Managing Information Technology 6 th Edition

1. Managing Information Technology6th Edition CHAPTER 14PLANNING INFORMATION SYSTEMS RESOURCES

2. Planning Information Systems Resources • In addition to understanding the technical and operation issues of the IS organization, IT managers must also align IT investments with the organization’s strategy • Setting a clear direction for the organizational information resources is a critical high-level IT management activity

3. The Need for Direction • An organizational plan for the development of information resources helps organizations to: • Share information among diverse parts of the organization • Communicate the future organizational plans to others • Provide a consistent rationale for making individual decisions • Make decisions about how the “business” of IS will be conducted • Plan for and respond to traumatic incidents

4. Business and IT Alignment • Alignment of IT strategy with the organization's business strategy is a fundamental principle

5. Outputs of the Direction-Setting Process • Formally developing an overall information resources plan may be new to many organizations • There are several deliverables during the process direction-setting process • Information resources assessment • Information vision • Information architecture • Strategic IS plan • Operational IS plan

6. Outputs of the Direction-Setting Process

7. Outputs of the Direction-Setting Process Information vision and architecture • An ideal view of the future state of the organization’s information resources • Must be specific enough to provide policy guidelines for individual decisions • Must focus on the long term • Although some firms combine them, there is a difference between vision and architecture

8. Outputs of the Direction-Setting Process

9. Outputs of the Direction-Setting Process Information resources plans

10. Outputs of the Direction-Setting Process Information resources plans

11. The Process Of Setting Direction IS and business planning • IS decisions must be tightly aligned with the direction of the business • Decisions should impact the next step in the process, but that is not always the case

12. The Process Of Setting Direction Assessment • Current performance is compared to a previous plan, competitors, or a set of past objectives • Comparisons made using: • Operating data • Survey of internal satisfaction with IS performance • Benchmarks of what is being achieved at other organizations

13. The Process Of Setting Direction Vision • Envision an ideal or intended state at some point in the future • At this point, no definition of how to achieve the vision is included

14. The Process Of Setting Direction Strategic planning • The process of constructing a viable fit between the organization’s objectives and resources and its changing market and technological opportunities

15. The Process Of Setting Direction Operational planning • Lays out the major actions the organization needs to carry out in the shorter term to activate its strategic initiatives

16. The Process Of Setting Direction Traditional planning in the IS organization • Needs-based (or project-oriented) planning • Until recently, many IS organizations were not involved in the organization’s business planning • These organizations tended to adopt a needs-based planning • Bottom-up, immediate approach to information resources planning • Used when a specific, urgent business need called for a new system • Emphasis on project planning rather than overall organizational planning

17. Assessing Current Information Resources Measuring IS use • Should measure current levels of information resources use within the organization and compare it to a set of standards • Standards can come from: • Past performance • Technical benchmarks • Industry norms • “Best of class” estimates from other companies

18. Assessing Current Information Resources Measuring Attitudes of Users • IT managers should assess the attitudes of users and IS staff about the performance of the IS organization in relating its activities to the needs and direction of the business

19. Assessing Current Information Resources IS Organizational Mission Statement • Should set forth the fundamental rationale (or reason to exist) for activities of the IS department • Should align with the needs of the business

20. Assessing Current Information Resources Assessing Performance Against Goals • Annual assessment of actual performance compared to previous goals should be conducted

21. Creating an Information Vision • Information vision represents how senior management wants information to be used and managed in the future • Steps: • Speculation on how the business’s competitive environment will change and how the company should take advantage of it • Business vision is specified and written • Implications for information use are outlined • Information vision is written

22. Designing the IT Architecture • IT Architecture • Specifies how the technological and human assets and the IS organization should be deployed in the future to meet the information vision • Two components: • Technological • Human

23. Designing the IT Architecture • Four stages of IT architecture maturity: • Business Silos – companies seek to maximize individual business unit or functional needs • Standardized Technology – companies seek to enable IT efficiencies through shared services and application rationalization, resulting in enterprise-wide IT standardization

