McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 11 Business/IT Strategies for Development

11-2 Learning Objectives  Discuss the role of planning in the business use of information technology, using the scenario approach, and planning for competitive advantage as examples.  Discuss the role of planning and business models in the development of business/IT strategies, architectures, and applications.  Identify several change management solutions for end-user resistance to the implementation of new IT-based business strategies and applications.

11-3 Section 1 IT Planning Fundamentals

11-4 I. Introduction  Simply knowing the importance and structure of e- business is not enough. A Plan is needed to transition from an old business design to a new e-business design.

11-5 II. Organizational Planning  Enterprise-wide plans are required to introduce IT/IS-based solutions to the entire firm.  Strategic Planning – develop a firm’s mission, goals, policies  Tactical Planning – develop objectives, procedures, rules, schedules, budgets  Operational Planning – implement/control day-to-day operations

11-6 III. The Scenario Approach  A less rigid but more realistic strategic planning methodology; combine known facts about the future with plausible alternatives  Knowledge:  Trends – Things we think we know something about  Uncertainties – Elements we consider uncertain or unknowable

11-7 III. The Scenario Approach Components of an Organizational Planning Process

11-8 III. The Scenario Approach Strategic Visioning Questions for e-Business

11-9 III. The Scenario Approach Converging Trends in Strategic Business/IT Planning

11-10 Risk Assessment and Mitigation  What are the four types of IT risks listed?  Describe each risk.  What could a firm do to mitigate each risk?

11-11 IV. Planning for Competitive Advantage  Evaluation of potential benefits/risk of using IT for competitive advantage  SWOT ( strengths, weaknesses, opportunities, threats) Analysis – evaluate impact of each possible strategic opportunity  Strengths – core competencies and resources  Weaknesses – areas of substandard performance  Opportunities – potential for new markets or innovation  Threats – potential for losses

11-12 Bristow Helicopters: Technology-Supported SWOT and Much More  What needs did Bristow have?  What key goal is identified?  What software technology was used to make these changes?  How did the software work to accomplish this?

11-13 V. Business Models and Planning  Conceptual framework of how a business can deliver value to customers at a cost and still turn a profit

11-14 V. Business Models and Planning Questions for All Business Models

11-15 V. Business Models and Planning Questions for e-Business Models

11-16 Iridium Satellite: Finding the Right Business Model  What product/market did Iridium originally service?  What product/market have they moved to?  Why is this different from the way they previously competed?

11-17 VI. Business/IT Architecture Planning  Plans on how to use IT to support customer value and business value goals  Strategic Development – business strategies that support a firm’s business vision  Resource Management – strategic plans for managing or outsourcing a firm’s IT resources  Technology Architecture – strategic IT choices reflecting an IT architecture that supports a firm’s e-business and other IT initiatives

11-18 VI. Business/IT Architecture Planning  Information Technology Architecture – blueprint that contains:  Technology Platform – complete infrastructure supporting strategic use of IT for e-commerce and business/IT applications  Data Resources – databases and data warehouses  Application Architecture – business applications  IT Organization – organizational structure of the IS function within a firm

11-19 VI. Business/IT Architecture Planning  Balanced Scorecard – measuring a company’s activities in terms of its visions and strategies; not based on proven economic theory or decision sciences  Financial Perspectives – measures of financial performance  Customer Perspective – measures directly impacting customers  Business Process Perspective – measures performance of key business processes  Learning and Growth Perspective – measures the firm’s learning curve

11-20 VII. Identifying Business/IT Strategies  To optimize strategic impact, firms must continually assess the value of IT/e-commerce applications  Cost and Efficiency Improvements – low internal/external connectivity and low use of IT  Performance Improvement in Business Effectiveness – high internal but low external connectivity, need to improve collaboration  Global Market Penetration – high external connectivity and use of IT  Product and Service Transformation – extensively networked internally and externally

11-21 e-Business Strategy Examples  Describe each example listed.  Discuss each example and how it could be used in a particular business.  Identify businesses (not those listed) that could utilize each example.

11-22 VIII. Business Application Planning  IT proposals for addressing strategic business priorities and planning for application development  Business/IT Architecture Planning – combines strategic planning methods (SWOT, etc.) with recent modeling and development methodologies

11-23 VIII. Business Application Planning E-Business Architecture Planning

11-24 KI: The Importance of Strategic Planning  Why is forming a strategic IT plan difficult at most companies?  What was the problem at KI?  How has developing a strategic IT plan helped the firm overall?  What pitfalls, resistance, and cultural issues might have been stumbling blocks along the way?

11-25 The Role of IT in Business Process Design  Why might IT personnel be in a better position to see organizational needs than other personnel?  Why would IT be in the right place to provide solutions to these needs?  What organizational and cultural issues might be stumbling blocks to adopting these solutions?

11-26 Section 2 Implementation Challenges

11-27 I. Implementation  Carrying out the strategic plans developed in the planning process

11-28 II. Implementing Information Technology  Moving to e-business involves major organizational change

11-29 II. Implementing Information Technology Impact and Scope of Business Change Caused By IT Implementation

11-30 III. End-User Resistance and Involvement  New ways of doing things always generates some resistance from those affected; end-user involvement in the change process can help minimize the resistance

11-31 III. End-User Resistance and Involvement Obstacles to Knowledge Management Systems

11-32 Société de Transport de Montréal: Smooth Ride after a Bumpy Start  What problem did STM have?  Why did this problem occur?  How did the IT staff work to resolve this problem?  What other issues/areas might this same problem arise within?  Why would the same problem manifest itself in other ares?

11-33 Understanding the Science Behind Change  What was the problem in IT at Blue Cross?  What causes these problems?  How does understanding the problem help?  How did Blue Cross address the problem?

11-34 IV. Change Management  Managing organizational change is important and can be difficult; people are a major focus here  A Change Management Process – these 8 steps are just one way of visioning change management

11-35 IV. Change Management Key Dimensions of Change Management

11-36 DHL Express: The Challenges of Global Change  What are the two extremes of the pendulum for IT?  What as the problem at DHL?  What solution did DHL provide for this problem?  How does this affect the IT department?  How does it affect DHL?

11-37 Reuters: Implementing Global Shared Services  What problem did Reuters have, and why?  What solution did they adopt?  Discuss the meaning of this solution.  How did this work out for Reuters?