1. Information Systems Planning Chapter 4 Information Systems Management In Practice 5E McNurlin & Sprague

2. Copyright 2002 by Prentice Hall, Inc. 4-2 Introduction What makes IS planning difficult (vs. construction planning): Aligning business goals and systems plans Materials (hard/software) continuously change Shift from project selection to portfolio development (evaluation more on individual merit) Joint responsibility/approach: top-down vs. bottom-up

3. Copyright 2002 by Prentice Hall, Inc. 4-3 Approaches to Planning IS 1. Stages of growth 2. Critical success factors 3. Competitive forces model 4. Value chain analysis 5. E-business value matrix 6. Linkage analysis planning

4. Copyright 2002 by Prentice Hall, Inc. 4-4 1. Stages of Growth Stage One: Early Successes: Increased interest and experimentation Stage Two: Contagion: Interest grows rapidly; learning period for the field Stage Three: Control: Efforts begun toward standardization Stage Four: Integration: Pattern is repeated

5. Copyright 2002 by Prentice Hall, Inc. 4-5 2. Critical Success Factors For each executive, CSF’s are the few key areas of the job where things must go right for the organization to flourish. Fewer than 10 per executive Time dependent (must be reexamined) Four sources: industry the business is in, company itself within industry, environment (consumer trends), and temporal organizational factors (inventory)

6. Copyright 2002 by Prentice Hall, Inc. 4-6 2. Critical Success Factors Used to determine factors critical to accomplish corporate objectives and corresponding measures Can be used to identify IS that need to be developed

7. Copyright 2002 by Prentice Hall, Inc. 4-7 3. Competitive Forces Model Companies must contend with five competitive forces: 1 Threat of new entrants 2 Bargaining power of customers and buyers 3 Bargaining power of suppliers 4 Substitute products or services 5 The intensity of rivalry among competitors

8. Copyright 2002 by Prentice Hall, Inc. 4-8 3. Competitive Forces Model Strategies for dealing with these competitive forces: Differentiate product and services - make them “better” in the eyes of the consumer Be the lowest-cost producer - not just a low-cost producer Find a niche - e.g., geographical market

9. Copyright 2002 by Prentice Hall, Inc. 4-9 4. Value Chain Analysis Five primary activities that form the sequence of the value chain: 1 Inbound logistics: receiving and handling inputs 2 Operations: converting inputs to the product/service 3 Outbound logistics: collect, store, and distribute the product/service to buyers 4 Marketing and sales: the means/incentives for buyers to buy the product/service 5 Service: enhancements/maintenance of the value of the product/service

10. Copyright 2002 by Prentice Hall, Inc. 4-10 4. Value Chain Analysis Four supporting activities that underlie the entire value chain: 1 Organizational infrastructure 2 Human resources management 3 Technology development 4 Procurement

11. Copyright 2002 by Prentice Hall, Inc. 4-11 5. E-Business Value Matrix Matrix has 2 axes and 4 quadrants. Horizontal axis is the newness of the idea in the IT project and the vertical axis is the criticality of the project to the business. New fundamentals: Low-Low=provide a fundamentally new way of working in overhead areas, not business critical areas Operational excellence: High in criticality to business-Low in newness of idea=medium risk because they may involve reengineering work processes Rational experimentation: Low in criticality to business- High in newness of idea=test new technologies and ideas Breakthrough strategy: High-High=potentially have a huge impact on the company

12. Copyright 2002 by Prentice Hall, Inc. 4-12 6. Linkage Analysis Planning Examines the links organizations have with one another with the goal of creating a strategy for utilizing electronic channels Methodology includes the following steps: Define power relationships among the various players and stakeholders: Identify who has the power Determine future treats and opportunities for the company

13. Copyright 2002 by Prentice Hall, Inc. 4-13 6. Linkage Analysis Planning Map out your extended enterprise to include suppliers, buyers, and strategic partners. The enterprise’s success depends on the relationships among everyone involved. Some 70% of the final cost of goods and services is in their information content. Plan your electronic channels to deliver the information component of products and services. Create, distribute, and present information and knowledge as part of a product or service or as an ancillary good.

14. Copyright 2002 by Prentice Hall, Inc. 4-14 Case Example: Electric Power Research Institute EPRI’s challenge - compress “information float” - elapsed time from availability research findings to the use of those results in industry Answer: EPRINET - a natural language front end for accessing online information, expert system-based products, e-mail facilities, and video conferencing 6. Linkage Analysis Planning

15. Copyright 2002 by Prentice Hall, Inc. 4-15 Conclusion IS plans must look towards the future IS planning must be intrinsic to business planning IS plans typically use a combination of planning techniques presented