Transcript
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BIS 3201| Dept: Information Systems| By
Asio E.P.K
STRATEGIC MANAGEMENTOF INFORMATION SYSTEMS
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Strategic Information
Systems Planning Process
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Strategic Information Systems
Planning Information Strategy - the process of deciding
the objectives for organizational computing and
identifying potential computer applications which
the organization should implement (Lederer and
Sethi,1988)
Earl (1989) sees SISP as a combination of
information systems strategy (aligning IS withbusiness goals, and exploiting IT for competitive
advantage), IM strategy and IT strategy
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Todays Lecture
Introduction
Why is planning so difficult?
The Changing World of Planning Traditional Strategy-Making
Todays Sense-and-Respond Approach
Planning techniques
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Definition / Levels of IS Planning
What is IS planning?
Information systems planning should be an
integral part of business planning
Business planningthe process of identifying
the firms goals, objectives, and priorities +
developing action plans for accomplishing
them.
Information systems planningthe part of
business planning concerned with developing
the firms information systems resources5
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Definition / Levels of IS Planning
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Organizational Strategy: Concepts and
Overview
Strategic Information Systems
Planning (SISP)
A process for developing a strategy andplans for aligning information systems
(including e-commerce applications)
with the business strategies of anorganization
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Components of an Information Systems
Strategic Plan
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Information Systems Strategic Planning* Why plan?
To obtain resources Financial
FacilitiesCapacity planning
Staff
To align IS with the business To identify needed applications
To establish goals, schedules, and milestones in order to trackprogress
To provide an opportunity for communication with top
management and user management Strategic planning improves performance
To counter excessive inward and short-term thinking
To solve major issues at a macro level
To communicate to everyone what is most important9
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Information Systems Strategic Planning*
Reactive vs. proactive?
Reactive means dealing with an issue because it hashappened.
Proactive means preparing early to either prevent anissue from happening, or having a solution at hand
when it does happen. Planning vs. forecasting?
Forecasting is predicting the future
Planning is being prepared for that future
If you fail to plan, then you plan to failbe
proactive about the future
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What is Strategic Planning?
Process of establishing priorities on what
you will accomplish in the future Forces you to make choices on what you
will do and what you will not do
Pulls the entire organization togetheraround a single game plan for execution
Gives a Broad outline on where resources
will get allocated
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A Good Strategic Plan should . . .
Address critical performance issues
Creates the right balance between what the
organization is capable of doing vs. what the
organization would like to do
Cover a sufficient time period to close theperformance gap
Visionary convey a desired future end state
Flexible allow and accommodate change
Guide decision making at lower levels
operational, tactical, individual
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Information Systems Strategic Planning
Process
Establish a mission statement
Assess the environment
Set goals and objectives Derive strategies and policies
Develop long-, medium-, and short-range
plans Implement plans and monitor results
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Information Systems Strategic Planning
Process
1. Establish a mission statement
These are the services that you are
responsible for; it is your place in theorganization
It is notwhat you are supposed to achieve,
it is who you are and what you do in the
company
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Mission Statement
Captures the essence of why the organizationexistsWho we are, what we do
Explains the basic needs that you fulfill
Expresses the core values of the
organization
Should be brief and to the point
Easy to understand
If possible, try to convey the unique natureof your organization and the role it plays that
differentiates it from others
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ExamplesGood and Bad
Mission Statements
To Make People Happy
To Explore the Universe
and Search for Life
and to Inspire the
Next Generation ofExplorers
NASA
Walt Disney
Does a good job of expressing the core values
of the organization. Also conveys unique
qualities about the organization.
Too vague and and unclear. Need more
descriptive information about what makes the
organization special.
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Vision
How the organization wants to be perceived
in the
future what success looks like
An expression of the desired end state Challenges everyone to reach for something
significant inspires a compelling future
Provides a long-term focus for the entire
organization
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Information Systems Strategic Planning
2. Assess the environment(s) . . .
1. The capabilities of the IT department
2. The readiness of the company to use IT
3. The status of our customers, our industry
4. The status of the economy, governmentregulations, environment, society, etc.
5. Technology
This is similar to a SWOT analysis Strengths and Weaknessitems no. 1 & 2; and
Opportunities and Threatsitems no. 3, 4, & 5
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Assessment Model: S W O T
External Assessment: Marketplace,competitors, social trends,
technology, regulatory environment,
economic cycles .
