Developing BusinessInformation Technology Strategies

1
Developing Business/InformationTechnology
Strategies
Section I
Ch9
2
Learning Objectives

• Discuss the role of planning in the business use
  of information technology, using the scenario
  approach and planning for competitive advantage.
• Discuss the role of planning and business models
  in the development of e-business strategies,
  architectures, and applications.

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Learning Objectives (continued)

• Identify several change management solutions for
  end user resistance to the implementation of new
  e-business strategies and applications.
• Identify the importance of business IT alignment

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Section I

• Planning Fundamentals

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Organizational Planning (continued)

• Strategic Planning
• Strategic Visioning
• Tactical Planning
• Operational Planning

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Organizational Planning

• The Planning Process
• Evaluating organizational accomplishments
  Analyzing the business, economic, political, and
  societal environment
• Anticipating and evaluating the impact of future
  developments

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IT Strategy

• Set of decisions made by IT and senior management
• Deployment of technology infrastructures
• Relationship of technology choices to business
  choices

An I/T Strategy is a set of discrete actionable
interventions which ensure that the firm I/T
capabilities deliver value towards strategic
business objectives in a cost efficient manner
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IT Strategy (ctd)

• I/T strategy may impact all aspects of the I/T
  portfolio applications, communication,
  infrastructure, processes, governance,
  organization
• Not a one-shot activity needs to be constantly
  refined and aligned with business priorities
• Impact of an I/T strategy must be measurable in
  terms of business value - revenue/margin growth,
  cost reduction etc.

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The IT strategic plan process
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2
3
4
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Align IT strategy to business within business
context
Define the budget to implement initiatives / SLAs
Understand business issues
Determine the implementation strategy
Define the IT strategic initiatives

• Input from the Business strategic plan

• Identify the evolution scenarios that impact the
  IT strategy
• Understand the evolution in terms of
• Business
• Organization
• Relations

• Implement a Project Office to manage all the
  initiatives in
• Infrastructure
• Applications
• Processes

• Plan initiatives within the scenarios
• Identify benefits / costs of the initiatives
• Costs
• Resources
• Timing
• Select initiative through the Master Plan tool

• Establish periodic reviews
• Define Application service level
• Short-term staffing needs
• Yearly budget

OBJECTIVES IDENTIFICATION
IMPLEMENTATION METHODS
INITIATIVES DEFINITION
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The Scenario Approach to Planning
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Align IT strategy to business within business
context

• Teams participate in a microworld
• A variety of business scenarios are created
• Alternative scenarios are created by teams or by
  business simulation software based on..
• A variety of developments, trends, and
  environmental factors

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Scenario Planning Grid
2
Align IT strategy to business within business
context
IMPACT ON FIRM
HIGH
MEDIUM
LOW
High Priority
HIGH
Strategy A
FEASIBILITY
Medium Priority
MEDIUM
Strategy B
Strategy C
Low Priority
LOW
Strategy D
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Planning for Competitive Advantage
2
Align IT strategy to business within business
context

• Especially important in todays competitive,
  complex environment
• Involves an evaluation of potential benefits and
  risks
• May include the competitive forces and
  competitive strategies models, as well as a value
  chain model of basic business activities
• Use a strategic opportunities matrix to evaluate
  strategic potential

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Planning for Competitive Advantage (continued)
2
Align IT strategy to business within business
context
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Planning for Competitive Advantage (continued)
2
Align IT strategy to business within business
context

• SWOT Analysis
• Recommend strategies that ensure best alignment
  between external and internal environments

Strengths Weaknesses Opportunities Threats
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Business Models and Planning
2
Align IT strategy to business within business
context

• A conceptual framework that expresses the
  underlying economic logic and system that prove
  how a business can deliver value to customers at
  an appropriate cost and make money.
• Specifies how the business will organize and
  operate
• Focuses attention on how all the essential
  components fit into a complete system

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e-Business Planning
3
Determine the implementation strategy

• 3 major components
• Strategy development
• Resource management
• Technology architecture

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e-Business Planning (continued)
3
Determine the implementation strategy

• IT architecture major components
• Technology platform
• Data resources
• Applications architecture
• IT organization

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Examples of IT Planning Process Results
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IT Strategic Initiatives
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Define the IT strategic initiatives

• Common applications
• Applications reference models
• Unique infrastructure
• Common I/T policies and standards
• Personal productivity
• Mobile interconnectivity
• Ubiquitous service availability

• New HR system
• New finance system
• Single engineering releasing system
• Virtual office for managers
• Logistic harmonization
• Document/Project management

