mass specc it planning assessments

7/31/2019 MASS SPECC IT Planning Assessments

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MASS SPECC IT STRATEGY ASSESSMENT2007-2011 & Beyond


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Strategic impact of information systems.

IT-enabled strategies to achieve competitive

advantage. Information technology skills and resources tosupport sustained competitive advantage.

The importance of IT alignment. (Requirements of IT Planning)


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Competitive Advantage An advantage over competitors in some measure such as cost,

quality, or speed

A difference in the Value Chain Data Improving Core Competency

Employee productivity

Operational efficiency

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SWOT Analysis Product Life Cycle Quality Preference Competitive

AdvantagePosition,

Capabilities, Cost-Quality Curve,Sustainability Company

ARC,Coordination,Incentives,

Explorer-ExploiterValue ChainCreation/Capture,

PIE, Supplier,Buyer

Performance

ProductDifferentiation,Substitutions

CompetitionLife Cycle, Market

Structure, Behavior,Barriers to Entry

StrategyScope, Goals,CompetitiveAdvantage,

Logic

IntroductoryStage

GrowthStage

MaturityStage

DeclineStage

Total

MarketSales

Time

LaggardsLate

MajorityEarly

MajorityEarly

AdoptersInnovators

"TheChasm"

Technology Adoption Process

Weaknesses

Opportunities Threats

Strengths

pric

e

productpla

ce

promotion

targetmarket

Mental Map

SCOPE

ExitStrategy

CashCows

Stars

Marketgrowthrate

Relative market share

?

Time&

Action

OligopolyDominantMonopoly

NicheCompetitive

$

Low

High

High

Low

Preference

UNCERT

AINTY&

CHANGE

January 2002

S M T W T F S

1 2 3 4 5

6 7 8 9 10 11 12

1 3 1 4 1 5 1 6 1 7 1 8 1 9

2 0 2 1 2 2 2 3 2 4 2 5 2 6

2 7 2 8 2 9 3 0 3 1

Implement

G1 G2 G3 G4 G5 G6

Demand

NeedsAnalysis

Strategy Evaluation & Development

Competitors

Management

Strategy Statement

A

B

CD

E

F

G H

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Strategic management is the way an organization maps or craftsthe strategy of its future operations.


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Innovative applications:Createinnovative applications that provide directstrategic advantage to organizations.

Competitive weapons:Informationsystems themselves are recognized as acompetitive weapon

Changes in processes:IT supportschanges in business processes that translate tostrategic advantage

Links with business partners:IT linksa company with its business partners effectivelyand efficiently.


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MSIS 5623 Chapter 12 6

Cost reductions:IT enables companies toreduce costs.

Relationships with suppliers and

customers:IT can be used to lock insuppliers and customers, or to build inswitching costs.

New products:A firm can leverage itsinvestment in IT to create new products that

are in demand in the marketplace.

Competitive intelligence: IT providescompetitive (business) intelligence by collectingand analyzing information about products,markets, competitors, and environmentalchanges .


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Such information-gathering drives business performance by increasing market knowledge

improving knowledge management

raising the quality of strategic planning

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One of the most important aspects in developing a competitiveadvantage is to acquire information on the activities and actionsof competitors.

However once the data has been gathered it must beprocessed into information and subsequently businessintelligence.

Porters 5 Forces is a well-known framework thataids in this analysis.


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The threat of entry of new competitors

The bargaining power of suppliers

The bargaining power of customers (buyers)

The threat of substitute products or services The rivalry among existing firms in the industry

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The model recognizes five major forces that could endanger a

companys position in a given industry.

External Competitive Forces

One of the most important aspects in developing a competitiveadvantage is to acquire information on the activities and actionsof competitors.


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Cost leadership strategy: Produceproducts and/or services at the lowest cost in the industry.

Differentiation strategy: Offer differentproducts, services, or product features.

Niche strategy: Select a narrow-scope segment (nichemarket) and be the best in quality, speed, or cost in that market.


11/40MSIS 5623 Chapter 12 11

Growth strategy: Increase market share, acquire more customers, orsell more products.

Alliance strategy: Work with business partners in partnerships,alliances, joint ventures, or virtual companies.

Innovation strategy: Introduce new products and services, putnew features in existing products and services, or develop new ways to producethem.

Operational effectiveness strategy: Improve themanner in which internal business processes are executed so that a firm performssimilar activities better than rivals.


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Customer-orientation strategy: Concentrate on makingcustomers happy

Time strategy: Treat time as a resource, then manage it and use it tothe firms advantage.

