1. Strategic Information Systems Planning
College of Information Technology
CISB444
Strategic Information Systems Planning 1

2. Course Overview
Strategic Planning for Information Systems explores the impact that information systems (IS) and information technology (IT) have on business performance and the contribution that they make to the strategic options of organisations.
It describes tools, techniques and management frameworks to both align strategies for IS and IT with business strategy, as well as seek out new opportunities through innovative deployment of technology.

3. Course Overview
This course demonstrates why strategic planning for information systems is essential to organisational success, especially in times of increasingly rapid change.
Over the long term any organisation will get the information systems it deserves, according to the approach adopted to the use and management of IS/IT.
To obtain the whole range of benefits available from IS/IT and avoid the potential pitfalls, every organisation must establish the means to manage IS/IT as an integral part of its approach to strategic management.

4. Course Objectives
To provide an understanding that strategic planning for information systems is both essential and feasible.
To demonstrate that organisation must establish a way of managing IS/IT strategically as part of the business development process in order to deliver the benefits available from IS/IT and to avoid the potential pitfalls in IS/IT implementation.
To assess alternative approaches to developing information systems (IS) strategies.
To highlight the importance of information as one of the organisation’s strategic resources

5. Managing the Applications Portfolio
Chapter 7
Managing the
Applications Portfolio

6. Chapter 7: Overview
Chapter 7 describes ways in which the current and future applications of IT can be assessed in terms of their business contribution, both individually and as an overall portfolio of IS/IT investments.
The appropriate means of managing each element of the portfolio and the overall set of applications can then be selected.

7. Chapter 7: Main Topics Classifying the applications in the portfolio
Generic application management strategies
Portfolio management principles applied to the application portfolio

8. Introduction
The applications portfolio concept, introduced in Chapter 1, is a means of bringing together existing, planned and potential information systems and assessing their business contribution.
The main purpose in classifying applications is to ensure that they are managed successfully and that the expected contribution is delivered.
Based on the issues relevant to each segment, appropriate implementation strategies can be adopted.
The application portfolio provide relevant guidance to enlighten and support management decision making.

9. Conclusions from Various Matrices and Models
A number of matrices have been produced to help management decision making with respect to IS/IT planning, utilisation, and resourcing.
Figure 7.1 represent a composite matrix, including some key ideas which are based on a number of main models:
The Sullivan matrix
The Information Technology Assessment and Adoption (ITAA)
Two matrices developed by Ives and Learmonth and Galliers
e-Business value matrix

11. Conclusions from Various Matrices and Models
Figure 7.2 suggest a number of cause-and-effect relationships, which are generally borne out by observation in many organisations:
Organisations that have a traditional, low impact view of the role of IS/IT with highly centralised IT decision making will tend to have a predominance of support applications.
Those with devolved IT decision making, because it is not seen as particularly critical to overall business success, will also produce a profusion of support systems, solving local problem plus a number of high potential ideas and some key operational systems with poor integration.
Where the impact of IS/IT has increased, probably due to external pressures, but IT is kept highly centralised, both key operational and support systems will be developed and continually improved, but more innovative uses of IS/IT will not be instigated, because of the limited knowledge in the business of what is possible.

13. Classifying the Applications in the Portfolio
Classifying existing and future applications in the portfolio helps the task of obtaining a consensus among executive management, line managers, and the IT management on the content of the IS strategy.
Once the portfolio is understood and agreed, decisions on how best to manage each application, both existing and future, can be made, along with overall decisions on the use of resources across the portfolio and the selection of the most effective sources for supply
Which aspects should be managed in-house and which can and should be outsourced.

14. Classifying the Applications in the Portfolio
It is important to understand the role of and value to the organisation of the existing application set :
Some applications may be obsolete and no longer required
Others may need significant investment to avoid future business problems
Some may be underexploited
Others may be consuming undue amounts of resource in relation to their business value

15. Classifying the Applications in the Portfolio: Questions
Is the application delivering benefits that:
Result in a clear competitive advantage for the business?
Is it clear what the business benefits are and how they can be obtained?
Enable the achievement of specific business objectives and/or critical success factors?
Overcome known business disadvantages in relation to competitors?
Avoid foreseeable business risks becoming major problems in the near future?
Improve the productivity of the business and reduce long-term costs?
Enable the organisation to meet statutory requirements?
Will failure to comply lead to significant business risks?
Provide benefits not yet known, but may result in 1 or 2 above?

16. Classifying the Applications in the Portfolio: Interpretation
Strategic
High Potential
Key Operational
Support
1. Yes
2. Yes No 3.
Yes 4. 5. 6. 7.

