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Context of This Session

IS/IT Strategic Analysis: Assessing and Understanding the Current Situation (Internal Business Analysis). Context of This Session. External Business Environment. Internal Business Environment. Internal IS/IT environment. Current Applications Portfolio. External IS/IT Environment.

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Context of This Session

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  1. IS/IT Strategic Analysis: Assessing and Understanding the Current Situation (Internal Business Analysis)

  2. Context of This Session External Business Environment Internal Business Environment Internal IS/IT environment Current Applications Portfolio External IS/IT Environment Strategic IS/IT Planning Process Planning Approaches, Tools and Techniques IS/IT Management Strategy Business IS Strategies IT Strategy Applications Portfolio Model & Matrices

  3. Session Objectives • To understand the current situation in the business as the baseline of the SPIS analysis • To identify business activities and business processes (existing condition) • To obtain Information System logical requirements based on fact finding, analysis and interpretation • To understand the use of various modeling and analysis tools (techniques). • To develop IS/IT Strategy based on the analysis

  4. I. Analysis of Internal Business Environment Business Process Re-engineering and IS Strategy • Most business strategy development needs re-engineering  to improve performance • Developing IS strategy needs understanding of business strategy • The success of BPR usually supported by IS strategy. Which one comes first: Business drives IS/IT or IS/IT support Business?

  5. The Role Of IS/IT in BPR: Questions to be asked • How can business processes be transformed using IT? • Based on IT capabilities • IT as enabler • How can IT support business processes? • Provide value added • Ultimately, how can IT deliver optimal benefits to organization? • Interface to IT Governance • Improve performance

  6. Role of IS/IT in BPR Organizational Approach Source Ward and Peppard

  7. Impact & Alignment of BPR and IS/IT Strategy

  8. Techniques and Analysis to Determine The IS Demand Current & Expected Business & Technical Environment SWOT, CSFs, Value Chain Business Model Current Status of IS/IT Business Strategy Determine The IS Demand Potential Status of IS/IT Opportunities For IS/IT Innovation Proposed IS/IT Initiatives Proposed Business Initiatives Impact and Role of IS/IT

  9. Gathering the Relevant Data in Order to Determine the Demand of Information Systems

  10. Where can you find all these data/information? How do you collect the data/information?

  11. Where to Find Data and Information? • All strategic business units (SBU) in the organizational hierarchical structure • Documentations related to business plan, business report, decree (surat keputusan) policy and regulation, etc. • Observation: work flows, information flow, chain of command, etc. • Survey and Interview

  12. How Do You Collect the Data? • Develop questioner for survey • Develop list of questions for interview • Record the interview • Develop check list for observation • Business process • Human resources • ICT facilities • Note taking for reading the documents of business report, strategic plan, etc.

  13. Points to Analyzed in the Internal Business Environment • The business strategy as the means to achieve business objectives • The current business process, activities, and the main information entities • The organizational environment: structure, asset and skills, competency, culture, etc.

  14. Internal Business Environment (Interpreting The Business Strategy) • Business strategy • Purpose: to ensure that IS strategy supports rather contradicts business strategy • Identify and analyze the current strategy • Compile and confirm the IS requirements, and document in the IS demand • Tools: critical success factors analysis and business drivers analysis • Business processes, activities, and key entities • Purpose: to understand important business tasks and processes, and the flow of information. Make up the business model with supporting IS model • Tools: processes effectiveness analysis, process flow diagrams, DFD, ER, and activity entity matrices (tabular representation of the business…) • Organizational environment • Purpose: to understand organizational arrangements, value system, and key people and their relationships. Understand the environment, its skills, resources, values, culture, social interactions, its management style… • Tool: organizational modeling

  15. Constituents of a Business Strategy(Usually included in Renstra) • Mission: Statement of overall purpose for the organization • Vision: Brief description of the future that is consistent with the mission • Business drivers: A set of critical forces for change that the business must respond to • Goals: Major achievements necessary to accomplish the vision • Objectives:Measurable targets that take the organization towards the goals • Strategies: Concrete ways to achieve the objectives (inputs from IS planning process) • Critical success factors: Areas where things must go right for the organization to flourish • Business area plans: the plans of various areas of the business

  16. Business Processes, Activities, and Key Entities • Business model depict the processes, activities and main information elements and how they relate to one another • IS model consists of • Process flow, functional decomposition, ERD, DFD, Activity/entity matrices • Use case diagram, Class Diagram, Activity Diagram, etc • IS architecture for the business: Relationship of business model to IS model

  17. Source Ward and Peppard

  18. Business Model • Business processes: the sets of interlinked activities or roles that deliver specific outputs to identified customers inside or outside the organization • Activities: the elements of the business processes that organization undertakes to produce, promote and distribute its products or services, to develop, support and administer its infrastructure and to measure performance against objectives. • Key entities: within an activity that are of fundamental importance to business processes.

