Chapter 6 Determining the Business Information System Strategy

Agenda • Strategic planning factors • Strategic planning approach • An framework to use the models and techniques • Portfolio management in a multi-business unit Organization

Strategic Planning Model • External long term: external business environment • External short term: external IS/IT environment • Internal long term: internal business environment • Internal short term: internal IS/IT environment + current application portfolio

External Long Term External Business Environment • State of the industry in terms of profitability, growth, and structure • Capability of IS/IT to change products, markets, and interrelationships of the industry

External Short Term External IS/IT Environment • Actual competitor usage of IS/IT and others for competitive edge • IS/IT opportunities to change the competitive factors and influences on industry (existing value chain, new entrants, or products and services)

Internal Long Term Internal Business Environment • New IS/IT effectively support or enhance the business strategy • IS/IT enable business to adopt a appropriate strategy to suit the future business environment

Internal Short Term Internal IS/IT Environment • The degree of existing IS supporting the business strategy and sustaining the business advantages • The appropriateness of IS/IT management to the business strategy and the development of IS/IT industry

Strategic Planning Approach - I • Input – External and internal business environment – External and internal IS/IT environment – Current application portfolio – Business portfolio analysis, competitive analysis, resource life cycles, value chain analysis, strategic option generator, organizational modeling

Strategic Planning Approach - II • Input – Mission, objectives, CSFs, process and activities analysis, data flow analysis and modeling – Informal/opportunistic creative thinking • Output – Strategies to achieve application portfolio – The future application portfolio

An Framework to Use the Models and Techniques • Objective – Identify the required applications and their priorities and resources to achieve the business goals and strategies • Three components – The existing application – The required application – The potential application

The Existing Application • Appraisal of IS/IT for the business – Understand the industry structure and business position in terms of SWOT – Analysis the external value chain and information flow implications – Analysis the internal value chain and organizational relationships – Assess the business of existing system in terms of SEOT

The Required Application • Assessing the need for immediate investment: short/medium term, 1 -2 years, analytical – Interpret business objectives and strategy – Determine CSFs for the corporate and its competitors, etc. – Identify critical business process and activities – Determine short-term focus for investment

The Potential Applications • Identifying potential future investment: long term, 1 -5 years, creative – Consider potential IS/IT impact on product/market, etc. – Consider the strategic potential of IS/IT and its effects on the value chain – Identify options for long-term IS/IT investment and select most beneficial

Portfolio Management in a Multi. Business Unit Organization • Coordination and coherent among corporate and business units • For each business unit – High potential (communicate): share ideas and results of evaluations and prototypes – Strategic (capitalize): evaluate how advantages gained in one SBU can be obtained in others

Portfolio Management in a Multi. Business Unit Organization • For each business unit – Key operational (control): transfer experience in use of applications and technology across units, and reduce duplication of IS/IT effort – Support (constrain): achieve economies by sharing non-critical systems and standardizing on technologies and resources used

Points to Remember • Strategic planning factors • Strategic planning approach • An framework to use the models and techniques • Portfolio management in a multi-business unit Organization

Question • How do you plan or justify an e-business as a required strategic information system?