17. Figure 7.3 Example Portfolio for a Manufacturing Company
Direct Marketing and Telesales System
Advertising and Promotion-Campaign Management
Sales forecasting/Market analysis
Customer Relationship Management
STRATEGIC
E-Procurement (general items)
On-line customer specification system
Product tracking/traceability
Product profitability analysis
Data warehouse-customer analysis
HIGH POTENTIAL
Payroll and Personnel systems
Ledgers – Receivables, Payables
General Ledger and Budgeting
Office systems
Purchasing-general
Samples Management
Etc.
SUPPORT
Product database/Intentory Management,
Manufacturing Requirements Planning
Order processing, Dispatch, Invoicing, etc.
Production control
Purchasing-materials
Costing systems (activity and product)
Sales analysis
Warehouse Management
Wholesaler EDI (ordering, etc.) etc.
KEY OPERATIONAL

19. Generic Application Management Strategies
Parsons (1983), described 5 strategies that are prevalent as the means by which organisations link the management of IS/IT to the corporate or business management processes.
These ‘linking strategies’ are general frameworks/generic strategies which guide:
the opportunities for IT which are identified,
the IT resources which are developed,
the rate at which new technologies are adopted,
the level of impact for IT within the firm, etc.

20. Generic Application Management Strategies
Centrally Planned
Leading Edge
Free Market
Monopoly
Scarce Resource
Management
Rationale
Central coordination of all requirements will produce better decision making
Technology can create business advantages and risks are worth taking
Market makes the best decisions and users are responsible for business results.
Integration is not critical
Information is a corporate good and an integrated resource for users to employ
Information is a limited resource and its development must be clearly justified
Organisational
Requirements
Knowledgeable and involved senior management.
Integrated planning of IS/IT within the business planning process
Commitment of funds and resources.
Innovative IS/IT management.
Strong technical skills
Knowledgeable users.
Accountability for IS/IT at business or functional level.
Willingness to duplicate effort.
Loose IT budget control
User acceptance of the philosophy.
Policies to force through single sourcing.
Good forecasting of resource usage
Tight budgetary control of all IS/IT expenses
Policies for controlling IS/IT and users
IT Role
Provide services to match the business demands by working closely with business managers
Push forward boundaries of technology use on all fronts
Competitive and probably profit centre – intended to achieve a return on its resources
To satisfy users’ requirements as they arise, but non-directive in terms of the uses of IS/IT
Make best use of a limited resource by tight cost control of expenses and projects.
Justify capital investment projects
Line Managers
and Users Role
Identify the potential of IS/IT to meet business needs at all levels of the organisation
Use the technology and identify the advantages it offers
Identify, source and control IS/IT developments
Understand needs and present them to central utility to obtain resources
Identify and cost-justify projects.
Passive unless benefits are identified

21. Relationship of Applications Portfolio and Generic IS Strategies
Centrally Planned
STRATEGIC
Leading Edge
Free Market
HIGH POTENTIAL
Scarce Resource
SUPPORT
Monopoly
KEY OPERATIONAL
Demand
Supply
Centralised
Decentralised

22. Portfolios, Planning, and Generic Strategies Evolution
STRATEGIC
HIGH POTENTIAL
SUPPORT
KEY OPERATIONAL
5. ORGANISATIONAL
and Central Planning
4.BUSINESS LED
and Free Market
(or Leading Edge technology)
3 ADMINISTRATION LED
Monopoly and
Scarce Resource
2.METHOD LED
and Monopoly
1.TECHNOLOGY LED
and Scarce Resource
(Free Market)
or even Monopoly

23. Portfolio Management Principles Applied to the Applications Portfolio
The main reason the product portfolio model offers useful input to the application portfolio is that it reflects the competitive business environment.
The model was developed to assist in managing and planning in an uncertain, market-driven environment, where management decisions are made within a total environment that can only be influenced, not determined.
IS/IT is also subject to the forces of the marketplace – external parameters now define the effectiveness of an organisation’s IS/IT management.

24. The Business/Systems Portfolio Matrix
Continuous innovation
Vertical integration
High value-added
STRATEGIC (STARS)
Process research and design
Minimal integration
Cost control
HIGH POTENTIAL (WILDCATS)
Disinvest/Rationalise
Efficiency
Sustained quality
SUPPORT (DOGS)
Defensive innovation
Effective resource utilisation
High quality
KEY OPERATIONAL (CASH COWS)

25. Key Issues in Managing the Evolution of an Application Over Time
Gain: Senior management ownership
: IT involvement
: Project management
STRATEGIC
Lose: Individual ownership
and freedom
HIGH POTENTIAL
Evaluate lower-cost options
to meet core needs
SUPPORT
Fully integrated with other
applications for effectiveness
KEY OPERATIONAL
Re-engineer
for long-term use
Re-evaluate benefits
and costs
Return to
standards

26. Management Styles DEVELOPER Organisation goal seeker
Risk accommodating
‘Central Planner’
STRATEGIC
ENTREPRENEUR
Personal achieve
Risk take
‘Free Marketeer’
HIGH POTENTIAL
CARETAKER
Immediate/Efficient solutions
Risk avoiding
‘Scarce resource’
SUPPORT
CONTROLLER
Long term/quality solutions,
stability
Risk reducing
‘Monopolist’
KEY OPERATIONAL

27. Chapter 6 Complete 15