O'Brien MIS, 6th ed.
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O'Brien MIS, 6th ed.






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  • i.e. Look at UPS site – IT Governance link http://pressroom.ups.com/mediakits/etech/technology/ UPS IT Governance: The Key to Aligning Technology Initiatives with Business Direction

O'Brien MIS, 6th ed. O'Brien MIS, 6th ed. Presentation Transcript

  • Developing Business/Information Technology Strategies Ch9 Section I
  • Learning Objectives
    • Discuss the role of planning in the business use of information technology, using the scenario approach and planning for competitive advantage.
    • Discuss the role of planning and business models in the development of e-business strategies, architectures, and applications.
  • Learning Objectives (continued)
    • Identify several change management solutions for end user resistance to the implementation of new e-business strategies and applications.
    • Identify the importance of business & IT alignment
  • Section I
    • Planning Fundamentals
  • Organizational Planning (continued)
    • Strategic Planning
    • Strategic Visioning
    • Tactical Planning
    • Operational Planning
  • Organizational Planning
    • The Planning Process
    • Evaluating organizational accomplishments Analyzing the business, economic, political, and societal environment
    • Anticipating and evaluating the impact of future developments
  • IT Strategy
    • Set of decisions made by IT and senior management
    • Deployment of technology infrastructures
    • Relationship of technology choices to business choices
    An I/T Strategy is a set of discrete actionable interventions which ensure that the firm I/T capabilities deliver value towards strategic business objectives in a cost efficient manner
  • IT Strategy (ctd)
    • I/T strategy may impact all aspects of the I/T portfolio : applications, communication, infrastructure, processes, governance, organization …
    • Not a one-shot activity : needs to be constantly refined and aligned with business priorities
    • Impact of an I/T strategy must be measurable in terms of business value - revenue/margin growth, cost reduction etc .
  • The IT strategic plan process Understand business issues Align IT strategy to business within business context Determine the implementation strategy Define the budget to implement initiatives / SLAs Define the IT strategic initiatives
    • Input from the Business strategic plan
    • Identify the evolution scenarios that impact the IT strategy
    • Understand the evolution in terms of
      • Business
      • Organization
      • Relations
    • Implement a Project Office to manage all the initiatives in
      • Infrastructure
      • Applications
      • Processes
    • Plan initiatives within the scenarios
    • Identify benefits / costs of the initiatives
      • Costs
      • Resources
      • Timing
    • Select initiative through the Master Plan tool
    • Establish periodic reviews
    • Define Application service level
    • Short-term staffing needs
    • Yearly budget
  • The Scenario Approach to Planning
    • Teams participate in a “microworld”
    • A variety of business scenarios are created
    • Alternative scenarios are created by teams or by business simulation software based on..
      • A variety of developments, trends, and environmental factors
    Align IT strategy to business within business context 2
  • Scenario Planning Grid IMPACT ON FIRM FEASIBILITY High Priority Medium Priority Low Priority HIGH MEDIUM LOW HIGH MEDIUM LOW Strategy A Strategy B Strategy C Strategy D Align IT strategy to business within business context 2
  • Planning for Competitive Advantage
    • Especially important in today’s competitive, complex environment
    • Involves an evaluation of potential benefits and risks
    • May include the competitive forces and competitive strategies models, as well as a value chain model of basic business activities
    • Use a strategic opportunities matrix to evaluate strategic potential
    Align IT strategy to business within business context 2
  • Planning for Competitive Advantage (continued) Align IT strategy to business within business context 2
  • Planning for Competitive Advantage (continued) Strengths Weaknesses Opportunities Threats
    • SWOT Analysis
    • Recommend strategies that ensure best alignment between external and internal environments
    Align IT strategy to business within business context 2 T Strategies O Strategies W Strategies S Strategies
  • Business Models and Planning
    • A conceptual framework that expresses the underlying economic logic and system that prove how a business can deliver value to customers at an appropriate cost and make money.
    • Specifies how the business will organize and operate
    • Focuses attention on how all the essential components fit into a complete system
    Align IT strategy to business within business context 2
  • e-Business Planning
    • 3 major components
    • Strategy development
    • Resource management
    • Technology architecture
    Determine the implementation strategy 3
  • e-Business Planning (continued)
    • IT architecture major components
      • Technology platform
      • Data resources
      • Applications architecture
      • IT organization
    Determine the implementation strategy 3
  • Examples of IT Planning Process Results
  • IT Strategic Initiatives Year 0 Today Long-term
    • Different applications
    • Lack of integration
    • Missing communication
    • Mix of owned and in-service applications
    • Islands of country I/T organizations
    • Common e-mail system
    • Company reporting system
