Chapter 11 BusinessIT Strategies for Development Mc GrawHillIrwin

Chapter 11 Business/IT Strategies for Development Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Learning Objectives v Discuss the role of planning in the business use of information technology, using the scenario approach, and planning for competitive advantage as examples. v Discuss the role of planning and business models in the development of business/IT strategies, architectures, and applications. v Identify several change management solutions for end-user resistance to the implementation of new IT-based business strategies and applications. Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Section 1 IT Planning Fundamentals Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

I. Introduction v Simply knowing the importance and structure of ebusiness is not enough. A Plan is needed to transition from an old business design to a new e-business design. Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

II. Organizational Planning v Enterprise-wide plans are required to introduce IT/IS-based solutions to the entire firm. v Strategic Planning – develop a firm’s mission, goals, policies v Tactical Planning – develop objectives, procedures, rules, schedules, budgets v Operational Planning – implement/control day -to-day operations Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

III. The Scenario Approach v. A less rigid but more realistic strategic planning methodology; combine known facts about the future with plausible alternatives v. Knowledge: v. Trends – Things we think we know something about v. Uncertainties – Elements we consider uncertain or unknowable Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

III. The Scenario Approach Components of an Organizational Planning Process Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

III. The Scenario Approach Strategic Visioning Questions for e-Business Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

III. The Scenario Approach Converging Trends in Strategic Business/IT Planning Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Risk Assessment and Mitigation v What are the four types of IT risks listed? v Describe each risk. v What could a firm do to mitigate each risk? Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

IV. Planning for Competitive Advantage v Evaluation of potential benefits/risk of using IT for competitive advantage v SWOT ( strengths, weaknesses, opportunities, threats) Analysis – evaluate impact of each possible strategic opportunity v. Strengths – core competencies and resources v. Weaknesses – areas of substandard performance v. Opportunities – potential for new markets or innovation v. Threats – potential for losses Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Bristow Helicopters: Technology-Supported SWOT and Much More v What needs did Bristow have? v What key goal is identified? v What software technology was used to make these changes? v How did the software work to accomplish this? Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

V. Business Models and Planning v Conceptual framework of how a business can deliver value to customers at a cost and still turn a profit Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

V. Business Models and Planning Questions for All Business Models Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

V. Business Models and Planning Questions for e-Business Models Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Iridium Satellite: Finding the Right Business Model v What product/market did Iridium originally service? v What product/market have they moved to? v Why is this different from the way they previously competed? Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

VI. Business/IT Architecture Planning v Plans on how to use IT to support customer value and business value goals v Strategic Development – business strategies that support a firm’s business vision v Resource Management – strategic plans for managing or outsourcing a firm’s IT resources v Technology Architecture – strategic IT choices reflecting an IT architecture that supports a firm’s e-business and other IT initiatives Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

VI. Business/IT Architecture Planning v Information Technology Architecture – blueprint that contains: v. Technology Platform – complete infrastructure supporting strategic use of IT for e-commerce and business/IT applications v. Data Resources – databases and data warehouses v. Application Architecture – business applications v. IT Organization – organizational structure of the IS function within a firm Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

VI. Business/IT Architecture Planning v Balanced Scorecard – measuring a company’s activities in terms of its visions and strategies; not based on proven economic theory or decision sciences v Financial Perspectives – measures of financial performance v Customer Perspective – measures directly impacting customers v Business Process Perspective – measures performance of key business processes v Learning and Growth Perspective – measures the firm’s learning curve Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

VII. Identifying Business/IT Strategies v To optimize strategic impact, firms must continually assess the value of IT/e-commerce applications v. Cost and Efficiency Improvements – low internal/external connectivity and low use of IT v. Performance Improvement in Business Effectiveness – high internal but low external connectivity, need to improve collaboration v. Global Market Penetration – high external connectivity and use of IT v. Product and Service Transformation – extensively networked internally and externally Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

e-Business Strategy Examples v. Describe each example listed. v. Discuss each example and how it could be used in a particular business. v. Identify businesses (not those listed) that could utilize each example. Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

VIII. Business Application Planning v. IT proposals for addressing strategic business priorities and planning for application development v. Business/IT Architecture Planning – combines strategic planning methods (SWOT, etc. ) with recent modeling and development methodologies Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

VIII. Business Application Planning E-Business Architecture Planning Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

KI: The Importance of Strategic Planning v Why is forming a strategic IT plan difficult at most companies? v What was the problem at KI? v How has developing a strategic IT plan helped the firm overall? v What pitfalls, resistance, and cultural issues might have been stumbling blocks along the way? Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

The Role of IT in Business Process Design v Why might IT personnel be in a better position to see organizational needs than other personnel? v Why would IT be in the right place to provide solutions to these needs? v What organizational and cultural issues might be stumbling blocks to adopting these solutions? Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Section 2 Implementation Challenges Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

I. Implementation v Carrying out the strategic plans developed in the planning process Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

II. Implementing Information Technology v Moving to e-business involves major organizational change Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

II. Implementing Information Technology Impact and Scope of Business Change Caused By IT Implementation Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

III. End-User Resistance and Involvement v New ways of doing things always generates some resistance from those affected; end-user involvement in the change process can help minimize the resistance Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

III. End-User Resistance and Involvement Obstacles to Knowledge Management Systems Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Société de Transport de Montréal: Smooth Ride after a Bumpy Start v. What problem did STM have? v. Why did this problem occur? v. How did the IT staff work to resolve this problem? v. What other issues/areas might this same problem arise within? v. Why would the same problem manifest itself in other ares? Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Understanding the Science Behind Change v. What was the problem in IT at Blue Cross? v. What causes these problems? v. How does understanding the problem help? v. How did Blue Cross address the problem? Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

IV. Change Management v. Managing organizational change is important and can be difficult; people are a major focus here v. A Change Management Process – these 8 steps are just one way of visioning change management Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

IV. Change Management Key Dimensions of Change Management Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

DHL Express: The Challenges of Global Change v. What are the two extremes of the pendulum for IT? v. What as the problem at DHL? v. What solution did DHL provide for this problem? v. How does this affect the IT department? v. How does it affect DHL? Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Reuters: Implementing Global Shared Services v. What problem did Reuters have, and why? v. What solution did they adopt? v. Discuss the meaning of this solution. v. How did this work out for Reuters? Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.