24. Designing the IT Architecture • Four stages of IT architecture maturity: • Optimized Core – companies implement enterprise-wide business processes and data with tightly linked systems and processes (such as with ERP systems) • Business Modularity – companies seek global flexibility with loosely coupled IT-enabled business process components, which enable local differences but also preserve enterprise-wide standards

25. Designing the IT Architecture

26. The Strategic IS Plan • Strategic IS Plan • Statement of the major objectives and initiatives that the IS organization and business managers must accomplish over some time period in order to enable the information vision and the IT architecture, and to be aligned with the strategic plan for the overall business

27. The Strategic IS Plan The Strategic IS Planning Process • This planning process includes: • Setting objectives • Conducting internal and external analyses • Establishing strategic initiatives • Most planning processes involve iterations through these steps

28. The Strategic IS Plan The Strategic IS Planning Process • Setting objectives • Measures are identified for each of the key result areas for the organization • IS objectives can be established for: • IS department service image • IS personnel productivity • The appropriateness of technology applications • Increased effectiveness • Access to external resources

29. The Strategic IS Plan The Strategic IS Planning Process • Conducting internal and external analyses • Review external environment and internal capabilities • Called a SWOT (strengths, weaknesses, opportunities, and threats) analysis • Identifies leverage points or limiting factors for new strategic initiatives

30. The Strategic IS Plan The Strategic IS Planning Process • Establishing strategic initiatives • Identifying important initiatives needed to enhance the role of IT • None of the initiatives is spelled out in enough detail to be immediately translated into action • These initiatives will be translated into actual projects in the operational planning step

31. Strategy Agenda

32. The Strategic IS Plan Tools for identifying IT strategic opportunities • Critical success factors (CSFs) • Information needs and processes critical to the success of a business function like sales or to the entire organization • Analysis of competitive forces • Competitive advantage can come about by changing the balance of power between a business and the other actors in the industry

33. The Strategic IS Plan Tools for identifying IT strategic opportunities • Analysis of competitive forces (cont’d) • A company can create strategic advantage by: • Raising the stakes for competition in the market • Providing difficult-to-duplicate product/service features • Providing unique product features or customer services • Making it easier for customers to do business with the company and more difficult to switch to a competitor • More strongly linking with suppliers to obtain lower-cost, higher-quality materials

34. The Strategic IS Plan Tools for identifying IT strategic opportunities • Value chain analysis • IT can be used in each activity of the value chain to capture, manipulate, and distribute the data necessary to support that activity and its linkages to other activities • Idea-generation and action-planning sessions can be used to generate strategic applications of IT

35. The Strategic IS Plan

36. The Strategic IS Plan Tools for identifying IT strategic opportunities • Scenario planning • Used by business leaders to address an uncertain future • Alternative scenarios for what the future might look like are developed • Typically a few major drivers are focused on to create a “scenario space” and then characteristics of the scenarios are used to help plan for the future

37. The Operational IS Plan • The initiatives in the strategic IS plan are translated into an action plan incorporating: • Precise expected results • Due dates • Priorities • Responsibilities

38. The Operational IS Plan • Multiyear operational IS plan developed for up to a three-year time period • Focus is on project definition, selection, and prioritization • Steps: • Define multiyear IS operating objectives • IS development or acquisition projects then defined and selected

39. The Operational IS Plan • Portfolio view of IS operational plan allows for a balance between risks and return of IS projects

40. The Operational IS Plan • Shorter-term operational IS plan developed for up to a one-year period • Focus is on specific tasks to be completed on projects that are currently underway or ready to be started • Linked to the firm’s business priorities by the annual budget

41. Guidelines for Effective IS Planning • Early clarification of the purpose of the planning process is essential • The information resources planning effort should be viewed as an iterative effort • The plan should reflect realistic expectations • A unified approach to delivering IT services should be used • An effective IS plan will also take into consideration potential barriers and constraints

42. Benefits of Information Resources Planning • Better IS resource allocation • Communicating budget needs with top management • Creating a context for IT decisions • Achieving both integration and innovation • Evaluating vendor options • Meeting management expectations