Business/Information Technology Strategies Chapter 9 Developing Business/Information Technology Strategies

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.

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

Planning Fundamentals Section I Planning Fundamentals

Organizational Planning The Planning Process Team building, modeling, & consensus Evaluating organizational accomplishments and the resources they have acquired Analyzing the business, economic, political, and societal environment Anticipating and evaluating the impact of future developments

Organizational Planning (continued) The planning process (continued) Building a shared vision and deciding on goals Deciding what actions to take to achieve goals

Organizational Planning (continued) Strategic Planning Strategic Visioning Tactical Planning Operational Planning

The Scenario Approach to Planning Teams participate in a “microworld” A variety of business scenarios are created Alternative scenarios are created by teams or by business simulation software based on.. A variety of developments, trends, and environmental factors

The Scenario Approach to Planning (continued)

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

Planning for Competitive Advantage (continued)

Planning for Competitive Advantage (continued) SWOT analysis Strengths (internal) Weaknesses (internal) Opportunities (external) Threats (external)

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.

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.

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

e-Business Planning The e-Business planning process has three major components Strategy development Resource management Technology architecture

e-Business Planning (continued) IT architecture major components Technology platform Data resources Applications architecture IT organization

Identifying e-Business Strategies The Strategic Positioning Matrix Cost and efficiency improvements Low level of connectivity and use of IT Strategy: use the Internet and Web to communicate and interact

Identifying e-Business Strategies (continued) Strategic Positioning Matrix (continued) Performance improvements in business effectiveness High 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

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.

Identifying e-Business Strategies (continued) Strategic Positioning Matrix (continued) Product and Service Transformation All stakeholders are extensively networked Strategy: implement Internet-based technologies including e-commerce websites and e-business intranets and extranets.

Identifying e-Business Strategies (continued)

e-Business Application Planning Begins after the strategic phase has occurred Includes.. 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

e-Business Application Planning (continued) Another alternative for planning – e-business architecture planning Combines contemporary methods and alternative planning scenarios with methodologies such as component-based development

Implementation Challenges Section II Implementation Challenges

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

Implementing IT Requires managing the effects of major changes in key organizational dimensions such as business processes organizational structure Managerial roles Employee work assignments Stakeholder relationships

Implementing IT (continued)

End User Resistance and Involvement Change can generate fear and resistance to change Keys to countering end user resistance Proper education and training End user involvement in organizational changes

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

Change Management People are a major focus of organizational change management Developing innovative ways to measure, motivate, and reward performance Designing programs to recruit and train employees in the core competencies Also involves analyzing and defining all changes facing the organization

Change Management (continued) Key tactics for change Involve as many people as possible Make constant change an expected part of the organizational culture Tell everyone as much as possible about everything as often as possible, preferably in person

Change Management (continued) Key tactics for change (continued) Make liberal use of financial incentives and recognition Work within the company culture

Change Management (continued)

Change Management (continued) A change management process Create a change vision Define a change strategy Develop leadership Build commitment

Change Management (continued) Change management process (continued) Manage people performance Deliver business benefits Develop culture Design organization

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?

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?

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?

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?

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?

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?

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?

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?

Real World Case 2 (continued) What change management challenges surfaced in each project? Where those challenges handled properly by the companies involved?

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?

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?

Real World Case 3 (continued) What could PeopleFirst and Cessna have done to avoid the failures in their first tries at implementing CRM systems?

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?

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?

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?

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?

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?

Real World Case 5 (continued) Were the change management methods revealed in this case adequate for the changes being made?

Real World Case 5 (continued) What further changes should be made in IT systems to better support Cincinnati Bell’s business convergence?