R. Ching, Ph.D. • MIS • California State University, Sacramento

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R. Ching, Ph.D. • MIS • California State University, Sacramento

  1. 1. R. Ching, Ph.D. • MIS • California State University, Sacramento 1 Week 5Week 5 Monday, September 26Monday, September 26 • IT PlanningIT Planning • Strategic IS AlignmentStrategic IS Alignment
  2. 2. R. Ching, Ph.D. • MIS • California State University, Sacramento 2 Planning TechniquesPlanning Techniques • Stages of Growth: Nolan's Stages TheoryStages of Growth: Nolan's Stages Theory • Rockart's Critical Success Factors (CSF)Rockart's Critical Success Factors (CSF) • Porter's Competitive Forces ModelPorter's Competitive Forces Model • Porter's Value Chain AnalysisPorter's Value Chain Analysis • e-Business value matrixe-Business value matrix • Linkage analysis planningLinkage analysis planning • Scenario planningScenario planning
  3. 3. R. Ching, Ph.D. • MIS • California State University, Sacramento 3 IT ResourceIT Resource Nolan's Stages TheoryNolan's Stages Theory IntroductionIntroduction ContagionContagion ControlControl IntegrationIntegration TimeTime InvestmentInvestment in ITin IT Stage 1Stage 1 Stage 2Stage 2 Stage 3Stage 3 Stage 4Stage 4 An organization’s experience with adopting ITAn organization’s experience with adopting IT DiffusionDiffusion
  4. 4. R. Ching, Ph.D. • MIS • California State University, Sacramento 4 Major Dimensions of CSFsMajor Dimensions of CSFs ExternalExternal InternalInternal MonitoringMonitoring (Control)(Control) BuildingBuilding (Innovation)(Innovation) SourcesSources • IndustryIndustry • StrategyStrategy • EnvironmentEnvironment • TemporalTemporal • PositionPosition Interest ratesInterest rates New skillNew skill acquisitionacquisition
  5. 5. R. Ching, Ph.D. • MIS • California State University, Sacramento 5 Porter’s Five Forces ModelPorter’s Five Forces Model Forces that Shape StrategyForces that Shape Strategy IndustryIndustry CompetitorsCompetitors Rivalry amongRivalry among existing firmsexisting firms SuppliersSuppliersSuppliersSuppliers Customers andCustomers and BuyersBuyers Customers andCustomers and BuyersBuyers PotentialPotential EntrantsEntrants PotentialPotential EntrantsEntrants SubstitutesSubstitutesSubstitutesSubstitutes Bargaining power of buyersBargaining power of buyers Threat of substitute products orThreat of substitute products or servicesservices Bargaining power ofBargaining power of supplierssuppliers Threat of new entrantsThreat of new entrants     How will the businessHow will the business react to threats (andreact to threats (and opportunities)?opportunities)?
  6. 6. R. Ching, Ph.D. • MIS • California State University, Sacramento 6 Porter’s Five Forces ModelPorter’s Five Forces Model IndustryIndustry CompetitorsCompetitors Rivalry amongRivalry among existing firmsexisting firms SuppliersSuppliersSuppliersSuppliers PotentialPotential EntrantsEntrants PotentialPotential EntrantsEntrants SubstitutesSubstitutesSubstitutesSubstitutes Bargaining power of buyersBargaining power of buyers Threat of substitute products orThreat of substitute products or servicesservices Bargaining power ofBargaining power of supplierssuppliers Threat of new entrantsThreat of new entrants     Customers andCustomers and BuyersBuyers Customers andCustomers and BuyersBuyers The strategy and actions an organization adoptsThe strategy and actions an organization adopts dependdepend upon its perceptions of itself and these threats.upon its perceptions of itself and these threats. The strategy and actions an organization adoptsThe strategy and actions an organization adopts dependdepend upon its perceptions of itself and these threats.upon its perceptions of itself and these threats. Porter’s strategies:Porter’s strategies: • Product differentiation (non-duplicable product or service)Product differentiation (non-duplicable product or service) • Low-cost producerLow-cost producer • Market niche (market segment or geographical market)Market niche (market segment or geographical market) Porter’s strategies:Porter’s strategies: • Product differentiation (non-duplicable product or service)Product differentiation (non-duplicable product or service) • Low-cost producerLow-cost producer • Market niche (market segment or geographical market)Market niche (market segment or geographical market)
  7. 7. R. Ching, Ph.D. • MIS • California State University, Sacramento 7 Value Chain AnalysisValue Chain Analysis InboundInbound logisticslogistics OperationsOperations OutboundOutbound logisticslogistics MarketingMarketing and salesand sales ServiceService Firm infrastructureFirm infrastructure Human resource managementHuman resource management Technology developmentTechnology development ProcurementProcurement Margin MarginMargin Margin SupportSupport ActivitiesActivities Primary ActivitiesPrimary Activities CustomersCustomers How can value be added at every activity?How can value be added at every activity?
