Establishing an Effective Process for

Developing Information Systems and

Technology (or Digital) Strategies

ISP680 – Corporate Strategic Information System Planning

Outline
• The Evolution of the IS/IT Strategy Process: From Technology Deployment to
Strategic Focus

• Establishing an Effective Process: Continuous and Flexible

• Setting the Scope for the Strategy

• A Framework for IS/IT Strategy Formulation

• Other Deliverables from the IS/IT Strategy Process

Mandate for the Strategic Management of
IS/IT
• The strategy brings together the aims of the organization and an understanding of the information needed to
help achieve those aims. It also incorporates opportunities for innovation and gaining strategic advantages by
both exploring and exploiting information.

• A key output of the process is a required portfolio of prioritized IT-based information, application and
technology investments, which is aligned with business unit and corporate strategies and also creates new
options for the organization's future success.

• The strategy also includes some organizational aspects of the management of IS/IT, such as allocating roles
and accountabilities, guidance for resourcing and sourcing IT, policies regarding information assets and a
future vision of the role and expected contribution of lS/IT in the organization.

• The success of the business strategy will be largely dependent on its digital strategy
The Evolution of the IS/IT Strategy Process: From
Technology Deployment to Strategic Focus
FIVE Approaches of IS Planning
1. Technology led - carried out mainly by IT specialists to establish technology foundations, architectures and
capabilities that should satisfy the expected application needs of business users.
2. Method driven - the use of techniques (often a consultant's methodology) to identify IS needs by analysing
business processes - an 'engineering' philosophy based on top-down analysis of information needs and
relationships. IS professionals may use analytical modelling and tools (e.g. Unified Modelling Language
(UML)) to produce IS/IT plans in the form of blueprints.
3. Administrative - the main objective is to establish IT capital and expense budgets and resource plans to
achieve approved IS applications, usually based on a prioritized wish list from users.
4. Business led - Business plans, usually at a functional level, are analysed to identify where IS/IT is most
critical in meeting short- to medium-term needs.
5. Organization led - the development of key themes for IS/ IT investment derived from a business consensus
view of how IS/IT can help meet overall business objectives, agreed by the senior management team. This
stage recognizes that the strategy reflects top management's attitudes to IS/IT and is there to guide future
decisions and actions.
The Evolution of the IS/IT Strategy Process: From
Technology Deployment to Strategic Focus
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Main Task IS/IT application Defining Detailed IS Strategic/ Linkage to
mapping business needs planning Competitive business
advantage strategy
Key objective Management Agreeing Balancing the Pursuing Integrating IS
understanding priorities portfolio opportunities and business
strategies
Direction from IT led Senior Users and IT Executives/ Coalition of
management together Senior users/
initiative management management
and users and IT
Main approach Bottom-up Top-down Balanced top- Entrepreneurial Multiple
development analysis down and (User method at same
bottom-up innovation) time
Summary Technology led Method driven Administrative Business led Organization led
The Evolution of the IS/IT Strategy Process: From
Technology Deployment to Strategic Focus
Enablers
Senior executive support for IT initiatives
IT staff involved in strategy development
IT staff understands the business
Business – IT partnership
Well-prioritized IT projects
IT demonstrates leadership
Enablers and inhibitors of strategic alignment
Inhibitors
IT organization/business lacks close
relationships
IT organization does not prioritize well
IT fails to meet commitments
IT does not understand business
Senior executives do not support IT initiatives
IT management lacks leadership
 Establishing an Effective Process: Continuous
Flexible
IS/ IT strategy may need reviewing and amending due to internal business changes and technology
developments or issues.
Internal Business Factors
• Changes in the nature of the business or the structure and organization
of the enterprise may result in the need to revisit or reconsider the
IS/IT strategy. For example: takeover by a new owner(s) or the
appointment of a new CEO or management team - this may simply
mean a new attitude to technology, or it may herald more drastic
change if it occurs as a result of a merger or takeover;
• major rationalization caused by, for example, downturn in the
economy, necessitating a severe trimming of both business and IS/IT
budgets;
• restructuring - often resulting from corporate strategic planning (e.g.
changing from a product-led to a customer-centric business, or
establishing Shared Service Centres for the main functional support
activities such as HR, Finance and Purchasing);
• new products or markets or channels to market - where there is a
recognition that the present infrastructure is incapable of adapting to
new requirements.
Technology Factors
• competitive opportunities and threats (real or potential) based on new
IT developments such as Web 2.0, cloud computing, social media,
sensors, analytics, mobile and wearable computing;
• new products or markets created by IS/ IT;
• technology cost-factor changes, such as those from cloud computing
(shifting spend from capital expenditure to operational expense) or
new software applications, producing a need to improve productivity
or risk losing business;
• recognition that the current infrastructure and legacy systems are
starting to 'creak' and need replacing. For example, the cutback in IT
spending as a result of the 2008 financial crisis has led to existing IT
infrastructures becoming both costly to maintain and often unsuitable
for developing new strategic applications.
 Setting the Scope for the Strategy
CORPORATION
Long-term planning and
resourcing
Corporate
goals/culture/policies
Corporate services BUSINESS UNIT n
Corporate IT BUSINESS UNIT 2
Consolidated BUSINESS UNIT 1
information Corporate
information needs
Products/ markets
Operational strategy
IT SUPPLY Resources
Business IS needs
Applications
Business
Information technologies
information supply
Resources
Operational Methods

