2Information requirement analysis Identifying the information that is needed in order to operate and mange the organisation so that the organisation can identify what IS should deliver. What IS need to developed – IS strategy
3Determining the IS Demand One way is to ask each area of the business their requirements.Provide a wish list,No genuine priorities associated with the listNo knowledge of the inherent demand in the business strategy.
4Another way is a group charged with defining or updating the IS/IT strategy to Absorb every written strategy statementInterpret them into relevant IS/IT principles and CSFs, application requirements associated with major planned initiatives, and a set of supply criteria to deliver the service demanded by the business.IssuesStrategy is not well documented all the timeInability to feed into the development of strategy
5The best option is to develop the IS demand parallel with the business strategy. Feeding trends, ideas opportunities into the top level business strategyWorking closely with the areas of business in building up a set of achievable business and associated IS/IT initiatives that will deliver the targeted performance.
6Need to obtain a profound understanding of the drivers for change, derived from Needs and objectivesThe current situation (where we are)Articulate the situation being sought (where we want to be)Start to propose how the gaps might be closed (how to get there).These are achieved through a mixture of fact finding and analysis focused on the elements of the business and technical environments.
7Determine the IS demand SWOT CSFs Value Chain Business ModelCurrent and Expected Business and Technical EnvironmentsBusiness StrategyCurrent Status of IS/TDetermine the IS DemandPotential Status of IS/TIS//IT OpportunitiesProposed business initiativesProposed IS/IT initiativesImpact from IS//ITDetermine the IS demand
8Identify the components and associated information needs Determine how IS/IT can contribute to strengthening the business’s competitive positioningUnderstand the relevant organisational characteristics, SWOTs and other factorsCrystallise the essential characteristics of success in meeting the objectives stated in strategyIdentify the most important information flow through the business and across its value chain partnersBring into focus the potential opportunities for improving the value delivered by the informationDetermine the inventory of the ISs in use, in development and assess their contribution and potential.Analysis of business strategyAnalysis of current and expected future business environmentAnalysis of internal business environmentIdentification of Critical Success Factors of the businessIdentification and analysis of the internal and external value chainFurther value chain analysisEvaluation of the current application portfolio
9Critical Success Factors (CSFs) “things must go right” (Rockart, 1979) for the business to flourish“are those handful of things that within someone’s job must go right for the organisation to flourish. They are the factors that the manager wishes to keep a constant eye upon.” (Robson)“An internal or external business-related result that is measurable and that will have a major influence on whether a business segment meets its goals.” (Martin)“The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organisation ... If the results in these areas are not adequate, the organisation’s efforts for the period will be less than desired.” (Rockart)
10It can be used in number of different ways and for different purposes. CSF analysis is a popular and powerful in IS/IT strategy planning and business planning.It can be used in number of different ways and for different purposes.Most effective technique ininvolving the senior management in IS planning, because it is wholly rooted in business issuesand in gaining their commitment to proposed IS actions that contribute achievement in critical areasEnables linking of candidate IS projects through CSFs to objectivesIn individual interviews with senior management , it is a good catalyst in unearthing their own individual information needsBy providing a link between objectives and information requirements, the CSF can play an important role in prioritising candidate schemesIt is particularly useful in IS planning when the business strategy has not been progressed beyond objectives by focussing attention on the most critical aspects of the business that need action taken to improve their performance.It is extremely powerful when used alongside value chain analysis in identifying the most critical processes, and enabling ownership of the CSF and is associated actions to be accurately pinpointed.
11CSF analysis is used for the purpose of interpreting the business objectives, tactics and operational activities in terms of key information needs of the organisation and its managers, and strengths and weaknesses of the existing systems.
12Corporative Objectives Corporative CSFsBusiness Unit ObjectivesBusiness Unit CSFs
13So there are five influential factors to consider CSFs differ from industry to industry, between organisations within the same industry, and from one time period to another in the same organisation.So there are five influential factors to considerthe industry or sector – all the organisation within one industry will share thisthe competitive strategy or industry position – large players may determine these for the smaller playersenvironmental factors – the economy, country or politics etctemporal factors – those are not ‘normally’ of concern but are so ‘for a time’managerial position – CSF will vary with the level in the hierarchy.The higher up the management triangle more likely it is that CSF will be of the building variety – tracking the progress of changes.Lower level of management have CSFs relating to monitoring of current operations.
