1. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 12-1 IT POLICY AND STRATEGY Pearson Custom Library CHAPTER 3 PLANNING INFORMATION SYSTEM RESOURCES

2. COMPLEMENTARY PRACTICES Corporate  Vision established  Mission in place  Polices developed  Strategies aligned  Goals & objectives created  Concurrently, alignment of IS NOTE: Once corporate establishes the above, revisited annually, along with strategy formulation Let’s take a look…

3. 12-3 BENEFITS OF INFORMATION RESOURCES PLANNING Creating a context for IS resource decision-making Aligning IS and business goals Balancing the tradeoffs between standardization and agility Obtaining IT capital investment approvals This requires both a periodic strategic planning process, as well as an ongoing monitoring of the appropriateness of IS plans in response to changes in the business and its environment.

4. 12-4 ALIGNING BUSINESS AND IS PLANNING IS decisions should tightly align with direction of business IS steps ideally impact next step in business planning process, NOTE: in practice often not done Fig 12.1 The Information Resources Planning Process

5. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 12-5 MULTI-STEP PLANNING PROCESS ( from an Enterprise perspective) 1.Assessment of current Information resources (the status quo) 2.Establish IS vision complementing company vision 3.IT Architecture establishment for vision 4.IS Strategic Plan formulation of complementing company plan 5.Formulation short-term operational IST plans based on IS Strategic Plan

6. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 12-6 ASSESSING CURRENT INFORMATION RESOURCES Inventorying & critically evaluating organization’s technical and human resources how well they meet organization’s business needs Current performance compared to previous plan, competitors and/or set of past objectives Comparisons made using: operational data (usage of IS resources) client IS performance satisfaction survey benchmarks of other organizations

7. 12-7 CREATING AN INFORMATION VISION IS vision requires understanding of future direction of business and understanding of role information can best play in enabling future business strategy focus is on long term Information Vision Written expression of desired future how information will be used and managed in the organization specific enough to guide policy decisions

8. 12-8 ASSESSING CURRENT INFORMATION RESOURCES Fundamental reason for IS organization activities Vary substantially from one organization to another Some IS departments play more “support” roles than “strategic” roles Extent IS organization plays strategic role measured by: – degree to which organization is dependent on IT for business operations – degree to which IT is enabling current business strategy Shared & evaluated with entire organization to resolve differences IS Organizational Mission Statement

9. 12-9 ASSESSING CURRENT INFORMATION RESOURCES Assessing the IS Mission involves reconciling any differences between IS manager and business manager views

10. 12-10 DESIGNING THE IT ARCHITECTURE Specifies how IS technological & human assets deployed in future to meet information vision Information Technology Architecture Depicts way organization’s IS deployed to deliver vision.

11. 12-11 DESIGNING THE IT ARCHITECTURE 1.Application Silos –maximize individual business unit or functional needs 2.Standardized Technology –enable IT efficiencies through shared services & application rationalization, resulting in enterprise-wide IT standardization 3.Rationalized Data –enterprise-wide business processes & data with tightly linked systems & processes, such as ERP 4.Modular –global flexibility with loosely coupled IT-enabled business process components, enabling local differences while preserving enterprise-wide standards Four Stages of IT Architecture Maturity (Ross, 2003):

12. 12-12 FORMULATING THE STRATEGIC IS PLAN Strategic IS Plan Long-term objectives (often three to five years) – represent measurable movement – toward the Information Vision & IT Architecture Major initiatives undertaken to achieve these objectives 4 Steps in Strategic IS Planning Process 1.Conducting an external analysis 2.Conducting an internal analysis 3.Establishing strategic initiatives 4.Setting objectives Most planning processes involve iterations through these 4 steps

13. 12-13 FORMULATING THE STRATEGIC IS PLAN 1 & 2 Conducting internal and external analyses – Review external environment & internal capabilities – One approach: SWOT analysis (strengths, weaknesses, opportunities, and threats) – Identify leverage points or limiting factors for new strategic initiatives

14. 12-14 FORMULATING THE STRATEGIC IS PLAN 3. Establishing strategic initiatives – Establish high-level initiatives for IS organization – Translate initiatives into projects as part of the operational IS planning