Relationship between information demand and

supply at corporate and SBU level
Setting the Scope for the Strategy
Opportunities for mutual activities or sharing with a view to increasing the value of the results and avoiding
duplicated or even wasted effort are quite varied:

• Acting as sounding boards during analysis, perhaps holding some joint opportunity identification workshop
sessions or at least using common tools for capturing insights and outputs.
• Sharing application portfolios or needs or ideas for individual applications. However, similar portfolios do no
necessarily emerge from what, at first sight, are similar businesses. Synergy is most likely to occur when the
industry/ product/market profiles are at comparable stages of maturity and/or when their competitive
strategies or organizational capabilities are similar.

• Building common conceptual models or business information architectures. Even when the application
portfolios differ considerably, there may still be substantial overlaps in the information architecture, and
benefits from transferring 'best practice', as well as saving in cost and time from sharing high level models.
A Framework for IS/IT Strategy Formulation
External External IS/IT Input
business environment
environment
1. The external business environment: the economic,
industry, social, regulatory and competitive climate in
Internal Internal IS/IT which the organization operates.
business environment 2. The internal business environment: current business
environment strategy, products and services, objectives, resources,
processes, and the culture and values of the business.
IS/IT 3. The external IS/IT environment: digital technology trends
Strategy and economics plus potential application opportunities
Process from new or emergent technologies and the use made of
IS/IT by others, especially customers, competitors and
suppliers, but also companies in other industries.
Business IS IS/IT IT strategies 4. The internal IS/IT environment: the current IS/ IT role in
strategies management the business, its maturity, business coverage and
strategies
contribution, skills, resources and the technological
infrastructure. The current application portfolio, including
chose under development, or planned but not yet under
Future
Application way, is also part of the internal IS/ IT environment.
Portfolio
The IS/IT or digital strategy model
A Framework for IS/IT Strategy Formulation
External External IS/IT
business environment
environment Outputs

1. Business IS strategies: how each unit or function will

Internal Internal IS/IT use information and IT applications in achieving its
business environment
environment
business objectives and/or creating new business
strategies and options.
2. IT strategy: technology investment and service plans
IS/IT and strategies for the acquisition and management of
Strategy technology, supplier relationships and specialist
Process resources.
3. IS/IT management strategies: policies and
governance mechanisms to enable the formulation
Business IS IS/IT IT strategies and successful implementation of the strategy and
strategies management
strategies
ensure it delivers the maximum available business
benefits at acceptable levels of cost and risk.

