2 Learning ObjectivesDiscuss the role of planning in the business use of information technology, using the scenario approach and planning for competitive advantage as examplesDiscuss the role of planning and business models in the development of business/IT strategies, architectures, and applicationsIdentify several change management solutions for end user resistance to the implementation of new IT-based business strategies and applications
3 Planning Fundamentals IT created a seismic shiftJust knowing the importance and structure of e-business is not enoughMust be able to transform an old business design to a new e-business designInformation technology has created a seismic shift in the way companies do businessJust knowing the importance and structure of e-business is not enoughYou must create and implement an action plan that allows you to make the transition from an old business design to a new e-business design
4 RWC 1: IT/Business Alignment One Goal – Winning CustomersEvery executiveEvery managerEvery employeeCritical SkillsMeeting or beating goalsExternal customer focusIdentifying and seizing commercial opportunitiesDifferentiating component – IT CapabilityMore than providing systemsBe part of the system
5 Components of Organizational Planning Strategic PlanningDeals with the development of an organization’s mission, goals, strategies, and policiesBegins with strategic visioning questionsTactical PlanningThe setting of objectives and the development of procedures, rules, schedules, and budgetsOperational PlanningDone on a short-term basis to implement and control day-to-day operations
6 Virtual world (microworld) exercises Scenario ApproachGaining popularityLess formalVirtual world (microworld) exercisesBusiness scenarios are created and evaluatedAlternative scenarios are then createdGaining in popularity as a less formal, but more realistic, strategic planning methodologyTeams of managers and planners participate in microworld or virtual world exercisesBusiness scenarios are created and evaluatedAlternative scenarios are then created
8 Trends that Affect Strategic Planning Planning for Competitive AdvantageStrategic business/IT planningInvolves evaluating the potential benefits and risks of using IT-based strategies and technologies for competitive advantageThe following models can help generate ideas for the strategic use of IT to support initiativesCompetitive forcesCompetitive strategiesValue chain
10 SWOT Analysis Strengths Weaknesses Opportunities Threats Core competencies and resourcesWeaknessesAreas of substandard business performanceOpportunitiesPotential for new business markets or innovative breakthroughsThreatsPotential for business and market lossesSWOT stands forStrengths: a company’s core competencies and resourcesWeaknesses: areas of substandard business performance compared to othersOpportunities: potential for new business markets or innovative breakthroughs that might expand current marketsThreats: anything that has the potential for business and market losses
11 Business Models and Planning Vital questionsWho are our customers?What do our customers value?How much will it cost to deliver that value?How do we make money in this business?Business model answers vital questions about the fundamental components of a business
12 Questions for Business Models Business model answers vital questions about the fundamental components of a business
13 The Business/IT Planning Process Business Models as Planning ToolsA business model forces rigorously and systematic thinking about the value and viability of business initiativesThe strategic planning process is then used to develop unique business strategies that capitalize on a business modelThe goal is to gain a competitive advantage in an industry or marketplaceThe business/IT planning process has three major componentsStrategic developmentResource managementTechnology architecture
14 Information Technology Architecture Conceptual design componentsTechnology platformData resourcesApplication architectureIT organizationThe IT architecture is a conceptual design that includes these major componentsTechnology platformData resourcesApplication architectureIT organization
15 Measures activities in terms of vision and strategies Balanced ScorecardMeasures activities in terms of vision and strategiesFinancial performanceImpact on customersPerformance of key business processesCompany’s learning curve and growthFour processesTranslate vision into operational goalsCommunicate vision and link to performanceBusiness planningFeedback/learning and strategy adjustmentThe balanced scorecard measures a company’s activities in terms of vision and strategiesThe business perspectives a scorecard measuresFinancial: reflects financial performance, such as cash flow or ROICustomer: measures having a direct impact on customers, such as time to process phone callsBusiness process: reflects the performance of key business processes, such as time spent prospecting or process costsLearning/growth: the company’s learning curve, such as how many hours are spent training staffThe system has four processesTranslating vision into operational goalsCommunicating the vision and linking it to individual performanceBusiness planningFeedback/learning and strategy adjustment
19 Cost and Efficiency Improvements Strategic MatrixCost and Efficiency ImprovementsLow internal and low external connectivityRecommend – Use the Internet as a fast, low-cost way to communicate and interact with othersPerformance Improvement in EffectivenessHigh internal but low external connectivityRecommend – Increase use intranets and extranetsStrategic MatrixCost and Efficiency ImprovementsUse the Internet as a fast, low-cost way to communicate and interact with othersUse of , chat systems, discussion groups, and company websitesPerformance Improvement in EffectivenessMajor improvements in business effectiveness recommendedIncrease use of Internet-based technologies, such as intranets and extranets
20 Global Market Penetration Strategic StrategiesGlobal Market PenetrationHigh external but low internal connectivityCapitalize with e-commerce websites using value-added information services and extensive online customer supportProduct and Service TransformationHigh external and high internal connectivityDevelop and deploy new Internet-based products and services to create a new strategic position in the marketplaceStrategic StrategiesGlobal Market PenetrationCapitalize on a high degree of customer and competitor connectivity and use of ITUse e-commerce websites with value-added information services and extensive online customer supportProduct and Service TransformationDevelop and deploy new Internet-based products and services that strategically reposition it in the marketplace
21 E-Business Strategy Examples Market CreatorChannel ReconfigurationTransaction IntermediaryInfomediary:Self-Service InnovatorSupply Chain InnovatorChannel MasteryMarket CreatorBe among the first to market and remain ahead of the competition by continuously innovatingChannel ReconfigurationUse the Internet to directly access customers, make sales, and fulfill ordersTransaction IntermediaryUse the Internet to process purchasesInfomediary:Use the Internet to reduce the search costOffer a unified process for collecting the information needed to make a large purchaseSelf-Service InnovatorProvide a comprehensive suite of services that the customer’s employees can use directlySupply Chain InnovatorUse the Internet to streamline supply chain interactionsChannel MasteryUse the Internet as a sales and service channel