Entry-barriers strategy: Create barriers to entry.

Lock in customers or suppliers strategy:Encourage customers or suppliers to stay with you rather than going to competitors.

Increase switching costs strategy: Discouragecustomers or suppliers from going to competitors for economic reasons.


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According to the value chain model (Porter, 1985), the activities conductedin any organization can be divided into two parts: primary activities andsupport activities.

Primary activities are those activities in which

materials are purchased, processed intoproducts, and delivered to customers. Each addsvalue to the product or service hence the valuechain.

Inbound logistics (inputs)

Operations (manufacturing and testing) Outbound logistics (storage and distribution)

Marketing and sales

Service


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Unlike the primary activities, which directly add value tothe product or service, the support activities areoperations that support the creation of value (primaryactivities)

The firms infrastructure (accounting, finance, management)

Human resources management

Technology development (R&D)

Procurement

The initial purpose of the value chain model was to analyze the internaloperations of a corporation, in order to increase its efficiency,effectiveness, and competitiveness. We can extend that companyanalysis, by systematically evaluating a companys key processes andcore competencies to eliminate any activities that do not add value tothe product.


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Suppliers

IT SolutionProvider

Systems Architect

Systems ProjectManagers

Cooperatives(End Users)

Buy

Developers

Primary Activities

SecondaryActivities:

Accounting

/Finance/Human

Resource/Infrastructure

Fulfill


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Critical success factors (CSFs)are those few things that must go right inorder to ensure the organization's survival and success. Critical success factors varyby industry categoriesmanufacturing, service, or governmentand by specific

industries within these categories. Sample questions asked in the CSF approach are: What objectives are central to your organization?

What are the critical factors that are essential to meeting these objectives?

What decisions or actions are key to these critical factors?

What variables underlie these decisions, and how are they measured?

What information systems can supply these measures?

Scenario planningis a methodology in which planners first create severalscenarios, then a team compiles as many as possible future events that mayinfluence the outcome of each scenario.


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Sustaining competitive advantage. As companies become larger and moresophisticated, they develop sufficient resources to quickly duplicate the successful systems oftheir competitors. For example, Alamo Rent-a-Car now offers a frequent-renter card similar to theone offered by National car rental.

Importance. Getting IT ready for the futurethat is, planningis one of the most challengingand difficult tasks facing all of management, including IS management. Each of the four steps of

the IT strategic planning process strategic planning, information requirements analysis,resource allocation, and project planningpresents its own unique problems. Yet, withoutplanning, or with poor planning, the organization may be doomed.

Organizing for planning. Many issues are involved in planning: What should be the role ofthe ISD? How should IT be organized? Staffed? Funded? How should human resources issues,such as training, benefits, and career paths for IS personnel, be handled? What about theenvironment? The competition? The economy? Governmental regulations? Emerging

technologies? What is the strategic direction of the host organization? What are its keyobjectives? Are they agreed upon and clearly stated? Finally, with these strategies and objectivesand the larger environment, what strategies and objectives should IS pursue? What policiesshould it establish? What type of information architecture should the organization have:centralized or not centralized? How should investments in IT be justified? The answer to each ofthese questions must be tailored to the particular circumstances of the ISD and the largerorganization of which it is a part.


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Fitting the IT architecture to the organization. Management of an organizationmay become concerned that its IT architecture is not suited to the needs of the organization.In such a case, there has likely been a failure on the part of the IT technicians to determineproperly the requirements of the organization. Perhaps there has also been a failure on thepart of management to understand the type and manner of IT architecture that they have

allowed to develop or that they need. IT architecture planning. IT specialists versed in the technology of IT must meet with

business users and jointly determine the present and future needs for the IT architecture. Insome cases, IT should lead (e.g., when business users do not understand the technicalimplications of a new technology). In other cases, users should lead (e.g., when technology isto be applied to a new business opportunity). Plans should be written and published as part ofthe organizational strategic plan and as part of the IT strategic plan. Plans should also deal

with training, career implications, and other secondary infrastructure issues.

IT policy. IT architectures should be based on corporate guidelines or principles laid out inpolicies. These policies should include the roles and responsibilities of IT personnel and users,security issues, cost-benefit analyses for evaluating IT, and IT architectural goals. Policiesshould be communicated to all personnel who are managing or directly affected by IT.


