Assessing and understanding the Business Needs

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Assessing and understanding the Business Needs
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LEARNING OBJECTIVES

• To understand the process in assessing and
  understanding the current situation in an
  organization, comprising of internal and external
  environment strategic analysis of the business
  and ICT.
• To utilize tools that can be used for assessment
  of current situation.

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Model of Strategic Planning Process

• Planning element Plan component Key
  Question

Mission
What should we be doing ?
Strategic analysis
Goals
Where are we going ?
Strategies
Strategic choice
What routes have we selected ?
How do we guide our collective decisions to get
there ?
Policies
Strategic implementation
Decisions
What choices do we have ?
Actions
Shall we do it ?
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Main Deliverables of the Business IS Strategy

• Analysis of
• existing expected future business
• IS/IT environments strategies
• IS demand from current business strategy
• through alignment of IS requirements with
  business needs and initiatives
• Future potential from IS/IT
• through identification of opportunities to impact
  the business strategy and significantly raise its
  competitive performance.

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Business Re-engineering and IS Strategy

• Most re-engineering initiative will spring from,
  and be part of, the business strategy
• The early work in developing IS strategy is first
  to flesh out the details behind the headlines in
  the business strategy, this means working with
  the business areas to helps determine what those
  business initiative will be and their expected
  contribution to business objective.
• Will accommodate in the IS strategy, and need to
  allocated the same priority that the business
  places on the change program.
• Common need in both IS strategy development
  business re-engineering to build up a model of
  the business as it currently exist and other
  potential models of how following transformation
  or evolutionary change.
• Success re-engineering, as which the development
  and implementation of IS/IT strategy, demands a
  strong business-IS function partnership.
• Designing or redesigning business process to take
  advantage of IS/IT capabilities is essential if
  the traditional problems of automating
  poorly-designed processes or inefficient work
  practices through IT are to be avoided.

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Business Re-engineering and IS Strategy

• IT is driver for re-engineering, an enabler or
  one of means of implementation.
• Two key question should be asked
• How can business processes be transformed using
  IT (Based on a full understanding of the
  capabilities of IT)?
• How can IT support business process?

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The role of IS/IT in BPR
Capabilities of IT as an enabler of Change
Identify need for change in development of
business strategy
Develop options for radical change
IT can be used to model / simulate / prototype
option for change
Evaluation of Option
IS and IT as a key component of achieving change
Implementation of chosen Options
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Reconciling IS/IT in BPR
Questions BPR IS/IT strategy formulation and planning
Formulation How can we re-engineer our business to provide advantage? How can IS/IT be exploited to provide business advantage? (impact)
implementation How can we improve our process to ensure success of the strategy How can IS/IT ensure the success of the business strategy? (alignment)
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Planning Components
SITUATION ANALYSIS Description of where we are
today 4 areas IBE, EBE, IICTE, EICTE (Internal,
external, business, ICT)
GAP ANALYSIS
STRATEGY FORMULATION Description of where we
want to be Business ICT Future
STRATEGY IMPLEMENTATION How to use ICT to get to
where we want to be.
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Phases of Planning Process

• Visioning Phase
• Initiate manage the project
• Understand business situation and vision
• Document and Confirm business analysis
• Analysis Phase
• Understand Current IS situation
• Analyze Current IS situation
• Develop recommendations, solution alternatives

• Direction Phase
• Develop IS Vision and direction
• Develop IS plan
• Identify IS project
• Recommendation Phase
• Develop roadmap
• Develop business case
• Communicate the plan

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Visioning Phase

• Initiate manage the project
• Understand business situation and vision
• Review business documentation
• Develop instruments
• Collect Data
• Document findings

• Document and Confirm business analysis Document
• Current business description, vision, values,
  goals, strategies, directions, operating vision,
  projects initiatives
• Industry business trends, business and customer
  requirements
• Business SWOT analysis
• Business Impact

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UNDERSTANDING THE CURRENT SITUATION

• Understand/Obtaining in depth
• the business strategy
• the business and technology environments
• Current status of IS/IT in the business
• Determine the opportunity, threats and
  requirements inherent in the business strategy
• Recognize the strength and weakness of the
  business and it IS/IT operations.

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Understanding the current situationDetermine the
IS/IT Requirement The IS Demand

• Wish list of business requirements of each area
• Absorb every written strategy statements, and
  interpret into relevant IS/IT principles and
  CSFs, application requirements associated with
  the major planned initiatives, and a set of
  supply criteria to deliver the services
• possible if have comprehensive documentations of
  current and planned business activities and
  environment
• In practice, this documentation is rarely exists,
  unless it was build up earliest business or IS
  strategy cycle and has been updated to reflect
  the current situation and requirements.