  19. IS Model • Process flow models • Functional decomposition model • ERD • DFD • Activity/Entity Matrices • Other Diagramming Techniques using UML - OO

  20. IIA. Analysis of Internal IS/IT Environment • Current IS management strategy (applications portfolio) • Content and coverage of applications • Contribution of applications • Current IS/IT regulation and policies • Value of IS organization • IS profile in organization: structure, function, etc. • IS perception in organization • Current IT management strategy (IT infrastructure) • IS/IT organization and processes • IS/IT assets, resources, and skills • IS methodologies and training provisions

  21. IIB. Analysis of External IS/IT Environment • To gain perspective on IT trend and opportunities • Looking at what competitors are doing with IS/IT • Identify elements of IS/IT that need further investigation

  22. III. Measurements, Techniques, Methods, etc to Determine IS Needs

  23. Critical Success Factors Analysis • “The limited number of areas, in which results, if they are satisfactory, will ensure competitive performance of the organization • Hierarchy of CSF (industry, organizational, business unit, and manager) • Identified from objectives and strategies • For prioritizing and determining IS applications

  24. Objectives and CSFs Relationship

  25. CSF Levels Industry CSFs Organizati Onal CSFs BusinessUnit or Function CSFs Manager’s CSFs “things must go right”

  26. Objective: To achieve 1 % growth in market share Other CSFs: access to raw material, timely delivery, etc

  27. Objective must be well defined and measureble CSF helps Define and set objectives

  28. Relationship BSC and CSF

  29. Example of Relationship BSC and CSF • The objective is to reduce stockholding costs • The CSFs for this objective are: • Earlier identification of obsolete items • Improve forecasting to reduce safety stock • Information requirements: • Analysis of stock turn • Stock forecasting • Stock replacement Information System Needed?

  30. CSF Analysis Executive IS IS applications Define Critical Success Factors Prioritize Define Identify Objectives and Business tasks Strategies and processes CSFs help manager to control the business performance CSFs help define and prioritize the IS needs

  31. Technique to analyze business processes: Process Effectiveness Analysis • To measure the ability of business processes to contribute to meeting business needs • Assess the effectiveness of each business process against each critical business driver • A business process is a logical collection of related business tasks • Examples of critical business drivers • Production efficiency: removal of duplication, removal of unnecessary checking, reduced transfers of responsibility, simplified procedures, and streamlined information flows • Customer satisfaction: reduced time to process orders, reduced time to answer queries, and improved quality of products delivered, and improved quality of services rendered

  32. Technique to analyze degree of Information System: IS Profile in Organizations High Support routine, Strategic to entire Distributed organization Computing Support routine, Crucial to some Centralized business areas computing Low Diffusion (deployment in business) High Infusion (impact on business)

  33. Technique to analyze the relationship of business and IS: Organizational Modeling • Structured technique to ensure comprehensive examination of business and IS environments • Documents environmental factors underlying each key business process • Assesses the implications of changing each key business process • Aid to decision making and communication • Especially useful during business re-engineering exercises

  34. Organizational Modeling • Organization arrangements • Hierarchy charts • Job description • Budgets • Employees and other assets • Skills and training • Fixed assets • Financial assets • Social systems • Relationships • Working attitudes • Cultural values • Technology • Hardware • Software • Methodologies • External environment • Competition • Legislation • Fiscal policies • Dominant coalition • Key players • Power distribution • Personal goals • Key business • processes • Acquisition • Production • Decision making

  35. Evaluating the Gap Between Current and Required IS/IT • Identify business processes in need of recognition, simplification, streamlining, or redesign • Identify new or upgraded information provisions • New uses of existing sources of information • New sources of information • Identify changes in the IT management strategy (supply provisions) to support the new role of IS in the organization

  36. Tips and Bits for this Session • Fact finding processes to obtained relevant information to develop IS/IT strategy • There are techniques to analyze and interpret the development of IS/IT Strategy • No trivial attempt to develop IS/IT strategy • More techniques to come….

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