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Ethical and legal issues. Conducting interviews for finding managersneeds andrequirements must be done with full cooperation. Measures to protect privacy must be taken.In designing systems one should consider the people in the system. Reengineering IT meansthat some employees will have to completely reengineer themselves. Some may feel too old todo so. Conducting a supply chain or business process reorganization may result in the need tolay off, retrain, or transfer employees. Should management notify the employees in advance

regarding such possibilities? Other ethical issues may involve sharing of computing resources orof personal information, which may be part of the new organizational culture. Finally,individuals may have to share computer programs that they designed for their departmentaluse, and may resist doing so because they consider such programs their intellectual property.

Appropriate planning must take these and other issues into consideration.

IT strategy. In planning IT it is necessary to examine three basic strategies: (1) Be a leaderin technology. The advantages of being a leader are the ability to attract customers, to provideunique services and products, and to be a cost leader. However, there is a high developmentcost of new technologies and high probability of failures. (2) Be a follower. This is a riskystrategy because you may be left behind. However, you do not risk failures, and so you usuallyare able to implement new technologies at a fraction of the cost. (3) Be an experimenter, on asmall scale. This way you minimize your research and development investment and the cost offailure. When new technologies prove to be successful you can move fairly quickly for fullimplementation.


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IT PLANNING APPROACHES

Business-led approach: The IT investment plan is defined on the basis of the currentbusiness strategy.

Method-driven approach: The IS needs are identified with the use of techniques and tools.

Technological approach: Analytical modeling and other tools are used to execute the ITplans.

Administrative approach: The IT plan is established by a steering committee.

Organizational approach: The IT investment plan is derived from a business-consensusview of all stakeholders in the organization


IT planningis the organized planning of the IT infrastructure andapplications portfolios for all levels of the organization.Corporate IT planning determines the IT infrastructure which in turndetermines what applications end users can deploy. Aligning the goals of theorganization and the ability of IT to contribute to those goals can delivergreat gains in productivity to the organization.


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Strategic IT planning: Establishes the relationship between the overallorganizational plan and the IT plan.

Information requirements analysis: Identifies broad, organizational information

requirements to establish a strategic information architecture that can be used todirect specific application development.

Resource allocation: Allocates both IT application development resources andoperational resources.

Project planning: Develops a plan that outlines schedules and resourcerequirements for specific IS projects.

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A four-stage model of IT planning that consists of four major activities.

The four-stage planning model is the foundation for the development of aportfolio of applications that is highly aligned with the corporate goals and hasthe ability to create an advantage over competitors.


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ITAlignment with Organizational Plans: The primary task of ITplanning is to identify information systems applications that fit the objectivesand priorities established by the organization.

Analyze the external environment(industry, supply chain, competition)and theinternal environment(competencies, value chain, organizational structure)thenrelate them to technology (alignment).

Alignment is a complex management activity whose complexity increases inaccordance with the complexity of organization.

The first stage of the IT planning model identifies the applicationsportfoliothrough which an organization will conduct its business. This stage canalso be expanded to include the process of searching for strategicinformation systems (SIS) that enable a firm to develop a competitiveadvantage. This involves assessing the current business environment and

the future objectives and strategies.


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Information requirements analysis in stage 2 is a morecomprehensive level of analysis. It encompasses infrastructures suchas the data needs (e.g., in a data warehouse or a data center),requirements for the intranet, extranet, and corporate partners areestablished.

Identifies high payoffs IT projects which will produce the highestorganizational payoff.

Provides an architecture thatleads to a cohesive, integratedsystems that offers the most benefit


The second stage of the model is the information requirements analysis,which is an analysis of the information needs of users and how thatinformation relates to their work. Thegoal of this second stage is to ensurethat the various information systems, databases, and networks can beintegrated to support the requirements identified in stage 1.


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Thebusiness systemsplanning (BSP) model, developed by IBM deals withtwo main building blocks which become the basis of an information architecture.

Business processes

Data classes

Stages Of It Growth Model, indicates that organizations go through six stagesof IT growth

Initiation. When computers are initially introduced.

Expansion (Contagion). Centralized growth takes place as users demand moreapplications.

Control. In response to management concern about cost versus benefits, systemsprojects are expected to show a return.

Integration. Expenditures on integrating (via telecommunications and databases)existing systems

Data administration. Information requirements rather than processing drive theapplications portfolio.

Maturity.The planning and development of IT are closely coordinated with business

development

Several methodologies exist to facilitate IT planning.


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Allocation is a difficult and in many cases a political process.

Difficult since opportunities and requests for spending far exceedthe available funds.

Difficult since some projects and infrastructures are necessaryinorder for the organization to stay in business.

Another major factor in resource allocation is employingoutsourcing strategy.