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Understanding the current situationDetermine the
IS/IT Requirement The IS Demand

• Develop IS Strategy and IS Demand in parallel
  with the Business Strategy
• feed trends / opportunities / ideas into top
  level business strategy, and work closely with
  the business to build up IS/IT initiatives to
  deliver the targeted performance

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Understanding the current situationDetermine The
IS Demand
SWOT CSFs. Value Chain Business Model
Current and Expected Business and Technical Enviro
nment
Business Strategy
Determine the IS Demand
IS/IT Opportunities
Proposed IS/IT Initiatives
Proposed Business initiatives
Impact and role of IS/IT
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Understanding the current situationGathering the
Relevant Data

• Value of IS/IT strategy is dependent upon
• the depth of understanding of business and its
  needs, and
• the constructive interpretation of these needs
  into beneficial information, systems and IT
  services.
• Thus, facts need to be recorded so as to
  facilitate analysis
• The approach relies on
• building up a clear structured set of
  information, and where suitable,
• constructing models showing the organization,
  business and information requirements.
• Requirement of fact finding
• understanding of business and information
  environments
• to be able to develop sensible and realistic
  strategies.

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Understanding the current situationGathering the
Relevant Data

• Start with Documentation Review of
• business strategy, objective, mission, annual
  plans, budgets, forecasts, KPIs (key performance
  indicator).
• prospectus supporting the raising capital,
• annual report providing the official financial
  view of the companys objective and general
  direction,
• additional sources such as job description for
  management level staff,
• This is followed by
• discussion, interview, workshop, or other
  information and issues not available in the
  documentation.

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The IS/IT Strategic Model
IS/IT Strategy Process
Current Applications Portfolio
Planning Approaches, Tools and Technique
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BUSINESS STRATEGY ANALYSIS

• Download the blueprint document for your Case
  Study.
• Identify the following business strategy elements
  from the document
• History and Background
• Business Description
• Vision and Mission
• Goals, Objectives
• Strategies
• Growth Objectives geography, market, customers,
  products, channels.
• SWOT Analysis

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INTERPRETING THE BUSINESS STRATEGY

• Two input from business perspective (Internal
  business environment External business
  environment) should be identified and analysed.
• IS demand can be derived exploiting
  opportunities or countering threat can be
  determined.
• The majority of information need are internally.

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Interpreting The Business Strategy Internal
Business Environment

• Three Element
• The business strategy
• The current business processes, activities and
  main information entities
• The organisational environment, covering its
  structure, assets and skill, and also the less
  tangible factor such as values style, culture and
  relationship.
• Identify
• The activities that can contribute to the
  achievement of business objectives and their
  supporting information needs
• Secondary activities that have to be performed in
  order to measure performance towards achieving
  those objectives, and which may then be used to
  modify goals.

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Interpreting The Business Strategy The Business
Strategy

• The business strategy
• Identify the current strategy, and, in
  particular, any new elements added since the
  previous strategy development cycle
• If necessary, investigate, extend and analyse the
  strategy, and document it in a structured manner.
  The best to tackle is by mixed group of both
  business and IS disciplines and skills
• Compile and confirm the IS requirements, and
  document the IS demand
• The business strategy may exist in a variety of
  forms. It may be accessible through formally
  recorded corporate, business unit or functional
  area strategy documents, or less formally in
  other documents and in peoples heads. It can
  usually be confirmed and expanded through
  discussions with senior management.

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Interpreting The Business Strategy The Business
Strategy

• IS strategy development and implementation
• Deriving the strategy alongside all other
  component strategies, such as marketing or
  product development, or within a business
  re-engineering programme or redesign of business
  processes
• Implementing a programme of initiatives to
  deliver the business strategy, which is
  coordinated to include the critical IS/IT
  development alongside and within other business
  initiatives.
• Possibility to business strategies objective
• Not recorded formally
• Not well constructed
• Not well communicated

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Interpreting The Business Strategy The Business
Strategy

• No business strategy at all
• Analyse and record current activities, tactics,
  and operational needs from top-down viewpoint.
• The analysis of the business and of its critical
  components will provide invaluable input into any
  future formulation of business strategy.
  Short-term planning can focus on supporting
  current high priority business needs, and on
  identifying and alleviating critical problems,
  which threatens the business with competitive
  disadvantage.
• The main technique used in this case is critical
  success/ failure factors
• Information needs may arise from all elements in
  the business strategy and they are significant
  sources of requirements and compilation of IS
  strategy.

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Interpreting The Business Strategy Business
Process, Activities and Key Entities.

• Another deliverable derived from analysis current
  situation, are models that depict the processes,
  activities and main information elements and how
  they relate to one another.
• These models make up the business model together
  with supporting IS models, comprise an IS
  architecture for business.

