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Prof. Rushen Chahal

Determining the BusinessInformation System Strategy

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Agenda

Strategic planning factorsStrategic planning approach

An framework to use the models andtechniquesPortfolio management in a multi-business

unit Organization

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Strategic Planning Model

External long term: external businessenvironmentExternal short term: external IS/ITenvironmentInternal long term: internal businessenvironment

Internal short term: internal IS/ITenvironment + current application portfolio

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External Long Term

External Business EnvironmentState of the industry in terms of profitability, growth, and structure

Capability of IS/IT to change products,markets, and interrelationships of theindustry

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External Short Term

External IS/IT EnvironmentActual competitor usage of IS/IT andothers for competitive edge

IS/IT opportunities to change thecompetitive factors and influences onindustry (existing value chain, newentrants, or products and services)

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Internal Long Term

Internal Business EnvironmentNew IS/IT effectively support or enhancethe business strategy

IS/IT enable business to adopt aappropriate strategy to suit the futurebusiness environment

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Internal Short Term

Internal IS/IT EnvironmentThe degree of existing IS supporting thebusiness strategy and sustaining the

business advantagesThe appropriateness of IS/IT managementto the business strategy and thedevelopment of IS/IT industry

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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 chainanalysis, strategic option generator,organizational modeling

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Strategic Planning Approach - II

Input Mission, objectives, CSFs, process and

activities analysis, data flow analysis andmodeling

Informal/opportunistic creative thinking

Output Strategies to achieve application portfolio The future application portfolio

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An Framework to Use the

Models and TechniquesObjective Identify the required applications and their

priorities and resources to achieve thebusiness goals and strategies

Three components The existing application The required application The potential application

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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

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The Required Application

Assessing the need for immediateinvestment: 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

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The Potential Applications

Identifying potential future investment:longterm, 1-5 years, creative

Consider potential IS/IT impact onproduct/market, etc. Consider the strategic potential of IS/IT and its

effects on the value chain

Identify options for long-term IS/IT investmentand select most beneficial

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Portfolio Management in a

Multi-Business UnitOrganizationCoordination 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 beobtained in others

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Portfolio Management in a

Multi-Business UnitOrganizationFor each business unit

Key operational (control): transfer experiencein use of applications and technology acrossunits, and reduce duplication of IS/IT effort

Support (constrain): achieve economies bysharing non-critical systems and

standardizing on technologies and resourcesused

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Points to Remember

Strategic planning factorsStrategic planning approach

An framework to use the models andtechniquesPortfolio management in a multi-business

unit Organization

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Q uestion

How do you plan or justify an e-businessas a required strategic informationsystem?