Internal Assessment: Organizational
assets, resources, people, culture,systems, partnerships, suppliers, . .
.
Easy to Understand
Apply at any
organizational level
Needs to be Analytical
and Specific
Be honest about your
weaknesses
Good Points Possible Pitfalls
SWOT SWOT
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Strengths
StrengthsThose things that you do well,
the high value or performance points Tangible Strengths: Loyal customers,
efficient distribution channels, very high
quality products, excellent financial condition Intangible Strengths: Good leadership,
strategic insights, customer intelligence, solid
reputation, high skilled workforce
Often considered Core Competencies
Best leverage points for growth without
draining your resources
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Weaknesses
WeaknessesThose things that prevent you
from doing what you really need to do Since weaknesses are internal, they are
within your control
Weaknesses include: Bad leadership,unskilled workforce, insufficient resources,
poor product quality, slow distribution and
delivery channels, outdated technologies,lack of planning, . . .
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Opportunities
OpportunitiesPotential areas for growthand higher performance
External in naturemarketplace,
unhappy customers with competitors,
better economic conditions, more open
trading policies, . .
Internal opportunities should be
classified as Strengths Timing may be important for capitalizing
on opportunities
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Threats
ThreatsChallenges confronting the
organization,
external in nature - Threats can take a wide
rangebad press coverage, shifts in consumer
behavior, substitute products, new regulations,. . .
May be useful to classify or assign
probabilities to threats The more accurate you are in identifying
threats, the better position you are for dealing
with the sudden ripples of change23
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Information Systems Strategic Planning
3. Goals and Objectives
Set goalswhat do you want to
achieve? Set objectiveswhat are your specific,
measurable targets?
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Goals
Describes a future end-statedesired outcome
that is supportive of the mission and vision. Shapes the way ahead in actionable terms.
Best applied where there are clear choices
about the future.
Puts strategic focus into the organization
specific ownership of the goal should be
assigned to someone within the organization.
May not work well where things are changingfastgoals tend to be long-term for
environments that have limited choices about
the future. 25
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Developing Goals
Cascade from the top of the Strategic Plan -
Mission, Vision, Guiding Principles. Look at your strategic analysisSWOT,
Environmental Scan, Past Performance, Gaps . .
Limit to a critical fewsuch as five to eight
goals.
Broad participation in the development of
goals:
Consensus from abovebuy-in at theexecution level.
Should drive higher levels of performance
and close a critical performance gap. 26
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Examples of Goals
Reorganize the entire organization for better responsiveness to customers
We will partner with other businesses, industry leaders, and government agencies in order to
better meet the needs of stakeholders across the entire value stream.
Manage our resources with fiscal responsibility and efficiency through a single comprehensive
process that is aligned to our strategic plan.
Improve the quality and accuracy of service support information provided to our internal
customers.
Establish a means by which our decision making process is market and customer focus.
Maintain and enhance the physical conditions of our public facilities.
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Objectives
Relevant - directly supports the goal
Compels the organization into action
Specific enough so we can quantify and
measure the results
Simple and easy to understand
Realistic and attainable
Conveys responsibility and ownership Acceptable to those who must execute
May need several objectives to meet a goal
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Goals vs. Objectives
GOALS OBJECTIVES
Very short statement,few words
Longer statement, moredescriptive
Broad in scope Narrow in scope
Directly relates to theMission Statement
Indirectly relates to theMission Statement
Covers long timeperiod (such as 10years)
Covers short time period(such 1 year budgetcycle)
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Examples of Objectives
Develop a customer intelligence database system to capture and analyze patterns inpurchasing behavior across our product line.
Launch at least three value stream pilot projects to kick-off our transformation to a leaner
organization.
Centralize the procurement process for improvements in enterprise-wide purchasing power.
Consolidate payable processing through a P-Card System over the next two years.
Monitor and address employee morale issues through an annual employee satisfaction
survey across all business functions.
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Information Systems Strategic Planning
4. Derive strategies and policies
Strategies for
Technology focus
Personnel and career development
Aligning with the company
Others . . . Policies for
Funding criteria; how much to spend on IT?
Allocation criteria; priority setting
Organizational arrangements Use of outside IT services, outsourcing
Selling IT services to outside organizations
Others . . .31
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Information Systems Strategic Planning
5. Short-, medium-, and long-range plans
Short-rangethe next year, the next budget period;developing and operating current systems
Medium-rangecommitting to development effortsfor applications that will take more than one year to
complete; meeting managements current informationneeds, projected into the future for as many years asneeded to complete them. This is what mostorganizations call Long-Range Planning.
