Module 4: Managing Information Systems Organizations Topic 7: Translate strategic and IT objectives into operating principles for IS planning

What is strategy? Strategy is the science and art to derive a plan of action and to execute an approved plan as effectively as possible to accomplish a specific goal (i.e., to gain and sustain a competitive advantage).

Strategy VS Operational Effectiveness Operational effectiveness is necessity but not sufficient for sustaining a competitive advantage. Strategy is required in order to sustain a competitive advantage in a long run.

Why strategy? IT itself doesn’t create a competitive advantage. IT can be easily assimilated by competitors. Strategy is unique and difficult to copy (i.e., a strategy that works in one organization may not work in the other.) IT may enable an organization to gain a competitive advantage, but strategy makes that advantage sustainable.

Strategic IS Planning (SISP) The process of deciding the objectives for organizational computing and identifying potential computer applications which the organization should implement.

Driving forces of SISP Change in nature of business strategic planning Attempt to reengineer business process Increased number of outsourcing

Problems due to lack of SISP Missing opportunities Islands of automation Poor performance Poor technology selection Lack of understanding between stakeholders

Effective IS strategy addresses three questions Where the organization wants to be? Where the organization is now? How best can we do to get there given the alternative options and resource available?

SISP process Start Planning –See the Integrated business planning framework (Ward & Griffith 1999) in the lecture note. Determine future requirements Contents of an information systems plan

Inhibitors of SISP Lack of top management support Lack of a team leader Resource constraints Failure to establish a permanent planning group Time and expense involved in staff Poor user-IS relationship

Chapter 5 Strategic Management Processes cut across 3 areas Technology Management Operational Systems Strategy Business Competitiveness Interfaces

Framework for Strategic Planning Processes Four stages of strategic management process development Eight characteristics required when developing a technical function

4-Stage of Strategic Management Process Development Isolated Reactive Proactive Integrated

8 Characteristics of Technical Function Development Mission Objective Strategic plan Processes Resources Linkages Opportunities/threats Strengths/weaknesses

Pros & Cons of the Framework Provide useful insights into policy area Identifies generic characteristics of superior performance Identifies areas for improvement Don’t identify attributes specific to firm contexts Fails to define those generic characteristics at a firm-specific level Doesn’t assist in developing a roadmap for improvement

Reasons why Businesses Fail Short-term oriented management practices Outdated management strategies Inadequate understanding of foreign culture Inadequate investment in human resources Failure to invest in new technology

Technology’s Interface with the Market Market integration with technology – a “gating” committee Customer-supplier and producer-user relationships

Accountability to Shareholders/Performance Measurements On-going benchmarking Against similar organizations in the same industry and against best-in- class organizations in other industries Government-sponsored innovation centers Public policy intervention