CISB444 - Strategic Information Systems Planning Chapter 3 : Developing an IS/IT Strategy: Establishing Effective Processes Part 2

Chapter 3 : Main Topics Establishing an IS/IT Strategy Process An IS/IT Strategy Framework and Approach Deliverables from the IS/IT Strategy Process2 Chapter 3 : Developing an IS/IT Strategy: Establishing Effective Processes Part 2

Establishing an IS/IT Strategy Process A Continuous Process Strategies and plans are refreshed regularly/frequently according to: – External forces – Business needs and opportunities – Culture of the organisation – Benefits delivered by implementation of the strategy 3

Establishing an IS/IT Strategy Process A learning process Both IS specialist and business people are more aware of business and technology issues. Learning to identify and exploit opportunities cooperatively Partnership between the IS function and the rest of the organisation reorientates itself to treat information, systems, and technology as core resources of the business 4

Establishing an IS/IT Strategy Process Initiating the Strategy Cycle It is crucial to spend time planning for planning Before embarking on an IS/IT strategy process, organisation need to answer a list of key questions - to create the Terms of Reference (TOR) There is no one ‘best’ way to tackle strategy formulation and planning for IS/IT - essential to assess the situation and the needs carefully, and then to deploy the most appropriate people, methods, and techniques to suit this context. Each organisation merits a different approach 5

Establishing an IS/IT Strategy Process Establishing Success Criteria – Start with defining appropriate relationship between the IS function and the business – Establish objectives for IS/IT Any objectives set for IS/IT must be similar to those for the business e.g. improving customer service, enhancing productivity or providing the means for product differentiation – Establishing criteria for how success will be measured 6

Establishing an IS/IT Strategy Process “The primary objective of developing an IS strategy is to identify a value-added portfolio of applications that will have a strategic impact on the organisation and increase its performance” – Key challenges to achieve the above: How to relate the IS strategy to organisational performance How to define and measure strategic impact – Reasons for the above challenges: Long lead time before benefits are realised The intangible nature of certain benefits Different purposes for engaging in an IS/IT strategy process 7

Establishing an IS/IT Strategy Process Success dimensions (ask if by the strategy can..) – improve the contribution of IS/IT to the performance of the organisation – achieve good alignment of IT investment with the business strategy – gaining competitive advantage through deployment of IS/IT – identify new and higher payback applications – increasing top-management commitment – improving communications with users – achieve better forecasting of IT resource requirements – improved allocation of IT resources – increased visibility for IS/IT in the organisation. 8

An IS/IT Strategy Framework and Approach The process of strategy formulation for effective exploitation of IS/IT needs to address several dimensions within its overall scope, and, thus a combination of approaches and tools are required. Because of the legacy of current information and systems infrastructure, this could be a very complex and costly operation, and requires careful justification 9

The IS/IT Strategic Model - Inputs The internal business environment: – Current business strategy, objectives, resources, processes, and the culture and values of the business The external business environment: – The economic, industrial, and competitive climate in which the organisation operates 10

The IS/IT Strategic Model - Inputs The internal IS/IT environment: – The current IS/IT perspective in the business, its maturity, business coverage and contribution, skills, resources and the technological infrastructure – The current application portfolio of existing systems and systems under development, or budgeted but not yet under way The external IS/IT environment – Technology trends and opportunities and the use made of IS/IT by others, especially customers, competitors and suppliers 11

The IS/IT Strategic Model - Outputs IS/IT Management Strategy: – The management of IT/IS strategy that apply throughout the organisation, ensuring consistent policies where needed Business IS strategies: – How each unit or function will deploy IS/IT in achieving its business objectives. – Alongside each of them are application portfolios to be developed for the business unit and business models, describing the information architectures of each unit. – The portfolios may include how IS/IT will be used at some future date to help the units achieve their objectives. 12

The IS/IT Strategic Model - Outputs IT Strategy – Policies and strategies for the management of technology and specialist resources 13

The IS/IT Strategic Model 14 The building blocks of the strategy formulation and planning framework

Framework for IS/IT Strategy Formulation and Planning Process 15

Initiate Strategy Process – Purpose, objectives, scope and deliverables are confirmed – Approach and resources are determined – Business participants are identified, teams are assembled, trained if necessary – Steering and management mechanisms are created – Plan for tasks, roles, timing and responsibilities and checkpoints are defined – Note : important aspect of this element is to enable the sponsor to develop understanding of the business needs that prompted for IS/IT strategy 16

Framework for IS/IT Strategy Formulation and Planning Process Understand the Current Situation and Interpret Business Needs Understand the Current Situation and Interpret Business Needs – Purpose is to develop extensive understanding of the business in its environments, to interpret its current, planned and future needs. – Studying existing documents, interviewing users, holding workshops and brainstorming sessions. – Tools like high-level information analysis, critical success factor and balanced scorecards are put to use here (to be discussed further in other chapters) 17

Framework for IS/IT Strategy Formulation and Planning Process Determine the Business IS strategy – Turn the accumulated business IS demands into recommendation for the deployment of IS/IT at business units’ levels and throughout the organization – Conceptual IS are consolidated and mapped onto an applications portfolio, representing current, required and future positions of each business unit 18

Framework for IS/IT Strategy Formulation and Planning Process Define Information and Systems Architecture – Takes the results of the analysis of the processes and information needs – Flow of information, connections between systems – Represents future ‘ideal’ process, information and system – Necessary to plot a direction in developing migration plan. 19

Framework for IS/IT Strategy Formulation and Planning Process Formulate IT strategies – Define the IT supply proposals – Specialist resources – Platforms & tools 20

Deliverables From The IS/IT Strategy Process The outputs from the IS/IT strategy process are a mixture of hard and soft deliverables. The hard output are documents defining strategies and plans, and frequently include computer-based material in the form of dictionaries, matrices, and information analysis models Soft outputs relate to human factors such as skills, awareness, and motivation. 21

Deliverables From The IS/IT Strategy Process The main purpose of the hard outputs is to document: – The current situation – The vision and rationale for what is being put into place – information, systems, technology, people and so on; – The plans for how it is going to be achieved, with the milestones along the implementation route. 22

Deliverables From The IS/IT Strategy Process The timescale for the vision and plans has to be consistent with the business vision and its plans, and similarly will be reviewed in line with business strategy and planning reviews. The objective is to ensure that users, management and IS professionals all understand the key elements of the strategy and thoroughly appreciate the strategy they have to carry through 23

Questions ? 1.Explain why is it challenging to measure the impact of the IS/IT strategy in organization. What are the questions you may want to ask to be able to help you measure the success rate of the strategy? 2.The outputs from the IS/IT strategy process are a mixture of hard and soft deliverables. Explain both deliverables with the support of examples 3.Discuss the input elements for the IT/IS strategic model. 24

List of questions to determine TOR What are the key business drivers to be addressed? How can IT/IS strategy process be effectively integrated with business strategy What are the expectations and objectives to be met, and what deliverables are required? What other resources are required? How long will the strategy process take and what will it cost? How should the process be steered and managed? And many more (text book - Box 3.1 pg 137) 25 back

Homework To check metalab next week for homework on Chapter 4 Assignment 1 due on 7 th Feb, latest by 5 pm. Mid Term confirmed on Wed 9 th Feb, 2-4 pm. Venue will be advised through online notification. 26