  8. 8. R. Ching, Ph.D. • MIS • California State University, Sacramento 8 e-Business Value Matrixe-Business Value Matrix • Project categories:Project categories: – New fundamentalsNew fundamentals – Operational excellenceOperational excellence – Rational experimentationRational experimentation – Breakthrough strategyBreakthrough strategy • Value of the project (low, high)Value of the project (low, high) – Criticality to businessCriticality to business – Newness of ideaNewness of idea
  9. 9. R. Ching, Ph.D. • MIS • California State University, Sacramento 9 e-Business Value Matrixe-Business Value Matrix Criticality to businessCriticality to business N ew nessofIdea N ew nessofIdea New fundamentalsNew fundamentals OperationalOperational excellenceexcellence RationalRational experimentationexperimentation BreakthroughBreakthrough strategystrategy LowLow HighHigh LowLow HighHigh OperationalOperational excellence, highexcellence, high criticality to business,criticality to business, high newness of ideahigh newness of idea
  10. 10. R. Ching, Ph.D. • MIS • California State University, Sacramento 10 Linkage Analysis PlanningLinkage Analysis Planning • StepsSteps – Define power relationships among various players andDefine power relationships among various players and stakeholders: Identify links between internal and externalstakeholders: Identify links between internal and external entitiesentities – Map out the extended enterprise to include suppliers,Map out the extended enterprise to include suppliers, buyers and strategic partners: Manage the linkagesbuyers and strategic partners: Manage the linkages – Plan electronic channels to deliver the informationPlan electronic channels to deliver the information component of products and services: Facilitate and enhancecomponent of products and services: Facilitate and enhance the exchange of informationthe exchange of information
  11. 11. R. Ching, Ph.D. • MIS • California State University, Sacramento 11 Linkage Analysis PlanningLinkage Analysis Planning Electronic ChannelsElectronic Channels Top managementTop management MiddleMiddle managementmanagement OperationsOperations managementmanagement RetailersRetailers DistributorsDistributors GovernmentGovernment StockholdersStockholders TraditionalTraditional competitorscompetitors NewNew competitorscompetitors SuppliersSuppliers
  12. 12. R. Ching, Ph.D. • MIS • California State University, Sacramento 12 Scenario PlanningScenario Planning • Steps:Steps: – Define a decision problem and timeframe to bound theDefine a decision problem and timeframe to bound the analysis (analysis (What if…What if…)) – Identify the major known trends that will affect theIdentify the major known trends that will affect the decision problemdecision problem – Identify just a few driving uncertaintiesIdentify just a few driving uncertainties – Construct the scenarios based on uncertaintiesConstruct the scenarios based on uncertainties • Trigger eventsTrigger events
  13. 13. R. Ching, Ph.D. • MIS • California State University, Sacramento 13 Strategic Information Systems PlanningStrategic Information Systems Planning (SISP)(SISP) • DefinitionDefinition ... a process conducted within the contexts of scope,... a process conducted within the contexts of scope, perspective, time frame, and level of abstraction, with any orperspective, time frame, and level of abstraction, with any or all of the following agenda: (1) supporting and influencingall of the following agenda: (1) supporting and influencing the strategic direction of the firm through identification ofthe strategic direction of the firm through identification of value-adding computerized information systems, (2)value-adding computerized information systems, (2) integrating and coordinating various organizationalintegrating and coordinating various organizational technologies through development of holistic informationtechnologies through development of holistic information architectures, and (3) developing general strategies forarchitectures, and (3) developing general strategies for successful systems implementation.successful systems implementation. Segars, Grover and Teng.1998Segars, Grover and Teng.1998