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Architecture Model
Business Model
Business Process Model
Business Data Model
Process/Entity Matrix
IS Model
Entity Life History
IS Process Model
IS/Entity Matrix
IS Data Model
IS Functional Model
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Interpreting The Business Strategy
Organizational Environment

• Must have clear understanding of the
  organizations current structure, relationships
  and people composed
• Organization is dynamic form an important input
  into the planning process.
• Necessary to understand the environment, and it
  skills, resources, values, culture and social
  interaction, management style and its
  relationship with the external environment.

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EXAMINING CURRENT IS/IT ENVIRONMENT

• Examination of external IT environment
• enables the strategist to take account of trend
  and opportunities from emerging technologies
• To investigate how competitive or complimentary
  organizations are applying IT.
• Assessment of the internal IS/IT environment
• an evaluation of current application portfolio
  and the applications under development to
  determine their content, coverage and
  contribution
• a similar evaluation of current databases and
  those under construction
• ascertaining the user perception of the value of
  portfolio
• an evaluation of current infrastructure and IT
  supply provisions, accomplished through a
  technology assessment and IT infrastructure
  review.
• The result are the basis assessment of the gap
  between the current and required provisions.

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EXAMINING CURRENT IS/IT ENVIRONMENT

• Current Portfolio Evaluation
• Current/Previous Strategies and Policies
• IS Organization and processes
• Current Assets, Resources and Skills
• Method and training provisions
• External IS/IT environment

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TECHNIQUES FOR INTERPRETATION AND ANALYSIS

• Business strategy analysis
• Critical success factor analysis
• SWOT Analysis
• Balance Scoreboard Analysis
• Business portfolio and competitive strategy
  analysis
• Value chain analysis
• Process analysis/ BPR
• Organizational modeling
• Business modeling information analysis
  technique
• Current portfolio evaluation
• Technology assessment and IS/IT infrastructure
  review

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TECHNIQUES FOR INTERPRETATION AND
ANALYSISBalanced Scorecard Analysis

• Financial how do we look our shareholders and
  those with a financial interest in the
  organization?
• Internal business perspective how do we have to
  excel at if we are to meet the expectations of
  our employees and trading partner?
• Customer perspective how do our customer
  perceive us in term of products, service,
  relationships and value-added?
• Innovation learning perspective to achieve our
  future vision, ho will we continue to improve and
  create future value for our stakeholders?

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TECHNIQUES FOR INTERPRETATION AND
ANALYSISBalanced Scorecard Analysis
TECHNOLOGY VIEW
process
DATA
interpret
INFORMATION
Balanced scorecard
obtain
decisions
KNOWLEDGE
defines
drive
ORGANIZATION ACTIONS
BUSINESS VIEW
require
BUSINESS RESULTS
Critical Success Factors
measure
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Information and Balanced Scorecard
How do we look to shareholders?
Ho do customer see us?
What must we excel at ?
How can we continue to improve and create value?
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Critical Success Factor Analysis

• For any business, the limited number of areas in
  which results, if they are satisfactory, will
  ensure successful competitive performance for
  organisation Rockart (1979)
• Thing must go right for business to flurish.

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CSF Identification

• Identify CSF against each objective
• Consolidate them across objectives, since many
  CSFs will recur
• Ranking of objective and the number sharing the
  same CSF
• Number of CSF 5 8 per objective
• Too many, objective is unachievable
• Too few, not ambitious enough

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CSF

• CSF Should be easily and directly related back to
  the objectives of the business units.
• CSF focus primarily on management control and
  tend to be internally focused and analytical,
  rather than creative.
• Nature of CSFs and KPIs reflect a particular
  executive management style.
• Involve top management in the IS/IT strategy
  process and gaining their commitment
• Developing concensus view of IS aplication in the
  business
• Linking IS activity to business strategy
• Providing guidance for defining executive
  information needs.

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Level of CSFs
INDUSTRY CSFs
Help define
Oganizational Objective
ORGANISATIONAL CSFs
Set
Business Unit or Functional Objective
BUSINESS UNIT OR FUNCTION CSFs
Help define
Managers Objective
MANAGERS CSFs
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CSF basic process
MISSION


Business Objective
Balanced Scorecard

Information To measure performance
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Two types of IS requirement derived from CSF
analysis
Information System to Manage the Business
Information System to Produce and Deliver the
Product / Service
Control
Focus /Select
Define
Critical Success Factor
To be prioritised
Application Identified AS Required to
support Business Activities
Objectives
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Understanding the Current SituationCSF analysis
process
Understand mission and Objective
Determine CSF for Each Objective
Conduct a SWOT on each CSF
Consolidate Across Objectives and
identify Information Dependencies
Develop Measures
Result Guides for the executive Information
System
Result Outline plan of IS Requirement
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Example of BSC CSF Analysis

• Manufacturing company
• For each perspective, construct scorecard of
  Objectives KPI/Measures
• Use CSF Analysis to identify CSF for each
  objective.
• Determine Information and Systems requirements to
  support the CSFs
• Consolidate the output of the BSC and CSF