14Business Unit or Function CSFs Industry CSFsOrganisational CSFsBusiness Unit or Function CSFsManager’s CSFsCSFs Levels
15Understand the mission and objectives Determine the CSFs for each objectiveConduct a SWOT on each CSFDevelop measuresConsolidate across objectives and identify information dependenciesResult: guide for the executive information systemResult: outline plan of IS requirements
16CSFs are needs,They help to bridge the gap between those who can act upon information and those who can provide it.they do not specify information systems or applications.They identify information requirements which may be the basis of an information system.
17CSF KD KD KD IR IR IR Identify CSF Identify key decisions related to the CSFsKDKDKDIRIRKDs provide bridge to the information requirementsIR
18ExampleOne of the objectives of an oil company is “to achieve 1% growth in market share”TacticsCSFsMeasuresImprove the performance across all regions at rates in excess of the industry average.Competitive pricingRemuneration of site managersDistribution of sitesCompany prices versus average priceAmount paid versus industry averageProportion of top turnover sitesTo improve performance in those regions which are currently under performing to match national averageLevel of advertising, national and localSite density / market size ratioAmount spent versus industry average
19CSFs were identified with reference to the objective and its supporting tactics. Having determined appropriate measures, the organisation identified more activities that it needed to do to meet its CSFsSurvey pricesReview and survey salariesReview demographics of site locationsCompare advertising expenditure against the industry averageThese in turn each have information requirements and associated performance measurement activities.
202 Critical success Factors 1 Business objectivesRaise shares earningsIncrease market shareDevelop new businessDevelop internationally2 Critical success FactorsCreate new marketFind new productAutomate factoriesDevelop world wide imageImprove product quality3 information system needsDevelop customer intelligenceInstall new product databaseInvestigate FMSDevelop profit analysis and financial controlExplore CAD link with customersStrategy group identify and agree on the objective of the SBUManagement team interview managers, get opinions and resolve conflicts to agree. Reveal critical process and activitiesApply technology to products and process. Develop IS management support and co-ordinate and control critical activities.
21General guidelines on CSF CSFs are very flexible which can entice some organisations to be too casual about their use.Casual applications can provide false results.CSFs should used within the same precision on as formal methodsThe person managing the CSF study should have a thorough understanding of the organisation’s business.It is helpful to have a senior management championEducate the staff members involved in the CSF method before the actual interviewDo not link concrete information such as information needs, computer applications etc during the first round of interviews.Try to use several management levels in order to validate the CSFs and to get a broader picture and higher organisational CSFs.
22There are lots of derivatives of CSF analysis All follow the top down approachHenderson’s work on critical sets is a variant of CSF analysis.This model suggest a three stage process can identify the IS strategy.
23Understand the business using Five forces modelValue chainsIdentifying information needs usingCritical setsHigh level data modelRanking IS/IT opportunitiesPlacing onto a two by two matrix segmentRanking is done byAnalysing the critical/key assumptions by their degree of stability and their importance to the business strategyThen analysing the critical/key decisions by their importance to the business strategy and the scope there is for the IS/IT to enhance their decision making process
24Critical Success Factors Business StrategyFeedbackGoals of ManagementCritical Success FactorsCAS (Assumptions)CIS (Information)CDS (Decisions)MonitorInputSupportEIS AnalysisMIS AnalysisDSS AnalysisCSF extended: critical information set
25Low investment justifiable High investment justifiable Little or no investment justifiableStabilityLowLowHighImportanceCritical assumptions ranked by analysing them by their degree of stability and their importance to the business strategy
26Low development cost justifiable High development cost justifiable Little or no justifiable costLow development cost and/or higher operating cost justifiableScope for enhancementLowLowHighImportanceCritical decisions ranked by their importance to the business strategy and the scope there is for the IS/IT to enhance their decision making process
27LimitationsTo be of value, the CSF should be easily and directly related back to the objectives of the business unit under review. From experience people found generally it loses its value when used below third level in an organisation hierarchy.CSFs tend to be internally focused and analytical rather than creativeCSFs, partly, reflect a particular executives management style.Needs very skilled and very perspective interviewers to do the abstracting of CSFs from senior managersMangers who are not really involved with strategic planning find it difficult to apply CSF analysisIt is usually impossible to build a true picture of the organisations information requirements using only CSFs.Resultant decisions may ignore any resources constraints surrounding their management