  14. 14. R. Ching, Ph.D. • MIS • California State University, Sacramento 14 Architectures forArchitectures for sharingsharing organizational andorganizational and interorganizationalinterorganizational data anddata and integrationintegration technologiestechnologies Architectures forArchitectures for sharingsharing organizational andorganizational and interorganizationalinterorganizational data anddata and integrationintegration technologiestechnologies SISP ProgressionSISP Progression IS viewed asIS viewed as strategicstrategic resourceresource EnablingEnabling initiatives forinitiatives for gaininggaining competitivecompetitive advantageadvantage EnablingEnabling initiatives forinitiatives for gaininggaining competitivecompetitive advantageadvantage Alignment ofAlignment of IS strategyIS strategy with corporatewith corporate strategystrategy Alignment ofAlignment of IS strategyIS strategy with corporatewith corporate strategystrategy
  15. 15. R. Ching, Ph.D. • MIS • California State University, Sacramento 15 Context CharacteristicsContext Characteristics Scope (broad)Scope (broad)Scope (broad)Scope (broad) PerspectivePerspective (upper management)(upper management) PerspectivePerspective (upper management)(upper management) Time FrameTime Frame (long range)(long range) Time FrameTime Frame (long range)(long range) Level of AbstractionLevel of Abstraction (conceptual)(conceptual) Level of AbstractionLevel of Abstraction (conceptual)(conceptual) StrategicStrategic InformationInformation SystemsSystems PlanningPlanning
  16. 16. R. Ching, Ph.D. • MIS • California State University, Sacramento 16 PlanningPlanning EffectivenessEffectiveness PlanningPlanning EffectivenessEffectiveness Coalignment*Coalignment*Coalignment*Coalignment* Six Process DimensionsSix Process Dimensions ComprehensivenessComprehensivenessComprehensivenessComprehensiveness FormalizationFormalizationFormalizationFormalization FocusFocusFocusFocus FlowFlowFlowFlow ParticipationParticipationParticipationParticipation ConsistencyConsistencyConsistencyConsistency *Alignment of dimensions*Alignment of dimensions Favorable coalignment willFavorable coalignment will lead to effective planninglead to effective planning
  17. 17. R. Ching, Ph.D. • MIS • California State University, Sacramento 17 1. Comprehensiveness1. Comprehensiveness • Thoroughly canvassing a wide range of alternativesThoroughly canvassing a wide range of alternatives • Surveying a full range of objectivesSurveying a full range of objectives • Carefully weighing the costs and risks of variousCarefully weighing the costs and risks of various consequencesconsequences • Intensively searching for information to evaluate alternativeIntensively searching for information to evaluate alternative actionsactions • Objectively evaluating information or expert judgmentObjectively evaluating information or expert judgment regarding alternative actionsregarding alternative actions • Re-examining the positive and negative consequences of allRe-examining the positive and negative consequences of all known alternativesknown alternatives • Making detailed plans, including consideration ofMaking detailed plans, including consideration of contingencies, for implementing a chosen actioncontingencies, for implementing a chosen action
  18. 18. R. Ching, Ph.D. • MIS • California State University, Sacramento 18 2. Formalization2. Formalization • Existence of structures, techniques, written procedures andExistence of structures, techniques, written procedures and policies that guide the planning processpolicies that guide the planning process – Written policies that structure the process of planningWritten policies that structure the process of planning – Formalized techniques adopted for the purpose ofFormalized techniques adopted for the purpose of conducting strategic planningconducting strategic planning – Known procedures for initiating the planning processKnown procedures for initiating the planning process • Processes systemize information collection and disseminationProcesses systemize information collection and dissemination Formalization vs. FlexibilityFormalization vs. Flexibility
  19. 19. R. Ching, Ph.D. • MIS • California State University, Sacramento 19 3. Focus3. Focus • The balance between creativity and control orientationsThe balance between creativity and control orientations inherent within the strategic planning systeminherent within the strategic planning system Innovation vs. IntegrationInnovation vs. Integration – Innovative orientation nurtures creativity (innovative,Innovative orientation nurtures creativity (innovative, novel solutions)novel solutions) – Integrative orientation focuses more on control (budgetary,Integrative orientation focuses more on control (budgetary, cost performance, controlled diffusion of assets within thecost performance, controlled diffusion of assets within the organization)organization)
