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Chapter

9

Developing Business/InformationTechnology Strategies

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Learning Objectives

Discuss the role of planning in the business use of information technology, using the scenario approach and planning for competitive advantage.

Discuss the role of planning and business models in the development of e-business strategies, architectures, and applications.

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Learning Objectives (continued)

Identify several change management solutions for end user resistance to the implementation of new e-business strategies and applications.

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Section I

Planning Fundamentals

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Organizational Planning

The Planning ProcessTeam building, modeling, & consensusEvaluating organizational accomplishments

and the resources they have acquiredAnalyzing the business, economic, political,

and societal environmentAnticipating and evaluating the impact of

future developments

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Organizational Planning (continued)

The planning process (continued)Building a shared vision and deciding on

goalsDeciding what actions to take to achieve

goals

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Organizational Planning (continued)

Strategic Planning

Strategic Visioning

Tactical Planning

Operational Planning

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The Scenario Approach to Planning

Teams participate in a “microworld”A variety of business scenarios are createdAlternative scenarios are created by teams or

by business simulation software based on..A variety of developments, trends, and

environmental factors

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The Scenario Approach to Planning (continued)

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Planning for Competitive Advantage

Especially important in today’s competitive, complex environment

Involves an evaluation of potential benefits and risks

May include the competitive forces and competitive strategies models, as well as a value chain model of basic business activities

Use a strategic opportunities matrix to evaluate strategic potential

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Planning for Competitive Advantage (continued)

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Planning for Competitive Advantage (continued)

SWOT analysisStrengths (internal)Weaknesses (internal)Opportunities (external)Threats (external)

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Business Models and Planning

A conceptual framework that expresses the underlying economic logic and system that prove how a business can deliver value to customers at an appropriate cost and make money.

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Business Models and Planning (continued)

Specifies what value to offer customers, and which customers to provide this value to using which products and services at what prices.

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Business Models and Planning (continued)

Specifies how the business will organize and operate

Focuses attention on how all the essential components fit into a complete system

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e-Business Planning

The e-Business planning process has three major componentsStrategy developmentResource managementTechnology architecture

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e-Business Planning (continued)

IT architecture major componentsTechnology platformData resourcesApplications architectureIT organization

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Identifying e-Business Strategies

The Strategic Positioning MatrixCost and efficiency improvements

Low level of connectivity and use of ITStrategy: use the Internet and Web to

communicate and interact

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Identifying e-Business Strategies (continued)

Strategic Positioning Matrix (continued)Performance improvements in business

effectivenessHigh level of internal connectivity and

pressures to substantially improve business processes, external connectivity is low

Strategy: making major improvements in business effectiveness. Use intranets and extranets to connect the organization with stakeholders

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Identifying e-Business Strategies (continued)

Strategic Positioning Matrix (continued)Global Market Penetration

Must capitalize on a high degree of customer and competitor connectivity and use of IT.

Strategy: develop e-business and e-commerce applications to optimize interaction with customers and build market share.

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Identifying e-Business Strategies (continued)

Strategic Positioning Matrix (continued)Product and Service Transformation

All stakeholders are extensively networkedStrategy: implement Internet-based

technologies including e-commerce websites and e-business intranets and extranets.

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Identifying e-Business Strategies (continued)

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e-Business Application Planning

Begins after the strategic phase has occurredIncludes..

Evaluation of proposals for using IT to accomplish the strategic priorities

Evaluation of the business case for investing in e-business development projects

Developing and implementing e-business applications and managing the development projects

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e-Business Application Planning (continued)

Another alternative for planning – e-business architecture planningCombines contemporary methods and

alternative planning scenarios with methodologies such as component-based development

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Section II

Implementation Challenges

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Implementation

A process of carrying out the plans for change in e-business strategies and applications that were developed during the planning process.

