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IT STRATEGY: S ETTING A D IRECTION FOR I NFORMATION R ESOURCES

IT STRATEGY: S ETTING A D IRECTION FOR I NFORMATION R ESOURCES. W HY S ET A D IRECTION FOR I NFORMATION R ESOURCES?. To share information among diverse parts of the organization To communicate the future to others

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IT STRATEGY: S ETTING A D IRECTION FOR I NFORMATION R ESOURCES

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  1. IT STRATEGY: SETTING A DIRECTION FOR INFORMATION RESOURCES

  2. WHY SET A DIRECTION FOR INFORMATION RESOURCES? • To share information among diverse parts of the organization • To communicate the future to others • To provide a consistent rationale for making individual decisions • Planning discussions help business managers and IS professionals in making decisions about how the “business” of IS will be conducted Page 559

  3. THE OUTPUTS OF THE DIRECTION-SETTING PROCESS Information Resources Assessment Information resources assessment – includes inventorying and critically evaluating these resources in terms of how well they are meeting the organization’s business needs Page 560

  4. OUTPUTS OF THE DIRECTION-SETTING PROCESS Information Vision and Architecture • Is an ideal view of the future • Not the plan on how to get there • Must be flexible enough to provide policy guidelines for individual decisions • More than just fluff • Must focus on the long term Page 560

  5. OUTPUTS OF THE DIRECTION-SETTING PROCESS Information Vision and Architecture Information vision – a written expression of the desired future about how information will be used and managed in the organization Page 560

  6. OUTPUTS OF THE DIRECTION-SETTING PROCESS Information Vision and Architecture Information vision – a written expression of the desired future about how information will be used and managed in the organization Information technology architecture – depicts the way an organization’s information resources will be deployed to deliver that vision Page 560

  7. OUTPUTS OF THE DIRECTION-SETTING PROCESS Information Resources Plans Strategic IS plan – contains a set of longer-term objectives that represent measurable movement toward the information vision and technology architecture and a set of associated major initiatives that must be undertaken to achieve these objectives Page 560

  8. OUTPUTS OF THE DIRECTION-SETTING PROCESS Information Resources Plans Strategic IS plan – contains a set of longer-term objectives that represent measurable movement toward the information vision and technology architecture and a set of associated major initiatives that must be undertaken to achieve these objectives Operational IS plan – is a precise set of shorter-term goals and associated projects that will be executed by the IS department and by business managers in support of the strategic IS plan Page 560

  9. THE PROCESS OF SETTING DIRECTION • Assessment • Vision • Strategic Planning • Operational Planning Figure 14.1 The Information Resources Planning Process Page 561

  10. 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 Figure 14.1 The Information Resources Planning Process Page 561

  11. 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 Figure 14.1 The Information Resources Planning Process Page 561

  12. Business Plan vs. Strategy Chesbrough and Rosenbloom (2003) • Creating value vs. capturing value - the business model focus is on value creation. While the business model also addresses how that value will be captured by the firm, strategy goes further by focusing on building a sustainable competitive advantage. • Business value vs. shareholder value - the business model is an architecture for converting innovation to economic value for the business. However, the business model does not focus on delivering that business value to the shareholder. For example, financing methods are not considered by the business model but nonetheless impact shareholder value. • Assumed knowledge levels - the business model assumes a limited environmental knowledge, whereas strategy depends on a more complex analysis that requires more certainty in the knowledge of the environment. Page 560

  13. THE PROCESS OF SETTING DIRECTION Traditional Planning in the IS Organization • Needs-based IS planning or project-oriented IS 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 Page 562

  14. ASSESSING CURRENT INFORMATION RESOURCES Measuring IS Use and Attitudes • Information resources assessment: • Must 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 Page 563

  15. ASSESSING CURRENT INFORMATION RESOURCES Reviewing the IS Organizational Mission • IS mission statement: Sets forth the fundamental rationale (or reason to exist) for activities of the IS department Page 563

  16. Reviewing the IS Organizational Mission Example IS Mission Statement Figure 14.3 IS-Prepared Mission Statement Example Page 565

  17. ASSESSING CURRENT INFORMATION RESOURCES Assessing Performance versus Goals • Traditional goal: • Reduce cost by increasing operating efficiencies • Scope of IS goals has expanded to include: • Systems to assist in decision making • Ways to help with competitive advantage Page 565

  18. CREATING AN INFORMATION VISION Information Vision: • Represents how senior management wants information to be used and managed in the future • Starts with 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 Page 566

  19. DESIGNING THE 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 Page 567

  20. DESIGNING THE ARCHITECTURE Components of Architecture Figure 14.5 Elements of an Information Technology Architecture Page 568

  21. 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: • move toward the information vision • fit the business strategic plan Page 569-570

  22. THE STRATEGIC IS PLAN The Strategic IS Planning Process The planning process includes: • Setting objectives • Conducting internal and external analyses • Establishing strategic initiatives Page 570

  23. THE STRATEGIC IS PLAN Tools for Identifying IT Strategic Opportunities • Critical success factors • Analysis of Competitive Forces • Value Chain Analysis Page 572-573

  24. Value Chain Analysis Figure 14.11 Strategic Information Systems Opportunities in the Value Chain Page 575

  25. THE OPERATIONAL IS PLAN • After the strategic plan, initiatives must be: • Identified • Translated into a set of defined IS projects with: • Precise expected results • Due dates • Priorities • Responsibilities Page 576

  26. THE OPERATIONAL IS PLAN The Long-Term Operational IS Plan • Developed for a 3-to-5 year time period • Focuses on project definition, selection, and prioritization Page 576

  27. THE OPERATIONAL IS PLAN The Long-Term Operational IS Plan Table 14.2 IS Long-Range Operational Plan Project Portfolio Page 576

  28. THE OPERATIONAL IS PLAN Page 576 Table 14.3 Sample 2004 Operational IS Plan

  29. THE OPERATIONAL IS PLAN The Short-Term Operational IS Plan • Developed for a 1-year time period • Focuses on specific tasks to be completed on projects that are currently underway or ready to be started Page 577

  30. GUIDELINES FOR EFFECTIVE PLANNING • Early clarification of the purpose of the planning process • Planning effort should be iterative • Plan should reflect realistic expectations • Process of setting expectations should involve business management • Plans should integrate all applications of IT • Plan will take into consideration the barriers and constraints facing all organizations Page 577-578

  31. BENEFITS OF INFORMATION RESOURCES PLANNING • Better IS resource allocation • Communicating with top management • Helping vendors • Creating a context for decisions • Achieving integration and decentralization • Evaluating options • Meeting expectations of management Page 578-579

  32. ROLES IN THE INFORMATION RESOURCES PLANNING PROCESS Role of the Business Manager • Active participation • Accept most of responsibility for identifying specific projects that contribute to vision • Stay involved in planning and system development activities • Regularly provide feedback and necessary input Page 579

  33. ROLES IN THE INFORMATION RESOURCES PLANNING PROCESS Role of the IS Professional • Act more in consulting and planning role • Help business managers understand how their ideas for competitive advantage can get built into a new information system • Create a project plan • Combine technical and organizational skills Page 579-580

  34. Questions?

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