Copyright 2004 Monash University IMS5042 Information Systems Strategic Planning Week 11: The nature of IS and its role in organisations – implications for strategic planning

Copyright 2004 Monash University 2 Agenda Context IS as an object for planning Roles for IS in organisations Nature and role of IS in planning theory Nicholas Carr The Exam

Copyright 2004 Monash University 3 1. Background and context for remaining 3 weeks We have looked at: Many different possible philosophies of planning A variety of different theories of IS planning The fact that these theories are clearly driven (at least in part) by very different philosophies of planning …. … But we also need to consider the influence on planning of different theories about the nature of IS and its role in organisations How are these different theories about IS reflected in different theories of IS planning?

Copyright 2004 Monash University 4 Linking Theories of IS to Planning Practice Philosophies of IS Theories of IS Theories of Planning Philosophies of Planning Theories of IS Planning Practice of IS Planning Plan Content (What do we plan about?) Planning Process (How do we plan?)

Copyright 2004 Monash University 5 IS in organisations – a recent major point of controversy “IT Doesn’t Matter”: Nicholas Carr and his consequences Reactions to Carr’s article Two key elements: What is IS? What does (or could/should) IS contribute to an organisation? Your answers to these questions will significantly influence your approach to IS strategic planning (or whether, in fact, you believe the concept of ‘strategy’ can be applied to IS)

Copyright 2004 Monash University 6 2. The nature of IS: IS as an object of planning IS is a term which may be seen as incorporating a very wide range of things, commonly including: Hardware Software Systems Information Technology-related change Services Management and governance Business directions and objectives Which of these things (and which aspects of them) should be the focus of IS planning?

Copyright 2004 Monash University 7 An example: The Monash IT Strategic Plan (note wording of name!) History Originally formulated in 2001 Up-dates annually Copy of all documents available at copy of overview on unit web site Includes examples of strategies which fit within ALL the above aspects of IS I have selected a few good examples of specific strategies as illustrations in the following slides

Copyright 2004 Monash University 8 Examples of hardware as the object of IS planning Hardware and O/S platform Technical architecture Network architecture Standard hardware operating environment Peripherals – general and special purpose Monash examples: Standard SOE for staff desktops – includes notebooks, hand devices, video conferencing, phones, etc Upgrade network components Establish high capacity data storage facilities

Copyright 2004 Monash University 9 Examples of software as the object of IS planning Software architecture/standard software operating environments Purchase/installation of major development s’ware Programming languages/scripting languages/software libraries; re-usable code Monash examples: Develop standard desktop software environment, and improve co-ordination and control of software up-grades and distribution Implement a standard web publishing environment Introduce a standard reporting tool for SAP and Callista

Copyright 2004 Monash University 10 Examples of systems as the object of IS planning Systems architecture and the system portfolio System enhancements and up-grades System integration New system developments Monash examples: Establish standard application architecture; formal standards, module inter-connections, etc Replace legacy Finance and HR systems Re-configure SAP to handle Activity-based costing Begin development of a Stores Management System

Copyright 2004 Monash University 11 Examples of information as the object of IS planning Information architecture Policies and procedures for information access and record management Knowledge management Monash examples: Establish organisational information architecture to minimise data duplication Establish university-wide architecture for knowledge management Continually upgrade network components Establish high capacity data storage facilities

Copyright 2004 Monash University 12 Examples of technology-related change as the object of IS planning Policies and processes for encouraging innovation and research Establishment of organisational structures to oversee, fund and promote innovation Development of pilot projects to explore emerging technologies Monash examples: Establish a fund to be allocated to new technologies Establish working parties for promoting, tracking and assessing emerging technologies Establish a New Technology Demonstration Centre

Copyright 2004 Monash University 13 Examples of IT/IS services as the object of IS planning Develop policies and procedures for provision of IT/IS services within the organisation Identify service level requirements Develop specific service strategies Monash examples: Develop a student contact centre to improve support services Provide guidelines for accessing and using on-line services and support Defining a baseline of IT services which will be available for staff and students at all campuses Develop training/literacy programs for IS/IT

Copyright 2004 Monash University 14 Examples of management/governance as the object of IS planning Positions, committees and organisational structures for managing IS issues Establishment of development processes and procedures for IS/IT Establishment of standards/policies for IS/IT Monash examples: Develop an organisational structure (committees and managerial positions) responsible for IS mgt Develop organisational standards for IS project management Establish an IT Security committee to oversee security policies and procedures

Copyright 2004 Monash University 15 Examples of business directions as the object of IS planning Aligning business needs with IS/IT Changing business practices and directions to take advantage of IT/IS developments Development of IT products and services as business products Monash examples: E-Monash Developing strategic partnerships for research with complementary organisations (CSIRO/synchrotron) Development of new learning and teaching technologies

Copyright 2004 Monash University 16 Distinguishing between strategy/tactics/operations Do all these things fit under the label of “IS”? Do they all fit under the label of “strategic IS”? Arguments over specifics of some of these areas (and the examples I have selected from the Monash plan) Organisational decision as to where strategy starts and ends for each area Decision based on cost? Perceived importance? Extent of long-term commitment? Etc Who makes the decision?

