Developing an IS/IT Strategy

Session Objectives

Understand the process of developing IS/IT Strategic Planning

Understand the components of IS/IT Strategic Planning

Understand how to evaluate IS/IT Strategic Planning

IS/IT Strategy Definition….

IS strategy defines the organization’s requirement for information systems to support the overall strategy of the business

The IT strategy is outlining the vision of how the organization’s demand for information and systems will be supported by IT

“An IS strategy brings together the business aims of the company, an understanding of the information needed to support those aims, and the implementation of computer systems to provide the information.

IS/IT Strategy is part of IS/IT Plan

Planning for the effective long-term management and optimal impact of information—in all its forms (IS, IT, manual and computer systems, organizational aspects of the management IS/IT throughout the business).

“The process of deciding the objectives for organizational computing and identifying potential computer applications which the organization should implement” (Sethi, 88)

It is a plan for the development of systems towards some future vision of the role of IS in the organization

The Objectives of Developing IS/IT Strategy

Alignment of IS/IT with the businessGaining competitive advantageBuilding cost effectiveDeveloping the appropriate resources

IS/IT strategy formulation

IS/IT planning

IS/IT strategy process

IS/IT Strategy Process Should Become an Integral Part of Business Strategy, Business Plan, and Its Implementation.

The primary objective to develop IS strategy is to identify value-added portfolio of applications that will have strategic impact .

Tips to Develop IS/IT strategy

The Evolution of the IS/IT Strategy Process: Technology Focus to Strategic Focus

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

Main task IS/ITapplicationmapping

Definingbusinessneeds

Detailed ISplanning

Strategic/competitiveadvantage

Linkage to businessstrategy

Keyobjective

Managementunderstanding

Agreeingpriorities

Balancing theportfolio

Pursuingopportunities

Integrating IS andbusiness strategies

Directionform

IT led Seniormanagementinitiative

User and ITtogether

Executives/senior managementand users

Coalition ofusers/managementand IT

Mainapproach

Bottom-updevelopment

Top-downanalysis

Balanced top-down andbottom-up

Entrepreneurial(userinnovation)

Multiple method atsame time

Summarydescription

Technology led Methoddriven

Administrative

Business led Organization led

Conform these stages with the evolution of IS/IT roles

IS Planning Problems

Fail to get top management supportValue system does not go throughout

organizationLack of proper person to the jobNot having clear-cut business strategyFail to anticipate new IT developmentIgnorance of environment-economy,

politic, etc

The Model of Strategic IS/IT Planning Processes

Inputs– Internal business environment

• Current business strategy, objectives, resources, processes and culture and values of business

– External business environment• The economic, industrial and competitive climate

– Internal IS/IT environment• Current IS/IT perspective in the business, its maturity,

business coverage and contribution, skills, resources and technological infrastructure

– External IS/IT environment• Technology trends and opportunities and the use made of

IS/IT by external bodies

The Model of Strategic IS/IT Planning Processes

Outputs– IS/IT management strategy

• The common elements of the strategy that apply throughout the organization, ensuring consistent policies where needed

– Business IS/IT strategy• How each unit or function will deploy IS/IT in achieving its

business objectives. • Alongside each of these are application portfolios to be

developed for business unit and business models, describing the information architecture of each unit.

• The portfolios may include how IS/IT will be used at some future date, to help the units to achieve their objectives

– IT strategy• Policies and strategies for management of technology and

specialist resources

External Business Environment Internal Business Environment

Internal IS/IT environment

Current Applications Portfolio

External IS/IT Environment

Planning Approaches, Tools and Techniques

Strategic IS/IT Planning Process

IS/IT Management Strategy Business IS Strategies IT Strategy

Applications Portfolio Model & Matrices

Types of Deliverables from The IS Planning Processes

Hard deliverables– The current situation– The vision and rationale for what is being put into

place—information, systems, technology, people, and so on.