Long-range planningpreparing for managementsfuture information needs. These are not applicationspecific; they are investments in infrastructure; it iscreating an information architecture.
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Information Systems Strategic Planning
6. And finally, implement plans and
monitor results (Evaluation)
The development of detailed, short-term and long term plans for carrying
out the projects agreed on in strategy
formulation
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Continuous Feedback through the Balanced
Scorecard
Cascade and align from the top to create aStrategic Management System.
Use the Balanced Scorecard framework to organizeand report actionable components.
Use the Scorecard for managing the execution ofyour strategy.
Scorecard forces you to look at differentperspectives and take into account cause-effect
relationships (lead and lag indicators)
Improves how you communicate your strategycritical to execution.
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Build the Balanced Scorecard
Performance Management
Establish a regular review cycle using your balanced
scorecard. Analyze and compare trends using graphs for rapid
communication of performance.
Dont be afraid to change your metricslife cycle(inputs to outputs to outcomes)
Work back upstream to revise your plans: ActionPlans > Operating Plans > Strategic Plans
Planning is very dynamicmust be flexible tochange.
Recognize and reward good performance results
Brainstorm and changetake corrective action on
poor performance results. 35
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Link Budgets to Strategic Plan
The worlds best Strategic Plan will fail if it is notadequately resourced through the budgeting process
Strategic Plans cannot succeed without people,time, money, and other key resources
Aligning resources validates that initiatives andaction plans comprising the strategic plan support
the strategic objectives
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Every Action Plan should identify the following:
The people resources needed to succeed The time resources needed to succeed
The money resources needed to succeed
The physical resources (facilities, technology, etc.) needed to
succeed Resource information is gathered by Objective Owners which
is provided to the Budget Coordinators for each Business Unit.
Resources identified for each Action Plan are used to establish
the total cost of the Initiative. Cost-bundling of Initiatives at the Objective level is used by
our Business Unit Budget Coordinators to create the Operating
Plan Budget
What Resources? How to Link?
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Some Final Thoughts
Integrate all components from the top to the
bottom: Vision > Mission > Goals >Objectives > Measures > Targets >Initiatives > Action Plans > Budgets.
Get Early Wins (Quick Kills) to createsome momentum
Seek external expertise (where possible andpermissible)
Articulate your requirements to seniorleadership if they are really serious aboutstrategic execution
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C k f IS l i h d l i
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Common weakness of IS planning methodologies
Poor integration of business and IS planning
Lack of planning for IS ongoing maintenancerequirements
Focus on tools and techniques instead of on real
business needs
Inability to handle change or uncertainty
Vision or architecture is too narrow and short-ranged
Obscure or complex planning processes
Problems without solutions in any current planning
approach
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Other Common weakness of IS planning
methodologies
Failure to deal effectively with applicationsintegration;
Insufficient evaluation of applications
package options and tradeoffs; Lack of effective risk assessment and
management; and
Failure to make use of existing best
practices already proven and public
knowledge from other firms in the industry.
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The Analysts Role in Strategic Planning
Special projects affecting executives
designing an executive information system
Business process managementredesign and improvements to
existing processes Strategic planning process (5 or more years in the future)
Information systems strategic planning
One of the key components of the strategic plan
Application architecture plan (business focus)
Technology architecture plan (infrastructure focus)
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Why Planning Is So Difficult
Alignment of strategic business goals
and systems plans
Technologies are rapidly changing
Is strategic planning even relevant?
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Why Planning Is So Difficult
Companies need IT portfolios rather than projects
Portfolio planning is sophisticated
Projects must be evaluated beyond individual
merits Fitting with other projects is crucial
Infrastructure development is difficult to fund
IT investments are grossly expensive Constant pressure to keep up with industry?
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Why Planning Is So Difficult
Responsibility needs to be joint
Commitment from multiple stakeholders
Consensus?
Involvement of external stakeholders?
Other planning issues
Organizational culture
Top-down versus bottom-up
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Managerial Issues in implementing SIS
Implementing strategic information
systems can be risky
Strategic information systems requireplanning
Sustaining competitive advantage is
challenging
Ethical issues
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Thanks foryour participation!
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NEXT CLASS: ---
IS Strategy Formulation
THE END. THANKS
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