• Active participation• Accept most of responsibility for identifying specific projects
that contribute to vision• Stay involved in planning and system development activities• Regularly provide feedback and necessary input
ROLES IN THE INFORMATION RESOURCES PLANNING PROCESS
Role of the Business Manager
34Page 579-580
ROLES IN THE INFORMATION RESOURCES PLANNING PROCESSRole of the IS Professional
• Act more in consulting and planning role• Help business managers understand how their ideas for
competitive advantage can get built into a new information system
• Create a project plan • Combine technical and organizational skills
35
Questions?
