Purpose of Information Systems Strategic Planning

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 Strategy:

 Definition:
o An integrated set of actions aimed at increasing
long-term well-being and strength of enterprise
relative to competitors.

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 Strategy must be coherent, consistent, and directional:

 Coherent means it is clear to both the business and IS

organization.
 Consistent means that it is constructed to fit together.
 Directional means it directs changes of some kind.

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 The need to complete strategic planning for
the IS function:

 The planning process enables IS to help the

organization meet its business objectives.

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The relationship between strategies and plans:
 A strategy is a collection of statements that expresses or
proposes a means through which an organization can fulfill
its mission:
 Identifies the goal or objective
 Insights
 A plan is a detailed description of how an organization can
accomplish its mission:
 Lays out in detail the steps necessary for the
organization to accomplish the goal.
 Plans turn insights into actions.

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 To be effective, the organization must implement strategic
planning as an ongoing process to ensure it keeps as current as
business and technology changes.

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IS strategic planning process may be initiated in an organization for
a variety of reasons:
 Systems investments are made that do not support business objectives.
 Loss of control of IS/IT, leading to individuals often struggling to
achieve incompatible objectives through IS/IT.
 Systems are not integrated. This can also lead to duplication of effort
and data leading to inaccuracy and no coherent information resource.
 No means of setting priorities for IS projects/resources and constantly
changing plans leading to lower productivity, etc.
 No mechanisms for deciding optimum resource levels or the best
means of supplying systems.
 Poor management information; it is either not available, inconsistent,
inaccurate or too slow.

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The benefits of IS planning include:
 Effective management of an expensive and critical asset of
the organization.
 Improving communication and the relationship between the
business and IS organization.
 Aligning the IS direction and priorities to the business
direction and priorities.
 Identifying opportunities to use technology for a competitive
advantage and increase the value to the business.
 Planning the flow of information and processes.
 Efficiently and effectively allocating IS resources.
 Reducing the effort and money required throughout the life
cycle of systems.

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 Aligning the IS direction and the business direction
properly having a considerable impact on the company’s
financial Performance.

 Proper alignment can:

 Improve efficiency and effectiveness
 Decrease costs
 Enhance competitive position

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 The benefits of aligning the IS direction and the business
direction:

 It can have a considerable impact on the company’s financial

performance by:
1. Improving efficiency and effectiveness
2. Decreasing costs
3. Enhancing competitive position

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 Symptoms of poor IS and business direction alignment:
1. Canceled projects.
2. Redundant projects.
3. Projects that do not deliver the intended value.
4. Lack of coordination between the business and IS.
5. Systems that do not meet the needs of the business.
6. Systems that cannot respond quickly to demands of business.
7. Business users unsatisfied with IS services.
8. Reactive, constant firefighting.
9. Never enough resources; fighting for resources.
10. Churning of priorities; slow progress.
11. Uninvolved business management.
12. High IS costs with a sense of low value.
13. Systems and tools not fully utilized.
14. Lack of integration of systems.
15. IS decisions made as a result of emotion or opinions.

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The components needed to be aligned in both business and IS:

 Business components include:

 Goal
 Objectives
 Strategies

 Information systems components include:

 Applications  Strategy
 Projects  Organization
 Budget  Processes
 metrics  Infrastructure

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Business strategies can result in unique IS strategies and priorities:
Business Strategy:
 High quality product  Low cost producer
 Quick time to market  High customer satisfaction
 Operate globally
IS Strategy:
 Quality modules, metrics  Low cost technology
 Flexible systems  Customer access
 Robust networks
IS Metric
 Number of incident reports  Total costs (business and IS)
 μ time to implement changes  Customer satisfaction survey
 WWW average response time

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Alternative business values:
1. Operational excellence: Has the best total cost strategy.
2. Customer intimacy: Supplies the best total solution for the
customer, builds a strong relationship with the customer, and
provides custom solutions at a reasonable cost.
3. Product leadership: A product leader continually improves
products and product offerings.
4. Creativity: Research and development, efficient engineering,
and time to market are critical.

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 In operationally excellent companies, business strategy focuses on:
 The business strategy focus is on operating and business process
efficiency, and on controlling costs.
 In operationally excellent companies, the IS strategy focuses on:
 The IS strategy needs to focus on:
 supporting business process improvement
 increasing efficiencies
 controlling costs
 IS projects that receive high priority in this environment include:
 Cost reductions, business process improvements, financial
analysis and reporting systems, quality systems, supplier
performance delivery systems, logistics systems, mobile
technology, and automation of the supply chain.

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 In customer intimate companies, the business strategy focuses on:
 The business strategy focuses on customer satisfaction and
customer needs.
 In customer intimate companies, the IS strategy focuses on
 Both customer and business satisfaction and provide technology
to improve the customer relationship.
 Flexible business applications must accommodate individual
customer needs.
 Strong customer relationship management (CRM), and order
management systems are critical to maintain a strong connection
with the customer and maintain detailed information about each
customer.

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In product leadership companies, the business strategy focuses on:
 The business strategy is future driven and focused on solving problems
and anticipating customer needs.
 The culture is usually flexible, decisive, and used to taking risks.

In product leadership companies, the IS strategy focus on:

 The IS strategy would include flexibility, providing technology that
enables cooperation and creativity, and supporting product management.
 Critical applications include Product Data Management (PDM(
engineering and CAD systems, and a CAD interface to engineering,
configurator, and project management.
 Knowledge management, conferencing, and product life cycle
management (PLM) would be useful.

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 Customer-intimate organizations may be able to achieve a
competitive advantage by using technology for improved
relationships with customers, proactively anticipating and
addressing customers’ unique needs.

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Planning and managing the flow of information throughout the
organization helps the organization:

 Planning and managing the flow of information throughout the

organization can:
 minimize labor, data redundancy, and inconsistency
 increase the quality and accuracy of the information

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 There are several different approaches to IS strategic planning in a
large corporate environment with multiple divisions.
 These strategies are:
1. Top-down approach
2. Bottom-up approach
3. Combination

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1) Top-down approach:
 This is where the corporate unit completes the initial plan,
establishes the areas of leverage, and recommends standards
across business units.
 This planning approach works best in a company with a strong
corporate entity with more power over the operating units.

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2) Bottom-up approach:
 In this approach, the business units complete their strategic plans
first.
 The corporate entity then completes its plan by identifying areas
common across the business units.
 This planning approach works best in a company with
autonomous divisions.

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3) Combination:
 This is where the business unit plan is done jointly with a
corporate entity, or initial high-level guidelines are developed as
the basis for the business unit plans.

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Top-down approach:
 This is where the corporate unit completes the initial plan, establishes
the areas of leverage, and recommends standards across business units.
 This planning approach works best in a company with a strong
corporate entity with more power over the operating units.
Bottom-up approach:
 In this approach, the business units complete their strategic plans first.
 The corporate entity then completes its plan by identifying areas
common across the business units.
 This planning approach works best in a company with autonomous
divisions.
Combination:
 This is where the business unit plan is done jointly with a corporate
entity, or initial high-level guidelines are developed as the basis for the
business unit plans.

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