  20. 20. R. Ching, Ph.D. • MIS • California State University, Sacramento 20 4. Flow4. Flow • Locus of authority or devolution of responsibilities forLocus of authority or devolution of responsibilities for strategic planningstrategic planning – Roles played by corporate and divisional managers in theRoles played by corporate and divisional managers in the initiation of the planning process (vertical orientation)initiation of the planning process (vertical orientation) Top-down vs. Bottom-upTop-down vs. Bottom-up – Top-down: limited participation of lower level managersTop-down: limited participation of lower level managers in the initiation of the strategic planning processin the initiation of the strategic planning process – Bottom-up: functional management involvement in theBottom-up: functional management involvement in the initiation of strategic planninginitiation of strategic planning
  21. 21. R. Ching, Ph.D. • MIS • California State University, Sacramento 21 5. Participation5. Participation • Breadth of organizational involvement in strategic planningBreadth of organizational involvement in strategic planning – Representation from the functional areasRepresentation from the functional areas Narrow vs. BroadNarrow vs. Broad – Narrow: fosters an isolated approach to plan formulationNarrow: fosters an isolated approach to plan formulation with little involvement or interaction among variouswith little involvement or interaction among various functional or operational managersfunctional or operational managers – Broad: a variety of functional and operational areas helpBroad: a variety of functional and operational areas help offset “bounded rationality” of top managersoffset “bounded rationality” of top managers
  22. 22. R. Ching, Ph.D. • MIS • California State University, Sacramento 22 6. Consistency6. Consistency • Concerned with the frequency of planning activities or cycles,Concerned with the frequency of planning activities or cycles, and evaluation /revision of strategic choicesand evaluation /revision of strategic choices Frequent vs. InfrequentFrequent vs. Infrequent – Infrequent: time frame longer, face-to-face meetings tendInfrequent: time frame longer, face-to-face meetings tend to be ad hoc or sporadic, planning cycles may be year-to-to be ad hoc or sporadic, planning cycles may be year-to- year (vs. continuous or consistent process)year (vs. continuous or consistent process) – Frequent high levels on consistency characterized byFrequent high levels on consistency characterized by continuous planning process with frequent meetings,continuous planning process with frequent meetings, constant communication among planning participants, andconstant communication among planning participants, and frequent assessment and revision of strategic directionfrequent assessment and revision of strategic direction
  23. 23. R. Ching, Ph.D. • MIS • California State University, Sacramento 23 PropositionProposition • Strategic IS planning systems that reflect a profile of rationalStrategic IS planning systems that reflect a profile of rational adaptation will be positively associated with planningadaptation will be positively associated with planning effectiveness. The structure or internal coalignment of aeffectiveness. The structure or internal coalignment of a rational adaptive planning system includes:rational adaptive planning system includes: – higher levels of comprehensivenesshigher levels of comprehensiveness – higher levels of formalizationhigher levels of formalization – a focus on control vs. creativitya focus on control vs. creativity – a top-down vs. bottom-up planning flowa top-down vs. bottom-up planning flow – higher levels of participationhigher levels of participation – higher levels on consistencyhigher levels on consistency Segars, Grover and Teng.1998Segars, Grover and Teng.1998
