3. Introduction to Strategic Information Systems Planning (SISP) Title: Strategic Information Systems Planning Historical development of IS Define SISP and its purpose Business/IS Strategy linkage IS Strategy problems IS,IT and IM Traditional Vs Sense and Respond Approach

IS/IT Issues Strategic Potential of IT Replacing The Legacy Systems of today with ? Linking IT/IS Strategy With Business Strategy IT Architecture Strategic Information Systems Sustainable Competitive Advantage

Strategic Use Of IS/IT CHANGE WHAT THE COMPANY DOES PRODUCTS SERVICES (Manchester buses - wireless) DELIVERY CHANNELS (www) CHANGE HOW THE COMPANY OPERATES ORGANISATION DECISIONS COMMUNICATIONS CHANGE PATTERNS OF INVESTMENT MORE INVESTMENT FOR MARKET LEADERSHIP

Strategic Potential of IT To gain competitive advantage To improve productivity and performance To enable new ways of managing and organising To develop new businesses To change distribution channels

IS Historical Development Historically IS planning has been neglected Systems have been developed to meet individual function or department needs (applications planning) The companies IS Strategy was simply a dept aggregation... Traditional IS Planning was on a project by project basis No coherent corporate or SBU IS/IT plan in place IS had minimal influence on Business Strategy Failures incompatible systems, poor functional IT and business integration, financial losses, lost business opportunities (for SIS) implementation lags, continuous management fire-fighting customer dissatisfaction If we fail to plan for IS, then we plan to fail with IS !

IS Strategy Linkage The IS Strategy must be linked to the business strategy. Possible linkages are The IS strategy may be aligned with the business goals by translating them into IS goals The IS strategy may impact on the business goals by competitively enhancing them The IS strategy may require the redesign of business processes in order to achieve the business goals IS can support business strategy e.g. IS can be aligned with one of Porter’s generic strategies IS can create strategic options e.g. IS can spearhead revolutionary approaches to the market place or internal operations No IS strategy planning is robust unless it is connected to the business strategy Conversely no business strategy is complete unless it is connected to the IS strategy IT delivery mechanisms may have to be conceptualised and planned strategically IT architecture is therefore a strategic issue Organisational capability in IT and IS may impact on delivering IS for strategic advantage. The management of information resources is therefore a strategic issue

IS Portfolio Mandatory Strategic Traditional Infrastructure Renewal R & D Maintenance

IS Strategy Positioning Business Strategy Divisional Strategy Divisional Strategy Divisional Strategy Production Strategy IS Strategy Marketing Strategy IT Strategy Manual Systems Strategy Communications Strategy Software Hardware Planning Staffing Data Voice Policies, implementation decisions Robson, ch 4, page 96

Strategic Information Systems Planning (SISP) Definition Strategic systems planning deals with planning for the use of IT for strategic purposes. It attempts to form a view of the future 3 to 5 years out to help determine what should be done now.

SISP contin… Objectives To identify strategic applications To develop an organisational IS architecture To Identify new applications which provide a greater return on investment To determine more opportunities for improving information systems provision To improve resource requirements forecasting To improve communications with users

SISP contin.. Some fundamental reasons why IS planning is difficult include: Business goals and System Plans need to Align Technologies are rapidly changing Companies need portfolios rather than projects Infrastructure development is difficult to fund Responsibility needs to be joint Other planning issues

Traditional Approach Three Levels of Strategy What? IS STRATEGY Division/Function Demand Oriented Business Focussed Applications IM STRATEGY Organisation Based Relationships Oriented Management Focussed Architecture Where? Management IT STRATEGY Activity based Supply oriented Technology focussed How? Delivery

IS STRATEGY The long term directional plan which determines what to do with IS It is concerned primarily with aligning IS development with business needs and with seeking strategic advantage from IS It is formulated at the level of the SBU or the level of business where specific customer needs, unique competitors and autonomous resources can be delineated In large complex organisations there may be more than one IS strategy.

IT STRATEGY The technology framework or architecture which drives, shapes and controls the IT infrastructure to support the IS strategy The IT strategy is concerned primarily with technology policies It deals with questions of architecture,vendor policies and technical standards

IM STRATEGY The management framework( i.e. the policies procedures aims and actions) which guides how the organisation should run IS/IT activities. The IM strategy is concerned with the role and structure of IT activities in the organisation management controls for IT, performance measurement and management processes wherefore-which way?,who does it?,where is it located?

MANAGING THE IT FUNCTION STRATEGIC IM QUESTIONS Planning What IS do our current business strategies require? What Strategic opportunities does IT offer? Organisation How will IT affect our organisation structure? How/where can we find more IT staff? How do we retain IT skills? Should we have an IT director at board level? Control How much are we spending on IT? How much should we be spending on IT? How can we evaluate IT proposals? How can we manage large IT projects? Answers to these problems/questions? Need to engage in serious strategic thinking... Question? Is there more than one way of thinking in order to answer these questions?

Problems in IS Planning Inadequate Business Plans Agreeing Priorities Lack of Planning Experience Rate of Business/User Change Organisation Structure Discovering Competitive Advantage No Standards for what an IS strategy plan should contain

Traditional IS Planning Assumptions Traditional stance based on assumptions: The future can be predicted Time is available to progress through this 3 part sequence IS supports and follows the business Top management knows best, because they have the broadest view of the firm The company can be viewed as an army: * due to the internet etc, these assumptions no longer hold true

Sense and Respond Approach What came out of this is a move towards a new approach: Let strategies unfold rather than plan them e.g. Microsoft Formulate strategy Closest to the Action E.g. Skandia Guide strategy making with a strategic envelope E.g. Shell Be at the table Test the future Put the infrastructure in place Case Study - Microsoft

IT strategic direction SISP Where are we today? Where do we want to go? How do we get there? Assessment of current technology & IT organisation Business directions IT deployment plan Projects Quick Hits IT opportunities IT strategic direction Benchmarking competitors and IT trends IT organisational alignment plan IT architecture

Toolkits for Strategic Planning There is a range of tools and techniques which have been developed to assist in formulating an explicit business strategy Similarly there is a range of tools, techniques and principles to guide management in exploiting IS for strategic advantage.