1. Chapter 4 Information Technology Planning

2. Introduction Strategy establishes the broad course of action for the firm –Establishes the destination and the general direction, but not the details Planning encompasses the specific information to reach goals and accomplish objectives –These are the individual specific steps needed to reach the objective

3. The Planning Horizon There are three general types of plans –Strategic Plans –Tactical Plans –Operational Plans and Controls They are distinguished by their time span or planning horizon –The planning horizons of each type of plan added together equals the firm’s extended planning horizon

4. The Extended Planning Horizon

5. Time Frames Operational plans cover about 90 days Tactical plans address the time frame ranging from 3 months to 2 years –They describe the actions that begin the implementation of strategic plans Strategic plans cover a range of 2 to 5 years and concern themselves with laying out the firm’s missions, goals, and objectives

6. Strategic Plans Attempt to convert strategies into plans –Take information found in the strategy statement and add detailed actions and resources necessary to attain the stated goal –They must convert assumptions in the strategy into reality –They must mitigate known risks to the fullest extent possible

7. Tactical Plans Intermediate range plans covering the current year in detail and the following in less detail –These plans are used to help assess a manager’s performance –They link near-term actions and long range goals

8. Operational Plans Broad based and very detailed –Attempt to deal with important activities occurring in the near-term –Attempt to bridge the gap from the present to the tactical time period –Contain detailed information used in the lower levels in an organization –Provide a basis for taking short-term action and measuring short-term results

9. Planning Schedules Planning is a continual process, tied to the calendar In organizations with well-established planning processes, the new tactical plan revises the second year of the previous plan and adds to it the first year of the previous strategic plan Revisions reflect changes due to changes in the business environment

10. The Second Planning Iteration

11. Rapid-Response Planning for Internet Applications The leverage businesses obtain with Internet technologies are maximized when they are deployed quickly –In this climate, detailed plans quickly become dated –Wise managers respond to these changes quickly, with planning keeping up with the current business environment, rather than slavishly being tied to a calendar

12. Planning Model for IT Managers Planning time horizons vary greatly from industry to industry –IT must work within the horizon constraints of the firm –Organizational factors strongly influence ITs planning activity –An effective plan is a detailed and thoughtful document describing actions for implementing strategy over the designated period

13. IT Management Planning Model

14. Application Considerations An applications portfolio consists of a complete set of application programs a firm uses to conduct its automated business functions Major difficulties surround project selection for the applications portfolio –Arise from competition for resources –Generally resolution requires intervention of senior executives

15. System Operations Running the firm’s applications according to defined processes –Processes may include online ERP systems, network e-commerce systems, scheduling systems, or a combination IT managers must plan system operations and service levels to satisfy customers both within and outside the firm

16. System Operations Planning Elements

17. Committed Service Levels Achieving committed service levels depends on having sufficient resources to process the applications in keeping with stated requirements –Must possess sufficient computing and network capacity to handle the workload –Physical resources such as CPUs, memory, and auxiliary storage –Human resources to maintain the servers and other equipment 24 x 7, with low downtime

18. Resource Planning IT resources consist of equipment, space, people, and finances –The IT plan describes the critical dependencies on available resources throughout the planning horizon –The plan must encompass all necessary obligations and expenses including leasing and finance costs, third party services, and capital equipment expenditures

19. People Plans The most crucial element of any plan –People management is a necessary condition for success but not sufficient by itself –Planning includes staffing, training and retraining costs, and time –The personnel plan identifies requirements for people according to skill level –At the level of line management, this includes formulation of individual development plans for employees

20. Financial Plans For an IT organization, this summarizes the costs of equipment, space, people, and miscellaneous items –Timing of expenditures reflect the rate at which the firm acquires or expends resources consistent with work product –Planning is iterative, with the figures changing due to negotiations and discussions –An IT manager’s performance is often judged against the financial plan

21. Administrative Actions The cooperation of managers in adjacent functions must occur to help coordinate the emerging plan –Bringing others in helps develop win-win strategies among the participants –Open lines of communication help to integrate participants across departments –Measurement and tracking mechanisms must be developed to monitor progress and help management assert control

22. Technology Planning The IT organization must stay informed about progress in the field –The rate of change in IT is enormous, with many enormous advances and technologic dead ends –In larger organizations, a small advanced technology group is useful to better quantify new technologies and their applicability to the current environment

23. Technology Areas

24. Critical Success Factors in Planning CSFs are critical tools in creating effective plans –Improve planning by focusing on important managerial issues –Audit the results of the planning process Four major categories –Long, intermediate, and short range issues –Business management issues

25. Business Systems Planning Concentrates on a firm’s data resources and attempts to develop an information architecture that supports a coordinated view of the data needs of the firm’s major systems Attempts to model the firm’s business through its information resources –Attention is shifted from the firm’s applications to the firm’s data

26. The Integrated Approach Some planning strategies are more suited to certain situations than others Two factors correlate with planning effectiveness –Infusion – the degree to which IT has penetrated the operation of the firm –Diffusion – the extent to which IT has disseminated throughout the firm

27. IT Planning Environments

28. Forecast-Based Forecast or extrapolation strategies work in firms in which the technology is limited in terms of its use, and does not have a high impact –These firms tend to use older generations of equipment in very circumscribed roles –Rapid advances in the state of the art can be ignored and as a late or limited adopter, risks and benefits can be well quantified

29. CSF and BSP These methodologies are more suited when technology is dispersed and its impact moderate (CSF) or those in which IT is centralized and has a high impact on the company (BSP) As e-business is more widely adopted, firms move from their present planning strategy to one more eclectic and complex

30. Eclectic Planning Strategies Technological approach –Attempts to build an IS-oriented architecture Administrative approach –Bottom-up resource allocation Method-Driven approach –Use consultants to critique existing plans Business-led –Assumes business plans will lead to IT plans

31. Organizational Approach Frequent interactions between IT and clients in order to develop projects that lead to shared outcomes Functional interactions occur on an as- needed basis to supplement other long- range planning activities

32. Management Feedback Mechanisms Control consists of knowing who, what, why, where, and when for all essential activities Control processes must be designed to compare the organization’s actual performance to plan predicted performance

33. Management Feedback Mechanisms

34. Summary Sound planning is critical for success Planning is divided into time periods of differing lengths Plans are only as good as their implementation and control mechanisms Control is a fundamental management responsibility Measurements are key to gauging planning success and deviation