    • Network separation and upgrade
    • Parent companies applications cloning
    • Applications migration
    • Video-conferencing and mobile communication
    • New HR system
    • New finance system
    • Single engineering releasing system
    • Virtual office for managers
    • Logistic harmonization
    • Document/Project management
    • Common applications
    • Applications reference models
    • Unique infrastructure
    • Common I/T policies and standards
    • Personal productivity
    • Mobile interconnectivity
    • Ubiquitous service availability
    TIME Tomorrow ILLUSTRATIVE Define the IT strategic initiatives 4
  • IT Strategy Implementation
    • Execute the strategy
    • Commitment and engagement of senior business management
      • Must occur prior to implementation planning
    • Strategic Alignment Maturity
      • Ability to adapt in harmonious fashion
    • Adoption of Measurement Criteria
      • Measure effects in several different dimensions
    Define the budget to implement initiatives / SLAs 5
  • Periodic Review
    • Define budget / time / resources for projects selected
      • Ensure initial assumptions are correct
      • Ensure implementation of plans are on schedule
    • Measurements are captured and reported
    Define the budget to implement initiatives / SLAs 5
  • Section II
    • Implementation Challenges
  • Implementation
    • A process of carrying out the plans for change in e-business strategies and applications that were developed during the planning process.
  • Implementing IT
    • Requires managing the effects of major changes in key organizational dimensions such as
      • business processes
      • organizational structure
      • Managerial roles
      • Employee work assignments
      • Stakeholder relationships
  • Dismissal Migration to New platforms Align to b usiness: Function evolution Maintain/ Improve LOW HIGH HIGH • Application A • ... • Application B • ... • Application C • ... • Application D • ... Company Strategy Business Requirements IT Implications Current portfolio evaluation Alignment to Business Technological Alignment Gap identification NEW APPLICATIONS DEVELOPMENT APPLICATION PORTFOLIO ANALYSIS • ... Comparing application portfolio with business requirements ILLUSTRATIVE Requires Change 1 2 3 4 5 5 4 3 2 1
  • Change Management
    • People are a major focus of organizational change management
      • Developing innovative ways to measure, motivate, and reward performance
      • Designing programs to recruit and train employees in the core competencies
    • Also involves analyzing and defining all changes facing the organization
  • End User Resistance and Involvement
    • Change can generate fear and resistance to change
    • Keys to countering end user resistance
      • Proper education and training
      • End user involvement in organizational changes
  • Ensuring Strategic Alignment Jerry N. Luftman model
  • Information Systems for Competitive Advantage
    • The Technology/Strategy Fit
      • An IS implementation should create a significant organizational change consistent with the business strategy
        • IT needs to be aligned to the business goals
  • Strategic Alignment Model
    • Business Strategy
      • Business Scope
      • Distinctive Competencies
      • Business Governance
    • Organization Infrastructure & Processes
      • Administrative Structure
      • Processes
      • Skills
    • IT Strategy
      • Technology Scope
      • Systemic Competencies
      • IT Governance
    • IT Infrastructure & Processes
      • Architecture
      • Processes
      • Skills
  • Alignment Maturity
    • Process which evaluates the IT/business alignment status of a specific organization
      • It has a defined number of levels and representations (5 levels)
      • It is based on a defined set of criteria (six key criteria)
  • Strategic Alignment Maturity Levels
    • Initial/Ad Hoc Process
      • Business and IT not aligned
    • Committed Process
      • Organization commits to becoming aligned
    • Established Focused Process
      • Established and Focused on business objectives
    • Improved/Managed Process
      • Reinforcing concept of IT as “Value Center”
    • Optimized Process
      • Integrated/Co-adaptive business and IT strategic planning
  • Strategic Alignment Maturity Criteria
    • Communications
    • Competency/value measurements
    • Governance
    • Partnerships
    • Scope and Architecture
    • Skills
  • Strategic Alignment Template
  • Discussion Questions
    • Planning is a useless endeavor , because developments in e-business and e-commerce, and in the political, economic, and social environments are moving too quickly nowadays. Do you agree with this statement?
    • “ Planning and budgeting processes are notorious for their rigidity and irrelevance to management action.” How can planning be made relevant to the challenges facing an e-business enterprise?
  • Discussion Questions (continued)
    • What planning methods would you use to develop e-business and e-commerce strategies and applications for your own business?
    • What are several e-business and e-commerce strategies and applications that should be developed and implemented by many companies today?
  • Discussion Questions (continued)
    • How can a company use change management to minimize the resistance and maximize the acceptance of changes in business and technology?
    • “ Many companies plan really well, yet few translate strategy into action.” Do you think this is true?
  • Discussion Questions (continued)
    • What major business changes beyond e-business and e-commerce do you think most companies should be planning for the next ten years?