Copyright 2004 Monash University 17 Identifying what is “strategic IS” Are the same aspects of IS equally strategic for planning in all organisations? Within a given organisation, are the same aspects of IS equally strategic for planning at all times? Deciding on which aspects of IS are strategic and what planning emphasis should be given to each is itself a major planning decision I think this is not given enough emphasis in planning texts

Copyright 2004 Monash University Roles for IS: IS as the means to an organisational end Second fundamental aspect of IS in organisations. What does IS contribute to an organisation? Based around three key issues: To what extent does the organisation rely on IS for its internal operations? To what extent does the organisation rely on IS to maintain its business/competitive position? To what extent is IS a commodity? Note: If IS consists of some or all of the aspects listed above, does each aspect contribute to the organisation in the same way?

Copyright 2004 Monash University 19 Some possible perspectives on the role of IS in organisations Four simplistic ‘extreme’ positions: Not strategic internally or externally Strategic internally, but not externally Strategic externally, but not internally Strategic internally and externally Note: To what extent can these simplistic labels be defined and applied to an organisation? To what extent do the labels fit an organisation over time?

Copyright 2004 Monash University 20 An argument for IS as non-strategic IS comprises relatively standardised well- understood elements – technical and non- technical These elements can now be treated as commodities and be easily taken on and implemented as required by any organisation No organisation can sustain any competitive advantage based on its use of IS either for internal or business-directed objectives Competitive disadvantages flowing from innovater/first adopter problems outweigh any advantages

Copyright 2004 Monash University 21 An argument for IS as internally strategic Various aspects of IS underlie an organisation’s operations The way in which IS is implemented and managed internally has a significant effect on its effectiveness Getting the right internal structures and framework for implementing and managing IS successfully in an organisation is a significant strategic task Some aspects of IS can be commodified, but others can’t and remain strategically significant to an organisation’s internal functioning

Copyright 2004 Monash University 22 An argument for IS as externally strategic IS/IT has been and will continue to be an area in which there will be dramatic change The ability of organisations to bring about (or at least respond quickly to) these changes will significantly affect their competitive position Commodification of the components of these changes take time or is only partially effective; being an innovator/first adopter will bring significant competitive advantage Organisations must maintain an ongoing focus on the strategic use of IS to achieve competitive advantage

Copyright 2004 Monash University 23 An argument for IS as sometimes strategic (internally or externally) A ‘stages’ model of the role of IS! Technologies, business products and management practices develop as innovations and may be strategically significant as they evolve Successful technologies, products and management practices eventually stabilise and become commodified; from this time on they lose strategic significance The strategic significance of IS will vary through this cycle

Copyright 2004 Monash University The nature and role of IS as expressed in theories of IS planning Each of the theories of planning we have studied has a particular perspective on the nature of IS and its role in organisations Extent to which this perspective is made explicit varies Extent to which this perspective is consistent between variations of the theory also varies Note: following are my perspectives of other people’s perspectives; feel free to disagree!

Copyright 2004 Monash University 25 The nature and role of IS in “Stages of Growth” theory Nolan – IS strategy is primarily about technology-related change and management/governance; implied internal focus McFarlan view of stages added business directions as a possible extra focus; internal vs external emphasis now a topic for planning decisions Later stages theory: different focuses for different stages; stage/focus as a reflection of ‘maturity’; transition from technical/software/systems focus to management/business alignment

Copyright 2004 Monash University 26 The nature and role of IS in “Critical Success Factor” theory Key aspects of IS are primarily information and secondly the application systems needed to provide it; other aspects are relatively minor Role of IS is support for management decision- making; internal or external focus unclear

Copyright 2004 Monash University 27 The nature and role of IS in “IT for competitive advantage” theory Key aspects of IS are primarily technological change and business directions; other aspects are relatively minor Role of IS is to build competitive advantage; very strong external focus

Copyright 2004 Monash University 28 The nature and role of IS in “Business Process Re-engineering” theory Key aspects of IS are primarily application systems and technological change; secondly, the information needs which needed to provide it; other aspects are relatively minor Role of IS is support for on-going radical re- structure of internal business processes; level of external focus unclear

Copyright 2004 Monash University 29 The nature and role of IS in “Alignment” theory Key aspects of IS is theoretically dependent on the circumstances ie deciding what matters is inherent in the approach In practice, there seems to be a strong focus on management and governance; significant focus on importance of internal strategic management/direction As with Stages of Growth, some suggestions that nature of alignment is a reflection of ‘maturity’. Transition from technical/software/systems focus to management/business alignment

Copyright 2004 Monash University Return to the Nicholas Carr debate Carr’s controversial paper on the nature of IS and its role in organisations Whether you agree or not, it has certainly provoked a massive response; helps articulate some of the arguments on both sides Impact on strategic planning theory and practice? More next week!