ILLUSTRATIVE

• Common e-mail system
• Company reporting system
• Network separation and upgrade
• Parent companies applications cloning
• Applications migration
• Video-conferencing and mobile communication

• Different applications
• Lack of integration
• Missing communication
• Mix of owned and in-service applications
• Islands of country I/T organizations

Year 0
Today
Long-term
Tomorrow
TIME
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IT Strategy Implementation
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Define the budget to implement initiatives / SLAs

• Execute the strategy
• Commitment and engagement of senior business
  management
• Must occur prior to implementation planning
• Strategic Alignment Maturity
• Ability to adapt in harmonious fashion
• Adoption of Measurement Criteria
• Measure effects in several different dimensions

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Periodic Review
5
Define the budget to implement initiatives / SLAs

• Define budget / time / resources for projects
  selected
• Ensure initial assumptions are correct
• Ensure implementation of plans are on schedule
• Measurements are captured and reported

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Section II
Ch9

• Implementation Challenges

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Implementation

• A process of carrying out the plans for change in
  e-business strategies and applications that were
  developed during the planning process.

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Implementing IT

• Requires managing the effects of major changes in
  key organizational dimensions such as
• business processes
• organizational structure
• Managerial roles
• Employee work assignments
• Stakeholder relationships

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Comparing application portfolio with business
requirements
APPLICATION PORTFOLIO ANALYSIS
ILLUSTRATIVE
Requires Change
Company Strategy
HIGH
Migration
Maintain/ Improve
Business Requirements
to New platforms
Application A
Application D
...
...
...
IT Implications
Alignment to Business
Align to business
Current portfolio evaluation
Dismissal
Function evolution
Application C
Application B
...
...
Gap identification
LOW
HIGH
Technological Alignment
NEW APPLICATIONS DEVELOPMENT
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Change Management

• People are a major focus of organizational change
  management
• Developing innovative ways to measure, motivate,
  and reward performance
• Designing programs to recruit and train employees
  in the core competencies
• Also involves analyzing and defining all changes
  facing the organization

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End User Resistance and Involvement

• Change can generate fear and resistance to change
• Keys to countering end user resistance
• Proper education and training
• End user involvement in organizational changes

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Ensuring Strategic Alignment

• Jerry N. Luftman model

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Information Systems for Competitive Advantage

• The Technology/Strategy Fit
• An IS implementation should create a significant
  organizational change consistent with the
  business strategy
• IT needs to be aligned to the business goals

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Strategic Alignment Model

• Business Strategy
• Business Scope
• Distinctive Competencies
• Business Governance

• IT Strategy
• Technology Scope
• Systemic Competencies
• IT Governance

• Organization Infrastructure Processes
• Administrative Structure
• Processes
• Skills

• IT Infrastructure Processes
• Architecture
• Processes
• Skills

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Alignment Maturity

• Process which evaluates the IT/business alignment
  status of a specific organization
• It has a defined number of levels and
  representations (5 levels)
• It is based on a defined set of criteria (six key
  criteria)

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Strategic Alignment Maturity Levels

• Initial/Ad Hoc Process
• Business and IT not aligned
• Committed Process
• Organization commits to becoming aligned
• Established Focused Process
• Established and Focused on business objectives
• Improved/Managed Process
• Reinforcing concept of IT as Value Center
• Optimized Process
• Integrated/Co-adaptive business and IT strategic
  planning

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Strategic Alignment Maturity Criteria

• Communications
• Competency/value measurements
• Governance
• Partnerships
• Scope and Architecture
• Skills

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Strategic Alignment Template
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Discussion Questions

• Planning is a useless endeavor, because
  developments in e-business and e-commerce, and in
  the political, economic, and social environments
  are moving too quickly nowadays. Do you agree
  with this statement?
• Planning and budgeting processes are notorious
  for their rigidity and irrelevance to management
  action. How can planning be made relevant to
  the challenges facing an e-business enterprise?

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Discussion Questions (continued)

• What planning methods would you use to develop
  e-business and e-commerce strategies and
  applications for your own business?
• What are several e-business and e-commerce
  strategies and applications that should be
  developed and implemented by many companies today?

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Discussion Questions (continued)

• How can a company use change management to
  minimize the resistance and maximize the
  acceptance of changes in business and technology?
• Many companies plan really well, yet few
  translate strategy into action. Do you think
  this is true?

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Discussion Questions (continued)

• What major business changes beyond
  e-business and e-commerce do you think most
  companies should be planning for the next ten
  years?