Strategic Management of IS/IT

Context of This SessionExternal Business Environment

Internal Business Environment

Internal IS/IT environment

Current Applications Portfolio

External IS/IT Environment

Planning Approaches, Tools and Techniques

Strategic IS/IT Planning Process

IS/IT Management Strategy Business IS Strategies IT Strategy

Applications Portfolio Model & Matrices

We are here …

Strategic Planning Vs. Strategic Management

Fokus pada pembuatan keputusan tentang strategi yang optimal

Suatu proses analitik

Fokus kepada variabel-variabel bisnis, ekonomi dan teknologi

Fokus kepada hasil dari penerapan strategi

Suatu proses aksi Fokusnya diperluas

sehingga mencakup juga variabel-variabel psikologi, sosiologi dan politik

Strategic Management Requirement Strategic Management is a combination of formal

planning, creativity, innovation, informal thinking and opportunism.

Requires some feedback or control mechanism to ensure that plans and their implementation are appropriate for the strategic direction or to enable changes of direction should achievement prove impossible. (See Figure 8.2)

Many organizations have suffered the consequences of lack of coordination in IS/IT Management, which can cause the existing (and potential) application portfolios effectively to disintegrate (see Figure 8.3).

The Impact of IS/IT Strategy Failure1. The systems that are developed and implemented do not

meet overall business needs;2. Resources are misused;3. Strategy formulation is essentially a retrofitting process,

producing enormous rework.The causes of IS/IT Strategy

Failure1. Lack of alignment between the business and IS strategies;2. Uncoordinated management of IS demand and IT supply;3. Over-centralization or decentralization of responsibility

Aspects of IS/IT Management Managing the information and data resource of the

organization to ensure that its business value is fully exploited and protected

Managing applications as investments, development projects and operational systems from the establishment of requirements to successful long-term use in the business

Managing information technology: introduction, development, utilization, replacement

Organizational management of IS/IT: related to resources, activities, administration.

IS/IT Organization Strategies

Written-formal: the approach is very structured and procedural Applied to key operational and support

Personal-formal: the approach is partially structured which relies on individuals reaching agreement within a formally constituted group process

Personal-informal: no formal planning relationship exists between IS, senior and line managers

Central Objectives of the IS/IT Management Strategy

The Roles of IT Division

User services: delivery services, systems development, support center, information center

Architecture management: planning, technology diffusion, data management

Technology development: research and development

General: administration, quality assurance

Imperatives for the Management of IS/IT1. Achieve two-way alignment between the business and

IS/IT strategy;2. Develop effective relationships with line management;3. Deliver and implement new systems;4. Build and manage IT infrastructure;5. Re-skill the IS function with new competencies and

knowledge;6. Manage vendor partnerships;7. Redesign and manage the federal IS organization

Four Components Reflects the Strategic Role for IT

The cost centre has an operational focus that minimizes risks with an emphasis on operational efficiency. Cost-centre activities are good candidates for outsourcing.

The service centre, although still minimizing risk, aims to create an IT-enabled business capability to support current strategies.

The investment centre has a long-term focus and aims to create new IT-based business capabilities. It seeks to maximize business opportunity from IT resources.

The profit centre is designed to deliver IT services to the external marketplace for incremental revenue and for gaining valuable experience in becoming a world-class IS function.

Five Key Competencies IT leadership, which includes IT envisioning, fusing IT

strategy with business strategy, and managing IS resources.

Architecture development, which is concerned with developing a blueprint for the overall IT technical design.

Business enhancement, which includes business process analysis and design, project management and managing relationships with users.

Technology advancement, which is application design and development.

Vendor management, which includes managing and developing relationships with vendors and suppliers, negotiating and monitoring contracts and purchasing.

Five Roles Critical to Success of Today’s CIO Leadership; Visionary; Relationship builder; Politician; Deliverer.

Establishing IS/IT Committees

Ensuring top management involvement in IS planning; Ensuring the fit between IS and business strategy; Improving communication with top and middle

management; Changing user attitudes to IT.

The Culture Gap

Lack of shared values

No agreed strategy Failed projects and

systems