IT/IS Strategic Analysis Assessing and Understanding Current Situation

1. IT/IS Strategic AnalysisAssessing and Understanding Current Situation

2. Business Reengineering and IS Strategy • Business Process (BP): The unique ways in which organization coordinate and organize work activities, information, and knowledge to produce a valuable product or service (Laudon & Laudon, 1998)

3. Business Reengineering and IS Strategy (Continued..)

4. Business Reengineering and IS Strategy (Continued..) Contemporary management movements focus on BP: • TQM • Business reengineering • Team-based competition • Team-based organization • Networked organization • Learning organization

5. Business Reengineering and IS Strategy (continued..) • Business Process Reengineering (BPR) or Reengineering: a fundamental rethinking and radical design of business process to achieve dramatic improvements in cost, quality, speed, and services (James A. O’Brien, 2001) BPR → improves performance of an organization in radical ways

6. How BPR Differs from Business Improvement (James A. O’Brien, 2001)

7. Role of IS/IT in BPR Capabilities of IT as an enabler of change Identify need for change in development of business strategy Develop options for radical change IT can be use to model / simulate / prototype option for change Evaluation Of options IS and IT as a key component of achieving change Implementation Of chosen options

8. Reconciling IS/IT and BPR

9. Understanding The Current Situation • The current situation can be a starting point for any change program • Understanding the current situation involves understanding of: • Business Strategy • The business and technology environments • Current status of IS/IT in the business

10. Determine the IS Demands • Determination of the IS demands can be done by: • Asking requirements of all functional areas • Creating a group to define or update IS/IT strategy, to absorb written strategy statement and interpret them into relevant IS/IT principle, CSFs, application requirement

11. Determine the IS Demands(Continued..) • Ideally, the IS strategy should be developed parallel with: • The business strategy • Feeding trends • Opportunities • Ideas • To achieve it, several question below should be answered: • Where we are • Where we want to be • How to get there

12. Determine the IS Demands(Continued..)

13. Fact Finding and Analysis Tasks

14. Interpreting The Business Strategy

15. Key Elements of Internal Business Environment • The elements should be identified and analyzed: • Business strategy (both objectives and means of achieving them) • Current business process, activities, and main information entities (e.g. customer, stock item, account) and how they relate to other entities • The organizational environment (structure, assets, skills, culture, etc) • Based on those elements, the information, systsems and technology can be assessed and prioritized

16. Business Strategy • Maybe exists on: • Formal and written documents • In the head of individuals • In the case of no well documented of business strategy, they should be identified through: • Questioning • Analysis and creative prompting

17. Examining the Current IS/IT Environment • The goal is establishing the gap between current and future targeted implementation • Targeted portfolio • Effects to organization, the competencies, the technical infrastructure, and other partners

18. Examination of External IT Environment • To take account of trends and opportunities with emerging technology • To investigate how competitive the organization in applying IT

19. Evaluation of Internal IT Environment • To evaluate application portfolio • To evaluate of current information resources • To evaluate of current infrastructure and IT services

20. Techniques for Interpretation and AnalysisCurrent Situation and Business Strategy

21. Balanced Scorecard • Developed by Kaplan and Norton (Harvard Business Scholl) • Examine performance of organization from four perspectives: • Financial • Internal business perspective • Customer perspective • Innovation and learning perspective • In each perspective, there are objectives and how to measure them

22. Balanced Scorecard(Continued..)

23. Example of Balanced Scorecard

24. Critical Success Factor (CSF) Analysis • Can be used to develop business strategy and IS/IT strategy as well • CSFs are : • key areas where “things must go right” for the business to flourish • The limited number of areas in which results, if the are satisfactory, will ensure successful competitive performance for the organization

25. Critical Success Factor (CSF) Analysis (Continued)

26. Critical Success Factor (CSF) Analysis (Continued)

27. Example of CSF Analysis Business objectives • Increase market share • Improve productivity • Others Critical Success Factors Create new markets Automate processes Maintain relationship Others Information system needs Customer Intelligence Systems, Web-based app A/R, A/P, G/L, etc Customer database …

28. Combination of CSF and Balanced Scorecard

29. Combination of CSF and Balanced Scorecard (continued..)

30. Business Process Analysis • A technique for assessing the effectiveness of core business processes in support of business objectives and drivers form one or a number of SBUs, or from specific business areas within SBUs • The result is a decision to redesign one or a number of business processes

31. Approaches to Redesign Processes • Systemic approach (improvement of existing process) • Clean sheet approach (design processes from scratch)

32. Focus of Redesign Processes • Known as ESIA • Eliminate all non-value-adding activities • Simplify aspect of work where possible • Integrate elements of the process • Automate where appropriate

33. Attention of ESIA

34. Different Effects of Implementation of IS/IT

35. Organization Modeling • A structured technique used to ensure comprehensive examination and documentation of a business and its IS/IT environment