15. 12-15 FORMULATING THE STRATEGIC IS PLAN 4. Setting objectives – Measures identified for each of the key result areas – IS objectives may be established for: IS department service image IS personnel productivity Appropriateness of technology applications Increased effectiveness Access to external resources

16. STRATEGIC IT OPPORTUNITIES IDENTIFICATION TOOLS Let’s take a look at some other useful tools for conducting strategic analysis…

17. 12-17 STRATEGIC IT OPPORTUNITIES IDENTIFICATION TOOLS Critical Success Factors (CSFs) -Information needs & processes critical to success of entire organization or specific business function (e.g., sales) Analysis of Competitive Forces -Porter’s 5 Forces model -analyze potential changes in competitive advantage -due to changes in balance of power between a business, its competitors, and other key stakeholders in the industry - Examples of ways a company can create competitive advantage: -Raising stakes for competition in market -Providing difficult-to-duplicate product/service features -Providing unique product features or customer services -Making it easier for customers to do business with company -and more difficult to switch to a competitor -More strongly linking with suppliers to obtain lower-cost, higher-quality materials

18. 12-18 STRATEGIC IT OPPORTUNITIES IDENTIFICATION TOOLS Value Chain Analysis -Based on value chain of Porter & Millar, analysis of primary & support activities of the business -Examine how data can be captured, manipulated, & distributed to better support each activity and its linkages to other activities - Idea-generation & action-planning sessions with business & IT managers used to generate ideas for strategic IT applications

19. 12-19 STRATEGIC IT OPPORTUNITIES IDENTIFICATION TOOLS Scenario Planning – Used by leaders to address an uncertain future – Alternative scenarios for what future might look like are developed – Typically few major drivers identified to create a matrix based on different values (e.g., high, low) of the drivers – Characteristics of scenarios then used to help plan for the future

20. 12-20 GUIDELINES FOR EFFECTIVE IS PLANNING 1.Early clarification of planning process purpose essential 2.IS planning effort should be viewed as an iterative effort 3.Plan should reflect realistic expectations 4.Unified approach to delivering IT services should be used 5.Effective IS plan also takes into consideration potential barriers & constraints

21. 12-21 FORMULATING OPERATIONAL IS PLANS Details major initiatives organization needs to carry out in short term to achieve strategic initiatives Action plans for one or more years based on Strategic IS Plan focus on prioritizing projects currently underway and new projects Specifies for current & newly defined IS projects: expected benefits and risks due dates responsibilities Operational IS Plan

22. GOALS & OBJECTIVES EXERCISE The following sections provide an overview of: – Goal formulation – Supporting objective development – Sample – An exercise for you to complete NOTE: This exercise is for hybrid and face-to-face classes only, since it is completed in the classroom

23. SMART Objectives Typically, corporate goals are developed Followed by unit or department goals Then, supporting objectives are developed SMART objective acronym represents: – Specific – Measurable – Achievable – Realistic – Time-based

24. “S” also equals Specific with a stretch Simple Sensible Significant

25. “M” also equals Measurable Meaningful Motivating

26. “A” also equals Achievable Acceptable Action-oriented Accountable/assignable Agreed/agreed-upon Actionable

27. “R” also equals Realistic Reviewable Rewarding Reasonable Results-oriented Relevant to a mission

28. “T” also equals Time-based/time-specific Tangible Timely Toward what you want Truthful

29. GOALS & OBJECTIVES EXERCISE On the next slide is a group exercise When told to begin: – You will forms groups of 2, 3 or 4 as directed – Meet with your group to review the information – Designate a spokesperson – As a group, complete the exercise – Regroup as a class – Spokesperson reads results to class

30. Your Goals: Fiscal Year 2016/2017 Assume your IS department was provided the following goals: 1.Capture additional 5% market share 2.Reduce overall costs by 10 percent 3.Increase overall revenue by 10 percent Your team’s job, as IS representatives: – Develop 2 SMART objectives for each goal – Establish plans (tactics) for each objective – Allocate/assign resources to support the plans – Assign responsibilities

31. Objectives: Fiscal Year 2016/2017 Let’s discuss the results…

32. QUESTIONS? Questions?