1 Getting Started : Purposes of IS Strategic Planning

2 Reasons for IS Strategic Planning?  A company was recently acquired and initiated the planning process to determine how to merge the systems and processes of two previously separate organizations.  A small and growing company was experiencing severe quality problems and found that the company was losing its competitive edge in the marketplace. * The company was gradually falling behind the industry.

3 Reasons for IS Strategic Planning?  A new Vice President was hired to lead Information Systems Unit (ISU) for an organization. * The strategic planning process was initiated to assess the current IS situation.  The business departments were frustrated with the response of ISs in another company. * Response was extremely slow.

4 Simplified Supply Chain Upstream Internal Downstream Suppliers Organization’s production processes, including materials handling, inventory management, manufacturing, quality control Distributors material information money Retailers Customers material information money

5 Reasons for IS Strategic Planning?  A manufacturing division of a large worldwide organisation was getting pressure to implement a particular vendor-supplied application package that was chosen by the corporate division. * The manufacturing division lacks software experience.

6 Reasons for IS Strategic Planning?  A company faced the common problem of a growing and endless backlog of IS projects. * The company began the IS strategic planning process to prioritise the projects and align IS priorities with business priorities.

7 Reasons for IS Strategic Planning?  A company faced the unpleasant task of downsizing. Executive Management initiated the IS strategic planning process to determine ways to reduce costs and gain efficiencies.

8 The Purposes of an IS Strategic Planning  Effectively managing the expensive and critical IS asset of the organisation.  Improving “communication” among business management and ISU.  Linking the IS direction to the business direction.  Planning the flow of information and business processes.  Efficiently and effectively allocating IS resources.  Reducing the time and expense of the IS life cycle.

9 Effectively Managing the IS Asset  Management needs effective ways to manage the IS asset.

10 Improving “Communication”  Business management will have a clear understanding of the business direction, as well as being able to identify any risks and opportunities.  ISU will need to understand such business direction so that it can then think of how technology can help business management achieve the organisation’s objectives.  This mutual understanding will help establish a solid direction.

11 Linking the IS Direction Business Strategy/Direction IS Strategy/Direction Corporate Goals and Objectives

12 IS Planning and Business Drivers (Internal and External Forces) finan ce, HR, time, etc.

13 IS Planning and Business Drivers  The IS direction should be aligned with business drivers and must also conform to boundary conditions imposed by the business environment.  Business drivers identify what to do (business direction).  Boundary conditions may limit what can be done.  The resulting plan describes how to do what can be done.

14 Planning the Flow of Information and Processes  Information is a valuable resource and it is important to maximise its value -- make full use of it.  Planning and managing the flow of information throughout the organisation can minimise: * labor, data redundancy and inconsistency, in addition to increasing the quality and accuracy of information.

15 Efficiently and Effectively Allocating IS Resources  Planning will direct the effective allocation of IS resources and minimise the costs of redesign, rework, and correction of errors.  ISU must utilise both computing and human resources to obtain the most value for the organisation.

16 Typical Steps in IS Life Cycle

17 Time Spent on Typical Life Cycle

18 The Problems with the Traditional Life Cycle  Without proper planning, several steps of the traditional cycle are inefficient and waste time and money.  The vendor review and vendor selection process takes a long time because it may be unclear exactly: what the company is looking for, what is important, or what problems the company is trying to solve.

19 The Problems with the Traditional Life Cycle  The project approval step may also consume a large amount of time because costs are generally more than management expects. Management begins to ask: “Do we really need it ?” “Are there less expensive alternatives ?”

20 The Problems with the Traditional Life Cycle  Implementation takes longer than anticipated because it is an inefficiently planned execution or priorities are not clear.  Trying to make an incorrectly chosen package fit the business means more effort expended in the maintenance years.

21 Improved IS Life Cycle Added step

22 Time Spent on Improved Life Cycle

23 Involvement of the Organization  Communication and involvement among employees are key aspects of the planning process.  The planning process consists of : * 80 % communication and obtaining input and * 20 % planning.  We need to involve all levels of the organisation in the planing process.

24 4 Different Groups (Typical Organisations)  In a typical organisation, we need to involve the following groups in a strategic planning process. - Information Systems Steering Committee (ISSC) - Executive Management (EM) - IS Unit (ISU) - Vendor Review and Implementation Team (VRIT)

25 IS Steering Committee  ISSC is the most important group and is instrumental in the success of the planning process.  The committee provides ISU with a voice from all areas of the business.  The committee will formulate recommendations regarding project priorities and resources that will, in turn, be approved by the executive committee.

26 IS Steering Committee  ISSC may consist of heads one level below Executive Management. Heads may be in the levels of directors/managers.  You (planner) should have Executive Management select their own representatives to be on the ISSC team.

27 ISSC’s Responsibilities  To provide recommendations and input to the IS strategic direction and plans. * The committee will ensure that the plans are in alignment with the business plans and direction.

28 ISSC’s Responsibilities  To provide input to assist in developing the vision for the deployment of technology to meet the business requirements.  To approve, sponsor, and support business-requested projects and project plans. * The committee will be the vehicle (voice) for users in all areas of business to propose and recommend IS projects.

29 ISSC’s Responsibilities  To prioritise all projects and project plans.  To provide recommendations for the resource allocation.  To monitor project progress against the approved plan.

30 ISSC’s Responsibilities  To provide communication to employees in the organisation, regarding IS activities.  To sponsor and initiate BPR projects.  To communicate and discuss about functional business issues.  To review IS standards and procedures.

31 Executive Management  It is crucial to involve Executive Management in the planning process.  This is because this team will approve the expenditure of the funds. * Their involvement at the beginning and throughout the process will make the approval process significantly easier.

32 Executive Management’s Responsibilities  To provide input and approve the IS strategic direction and plans. * Ensure that the IS plans are in agreement with the strategic business plans.  To approve all large projects and provide the final authority in the allocation of resources.  To provide high-level business direction that affects the information systems.

33 ISU  It is important to involve ISU people in the planning process because any changes in business direction will significantly affect them.  They are more of a technical reference and take more of a back- seat/behind-the-scene role in the planning process.

34 ISU  After communicating the business direction to ISU, they can brainstorm to come up with IS goals and objectives in an IS plan (to be updated and approved by ISSC).

35 Vender Review and Implementation Team  Must include representatives from various areas (functions) of the business, as well as one or two from ISU.  This team will provide recommendations, e.g., on vendor packages, to ISSC and look at various options in detail.  The vendor review team, if possible, should be the same as the implementation team.