Future
Application
Portfolio
The IS/IT or digital strategy model
A Framework for IS/IT Strategy Formulation
Understand the
Business and Initiate strategy current situation
Other planning
technical process and interpret
activities
environment business needs

Define/ Update
information and Determine business
systems IS strategy
architecture

Understand the Prepare migration

current situation Formulate IT plans and business
and interpret strategy case
business needs

Business strategy IS/IT strategy and Framework for IS/IT (or

and proposed proposed plans digital) strategy formulation
development and planning process
programme
A Framework for IS/IT Strategy Formulation
Initiate
strategy Initiate the process - Identify who needs to become involved
process

Strategy team Skills

composition
Team leader and - Broad knowledge of the business and its organizational objectives,
members management styles, culture, processes and people
- Good communication skills
- Ability and authority to make and implement plans and decisions
that may affect the whole organization
- Respect of management and staff
- An interest in area other than their own and an ability to analyse
objectively
- Experience of IS/IT strategy formulation and planning in at least
some of the team
A Framework for IS/IT Strategy Formulation
Initiate
strategy Initiate the process - Identify who needs to become involved
process

Strategy team Roles and responsibilities

composition
Executive Sponsor - Chairing the steering committee and approving the budget and plan
for any IS/IT proposals
- Assuring management participation ad commitment through active
backing and allocation of the right resources
- Representing the interests of the executive team
- Heading the marketing effort
- Acting as the focal point for decisions about the scope, Terms of
References (TOR) and conduct of the work
A Framework for IS/IT Strategy Formulation
Initiate
strategy Initiate the process - Identify who needs to become involved
process

Strategy team Roles and responsibilities

composition
Steering Committee - Providing strategic direction and guidance on business issues and
priorities
- Reviewing and approving the outputs and plans, and taking up risk
management issues
- Conducting checkpoint reviews and agreeing the continuation of
work
- Agreeing the strategy and its recommendations before submission to
the executive team
 A Framework for IS/IT Strategy Formulation
Understand the
current situation
and interpret
business needs
Technique
Analysis of current and expected
business environment and the
existing business strategy
(5 forces, PESTER analysis)
Critical Success Factor (CSF)
Key Performance Indicators
Balanced Score Card
SWOT analysis
The quality and value of any IS/IT strategy is dependent upon the depth of understanding of the business needs
and opportunities, their interpretation and translation into appropriate information resources, application,
services and IT infrastructure
Deliverables
- Economic and competitive forces influencing the strategic options – drivers for change at
industry and firm level
- Business strategy – mission, objectives etc.
- Existing business initiatives
- Known business priorities leading to IS/IT options
- Areas of business where things must go right
- Priority improvement areas and associated IS/IT opportunities
- Performance measures and new information needs
- Analysis of Strengths, Weaknesses, Comparative Opportunities and Threats if current
strategy
- Key areas for improvement (Product, Customer, Operations) and how IS/IT can contribute
 A Framework for IS/IT Strategy Formulation
Understand the
The quality and value of any IS/IT strategy is dependent upon the depth of understanding of the business needs
current situation
and opportunities, their interpretation and translation into appropriate information resources, application,
and interpret
services and IT infrastructure
business needs

Technique
Business portfolio and competitive
strategy analysis
Value chain/ network analysis
(external and internal)
Business process analysis/ Process
re-engineering
Product and customer life cycle
Perceived use value
Deliverables
- Options for medium-terms IS investment to strengthen competitive position
- High-level industry information flow model
- Model of ecosystem dynamics
- Internal business information flows
- Potential impact of IS/IT on processes and relationships
- Identification of core business processes
- Effectiveness of process in meeting key business drivers
- Process improvement options
- Process redesign blueprints
- Understand what the customer values and why; how the customer interacts with the
organization and what his/her issues are at each touch point
 A Framework for IS/IT Strategy Formulation
Understand the
The quality and value of any IS/IT strategy is dependent upon the depth of understanding of the business needs
current situation
and opportunities, their interpretation and translation into appropriate information resources, application,
and interpret
services and IT infrastructure
business needs