– The plans for how it is going to be achieved, with the milestones along the route

Soft deliverables– Relate to human factors: skill, awareness and

motivation.

InitiatePlanningProcess

Understand theCurrent

Situationand Interpret

Business Needs

Define/UpdateInformation and

SystemsArchitecture

DetermineBusiness IS

Strategy

Formulate ITStrategy

PrepareMigrationPlans and

Business Case

BusinessStrategy and

ProposedDevelopmentProgrammme

IS/IT Strategyand Proposed

plans

Business andTechnical

Environment

PreviousIS/IT

Strategy

OtherPlanningActivities

Framework for the IS Planning Process

Initiate Planning Process

The purpose, objectives, scope and deliverables are confirmed

The approach determined and resourced acquired, such as automated tools

Business participants identified and team assembled and trained

Expectations, such issues and problems addressed, and risk management proposals put into gear

Process steering and management mechanisms created

How the work will interface with and feed into business planning The people to be interviewed, or who are needed to participate in

group sessions are identified

Plan for the work, tasks, timing, roles and responsibilities, and checkpoints defined.

Understand the Current Situation and Interpret Business Need

· Analysis of the business strategy, objectives, critical success factors (CSFs), critical problems, and processes, in order to determine the current situation, and its strengths and weaknesses, and the information needs and thus the focus for investment in systems to meet these.

· Evaluation of the current IS/IT operation – its systems, information provision, resources, organization, skills and services, to determine coverage and contribution and where improvements would be beneficial.

·  Innovative analysis of the external and internal business environment to identify potential applications of IS/IT.

Determine the Business IS Strategy

The accumulated business IS demand is turned into recommendations for the deployment of IS/IT throughout the organization and at SBU level.

Define Information and System Architecture

This step takes the results of the analysis of procedures and information needs in order to build a proposed business model for the business.

It represents the future “ideal” in process, information and system terms, and is needed to plot a direction when developing migration plans.

Formulated IT Supply Proposals

IS strategy and the IT supply proposals can be fed back into the business strategy, for consideration and consolidation to occur, and senior business management to decide on the likely candidates for the investment programme for the business.

 For IS/IT management, it means that the strategy can be

firmed up to give a clearer directions for where IS is aiming to go.

 Outline plans can the be constructed to give a route map,

and milestone for the main initiatives.

Business IS Strategy

It states how the business will deploy IS/IT in achieving its objectives.

To link IS/IT firmly to the business strategy

It states the applications and services requirements for the SBU

Give an example of Business IS Strategy??

IT Strategy: Management of Supply

To define how resources and technologies will be managed and developed to satisfy business IS strategies.

It consists of:– Application portfolio management– Organization of IS/IT– Managing the info resources and provision of info

services– Managing investment, prioritization and benefits– Managing application development– Managing technology

Give an example of IT Strategy??

IS/IT Management Strategy

Apply throughout the organization, ensuring consistent policies where needed

It covers:– Scope and rationale– IS/IT organization– Investment and prioritization policies– Vendor policies– Human impact policies– IS accounting policies

Give an example of IS/IT Management Strategy??

Success Criteria in Developing IS/IT Strategy

Success Criteria

Improve performanceGaining competitive advantageAlign IT investment with business strategyBetter communicationImprove management commitmentBetter allocation of IT resourcesBetter IT forecasting requirement

Try to quantify the success criteria for old vs. new system??

Factors affecting IS/IT Development

External business External technologyInternal businessInternal technology

Give examples on how those factors affect IS/IT Development ??

Context of IS/IT Strategy

Objectives of IS/IT Strategy Formulation and Planning

Discussion on the end of Chapter 3

What is IS/IT Strategy?Why Developing IS/IT Strategy?How IS/IT Strategy fits in Business Strategy?Who in charge developing IS/IT Strategy?What are steps to develop IS/IT Strategy? How do you evaluate the success of IS/IT strategy