1. Copyright 2002 Monash University IMS5042 Information Systems Strategic Planning Week 3:Methodologies, Organisations, IS and Planning

2. Copyright 2002 Monash University 2 Re-cap from week 2 We have looked at aspects of the philosophies/belief systems which underlie planning We have looked at some case studies of how planning practices may vary significantly in content and process, depending on the philosophical position which is taken Today, look at some other pragmatic (and theoretical) factors which can influence planning practice

3. Copyright 2002 Monash University 3 Agenda 1. Organisations and planning 2. IS and planning 3. Methodologies and planning 4. Implications for IS planning

4. Copyright 2002 Monash University 4 1. Organisations and planning Strategic planning is a characteristic activity of large organisations The nature of the organisation will have a major influence on how it plans The nature of the planning process and the plan has to be compatible with the nature of the organisation

5. Copyright 2002 Monash University 5 Some possible organisational styles The team model The army model The feudal model The democratic model The federal model Etc etc (see Organisational Theory literature)

6. Copyright 2002 Monash University 6 Organisational styles: the team model Organisational members see themselves as part of a unit with a shared commitment to a common set of beliefs/values/goals/etc - what’s good for the team is good for us all There is a high degree of mutual caring, responsibility and self-sacrifice between members Each part of the organisation plays a particular role and contributes a specific capability to it Maintenance of the unit is a key organisational goal; team members who don’t fit are removed or remove themselves The independence of organisational members depends on whether their actions fit the team’s pattern

7. Copyright 2002 Monash University 7 Organisational styles: the army model The organisation exists asa single unit whose goals are set by the Commander-in-Chief (CEO) The team members are like components of a machine – replaceable units which function as directed; minimal scope for individuality Organisational processes are based on structure and the chain of command Membership is dependent on willingness to follow commands without question

8. Copyright 2002 Monash University 8 Organisational styles: the feudal model The organisation is a group of separate units which are controlled and dominated by a single powerful central group to whom they give allegiance Parts of the organisation may be given some local autonomy to run their own affairs, but their ultimate loyalty is to the centre Organisational units supply support/resources to the centre as required – both on-going and occasional The survival of the organisation as a whole is dependent on the strength of the central group

9. Copyright 2002 Monash University 9 Organisational styles: the democratic model The organisation is composed of individuals who each have an equal stake in it Everyone is equal and has a right to express their point of view Decision-making is through open debate and discussion to which all members have the right to contribute; majority rules Persuasion rather than coercion is the only acceptable way of changing someone’s viewpoint

10. Copyright 2002 Monash University 10 Organisational styles: the federal model The organisation comprises a set of strong semi- independent sub-units, each with their own autonomy, resources, etc and a strong central unit to which the sub-units cede some of their power Allocation of power and decision-making control between centre and sub-units is by negotiated agreements Centre has only limited power to coerce sub-units

11. Copyright 2002 Monash University 11 Organisational styles and planning These are just a few organisational models; the organisational theory and management literature identify many more Note the important differences in approach and attitudes which these models imply What impact will these have on attitudes to strategic planning and decision-making? What will happen if you try to impose a planning approach which does not fit the organisational style?

12. Copyright 2002 Monash University 12 2. IS and planning Various roles have been proposed for IS in organisations over the last 40 years (relate to the 3 town planning examples in last week’s lecture) Principle roles have been: IS for data processing IS for management information IS for competitive advantage IS for business re-structure IS-business alignment

13. Copyright 2002 Monash University 13 IS for data processing IS seen as being about automation of manual processes Key organisational benefit of IS = increased efficiency; better resource control Planning = developing the action plan for automating business processes

14. Copyright 2002 Monash University 14 IS planning content for data processing Identify business process which can be automated Determine the applications portfolio (based on maximising cost reductions) Develop and maintain applications portfolio and the IT infrastructure to support it Focus is on identifying actions and resource needs

15. Copyright 2002 Monash University 15 IS for management information (Management Information Systems) IS seen as being about provision of better information for managers Key organisational benefit of IS = increased effectiveness through better managerial decision- making Planning = identifying information needs for managers and developing applications to support them

16. Copyright 2002 Monash University 16 IS planning content for MIS Identify information needs which are critical to management decision-making Determine system integration, and reporting and analytical capabilities needed to provide this information Develop systems architecture and IS portfolio/infrastructure to meet information needs Focus is on information needs - systems are a logical consequence

17. Copyright 2002 Monash University 17 IS for competitive advantage (Strategic Information Systems) IS seen as being about applications which drive and modify business strategy Key organisational benefit of IS = competitive edge; new business opportunities Planning = identifying the leading edge systems and technologies which can put the organisation in front of the competition