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Implementing IT

Requires managing the effects of major changes in key organizational dimensions such as business processes organizational structureManagerial rolesEmployee work assignmentsStakeholder relationships

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Implementing IT (continued)

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End User Resistance and Involvement

Change can generate fear and resistance to change

Keys to countering end user resistanceProper education and trainingEnd user involvement in organizational

changes

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End User Resistance and Involvement (continued)

End user involvement in the development of new information systems

Involvement and commitment of top management and all business stakeholders

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Change Management

People are a major focus of organizational change managementDeveloping innovative ways to measure,

motivate, and reward performanceDesigning programs to recruit and train

employees in the core competenciesAlso involves analyzing and defining all

changes facing the organization

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Change Management (continued)

Key tactics for change

Involve as many people as possibleMake constant change an expected part of

the organizational cultureTell everyone as much as possible about

everything as often as possible, preferably in person

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Change Management (continued)

Key tactics for change (continued)

Make liberal use of financial incentives and recognition

Work within the company culture

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Change Management (continued)

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Change Management (continued)

A change management process

Create a change visionDefine a change strategyDevelop leadershipBuild commitment

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Change Management (continued)

Change management process (continued)

Manage people performanceDeliver business benefitsDevelop cultureDesign organization

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Discussion Questions

Planning is a useless endeavor, because developments in e-business and e-commerce, and in the political, economic, and social environments are moving too quickly nowadays. Do you agree with this statement?

“Planning and budgeting processes are notorious for their rigidity and irrelevance to management action.” How can planning be made relevant to the challenges facing an e-business enterprise?

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Discussion Questions (continued)

What planning methods would you use to develop e-business and e-commerce strategies and applications for your own business?

What are several e-business and e-commerce strategies and applications that should be developed and implemented by many companies today?

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Discussion Questions (continued)

How can a company use change management to minimize the resistance and maximize the acceptance of changes in business and technology?

“Many companies plan really well, yet few translate strategy into action.” Do you think this is true?

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Discussion Questions (continued)

What major business changes beyond e-business and e-commerce do you think most companies should be planning for the next ten years?

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Real World Case 1 – The Rowe Cos. & Merrill Lynch

What are the benefits and possible limitations of the Rowe Companies ROI methodologies for IT project planning?

What is the business value of the ROI evaluation methodology required for project planning by Merrill Lynch?

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Real World Case 1 (continued)

Do you agree with the IT investment decisions being made by the Rowe Companies in response to changing economic conditions?

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Real World Case 1 (continued)

How can a company identify, measure, and compare the business/IT innovation as well as the profitability of IT projects in their planning process?

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Real World Case 2 – Verizon, F.X. Coughlin, & A-dec

Implementation challenges

What business benefits resulted from the integration projects of Verizon Wireless, F.X. Coughlin, and A-dec?

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Real World Case 2 (continued)

What change management challenges surfaced in each project?

Where those challenges handled properly by the companies involved?

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Real World Case 2 (continued)

What are several change management actions these companies could have taken to increase the acceptance of their IT integration challenges?

What other change management methods could be used to improve the acceptance of business/IT changes like those implemented at each company?

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Real World Case 3 – PeopleFirst, Cessna, Allstate, & Sprint

Challenges of Implementing CRM Systems

What are several reasons for the high failure rate in implementing CRM systems?

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Real World Case 3 (continued)

What could PeopleFirst and Cessna have done to avoid the failures in their first tries at implementing CRM systems?

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Real World Case 3 (continued)

How have Allstate and Sprint Corp. helped to ensure their successful CRM implementations?

What are other things companies could do to help implement CRM systems?

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Real World Case 4 – Corning Inc.

Business/IT Planning Strategies in Challenging Times

Do you agree with how CIO Richard Fishburn has defended Corning’s IT department from an economic downturn?

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Real World Case 4 (continued)

Why is aligning IT projects with business objectives a good business/IT strategy in challenging economic times?

And in good times?

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Real World Case 4 (continued)

Does Corning’s business/IT planning process for its new production and supply chain system prove the value of aligning IT with business goals?

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Real World Case 5 – Cincinnati Bell

Change Management Challenges of Business Convergence

Was the reorganization of Cincinnati Bell as revealed in this case a good business strategy?

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Real World Case 5 (continued)

Were the change management methods revealed in this case adequate for the changes being made?

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Real World Case 5 (continued)

What further changes should be made in IT systems to better support Cincinnati Bell’s business convergence?