Mit6e Ch14 by Firli

8/6/2019 Mit6e Ch14 by Firli

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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 1

Managing Information Technology

6th Edition

CHAPTER 14

PLANNING INFORMATION

SYSTEMS RESOURCES


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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 organizations strategy

Setting a clear direction for the organizational

information resources is a critical high-level IT

management activity


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The Need for Direction

An organizational plan for the development ofinformation 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


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Business and IT Alignment

Alignment of IT strategy with the

organization's business strategy is a

fundamental principle

BusinessStrategy

InformationTechnology

Strategy


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Outputs of the Direction-Setting

Process

Formally developing an overall informationresources plan may be new to manyorganizations

There are several deliverables during the processdirection-setting process

Information resources assessment

Information vision

Information architecture

Strategic IS plan

Operational IS plan


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Process

Includes inventorying and critically evaluatingan organizations technical and humanresources in terms of how well they aremeeting the organizations business needs

Information Resources Assessment


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Process

An ideal view of the future state of the

organizations 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

Information vision and architecture


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Process

A written expression of the desired future about

how information will be used and managed inthe organization

Information Vision

Depicts the way an organizations informationresources will be deployed to deliver that vision

Information Technology Architecture


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ProcessInformation resources plans

Contains a set of longer-term objectives thatrepresent measurable movement toward theinformation vision and technology architecture

and a set of associated major initiatives thatmust be undertaken to achieve these objectives

Strategic IS plan


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ProcessInformation resources plans

Contains a set of longer-term objectives thatrepresent measurable movement toward theinformation vision and technology architecture

and a set of associated major initiatives thatmust be undertaken to achieve these objectives

Operational IS Plan


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The Process Of Setting Direction

IS decisions must be

tightly aligned with the

direction of the business

Decisions should impact

the next step in the

process, but that is notalways the case

IS and business planning


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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

Assessment


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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

Vision


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The process of constructing a viable fit

between the organizations objectives and

resources and its changing market and

technological opportunities

Strategic planning


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Lays out the major actions the organization

needs to carry out in the shorter term to

activate its strategic initiatives

Operational planning


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Needs-based (or project-oriented) planning

Until recently, many IS organizations were not

involved in the organizations business planning These organizations tended to adopt a needs-based

planning

Bottom-up, immediate approach to information resourcesplanning

Used when a specific, urgent business need called for a newsystem

Emphasis on project planning rather than overallorganizational planning

Traditional planning in the IS organization


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Assessing Current Information Resources

Should measure current levels of informationresources 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

Measuring IS use


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IT managers should assess the attitudes of

users and IS staff about the performance of

the IS organization in relating its activities tothe needs and direction of the business

Measuring Attitudes of Users


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Should set forth the fundamental rationale (or

reason to exist) for activities of the IS department

Can vary substantially from one organization toanother

IS departments may take on different roles:

Offensive Defensive

Strategic

IS Organizational Mission Statement


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The mission, or role, of the IS organization

should align with the needs of the business

IS Organizational Mission Statement


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Annual assessment of actual performance

compared to previous goals should be conducted

Assessing Performance Against Goals


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Creating an Information Vision

Information vision represents how seniormanagement wants information to be used andmanaged in the future

Steps:1. Speculation on how the businesss competitive

environment will change and how the companyshould take advantage of it

2. Business vision is specified and written3. Implications for information use are outlined

4. Information vision is written


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Designing the IT Architecture

ITArchitecture

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


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Four stages of IT architecture maturity:

1. Business Silos companies seek to maximize

individual business unit or functional needs

2. Standardized Technology companies seek to

enable IT efficiencies through shared services

and application rationalization, resulting in

enterprise-wide IT standardization


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Four stages of IT architecture maturity:

3. Optimized Core companies implemententerprise-wide business processes and data

with tightly linked systems and processes (suchas with ERP systems)

4. Business Modularity companies seek globalflexibility with loosely coupled IT-enabled

business process components, which enablelocal differences but also preserve enterprise-wide standards


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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


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This planning process includes:

Setting objectives

Conducting internal and external analyses

Establishing strategic initiatives

Most planning processes involve iterations

through these steps

The Strategic IS Planning Process


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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



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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 fornew strategic initiatives



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SWOT Analysis

Strengths Weaknesses

Opportunities Threats

SWOTAnalysis


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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 actualprojects in the operational planning step



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Strategy Agenda


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Critical success factors (CSFs)

Information needs and processes critical to the

success of a business function like sales or to theentire organization

Analysis of competitive forces

Competitive advantage can come about bychanging the balance of power between a

business and the other actors in the industry

Tools for identifying IT strategic opportunities


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Analysis of competitive forces (contd)

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



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Value chain analysis

IT can be used in each activity of the value chain

to capture, manipulate, and distribute the datanecessary 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



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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 tocreate a scenario space and then characteristics

of the scenarios are used to help plan for the

future



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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


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Multiyear operational IS plan developed for up

to a three-year time period

Focus is on project definition, selection, andprioritization

Steps:

1. Define multiyear IS operating objectives

2. IS development or acquisition projects then

defined and selected


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Portfolio view of IS operational plan allows fora balance between risks and return of IS

projects


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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 firms business priorities by the

annual budget


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Guidelines for Effective IS Planning

1. Early clarification of the purpose of the planningprocess is essential

2. The information resources planning effort

should be viewed as an iterative effort3. The plan should reflect realistic expectations

4. A unified approach to delivering IT servicesshould be used

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


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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


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All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

Copyright 2009 Pearson Education, Inc.Publishing as Prentice Hall

Mit6e Ch14 by Firli

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