Information Systems Planning and 5 Development Strategies Jamshid Nazemi 1 IS/IT Strategic planning-lecture
Why have an IS/IT Strategy? Systems investments are made that do not support business objectives Loss of control of IS/IT Systems are not integrated No means for prioritising investments No mechanisms for deciding optimum resource usage Jamshid Nazemi 2 IS/IT Strategic planning-lecture 5
Why have an IS/IT Strategy? Poor management information Misunderstandings between users and IT specialists Technology strategy is incoherent and constrains options Inadequate infrastructure investments made Problems caused by IS/IT investments can become a source of conflict Localised justification of investments can produce benefits that are counterproductive in the overall business context Jamshid Nazemi 3 IS/IT Strategic planning-lecture 5
Strategy versus Planning Strategy An integrated set of actions aimed at increasing long-term wellbeing and strength of enterprise relative to competitors Strategic thinking Strategic planning Opportunistic decision-making Jamshid Nazemi 4 IS/IT Strategic planning-lecture 5
The Strategic Framework The external environment Economic/ Social / Political / Legal / Ecological / Technological Pressure groups and stakeholders Shareholders / Competitors / Customers/Suppliers / Government / Unions / Employees / The public / Media / Financial Institutions Internal business strategizing and planning SBU / Objectives / Situation analysis / Future strategies Jamshid Nazemi 5 IS/IT Strategic planning-lecture 5
Business strategy 1. Business decision 2. Objectives and directions 3. Change IS Strategy 1. Business based 2. Demand oriented 3. Application focused IT Strategy 1. Activity based 2. Supply oriented 3. Technology focused Jamshid Nazemi 6 IS/IT Strategic planning-lecture 5
Business Strategic Mgmt Executive management IS/IT Strategic MGMT User management Information System management User operation Relationship between Business, SIS,MIS,data processing Project Management & Data processing Jamshid Nazemi 7 IS/IT Strategic planning-lecture 5
Environment analysis of IS/IT strategy Internal demand for IS/IT control Degree Of Decentralized IS/IT in company High Low oppurtunistic traditional Low complex backbone High External Importance Of IS/IT Degree of business dependence on IS/IT Jamshid Nazemi 8 IS/IT Strategic planning-lecture 5
STRATEGIC -applications which are critical to sustaining the future business strategy HIGH POTENTIAL - applications which may be important in achieving future success - applications on which the organisation currently depends for success - applications which are valuable but not critical for success KEY OPERATIONAL SUPPORT Applications Portfolio Jamshid Nazemi 9 IS/IT Strategic planning-lecture 5
External STRATEGIC INTEGRATION Internal Business Strategy Organisational Infrastructure and Processes Information Technology Strategy Information Systems, Infrastructure and Processes Business Domain IT Domain FUNCTIONAL INTEGRATION The Strategic Alignment Model Jamshid Nazemi 10 IS/IT Strategic planning-lecture 5
Internal organisational pressure HIGH Opportunistic Complex Diffusion degree of decentralisation of IS/IT control Traditional LOW Backbone HIGH External Competitive Pressure Infusion - degree of dependence on IS/IT Environments of IS/IT Strategy Jamshid Nazemi 11 IS/IT Strategic planning-lecture 5
Competitors Business Environment Impact of Competitor strategies Disrupts Changes the rules The Organisation Supports Duality of IT IT Infrastructure Provides novel opportunities IT Innovations Influence and Impact of IT Jamshid Nazemi 12 IS/IT Strategic planning-lecture 5
Evolution of Strategic Management Maturity Phase 1 Financial planning Meet the budget Phase 2 Forecast-based planning Predict the future Phase 3 Externally-oriented planning Think strategically Phase 4 Strategic management Create the future Jamshid Nazemi 13 IS/IT Strategic planning-lecture 5
Information system & Environment Operational efficiency Management effectiveness Business advantage internal Data processing MIS Internal business integration( BPR, OLAP, Data Flow mgmt) External EDI Information sharing External business integration ( e ) Jamshid Nazemi 14 IS/IT Strategic planning-lecture 5
Purpose Focus Operational Efficiency Management Effectiveness Business Advantage Though Change Internal Data processing automation of business tasks and processes Management Information Systems (and Executive IS) Internal business integration by process, job and orgn. Redesign External Electronic links between orgns. Automating data exchange Sharing info. By direct access from one coy. To another s info. Resources External business integration, changing the roles of firms in the industry The IS Management Environment
Imposed changes New opportunities INTENDED STRATEGY plans EMERGENT STRATEGY REALISED STRATEGY Unexpected constraints or options Failed implementation Realities of Strategy Development Unrealised Strategies Jamshid Nazemi 16 IS/IT Strategic planning-lecture 5
Strategy Tools and Techniques Portfolio and Planning Matrices Competitive Forces and Competitive Strategies Resource-based strategies Jamshid Nazemi 17 IS/IT Strategic planning-lecture 5
HIGH a) Market growth STAR WILDCAT or PROBLEM CHILD b) Cash use CASH COW FUNDS DOG LOW HIGH a) Relative market share LOW b) Cash generation Boston Consulting Group s Product Portfolio Jamshid Nazemi 18 IS/IT Strategic planning-lecture 5
Threat of New entrants Bargaining Power of Suppliers Rivalry Among Existing Competitors Bargaining Power of Buyers Threat of Substitute Products or Services Industry Competitive Forces Jamshid Nazemi 19 IS/IT Strategic planning-lecture 5
Table 2.4 p107
Economic Environment EXTERNALLY DRIVEN Stakeholder Demands Market Requirements Operational excellence? Customer intimacy? Product leadership? Resources Competitors INTERNALLY DRIVEN Competencies Forces Shaping Strategy Jamshid Nazemi 21 IS/IT Strategic planning-lecture 5
IS/IT Strategy Process IS/IT strategy formulation IS/IT planning Jamshid Nazemi 22 IS/IT Strategic planning-lecture 5
What and why? IS/IT Planning & Strategy IS/IT Strategic Analysis How? Methodologies Tools IS Development Strategies Strategic IS/IT Management IS/IT Organisation Info. & Knowledge resources IT Infrastructure Jamshid Nazemi 23 IS/IT Strategic planning-lecture 5