1. 41 4. Determining Current IS Needs Business environment Constituents of a business strategy Critical success factor analysis Business process analysis Organizational modeling

2. 42 Business Environment Business strategy –Purpose: To ensure that IS strategy supports rather than contradicts business strategy –Tools: Critical success factor analysis, balanced scorecard analysis, and business strategy analysis Business processes, activities, and key entities –Purpose: To understand important business tasks and processes, and the flow of information –Tools: Business process analysis, process flow diagrams, data flow diagrams, and entity relationship models Organizational environment –Purpose: To understand organizational arrangements, value system, and key people and their relationships –Tools: Organizational modeling

3. 43 Constituents of a Business Strategy Mission –Statement of overall purpose for the organization Vision –Brief description of the future that is consistent with the mission Objectives –Measurable targets that take the organization towards achieving its vision Strategies –Concrete ways to achieve the objectives (inputs from IS planning) Critical success factors –Areas where things must go right for the organization to flourish

4. 44 Critical Success Factor Analysis Objective: To achieve 1% growth in market share StrategyCritical success factorsIS implications 1. Improve sales in all stores at rates higher than industry average 1A. Competitive product pricing 1B. Salary of store managers 1A. Company product prices versus industry average 1B. Manager salary versus industry average 2. Improve sales of under-performing stores 2A. Level of advertising 2B. Variety of products 2A. Amount spent versus regional average 2B. Complements of high turnover products

5. 45 Critical Success Factor Analysis Hierarchy of critical success factors (industry, organizational, business unit, and manager) Derived from business strategy Key benefits –Clear relationship of IS plan to business plan –Involvement of top management in IS planning process –Definition of executive information needs –Helps to prioritize IS applications Can be used in conjunction with other tools (strengths-weaknesses-opportunities-threats analysis and balanced scorecard analysis)

6. 46 Business Process Analysis To gauge the ability of business processes to contribute to meeting business needs Assess the effectiveness of each business process against each critical business driver A business process is a logical collection of related business tasks Examples of critical business drivers –Production efficiency: Removal of duplication, removal of unnecessary checking, reduced transfers of responsibility, simplified procedures, and streamlined information flows –Customer satisfaction: Reduced time to process orders, reduced time to answer queries, and improved quality of products delivered, and improved quality of services rendered

7. 47 Business Process Analysis Driver 1Driver 2Driver 3Driver 4Total gap Weight 3Weight 4Weight 1Weight 5 Process 1Current 0/0 Potential 4/12 Gap 12 Current 2/10 Potential 6/30 Gap 20 Current 2/2 Potential 2/2 Gap 0 Current 0/0 Potential 2/8 Gap 8 Process 3 Process 2Current 2/6 Potential 6/18 Gap 12 Current 2/10 Potential 4/20 Gap 10 Current 0/0 Potential 6/6 Gap 6 Current 0/0 Potential 6/24 Gap 24 Current 0/0 Potential 2/6 Gap 6 Current 2/10 Potential 6/30 Gap 20 Current 4/4 Potential 6/6 Gap 2 Current 2/8 Potential 4/16 Gap 8 40 52 36 Contribution: 0 = nothing; 2 = minor; 4 = moderate; 6 = major Risk factors: 0 = nothing; 2 = minor; 4 = major; 6 = critical

8. 48 Business Process Analysis Potential improvement Potential risk 30 40 50 60 0246 + Process 1 + Process 2 + Process 3 Priority band 1Priority band 2Priority band 3Priority band 4

9. 49 Organizational Modeling Structured technique to ensure comprehensive examination of business and IS environments Documents environmental factors underlying each key business process Assesses the implications of changing each key business process Aid to decision making and communication Especially useful during business process re- engineering exercises

10. 50 Organizational Modeling Employees and tangible assets People Plant Equipments Social systems Culture Attitudes Relationships Technology Hardware Software Methods Organizational arrangements Structure Operations Job descriptions External environment Task nature Competition Legislation Dominant coalition Characteristics Goals Strategies Key business processes Acquisition Information gathering Decision making