1 IT STRATEGY: S ETTING A D IRECTION FOR I NFORMATION R ESOURCES

2 W HY S ET A D IRECTION FOR I NFORMATION R ESOURCES? Page 559 To share information among diverse parts of the organization To communicate the future to others To provide a consistent rationale for making individual decisions Planning discussions help business managers and IS professionals in making decisions about how the “business” of IS will be conducted

3 T HE O UTPUTS OF THE D IRECTION- S ETTING P ROCESS Page 560 Information Resources Assessment Information resources assessment – includes inventorying and critically evaluating these resources in terms of how well they are meeting the organization’s business needs

4 O UTPUTS OF THE D IRECTION- S ETTING P ROCESS Page 560 Information Vision and Architecture Is an ideal view of the future Not the plan on how to get there Must be flexible enough to provide policy guidelines for individual decisions More than just fluff Must focus on the long term

5 O UTPUTS OF THE D IRECTION- S ETTING P ROCESS Page 560 Information Vision and Architecture Information vision – a written expression of the desired future about how information will be used and managed in the organization

6 O UTPUTS OF THE D IRECTION- S ETTING P ROCESS Page 560 Information Vision and Architecture Information vision – a written expression of the desired future about how information will be used and managed in the organization Information technology architecture – depicts the way an organization’s information resources will be deployed to deliver that vision

7 OUTPUTS OF THE DIRECTION- SETTING PROCESS Page 560 Information Resources Plans Strategic IS plan – contains a set of longer-term objectives that represent measurable movement toward the information vision and technology architecture and a set of associated major initiatives that must be undertaken to achieve these objectives

8 Page 560 Strategic IS plan – contains a set of longer-term objectives that represent measurable movement toward the information vision and technology architecture and a set of associated major initiatives that must be undertaken to achieve these objectives Operational IS plan – is a precise set of shorter- term goals and associated projects that will be executed by the IS department and by business managers in support of the strategic IS plan OUTPUTS OF THE DIRECTION- SETTING PROCESS Information Resources Plans

9 T HE P ROCESS OF S ETTING D IRECTION Assessment Vision Strategic Planning Operational Planning Page 561 Figure 14.1 The Information Resources Planning Process

10 T HE P ROCESS OF S ETTING D IRECTION Strategic Planning – the process of constructing a viable fit between the organization’s objectives and resources and its changing market and technological opportunities Page 561 Figure 14.1 The Information Resources Planning Process

11 T HE P ROCESS OF S ETTING D IRECTION Operational Planning – lays out the major actions the organization needs to carry out in the shorter term to activate its strategic initiatives Page 561 Figure 14.1 The Information Resources Planning Process

12 Business Plan vs. Strategy Page 560 Chesbrough and Rosenbloom (2003) Creating value vs. capturing value - the business model focus is on value creation. While the business model also addresses how that value will be captured by the firm, strategy goes further by focusing on building a sustainable competitive advantage. Business value vs. shareholder value - the business model is an architecture for converting innovation to economic value for the business. However, the business model does not focus on delivering that business value to the shareholder. For example, financing methods are not considered by the business model but nonetheless impact shareholder value. Assumed knowledge levels - the business model assumes a limited environmental knowledge, whereas strategy depends on a more complex analysis that requires more certainty in the knowledge of the environment.

13 T HE P ROCESS OF S ETTING D IRECTION Page 562 Needs-based IS planning or project- oriented IS planning: – Bottom-up, immediate approach to information resources planning – Used when a specific, urgent business need called for a new system – Emphasis on project planning rather than overall organizational planning Traditional Planning in the IS Organization

14 A SSESSING C URRENT I NFORMATION R ESOURCES Page 563 Information resources assessment: – Must measure current levels of information resources use within the organization and compare it to a set of standards Standards can come from: – Past performance – Technical benchmarks – Industry norms – “Best of class” estimates from other companies Measuring IS Use and Attitudes

