Chapter 4 IS/IT Strategic Analysis: Current Situation

Agenda Business re-engineering and IS strategy Understanding the current IS/IT requirements Understanding IS/IT needs of the business strategy Examining current IS/IT supply Analysis techniques –Critical success factors –Process effectiveness –Organizational model

Business Re-engineering and IS Strategy Re-engineering initiatives spring from business strategy IS demand supports business strategy Re-engineering needs IS/IT element Re-engineering and IS strategy forms potential models of the business

Understanding the Current IS/IT Requirements - I Business strategy analysis for information needs External environment, current and future business portfolio, and competitive strategy for IS/IT competitive contribution Critical success factor identification for finding the information change drivers

Understanding the Current IS/IT Requirements - II Current process effectiveness evaluation for IS/IT to improve the performance Internal and external value chain analysis for information flow and IS/IT opportunities Conceptual architecture of information and processes restructuring to reach IS/IT maximum contribution

Understanding the Current IS/IT Requirements - III Hardware and software functions for future plan migrating Current application portfolio evaluation for assessing contribution and potential IS/IT principles, organization, processes, services, and capabilities evaluation for meeting current and future business needs

Understanding IS/IT Needs of Business Strategy - I Information, system, and technology for –The achievement of the business objectives –The measurement of the performance towards achieving the business objectives

Understanding IS/IT Needs of Business Strategy - II Internal business environment –Business strategy –Current business processes, activities, and main information entities –Organizational environment: structure, assets skills, values, style, culture, and relationship External business environment –Opportunities

Business Strategy - I Components of business strategy –Mission: an unambiguous statement of what the business does and its long-term purpose –Vision: an easy identify picture of what the business will be in the future, and how it will operate –Goals: the set of major achievements that will accomplish the vision

Business Strategy - II Components of business strategy –Objectives: the targets (unambiguous and measurable) for accomplish the business vision –Strategies: the methods to meet the business objectives –Critical success factors (CSFs): a few areas have to be right in order for the business to flourish

Business Strategy - III Components of business strategy –Business drivers: a set of critical forces for the business to change –Business area plans: document the response or information needs to the business strategy

Business Process, Activities and Key Entities - I Business processes: the sets of interlinked activities to deliver specific outputs to customers Activities: the elements of processes –To produce, promote and distribute products or services –To develop, support, and administer the infrastructure –To measure the performance against objectives

Business Process, Activities and Key Entities - II Key entities: important data and information associated with business processes Models –Process flow models or process dependency charts –Hierarchical activity models or functional decomposition diagrams –Entity relationship models

Business Process, Activities and Key Entities - III Models –Data flow diagrams (DFDs) –Activity/entity matrices –Class diagram

Examining Current IS/IT Supply - I Objectives –Categorize in terms of strategic, high potential, key operational, and support –Contribution to business needs –Assessment of effectiveness, robustness, and unrealized potential –Potential improvement –Risks and opportunities –Strength and weakness in terms of CSFs

Examining Current IS/IT Supply - II Evaluate: –Application portfolio and applications under development: content, coverage, and contribution –Current databases and those under construction –Users’ perception of the value of the portfolio –Current infrastructure and IT supply provisions

Examining Current IS/IT Supply - III Evaluate –Current infrastructure and IT supply provisions Current/previous strategy and policies IS/IT organization and processes Current assets, resources, and skills Methods and training provisions

Analysis Techniques - I Business strategic analysis CSF analysis SWOT analysis Business portfolio and competitive strategic analysis Value chain analysis Process effectiveness

Analysis Techniques - II Business process redesign Organizational modeling Business modeling-information analysis techniques Current portfolio evaluation Technology assessment and IS/IT infrastructure review

Critical Success Factors - I Levels –Industry –Corporate –Business unit or function –Manger Usages in management –IS opportunities to achieve Objectives –Information needed by executives

Critical Success Factors - II Analysis process for IS requirements –Understand mission and objectives –Determine CSF for each objective –Conduct a SWOT on each CSF –Consolidate across objectives and identify information dependencies –Outline plan of IS requirements

Critical Success Factors - III Analysis process for executive information system –Understand mission and objectives –Determine CSF for each objective –Develop measures –Guides for the executive information systems

Process Effectiveness Identify core processes Assess effectiveness of processes against their drivers Assess risks of not improving the processes Investigate urgency of opportunities for improvement Establish future vision of the business processes

Organizational Model The formal organizational arrangements Employees and other tangible assets Social structure Technology employed The external environment The dominant coalition The key processes

Points to Remember Business re-engineering and IS strategy Understanding the current IS/IT requirements Understanding IS/IT needs of the business strategy Examining current IS/IT supply Analysis techniques –Critical success factors –Process effectiveness –Organizational model

Questions What are the critical success factors associated with an e-business? How do you conduct a strategic analysis for an e-business?