25 Implementation Challenges Do what you planned to doCritical skill for managersMany companies are good at planningFew are good at executing the planEven if senior management consistently identifies e-business as an area of great opportunity and critical needImplementationDo what you planned to doCritical skill for managersMany companies plan changes very wellFew manage to convert a plan into actionThis is true even if senior management consistently identifies e-business as an area of great opportunity
26 People skills critical to project success RWC 2: Project SuccessPeople skills critical to project successTeamworkSupport during tough timesBad relationships leading cause of failureManagers tend to go to software instead of building relationsShowing progress at short intervals helps
27 Implementing Information Technology Developments that have generated organizational changeBusiness process reengineeringERP systemsY2K complianceShared service centersJust-in-time manufacturingSales force automationContract manufacturingIntroduction of Euro currencyE-business is the latest catalystMany businesses have undergone multiple major reorganization since the early 1980sBusiness process reengineeringInstallation and upgrades of an ERP systemUpgrading legacy systems to be Y2K compliantCreating shared service centersJust-in-time manufacturingSales force automationContract manufacturingThe introduction of euro currencyE-business is the latest organizational change
29 Impact and Scope of Implementing IT Intranet Enterprise Portal ChallengesSecurity, security, securityDefining the scope and purpose of the portalFinding the time and the moneyEnsuring consistent data qualityGetting employees to use itOrganizing the dataFinding technical expertiseIntegrating the piecesMaking it easy to useProviding all users with accessEnterprise Resource Planning ChallengesGetting end user buy-inScheduling/planningIntegrating legacy systems/dataGetting management buy-inMultiple/international sites and partnersChanging culture and mind-setsIT trainingGetting, keeping IT staffMoving to a new platformPerformance/system upgrades
30 End User Resistance and Involvement Change generates resistanceExamples:Customer Relationship Management (CRM)Knowledge Management Systems (KM)CRM failuresCRM failure rate up to 75 percentCauses for failureSales force automation problemsUnaddressed cultural issuesSales staffs fearful and thus resistantAny new way of doing things generates some resistance from the people affectedCRM projects have a history of failureUp to 75 percent of CRM projects fail to meet their objectivesThis is often due to sales force automation problems and unaddressed cultural issuesSales staffs are often resistant to, or fearful of, using CRM systems
32 Keys to Solving End User Resistance Create relationshipsUnderstand the end-user’s situationProvide education and trainingRequire involvement and commitmentEnd-usersTop managementAll stakeholdersEliminate frustration and inconvenienceUnderstanding the end-user’s situationEducation and trainingEnd-user involvement in organizational changes and system developmentRequiring involvement and commitment of top management and all stakeholdersSystems that inconvenience or frustrate users cannot be effective, no matter how technically elegant or efficient
33 Key Dimensions of Change Management People factors have the highest level of difficulty and longest time to resolve of any dimension of change management.Thus, people are a major focus of organizational change management. This includesactivities such as developing innovative ways to measure, motivate, and reward performance.It is important to design programs to recruit and train employees in the core competencies required in a changing workplace.
34 Change Management Programs Develop a change action planAssign managers as change sponsorsDevelop employee change teamsEncourage open communications and feedback about organizational changes
35 Change Management Tactics Involve as many people as possible in e-business planning and application developmentMake constant change an expected part of the cultureTell everyone as much as possible about everything, as often as possible, in personMake liberal use of financial incentives and recognitionWork within company culture, not around it
36 A Change Management Process A process of change management. Examples of the activities involved in successfully managing organizational change caused by the implementation of new business processes.This eight-level change management model is only one of many that could beapplied to manage organizational changes caused by new business/IT strategies andapplications and other changes in business processes.This model suggests that the business vision created in the strategic planning phase should be communicated in a compelling change story to the people in the organization. Evaluating thereadiness for changes within an organization and then developing change strategies and choosing and training change leaders and champions based on that assessment could be the next steps in the process.
37 Avnet Marshall’s Transformation Avnet Marshall moved through several stages of organizational transformation as it implemented various e-business and e-commerce applications, driven by the customer value focus of its Free.Perfect.Now business model.
38 RWC 3: Crucial Strategic Planning Elements Alignment between business and ITIT strategic plan to improve the business-IT relationshipArticulate how IT fits into business and overall business strategy.Apply clear strategy to business activitiesThe alignment between business and IT strategy is crucial to business success; sometimes it is IT that makes it happen.For most CIOs, putting together an IT strategic plan which helps to improve the business-IT relationship is very important.Businesses may not have a clear strategy or they may have some strategies, but they may not apply to all the business activities taking place.IT can help the business articulate how IT fits into business and influence overall business strategy.
39 RWC 4: The Science behind Change Implementing changes is very challengingEmployees resist changeUnderstanding can lead to smoother transitionsNot everyone is motivated by ambitionEducation and training aid with acceptanceImplementing changes needed by new information systems in an organization is very challenging as employees resist change .Understanding the science behind change and resistance to change can lead to more effective approaches to foster involvement and smooth out transitions to new systems.One of the biggest mistakes managers make is assuming that everyone is motivated by ambition.Many people are motivated as much or more by the work they do as they are by the opportunity to move up in the hierarchy.One way to manage change is through education and training. Employees accept change if they are provided proper education and training on the new system that is being implemented.