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.

    1. 1. Developing Business/Information Technology Strategies Ch9 Section I
    2. 2. Learning Objectives <ul><li>Discuss the role of planning in the business use of information technology, using the scenario approach and planning for competitive advantage. </li></ul><ul><li>Discuss the role of planning and business models in the development of e-business strategies, architectures, and applications. </li></ul>
    3. 3. Learning Objectives (continued) <ul><li>Identify several change management solutions for end user resistance to the implementation of new e-business strategies and applications. </li></ul><ul><li>Identify the importance of business & IT alignment </li></ul>
    4. 4. Section I <ul><li>Planning Fundamentals </li></ul>
    5. 5. Organizational Planning (continued) <ul><li>Strategic Planning </li></ul><ul><li>Strategic Visioning </li></ul><ul><li>Tactical Planning </li></ul><ul><li>Operational Planning </li></ul>
    6. 6. Organizational Planning <ul><li>The Planning Process </li></ul><ul><li>Evaluating organizational accomplishments Analyzing the business, economic, political, and societal environment </li></ul><ul><li>Anticipating and evaluating the impact of future developments </li></ul>
    7. 7. IT Strategy <ul><li>Set of decisions made by IT and senior management </li></ul><ul><li>Deployment of technology infrastructures </li></ul><ul><li>Relationship of technology choices to business choices </li></ul>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
    8. 8. IT Strategy (ctd) <ul><li>I/T strategy may impact all aspects of the I/T portfolio : applications, communication, infrastructure, processes, governance, organization … </li></ul><ul><li>Not a one-shot activity : needs to be constantly refined and aligned with business priorities </li></ul><ul><li>Impact of an I/T strategy must be measurable in terms of business value - revenue/margin growth, cost reduction etc . </li></ul>
    9. 9. 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 <ul><li>Input from the Business strategic plan </li></ul><ul><li>Identify the evolution scenarios that impact the IT strategy </li></ul><ul><li>Understand the evolution in terms of </li></ul><ul><ul><li>Business </li></ul></ul><ul><ul><li>Organization </li></ul></ul><ul><ul><li>Relations </li></ul></ul><ul><li>Implement a Project Office to manage all the initiatives in </li></ul><ul><ul><li>Infrastructure </li></ul></ul><ul><ul><li>Applications </li></ul></ul><ul><ul><li>Processes </li></ul></ul><ul><li>Plan initiatives within the scenarios </li></ul><ul><li>Identify benefits / costs of the initiatives </li></ul><ul><ul><li>Costs </li></ul></ul><ul><ul><li>Resources </li></ul></ul><ul><ul><li>Timing </li></ul></ul><ul><li>Select initiative through the Master Plan tool </li></ul><ul><li>Establish periodic reviews </li></ul><ul><li>Define Application service level </li></ul><ul><li>Short-term staffing needs </li></ul><ul><li>Yearly budget </li></ul>1 2 3 4 5 OBJECTIVES IDENTIFICATION IMPLEMENTATION METHODS INITIATIVES DEFINITION
    10. 10. The Scenario Approach to Planning <ul><li>Teams participate in a “microworld” </li></ul><ul><li>A variety of business scenarios are created </li></ul><ul><li>Alternative scenarios are created by teams or by business simulation software based on.. </li></ul><ul><ul><li>A variety of developments, trends, and environmental factors </li></ul></ul>Align IT strategy to business within business context 2
    11. 11. 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
    12. 12. Planning for Competitive Advantage <ul><li>Especially important in today’s competitive, complex environment </li></ul><ul><li>Involves an evaluation of potential benefits and risks </li></ul><ul><li>May include the competitive forces and competitive strategies models, as well as a value chain model of basic business activities </li></ul><ul><li>Use a strategic opportunities matrix to evaluate strategic potential </li></ul>Align IT strategy to business within business context 2
