IS & KM (INFO 640) L2: IS Planning GP Dhillon, PhD Associate Professor of IS School of Business, VCU

Inputs to IS planning Competitive analysis Value Chain analysis Mission; CSFs Data flow model Strategic options Organization model External Business Environment Internal Business Environment External IS Environment Internal IS Environment A Portfolio of IS Applications

Expanding the portfolio - a Degree of dependence of the business on IS/IT application in achieving overall business performance objectives H L H L Potential contribution of IS/IT application to achieving future business goals CorporateLocal Strategic (attack)High Potential (Beware) Key Operational (Explore)Support (Safe) Opportunity seeking Critical Success Factors Demand Management Supply Management Opportunity taking Current problem solving Competitive/Effectiveness focus Complex - organizational planning, ideal, multiple methods based on goal seeking - coalition Competitive focus (Proactive) Federation - Business led Decentralization, Entrepreneurial or Technology driven Backbone -Integrated (top down) Planning, Centralized control Reactive - Current Effectiveness Focus Traditional - Stage of growth, isolate applications decentralized control Reactive -Technology focus - Efficiency focus Business issue driven IT issue driven

Expanding the portfolio - b High Potential Strategic Key Operational Support Applications which are critical to achieving future business strategy Applications upon which the organization currently depends Applications which are valuable but not critical to business success Applications which may be important in achieving future business success

High potential applications key features A new business idea or technological opportunity The rapid evaluation of prototypes, with an ability to reject failures, before they waste resources An individual initiative in one part of the business, the idea being owned by someone who champions it The objective, which is to demonstrate the value, and then decide whether and how to exploit it for business To understand the potential of the application in relation to the business strategy and the likely economic s To identify the best way to proceed - what to do next, how that should be done and by whom Driving forces Requirements

Strategic applications key features Market requirements and/or competitive pressures, essentially externally driven (perhaps by suppliers or customers) Rapid development to meet the business objective, and realize the business benefits within the window of opportunity Business objectives, success factors and management vision of how to achieve them Obtaining an advantage and then sustaining it by further developments if possible A flexible solution which can be adapted further to meet changes in the business environment Links to an associated business initiative or change to sustain the business commitment to IS development Driving forces Requirements

Key operational applications key features Improving the performance of existing activities, in terms of speed, accuracy, effectiveness and economies High quality solutions and effective data management, to ensure a degree of stability and reduced costs of change over time Integrating systems and data to avoid misinformation and duplication of tasks, to minimize the risk of activities being inconsistent or ineffective Avoiding a business disadvantage or preventing a business risk from becoming critical Balancing costs with benefits and business risks, to identify the best solution to the business problem The evaluation of options available to select the most effective, by means of an objective analysis of the feasible alternatives Driving forces Requirements

Support applications key features Improved productivity and efficiency of specific (often localized) existing tasks Lowest cost, long term solutions which often lead to package software and even compromising user needs to the solutions available Legal requirements which have to be met to avoid prosecution Most cost effective use of IS funds and resources, to find the most business efficient solution Avoiding obsolescence by evolution at the pace of the IT industry Objective cost benefit analysis to reduce financial risk, and ensure the costs of development are easily controlled Driving forces Requirements

Application portfolio in different IS/IT environments Complex Opportunistic Traditional Backbone Diffusion (Ability to devolve IS/IT decisions) Infusion (impact of IS/IT on a business) L L H H StHp KoSu StHp KoSu StHp KoSu StHp KoSu Application portfolio

Key questions in an application portfolio High Potential Strategic Key Operational Support Why? - not clear What? - not certain How? - not yet known Why - do we want to do it in strategic terms? What - does the system need to do for competitive advantage? How - best to do it? Why - to improve performance? What - actually has to improve? How - best to do it? Why - to reduce cost? What - of existing tasks? How - best to do it?

Things to do in an application portfolio High Potential (Wild cats) Strategic (Stars) Key Operational (Cash cows) Support (Dogs) Process R & D Minimal integration Cost control Continuous innovation Vertical integration High Value added Defensive innovation Effective resource utilization High quality Disinvest/rationalize Efficiency Sustained quality

Managing the evolution of an application over time High Potential Strategic Key Operational Support Lose: individual ownership and freedom Gain: senior management support; IT involvement; project management Re-engineer for long term use Fully integrated with other applications for effectiveness Re-evaluate benefits and costs Return to standards Evaluate lower cost options to meet core needs

Avoiding the disintegration of the portfolio High Potential Strategic Key OperationalSupport How to resource and manage? How to justify and reap benefits from business changes? How to ensure appropriate linkages etc to avoid enormous rework later? How to evaluate and select/reject? How to convert to strategic? Or restrict further risk? How to release resources and ensure existing systems and infrastructure will support the strategic applications? Business initiatives Individual initiatives Lack of definition between HP and Support Decisions about which to exploit and when Provision of resources How and when to consolidate

Implementing IS Plans

Organizational structures basic choices Centralized Structure Centralized Structure One line manager directly responsible One line manager directly responsible Defined corporate wide procedures and controls Defined corporate wide procedures and controls Data administration under singular control Data administration under singular control Decentralized Structure Decentralized Structure Several individuals work independent of each other Several individuals work independent of each other Each unit may conduct independent analysis and design Each unit may conduct independent analysis and design Special purpose d/b and applications at each unity Special purpose d/b and applications at each unity

Centralized

Decentralized

Rationale for choosing particular organizational structures Central coordination of all requirements will produce better decision making Central coordination of all requirements will produce better decision making Technology can create business advantages and risks are worth taking Technology can create business advantages and risks are worth taking Market makes the best decision and users are responsible for business results Market makes the best decision and users are responsible for business results Information is a corporate good and a key resource for users to employ Information is a corporate good and a key resource for users to employ Information is a limited resource and its development must be clearly justified Information is a limited resource and its development must be clearly justified

Rationale cont/- Central coordination of all requirements will produce better decision making Central coordination of all requirements will produce better decision making Technology can create business advantages and risks are worth taking Technology can create business advantages and risks are worth taking Market makes the best decision and users are responsible for business results Market makes the best decision and users are responsible for business results Information is a corporate good and a key resource for users to employ Information is a corporate good and a key resource for users to employ Information is a limited resource and its development must be clearly justified Information is a limited resource and its development must be clearly justified Centrally planned Leading edge Free market Monopoly Scarce resource

The ‘rationale’ takes the form of generic information systems implementation strategies

Generic strategies and the application portfolio High Potential Strategic Key Operational Support Leading edge Free market Scarce resource Centrally planned Monopoly CentralizedDecentralized

Resourcing applications High Potential Strategic Key Operational Support Matrix/Team structure Functional Structure with task separation Cross functional structure with multi-skill resourcing Individual initiative - competitive