WHY IT SYSTEMS PLANNING? IT SYSTEMS PLANNING... l provides a systematic process for finding new IT systems. l generates a comprehensive list of new IT systems to develop that support the business strategy. l begins the systems development life cycle (see Chapter 9). Introduction8-2

INFORMATION TECHNOLOGY (IT) SYSTEMS PLANNING IT Systems Planning8-4 is the process that uses the goals, strategies, objectives, processes, and information requirements of your organization as a foundation for identifying and selecting which IT systems to develop and deciding when to develop them.

IT SYSTEMS PLANNING PRODUCES A PLAN 1.Aligning Organizational Goals and IT 2.Identifying Specific Processes 3.Identifying Specific Information 4.Evaluating IT Systems 5.Planning for What You Can’t Live Without IT Systems Planning8-5 The 5 step IT systems planning process includes: The result is the INFORMATION TECHNOLOGY (IT) SYSTEMS PLAN that documents the results of the IT systems planning process.

ALIGNING ORGANIZATIONAL GOALS AND IT l IT Fusion l Competitive Forces Model l Competitive Intelligence Aligning IT & Business8-7 Three methods support aligning the organizational goals with IT. They include:

INFORMATION TECHNOLOGY FUSION (IT FUSION) OCCURS... Aligning IT & Business8-8 when the information technology within your organization is indistinguishable from the business processes and the people who exploit the information technology.

THE COMPETITIVE FORCES MODEL... 1.Customer force 2.Substitute force 3.Supplier force 4.New competition force 5.Current competition force Aligning IT & Business8-9 is a tool to formulate strategy by examining the environment in which your organization competes (See Figure 8.4, page 309). Five forces create the competitive environment:

WHY COMPETITIVE INTELLIGENCE? l Helps you anticipate market changes l Helps you anticipate competitive actions l Alerts you to new or potential competitors l Allows you to learn from other’s successes and failures l Allows you to learn about regulatory changes l Allows you to compare your processes to others. Aligning IT & Business8-10

THE COMPETITIVE INTELLIGENCE PROCESS 1.PLANNING –COMPETITIVE SCANNING - continuous competitive intelligence 2.GATHERING –PRIMARY INTELLIGENCE - gathering intelligence directly from the source –SECONDARY INTELLIGENCE - gathering intelligence indirectly 3.ANALYSIS by knowledge workers 4.INTEGRATION or using results to support your goals Aligning IT & Business8-11

IDENTIFYING SPECIFIC INFORMATION l Information Architecture l Critical Success Factors l Business Systems Planning Identifying Information8-16 Three methods support identifying your organization’s information needs. They include:

AN INFORMATION ARCHITECTURE... Identifying Information8-17 for an organization describes what information your organization needs and which people within your organization need that information. Remember: Information must support the customer’s moment of value.

CRITICAL SUCCESS FACTOR Examples: l Engineering start-up firm - creating designs that meet standards l Bank - providing low transaction costs l Ice cream manufacturer - providing fresh product on store shelves l Discount retail chain - keeping shelves fully stocked l Shipping firm - delivering packages on time Identifying Information8-19 a factor critical to organizational success.

BUSINESS SYSTEMS PLANNING (BSP) l Identifies groups of related information called information classes. l Relates those classes to business processes. l Documents the processes that create and use information. Identifying Information8-20 identifies information requirements by documenting the relationships between business processes and information classes.

EVALUATING IT SYSTEMS l Cost-Benefit Analysis l Risk Analysis l Capital Investment Analysis - calculates a quantitative measure of IT systems value. Evaluating IT Systems8-22 Three analysis methods support evaluating potential IT systems identified to this point. They include:

COST-BENEFIT ANALYSIS 1.Gathering proposed systems costs. 2.Gathering proposed systems benefits. 3.Comparing costs and benefits. Evaluating IT Systems8-23 is the process of evaluating IT systems for development by comparing systems costs with systems benefits. The analysis involves 3 steps. They are:

PROPOSED SYSTEMS COSTS & BENEFITS l Costs estimates for systems development. l Costs estimates for systems operation and maintenance. l Costs estimates for systems adoption at different times in the future. l Costs for the organizational changes required. Evaluating IT Systems8-24 The proposed systems costs are calculated from several sources. Systems costs should include: l The proposed systems’ benefits fall into two categories - tangible and intangible. l TANGIBLE BENEFITS are systems benefits that can be monetarily quantified. l INTANGIBLE BENEFITS are systems benefits that cannot be monetarily quantified.

RISK ANALYSIS l Unproven technology l A changing market or economy l Long selection and development time l Significant organizational change l Poor or too many assumptions Evaluating IT Systems8-27 INFORMATION TECHNOLOGY SYSTEMS RISK is the possibility that a system will not achieve the predicted benefits. Some sources of IT risk include:

CONTINGENCY PLANNING: Planning for What You Can’t Live Without Contingency Planning8-30 Ninety percent of businesses whose computers are down for more than 5 working days will be out of business within a year!

Potential Opportunities for Disaster Include... l Weather-related disasters –Floods –Lightning strikes –Hurricanes –Tornadoes l Earthquake disasters l Loss of system and information access l Technology failure Contingency Planning8-31

CONTINGENCY PLANNING 1.Discovering what’s really important. 2.Asking how much does it cost to have information unavailable. 3.Balancing the cost of unavailability with the cost of recover. Contingency Planning8-32 is the process of examining the possibilities of losing an IT system and formulating procedures to minimize the damage. The three steps in contingency planning are:

THE INFORMATION TECHNOLOGY SYSTEMS PLAN l The documented results of IT systems planning. l This document does not signal an end to planning. l IT systems planning is an ongoing process, not a project. IT Systems Plan8-37 Look over Figure 8.17 (page 331) for an IT system plan outline.