Resource allocation, the third stage of the IT planning model, consists ofdeveloping the hardware, software, data networks and communications,facilities, personnel, and financial plans needed to execute the masterdevelopment plan as defined in the requirements analysis phase.


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Various tools exist for planning and control:

PERT & CPM

Gantt Charts


The fourth and final stage of the model for IT planning is project planning.It provides an overall framework within which specific applications can beplanned, scheduled, and controlled. Additional emphasis is placed on vendormanagement and control it the organization will outsources some of therequirements.

We have to understand what we are going to do

We need to know the start and end dates

We need to know the resources

We need to know the tasks


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This structure consists of applications for various management levels operational control

management planning and control

strategic planning

Applications oriented to various functional-operational activities

Marketing

R&D

Production

Distribution It also includes infrastructure

Databases

Supporting software

Networks


Information technologyarchitecture refers to the overall structure of allinformation systems in an organization.


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Industry. Manufacturing firms use fewer IT infrastructure services than retail orfinancial firms.

Market volatility. Firms that need to change products quickly use more ITinfrastructure services.

Business unit synergy. Firms that emphasize synergies (e.g., cross-selling) usemore IT infrastructure services.

Strategy and planning. Firms that integrate IT and organizational planning, andtrack or monitor the achievement of strategic goals, use more IT infrastructureservices.


Different organizations have different IT infrastructure requirements. Twogeneral factors that influence infrastructure levels are information intensity(the extent to which products or processes incorporate information) and strategicfocus(the level of emphasis on strategy and planning). Firms with higher levels of

these two factors use more IT infrastructure services,


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Architectural choices are:

Centralized computing: puts all processing and control authority within one computer

to which all other computing devices respond. Distributed computing: gives users direct control over their own computing by

providing a decentralized environment

Blended computing: a blend of the two models

End-user configurations (workstations):

Centralized computing with the PC functioning as dumb terminals or not smart

thin PCs. A single-user PC that is not connected to any other device.

A single-user PC that is connected to other PCs or systems, using atelecommunications connections.

Workgroup PCs connected to each other in a small P2P network.

Distributed computing with many PCs fully connected by LANs via wireline or Wi-FI.


Each organization has its own particular needs and preferences forinformation. Therefore, todays IT architecture is designed around business

processes rather than traditional departmental hierarchy.


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Planning for Interorganizational Systems (IOS) involving several organizations may becomplex. Those involved with hundreds or even thousands of business partners isextremely difficult. IT planners in those cases should focus on groups of customers,

suppliers, and partners IT Planning for Multinational Corporationsface a complex legal, political, and social

environment, which complicates corporate IT planning. Therefore, many multinationalcompanies prefer to decentralize their IT planning and operations. Thus evolving into localsystems.

Other Problems for IT Planning

Cost, ROI justification Time-consuming process Obsolete methodologies Lack of qualified personnel

Poor communication flow Minimal top management support


Information technology planning gets more complicated when severalorganizations are involved, as well as when we deal with multinationalcorporations.


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Many companies are operating in a global environment. Doing business inthis environment is becoming more challenging as the political environmentimproves and as telecommunications and the Internet open the door to alarge number of buyers, sellers, and competitors worldwide. This increasedcompetition is forcing companies to look for better ways to compete globally.

Global dimensions along which management can globalize

Product

Markets & Placement

Promotion

Where value is added to the product Competitive strategy

Use of non-home-country personnel - laborMultidomestic Strategy: Zero standardization along the global

dimensions. Global Strategy: Complete standardization along theseven global dimensions.


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Various tools exist for planning and control:

PERT & CPM

Gantt Charts


The fourth and final stage of the model for IT planning is project planning.It provides an overall framework within which specific applications can beplanned, scheduled, and controlled. Additional emphasis is placed on vendormanagement and control it the organization will outsources some of therequirements.

We have to understand what we are going to do

We need to know the start and end dates

We need to know the resources

We need to know the tasks


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E-planning is usually less formal

E-planning must be more flexible

In e-planning more attention is given to:

applications portfolio

risk analysis, the degree of risk in Web-based systems can be high strategic planning issues such as the use of metrics (industry standards)

strategic planning must integrate, e-business and knowledge management

The Web environment is very turbulent

Strategic planning for Web-based systems can be viewed as a subset of ITstrategic planning. However, in many cases it is done independently of ITplanning. E-planning mostly deals with the EC infrastructure uncoveringbusiness opportunities and deciding on an applications portfolio that willexploit those opportunities.

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