  24. 24. R. Ching, Ph.D. • MIS • California State University, Sacramento 24 CoalignmentCoalignment • Coalignment strongly associated with planning effectivenessCoalignment strongly associated with planning effectiveness – If dimensions of strategic planning systems favorablyIf dimensions of strategic planning systems favorably align, the planning system as a structure should be morealign, the planning system as a structure should be more successful than its individual dimensionssuccessful than its individual dimensions – Effectiveness may beyond performance measurement (e.g.,Effectiveness may beyond performance measurement (e.g., ROI, ROE)ROI, ROE) – Alternative:Alternative: value-addedvalue-added approachapproach • Improved management makingImproved management making • Lower costs of developmentLower costs of development • Plans that are actionable and implementedPlans that are actionable and implemented
  25. 25. R. Ching, Ph.D. • MIS • California State University, Sacramento 25 Planning effectivenessPlanning effectivenessPlanning effectivenessPlanning effectiveness Internal Planning System CoalignmentInternal Planning System Coalignment • The planning system should be structured process ofThe planning system should be structured process of opportunity search that “adapts” through consistent feedbackopportunity search that “adapts” through consistent feedback and wide participationand wide participation – Rational planning tendencies of extensive alternativeRational planning tendencies of extensive alternative generation and solution search, formalized procedures andgeneration and solution search, formalized procedures and policies for planning, a focus on control, and top-downpolicies for planning, a focus on control, and top-down planning flowplanning flow – Adaptive tendencies of wide participation profiles and highAdaptive tendencies of wide participation profiles and high levels of planning consistencylevels of planning consistency Rational adaptationRational adaptationRational adaptationRational adaptation
  26. 26. R. Ching, Ph.D. • MIS • California State University, Sacramento 26 Implications for Strategic IS PlanningImplications for Strategic IS Planning • Planning must be designed, evaluated, and refined such thatPlanning must be designed, evaluated, and refined such that the overall activity of planning does not become dysfunctionalthe overall activity of planning does not become dysfunctional • Emergent systems of planning should reflect theEmergent systems of planning should reflect the environmental and organizational context within which theyenvironmental and organizational context within which they functionfunction
  27. 27. R. Ching, Ph.D. • MIS • California State University, Sacramento 27 Source:Source: “Strategic Information Systems Planning: Planning“Strategic Information Systems Planning: Planning System Dimensions, Internal Coalignment and ImplicationsSystem Dimensions, Internal Coalignment and Implications for Planning Effectiveness,” Albert H. Segars, Varun Grover,for Planning Effectiveness,” Albert H. Segars, Varun Grover, and James T. Teng.and James T. Teng. Decision SciencesDecision Sciences (journal), vol. 29, no. 2(journal), vol. 29, no. 2 (Spring 1998).(Spring 1998).
  28. 28. R. Ching, Ph.D. • MIS • California State University, Sacramento 28 Architecture and InfrastructureArchitecture and Infrastructure • Architecture – a blueprint that shows interrelationships of theArchitecture – a blueprint that shows interrelationships of the components of a systemcomponents of a system – Emphasis on theEmphasis on the whatswhats – Based on the business modelBased on the business model • IT Infrastructure – implementation of the architectureIT Infrastructure – implementation of the architecture Purpose:Purpose: To deliver the right information to the right people atTo deliver the right information to the right people at the right timethe right time – Two parts:Two parts: • Technical IT infrastructure (processors,Technical IT infrastructure (processors, telecommunication, database, etc.)telecommunication, database, etc.) • Human IT infrastructureHuman IT infrastructure – Emphasis on theEmphasis on the howshows
  29. 29. R. Ching, Ph.D. • MIS • California State University, Sacramento 29 ArchitectureArchitecture • Defines guidelines and standardsDefines guidelines and standards • Service Oriented Architecture (SOA)Service Oriented Architecture (SOA) – Emphases on accessibility of others systems to data andEmphases on accessibility of others systems to data and functions, and reusability of programming codefunctions, and reusability of programming code – Supports the organization's agilitySupports the organization's agility