18. Copyright 2002 Monash University 18 IS planning content for SIS Identify new business opportunities created by IS/IT Analyse competitive environment, risks, opportunities Develop innovative new systems and new (IT-based) business ideas Focus is on keeping ahead of potential competitors - “you have to run very fast just to stay in the same place” (apologies to Alice in Wonderland)

19. Copyright 2002 Monash University 19 IS for business re-structure (Business Process Re-engineering) IS seen as being about complete re-design of business processes Key organisational benefit of IS = revolutionary change to business operations; improved organisational business practices with IT/IS as the key Planning = “Ground-up” development of IS/IT architecture to provide the foundation for new organisational processes

20. Copyright 2002 Monash University 20 IS planning content for BPR Top-down re-evaluation of the business Re-designed business processes to make optimal use of IS/IT Use new IT-based systems as the basis for new organisational forms Focus is on total abandonment of past business practices and development of new ways of doing business

21. Copyright 2002 Monash University 21 IS/business alignment Position of IS relative to business is seen as being dependent on industry and organisational circumstances IS may play any of the previously–defined roles (or others) according to what is needed Planning = working out the best ‘fit’ for IS within the business environment and proceeding accordingly

22. Copyright 2002 Monash University 22 IS planning content for business alignment Identify characteristics of business and business environment Re-designed business processes to make optimal use of IS/IT Use new IT-based systems as the basis for new organisational forms Choose appropriate blend of planning approaches to

23. Copyright 2002 Monash University 23 An Organisational Maturity Model of the IS Planning Role As with town planning examples, perhaps all these stages may co-exist, but emphasis changes over time Some textbooks suggest that they reflect organisational maturity with regard to IS: DP = 1st stage in organisational understanding/ exploitation of IS MIS = 2nd stage SIS = 3rd stage BPR = 4th stage Alignment = 5 th stage(?) Implication is that early stages cease to be a strategic focus

24. Copyright 2002 Monash University 24 Implications for Business Role of IS Planning Stage 1: Business and IS planning are separate activities Stage 2: IS planning follows from business planning Stage 3: IS planning drives business planning Stage 4: IS planning is business planning! Stage 5: IS and business planning are closely integrated

25. Copyright 2002 Monash University 25 3. Methodologies Methodology = a recipe; a set of instructions; a standardised approach to doing something Methodologies may cover such things as: Tasks/activities which must be done; Resources needed to do the tasks Techniques which must be used Tools which can be used Standards for documentation/deliverables/etc

26. Copyright 2002 Monash University 26 What is strategic planning about? Methodologies may be content-oriented (what needs to be done), process-oriented (how it should be done), or both Methodologies vary in their level of detail and degree of specificity A methodology embodies within it a set of beliefs or assumptions about the task and your aims in doing it These beliefs/assumptions are often unstated!

27. Copyright 2002 Monash University 27 Methodologies: My biases in favour They can establish a useful base set of standards or ideas for practice They help pass on specialist knowledge, expertise and experience They can provide standard solutions for standard problems - saves time and effort

28. Copyright 2002 Monash University 28 Methodologies: My biases against They are not well-suited to non-standard tasks They tend not to explain the beliefs/assumptions which underlie them They shift the focus from the problem/need to the methodology They encourage you to shape the task to fit the methodology They provide an appearance of control/certainty over the process which may or may not be justified They can be used to disguise the fact that you don’t really know what you are doing

29. Copyright 2002 Monash University 29 Examples of IS planning methodologies See diagrams shown in class See resources list for more detailed examples: Business Systems Planning GAO (1992) and GAO (1996) Lederer & Gardiner (1991)

30. Copyright 2002 Monash University 30 Sample IS planning methodologies Note points of similarity and difference Approach to planning process Structured Stepwise Sequenced Rational Specific planning tasks Objectives Goals Process outcomes

31. Copyright 2002 Monash University 31 A warning about IS planning methodologies They are very popular among consulting companies They are often ‘dressed-up’ to incorporate the latest fads (BPR, Enterprise architectures, Knowledge M’ment, Business Intelligence, etc) They are sometimes (often?!) applied without any real understanding of what is behind them They are sometimes (often?!) applied without any understanding of whether they fit the real organisational needs and circumstances

32. Copyright 2002 Monash University 32 Summary I don’t mind using methodologies for planning (or anything else) … … but I must first be persuaded that it is a valid approach to the task… … and then, that it is an approach which suits the circumstances If the person pushing the methodology can’t explain how and why it fits, then why should I use it?

33. Copyright 2002 Monash University 33 4. Implications for IS Planning Further complications for planning strategy! Now must consider: Planning philosophy Organisational style Role of IS within the organisation Some obvious interactions between these, but also some distinct individual issues What does this mean for methodologies??

34. Copyright 2002 Monash University 34 Next week Start to look at specific IS planning approaches