    13. 13. Planning for Competitive Advantage (continued) Align IT strategy to business within business context 2
    14. 14. Planning for Competitive Advantage (continued) Strengths Weaknesses Opportunities Threats <ul><li>SWOT Analysis </li></ul><ul><li>Recommend strategies that ensure best alignment between external and internal environments </li></ul>Align IT strategy to business within business context 2 T Strategies O Strategies W Strategies S Strategies
    15. 15. Business Models and Planning <ul><li>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. </li></ul><ul><li>Specifies how the business will organize and operate </li></ul><ul><li>Focuses attention on how all the essential components fit into a complete system </li></ul>Align IT strategy to business within business context 2
    16. 16. e-Business Planning <ul><li>3 major components </li></ul><ul><li>Strategy development </li></ul><ul><li>Resource management </li></ul><ul><li>Technology architecture </li></ul>Determine the implementation strategy 3
    17. 17. e-Business Planning (continued) <ul><li>IT architecture major components </li></ul><ul><ul><li>Technology platform </li></ul></ul><ul><ul><li>Data resources </li></ul></ul><ul><ul><li>Applications architecture </li></ul></ul><ul><ul><li>IT organization </li></ul></ul>Determine the implementation strategy 3
    18. 18. Examples of IT Planning Process Results
    19. 19. IT Strategic Initiatives Year 0 Today Long-term <ul><li>Different applications </li></ul><ul><li>Lack of integration </li></ul><ul><li>Missing communication </li></ul><ul><li>Mix of owned and in-service applications </li></ul><ul><li>Islands of country I/T organizations </li></ul><ul><li>Common e-mail system </li></ul><ul><li>Company reporting system </li></ul><ul><li>Network separation and upgrade </li></ul><ul><li>Parent companies applications cloning </li></ul><ul><li>Applications migration </li></ul><ul><li>Video-conferencing and mobile communication </li></ul><ul><li>New HR system </li></ul><ul><li>New finance system </li></ul><ul><li>Single engineering releasing system </li></ul><ul><li>Virtual office for managers </li></ul><ul><li>Logistic harmonization </li></ul><ul><li>Document/Project management </li></ul><ul><li>Common applications </li></ul><ul><li>Applications reference models </li></ul><ul><li>Unique infrastructure </li></ul><ul><li>Common I/T policies and standards </li></ul><ul><li>Personal productivity </li></ul><ul><li>Mobile interconnectivity </li></ul><ul><li>Ubiquitous service availability </li></ul>TIME Tomorrow ILLUSTRATIVE Define the IT strategic initiatives 4
    20. 20. IT Strategy Implementation <ul><li>Execute the strategy </li></ul><ul><li>Commitment and engagement of senior business management </li></ul><ul><ul><li>Must occur prior to implementation planning </li></ul></ul><ul><li>Strategic Alignment Maturity </li></ul><ul><ul><li>Ability to adapt in harmonious fashion </li></ul></ul><ul><li>Adoption of Measurement Criteria </li></ul><ul><ul><li>Measure effects in several different dimensions </li></ul></ul>Define the budget to implement initiatives / SLAs 5
    21. 21. Periodic Review <ul><li>Define budget / time / resources for projects selected </li></ul><ul><ul><li>Ensure initial assumptions are correct </li></ul></ul><ul><ul><li>Ensure implementation of plans are on schedule </li></ul></ul><ul><li>Measurements are captured and reported </li></ul>Define the budget to implement initiatives / SLAs 5
    22. 22. Section II <ul><li>Implementation Challenges </li></ul>Ch9
    23. 23. Implementation <ul><li>A process of carrying out the plans for change in e-business strategies and applications that were developed during the planning process. </li></ul>
    24. 24. Implementing IT <ul><li>Requires managing the effects of major changes in key organizational dimensions such as </li></ul><ul><ul><li>business processes </li></ul></ul><ul><ul><li>organizational structure </li></ul></ul><ul><ul><li>Managerial roles </li></ul></ul><ul><ul><li>Employee work assignments </li></ul></ul><ul><ul><li>Stakeholder relationships </li></ul></ul>