  30. 30. R. Ching, Ph.D. • MIS • California State University, Sacramento 30 InfrastructureInfrastructure • Delivering IT resources to support users throughout theDelivering IT resources to support users throughout the organizationorganization • Four layer infrastructure (Four layer infrastructure (Weill and BroadbentWeill and Broadbent)) – IT componentsIT components – Human IT infrastructureHuman IT infrastructure – Shared IT services – services that users can draw upon andShared IT services – services that users can draw upon and share to conduct businessshare to conduct business – Shared and standard IT applications – stable applicationsShared and standard IT applications – stable applications that change less frequentlythat change less frequently
  31. 31. R. Ching, Ph.D. • MIS • California State University, Sacramento 31 Structure of the IT InfrastructureStructure of the IT Infrastructure IT componentsIT components Shared IT servicesShared IT services Human IT infrastructureHuman IT infrastructure Shared and standardShared and standard IT applicationsIT applications Local applicationsLocal applications IT infrastructureIT infrastructure
  32. 32. R. Ching, Ph.D. • MIS • California State University, Sacramento 32 Three Views of InfrastructureThree Views of Infrastructure • Economies of scale (utility) – providing IT/IS as a service toEconomies of scale (utility) – providing IT/IS as a service to the business to facilitate operationsthe business to facilitate operations – Emphasis on reducing costsEmphasis on reducing costs • Support for business programs (dependent) – IT tied toSupport for business programs (dependent) – IT tied to business plan and value-added initiativesbusiness plan and value-added initiatives • Flexibility to meet changes in the marketplace (enabling) – ITFlexibility to meet changes in the marketplace (enabling) – IT planning tied to business strategic planplanning tied to business strategic plan – Co-alignment between business strategy and IT strategyCo-alignment between business strategy and IT strategy – Strategic IT and strategic IT planningStrategic IT and strategic IT planning
  33. 33. R. Ching, Ph.D. • MIS • California State University, Sacramento 33 Centralized vs. Distributed ProcessingCentralized vs. Distributed Processing • Centralized processing: Processing centrally located usually atCentralized processing: Processing centrally located usually at a single site (at least logically centralized)a single site (at least logically centralized) • Distributed process: Processing divided between (among)Distributed process: Processing divided between (among) different physically dispersed sitesdifferent physically dispersed sites – Transparency – The user or customer is unaware where theTransparency – The user or customer is unaware where the processing is handledprocessing is handled – Reduces network traffic to one locationReduces network traffic to one location – Closely places the data to where they are needed or usedClosely places the data to where they are needed or used – Follows a system-wide protocolFollows a system-wide protocol Depends on the organizationDepends on the organizationDepends on the organizationDepends on the organization
  34. 34. R. Ching, Ph.D. • MIS • California State University, Sacramento 34 Centralized ProcessingCentralized Processing Single SiteSingle Site
  35. 35. R. Ching, Ph.D. • MIS • California State University, Sacramento 35 Distributed ProcessingDistributed Processing NetworkNetwork Site 2Site 2 Geographically DistributedGeographically Distributed TransparencyTransparency Site 1Site 1 DatabaseDatabase Local DBMSLocal DBMS Global DataGlobal Data DictionaryDictionary Global DataGlobal Data DictionaryDictionary DDBMSDDBMSDDBMSDDBMS Site 1Site 1 DatabaseDatabase Local DBMSLocal DBMS Global DataGlobal Data DictionaryDictionary Global DataGlobal Data DictionaryDictionary DDBMSDDBMSDDBMSDDBMS Site 1Site 1 Heterogeneous vs. HomogenousHeterogeneous vs. Homogenous Site 3Site 3 Site 1Site 1 DatabaseDatabase Local DBMSLocal DBMS Global DataGlobal Data DictionaryDictionary Global DataGlobal Data DictionaryDictionary DDBMSDDBMSDDBMSDDBMS
  36. 36. R. Ching, Ph.D. • MIS • California State University, Sacramento 36

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