Making the Business Case Achieving Strategic Alignment

Why Establish team credibility Sell the project New project Pilot project Support design trade-off decisions Define evaluation metrics

What is the business case? Alignment: How does the project fit into organization goals? Impact: Where does the project impact organization processes? Contribution: What contribution does the project make? Metrics: How will we define success?

Strategic View: Who is the organization? Vision Mission Objective Tactic

Tactical Alignment Business Objective Business Tactic IT Objective IT Tactic

Support Activities Primary Activities Firm Infrastructure (general management, accounting, finance, strategic planning) Support Activities Human Resource Management (recruiting, training, development) Technology Development (R&D< product and process improvement) Procurement (purchasing of raw materials, machines, supplies) Inbound Logistics (raw materials handling and warehous- ing) Outbound Logistics (warehous- ing and distribution of finished product) Marketing and Sales (advertising, promotion, pricing, channel relations) Operations (machine assembling, testing) Service (installation, repair, parts) Primary Activities 7

Value Chain Model Chain of basic activities that add to firm’s products or services Products can be services or goals (particularly for public organizations) Each product has its own value chain Primary activities Secondary activities 8

Value Chain Primary Activities Inbound Outbound Operations Marketing and Sales After-Sale Services 9

Value Chain Support Activities Technology development Procurement Human Resources Management Management Control accounting/finance coordination general management central planning 10

Generic System Contributions Automate* Informate* Up Down Transform* Discover * Scott Morton (1991); and S. Zuboff, In the Age of the Smart Machine (New York: Basic Books, 1988).

Automation Information Systems Replace human effort with machine effort Reduce the number of workers Expand the amount of work that can be done by the current work force Expandable and non-expandable tasks Move the automation boundary Improved accuracy Customer empowerment Improve organization response time Increase focus on core competencies

Informating Information Systems Provide information to upper management Reduce the layers of management Improve the span of control Improve decision making ability Provide information to operational personnel Empower workforce

Transformational Information Systems Radical changes in an organization’s business processes (Business Process Reengineering) Radical changes in an organization’s structure Radical changes in an industry’s value streams

Business Process Reengineering (BPR) Completely changes manner in which business is done Fewer steps, shorter cycle times Complete, more expert handling of events Not incremental improvement Typically uses IT as an enabler Involves discontinuous thinking 21

Characteristics of BPR Combining jobs Empowering employees Jobs done simultaneously Customizing product/service Work performed where most logical Single point of customer contact 22

Transformational Information Systems Radical changes in an organization’s structure reduce layers of management empower front-line workers loosely couple work units Radical changes in an industry’s value streams disintermediation create new markets