    25. 25. 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
    26. 26. Change Management <ul><li>People are a major focus of organizational change management </li></ul><ul><ul><li>Developing innovative ways to measure, motivate, and reward performance </li></ul></ul><ul><ul><li>Designing programs to recruit and train employees in the core competencies </li></ul></ul><ul><li>Also involves analyzing and defining all changes facing the organization </li></ul>
    27. 27. End User Resistance and Involvement <ul><li>Change can generate fear and resistance to change </li></ul><ul><li>Keys to countering end user resistance </li></ul><ul><ul><li>Proper education and training </li></ul></ul><ul><ul><li>End user involvement in organizational changes </li></ul></ul>
    28. 28. Ensuring Strategic Alignment Jerry N. Luftman model
    29. 29. Information Systems for Competitive Advantage <ul><li>The Technology/Strategy Fit </li></ul><ul><ul><li>An IS implementation should create a significant organizational change consistent with the business strategy </li></ul></ul><ul><ul><ul><li>IT needs to be aligned to the business goals </li></ul></ul></ul>
    30. 30. Strategic Alignment Model <ul><li>Business Strategy </li></ul><ul><ul><li>Business Scope </li></ul></ul><ul><ul><li>Distinctive Competencies </li></ul></ul><ul><ul><li>Business Governance </li></ul></ul><ul><li>Organization Infrastructure & Processes </li></ul><ul><ul><li>Administrative Structure </li></ul></ul><ul><ul><li>Processes </li></ul></ul><ul><ul><li>Skills </li></ul></ul><ul><li>IT Strategy </li></ul><ul><ul><li>Technology Scope </li></ul></ul><ul><ul><li>Systemic Competencies </li></ul></ul><ul><ul><li>IT Governance </li></ul></ul><ul><li>IT Infrastructure & Processes </li></ul><ul><ul><li>Architecture </li></ul></ul><ul><ul><li>Processes </li></ul></ul><ul><ul><li>Skills </li></ul></ul>
    31. 31. Alignment Maturity <ul><li>Process which evaluates the IT/business alignment status of a specific organization </li></ul><ul><ul><li>It has a defined number of levels and representations (5 levels) </li></ul></ul><ul><ul><li>It is based on a defined set of criteria (six key criteria) </li></ul></ul>
    32. 32. Strategic Alignment Maturity Levels <ul><li>Initial/Ad Hoc Process </li></ul><ul><ul><li>Business and IT not aligned </li></ul></ul><ul><li>Committed Process </li></ul><ul><ul><li>Organization commits to becoming aligned </li></ul></ul><ul><li>Established Focused Process </li></ul><ul><ul><li>Established and Focused on business objectives </li></ul></ul><ul><li>Improved/Managed Process </li></ul><ul><ul><li>Reinforcing concept of IT as “Value Center” </li></ul></ul><ul><li>Optimized Process </li></ul><ul><ul><li>Integrated/Co-adaptive business and IT strategic planning </li></ul></ul>
    33. 33. Strategic Alignment Maturity Criteria <ul><li>Communications </li></ul><ul><li>Competency/value measurements </li></ul><ul><li>Governance </li></ul><ul><li>Partnerships </li></ul><ul><li>Scope and Architecture </li></ul><ul><li>Skills </li></ul>
    34. 34. Strategic Alignment Template
    35. 36. Discussion Questions <ul><li>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? </li></ul><ul><li>“ 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? </li></ul>
    36. 37. Discussion Questions (continued) <ul><li>What planning methods would you use to develop e-business and e-commerce strategies and applications for your own business? </li></ul><ul><li>What are several e-business and e-commerce strategies and applications that should be developed and implemented by many companies today? </li></ul>
    37. 38. Discussion Questions (continued) <ul><li>How can a company use change management to minimize the resistance and maximize the acceptance of changes in business and technology? </li></ul><ul><li>“ Many companies plan really well, yet few translate strategy into action.” Do you think this is true? </li></ul>
    38. 39. Discussion Questions (continued) <ul><li>What major business changes beyond e-business and e-commerce do you think most companies should be planning for the next ten years? </li></ul>