15 A SSESSING C URRENT I NFORMATION R ESOURCES Page 563 IS mission statement: Sets forth the fundamental rationale (or reason to exist) for activities of the IS department Reviewing the IS Organizational Mission

16 Page 565 Reviewing the IS Organizational Mission Figure 14.3 IS-Prepared Mission Statement Example Example IS Mission Statement

17 A SSESSING C URRENT I NFORMATION R ESOURCES Page 565 Traditional goal: – Reduce cost by increasing operating efficiencies Scope of IS goals has expanded to include: – Systems to assist in decision making – Ways to help with competitive advantage Assessing Performance versus Goals

18 Page 565 Assessing Performance versus Goals Table 14.1 Objectives for the IS Department

19 Page 566 Information Vision: Represents how senior management wants information to be used and managed in the future Starts with speculation on how the business’s competitive environment will change and how the company should take advantage of it Business vision is specified and written Implications for information use are outlined C REATING AN I NFORMATION V ISION

20 Page 567 D ESIGNING THE A RCHITECTURE IT architecture – specifies how the technological and human assets and the IS organization should be deployed in the future to meet the information vision

21 Page 568 D ESIGNING THE A RCHITECTURE Components of Architecture Figure 14.5 Elements of an Information Technology Architecture

22 Page T HE S TRATEGIC IS P LAN Strategic IS Plan – statement of the major objectives and initiatives that the IS organization and business managers must accomplish over some time period in order to: move toward the information vision fit the business strategic plan

23 Page 570 T HE S TRATEGIC IS P LAN The Strategic IS Planning Process The planning process includes: Setting objectives Conducting internal and external analyses Establishing strategic initiatives

24 Page Critical success factors Analysis of Competitive Forces Value Chain Analysis T HE S TRATEGIC IS P LAN Tools for Identifying IT Strategic Opportunities

25 Page 575 Value Chain Analysis Figure Strategic Information Systems Opportunities in the Value Chain

26 Page 576 After the strategic plan, initiatives must be: – Identified – Translated into a set of defined IS projects with: Precise expected results Due dates Priorities Responsibilities T HE O PERATIONAL IS P LAN

27 Page 576 Developed for a 3-to-5 year time period Focuses on project definition, selection, and prioritization T HE O PERATIONAL IS P LAN The Long-Term Operational IS Plan

28 Page 576 T HE O PERATIONAL IS P LAN The Long-Term Operational IS Plan Table 14.2 IS Long-Range Operational Plan Project Portfolio

29 Page 576 T HE O PERATIONAL IS P LAN Table 14.3 Sample 2004 Operational IS Plan

30 Page 577 T HE O PERATIONAL IS P LAN The Short-Term Operational IS Plan Developed for a 1-year time period Focuses on specific tasks to be completed on projects that are currently underway or ready to be started

31 Page Early clarification of the purpose of the planning process 2.Planning effort should be iterative 3.Plan should reflect realistic expectations 4.Process of setting expectations should involve business management 5.Plans should integrate all applications of IT 6.Plan will take into consideration the barriers and constraints facing all organizations G UIDELINES FOR E FFECTIVE P LANNING

32 Page Better IS resource allocation Communicating with top management Helping vendors Creating a context for decisions Achieving integration and decentralization Evaluating options Meeting expectations of management B ENEFITS OF I NFORMATION R ESOURCES P LANNING

33 Page 579 Active participation Accept most of responsibility for identifying specific projects that contribute to vision Stay involved in planning and system development activities Regularly provide feedback and necessary input R OLES IN THE I NFORMATION R ESOURCES P LANNING P ROCESS Role of the Business Manager

34 Page R OLES IN THE I NFORMATION R ESOURCES P LANNING P ROCESS Role of the IS Professional Act more in consulting and planning role Help business managers understand how their ideas for competitive advantage can get built into a new information system Create a project plan Combine technical and organizational skills

35 Questions?