Managing information systems 7th edition brow ch012

publishing as Prentice Hall 12-2PLANNING INFORMATION SYSTEMS RESOURCES • IS and business managers need to work together to guide their organization in the planning and management of IS r

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MANAGEMENT INFORMATION SYSTEMS

CHAPTER 12

PLANNING INFORMATION SYSTEM RESOURCES

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PLANNING INFORMATION SYSTEMS RESOURCES

• IS and business managers need to work together to guide their organization in the planning and management of

IS resources

- Chapter 12: Steps for effective IS resource planning to best position the IS organization to enable current and

future business goals

- Chapter 13: Roles, responsibilities, and some “best practices” for leading an IS organization

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BENEFITS OF INFORMATION RESOURCES PLANNING

• Creating a context for IS resource decision-making

• Aligning IS and business goals

• Balancing the tradeoffs between standardization and agility

• Obtaining IT capital investment approvals

This requires both a periodic strategic planning process, as well as an ongoing monitoring of the appropriateness of

IS plans in response to changes in the business and its environment.

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MULTI-STEP PLANNING PROCESS

( from an Enterprise perspective)

1. Assessment of current Information resources (the status quo)

2. Establishment of an Information Vision

3. Establishment of an IT Architecture for that vision

4. Formulation of an IS Strategic Plan (roadmap) to evolve an organization’s information resources from their current

status toward the desired vision and IT architecture

5. Formulation of short-term Operational IS Plans based on the IS Strategic Plan

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ALIGNING BUSINESS AND IS PLANNING

• IS decisions should be tightly aligned with the direction

of the business

• IS steps ideally impact the next step in the business

planning process, but in practice this is not

yet typically found

Fig 12.1 The Information Resources Planning Process

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ASSESSING CURRENT INFORMATION RESOURCES

• Current performance is compared to a previous plan, competitors,

or a set of past objectives

• Comparisons are made using:

- Operational data (usage of IS resources)

- Survey of client satisfaction with IS performance

- Benchmarks of what is being achieved at other organizations

Inventorying and critically evaluating an organization’s technical and human resources in terms of how well they

are meeting the organization’s business needs

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INFORMATION RESOURCES ASSESMENT:

Examples of Assessment Statements

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• Example: comparing actual performance to goals

Assessing IS Performance

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• IT managers should also consider assessing the attitudes of users about the performance of the IS

organization in relation to the current needs & future direction of the business

Measuring Attitudes of Users

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• Sets forth the fundamental rationale (or reason to exist) for activities of the IS organization

• Can vary substantially from one organization to another because some IS departments play more “support”

roles than “strategic” roles

• The extent to which the IS organization plays a strategic role can be measured by:

– the degree to which the organization is dependent on IT for business operations

– the degree to which IT is enabling the current business strategy

IS Organizational Mission Statement

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Assessing the IS Mission involves reconciling any differences between IS manager and business manager

views

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CREATING AN INFORMATION VISION

Developing a vision requires both an understanding of the future direction of the business and an understanding of the role information can best play in enabling that future business strategy

- Focus is on the long term

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DESIGNING THE IT ARCHITECTURE

• Specifies how the Technological and Human assets of the IS organization will be deployed in the future to

meet the information vision

Information Technology Architecture

• Depicts the way an organization’s information resources will be deployed to deliver its vision

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DESIGNING THE IT ARCHITECTURE

rationalization, resulting in enterprise-wide IT standardization

processes (such as with ERP systems)

enable local differences but also preserve enterprise-wide standards

Four Stages of IT Architecture Maturity (Ross, 2003):

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4 STAGES OF ARCHITECTURE MATURITY

Fig 12.5 Changing Resource Allocation across Architecture stages, Ross 2003

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IT CAPABILITIES AND BUSINESS METRICS FOR

IT ARCHITECTURE STAGES

Figure 12.6 IT Capabilities and Business Metrics for 4 IT Architecture Stages (Based on Ross, 2003)

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FORMULATING THE STRATEGIC IS PLAN

Strategic IS Plan

Long-term objectives (often three to five years) that represent measurable movement toward the Information

Vision and IT Architecture

and

Major initiatives that must be undertaken to achieve these objectives

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1. Setting objectives

2 Conducting an external analysis

3 Conducting an internal analysis

4 Establishing strategic initiatives

Most planning processes involve iterations through these 4 steps

4 Steps in Strategic IS Planning Process

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1 Setting objectives

– Measures are identified for each of the key result areas

– IS objectives may be established for:

- IS department service image

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2 & 3

Conducting internal and external analyses

– Review external environment and internal capabilities

– One approach: SWOT analysis

(strengths, weaknesses, opportunities, and threats)

– Identify leverage points or limiting factors for new strategic initiatives

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4 Establishing strategic initiatives

– Establish high-level initiatives for IS organization

– These initiatives will be translated into actual projects as part of the operational IS planning

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Example: Strategic IS Plan for mid-sized company

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OTHER TOOLS FOR IDENTIFYING STRATEGIC IT OPPORTUNITIES

• Critical Success Factors (CSFs)

- Information needs and processes critical to the success of an entire organization or a specific business function (e.g.,

sales)

• Analysis of Competitive Forces

- Using Porter’s 5 Forces model to analyze potential changes in competitive advantage due to changes in balance of

power between a business, its competitors, and other key stakeholders in the industry

- Examples of ways a company can create competitive advantage:

- 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

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• Value Chain Analysis

- Based on the value chain of Porter and Millar, analysis of Primary and Support activities of the

business

- Examine how data can be captured, manipulated, and distributed to better support each activity and its

linkages to other activities

- Idea-generation and action-planning sessions with business and IT managers can be used to generate

ideas for strategic applications of IT

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TOOLS FOR IDENTIFYING STRATEGIC IT OPPORTUNITIES

Strategic IT Application Opportunities in the Value Chain

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• Scenario Planning

- Used by leaders to address an uncertain future

- Alternative scenarios for what the future might look like are developed

- Typically a few major drivers are identified to create a matrix based on different values (e.g., high, low) of the drivers

- Characteristics of the scenarios are then used to help plan for the future

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FORMULATING OPERATIONAL IS PLANS

Details the major initiatives the organization needs to carry out in the short term to achieve its strategic

initiatives

Action plans for one or more years based on Strategic IS Plan, with a focus on prioritizing projects

currently underway and new projects

Specifies for current and newly defined IS projects:

- Expected benefits and risks

- Due dates

- Responsibilities

Operational IS Plan

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FORMULATING OPERATIONAL IS PLANS

Balancing the risks and returns of the Portfolio of IS Projects

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GUIDELINES FOR EFFECTIVE IS PLANNING

1. Early clarification of the purpose of the planning process is essential

2. The information resources planning effort should be viewed as an iterative effort

3. The plan should reflect realistic expectations

4. A unified approach to delivering IT services should be used

5. An effective IS plan will also take into consideration potential barriers and constraints

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