Technique
Business Model and Value
Proposition
Organizational Modelling
Business modelling – information
analysis techniques
Current application portfolio
evaluation
Technology assessment and IS/IT
infrastructure review
Deliverables
- New or extended value propositions
- Options for informating products and services
- Assessment of the business and IS/IT environments. Capabilities and issues
- Filtering mechanism in assessing options for change
Enterprise models:
- Entity and object models
- Process maps and dependency charts
- Function decomposition diagrams
- Conceptual enterprise architecture
- Profile and business contributions of existing applications and those under development
- Coverage and value to business users, costs and technical quality
- Inventory of current hardware (software and services)
- Assessment of IS/IT organization capabilities, policies, skills and methods
 A Framework for IS/IT Strategy Formulation
Determine the
business IS States how the business will deploy information, systems, and technologies in achieving its objectives
strategy

Structure
1. Purpose of IS Strategy
2. Overview/ Summary of
Business Strategy
3. The Arguments for
4. Summary of
opportunities/problem
issues
Content
- Reasons for new/updated strategy – key changes in business and IT context since last
strategy
- To provide the context for IS Strategy (Objectives, CSF, SWOT, 5 forces, etc) and
resulting issues affecting the IS Strategy
- New information, IS or digital technology opportunities (to gain advantage)
- Critical improvement areas
- Explaining the application/ opportunities/ problem; outline descriptions, the
rationale, potential benefits from investment, any critical dependencies and issues to
be resolved in the context of an overall estimated timeframe for the investment
 A Framework for IS/IT Strategy Formulation
Determine the
business IS States how the business will deploy information, systems, and technologies in achieving its objectives
strategy

Structure Content
5. Review of current - Status of current projects, other investments currently in hand and the overall
application portfolio resources implications
6. Future application - To show the intended/potential investments with priorities, and the implications for
portfolio the rest of the portfolio
7. Issues arising from the IS - Priorities, resources, organization and other initiatives
Strategy
A Framework for IS/IT Strategy Formulation

• Uses the results of the analysis of processes and information

needs in order to build a proposed information and systems
Define architecture to enable and support the current and future
information business operating model.
and systems
architecture • lt represents the future 'ideal' in terms of process, information
and systems, and is necessary in order to plot a direction when
developing migration plans to guide the design of new
applications and avoid potential incompatibilities and duplicated
data resources.
A Framework for IS/IT Strategy Formulation

• To define how technical resources and technologies will be acquired,

managed and developed to deliver applications and services required by
the business IS strategy or strategies (depending on whether it relates to
one business unit or is corporate wide).
Formulate IS
Strategy
• It should address how suppliers and other external providers of the
capabilities are selected and contracted. In addition, it should reflect
current trends and developments in IT that could cause future
opportunities or constraints.
A Framework for IS/IT Strategy Formulation
• In practice, at this point both the IS demand strategy and the IT supply strategies
can be fed back into the business strategy process for consideration, and
ultimately for consolidation.

Prepare • Senior business management can then decide on the most beneficial and feasible
Migration investment programme, allowing for both demand and supply options and
Plans constraints, but also taking into consideration the organization's ability to cope
with the resulting changes.

• This will entail dose cooperation with the business areas involved to pull together
the IS/IT and business aspects of the 'approved' developments to produce an
outline migration plan and a high-level business case for each.
Other Deliverables from the IS/IT Strategy
Process
• The IS/IT Management Strategy
• Scope and rational
• The formal organization and resource structures
• Investment approval and prioritization policies and practices
• Vendor or supplier policies
• HR policies
• IS/IT accounting policies
• 'Hard' and 'Soft' Outputs
• Hard outputs - documents defining strategies and plans, and frequently include diagrammatic
material - portfolio matrices, business and application models and architectures.
• Soft deliverables relate to organizational and human factors such as culture, behaviour,
awareness and motivation.
• 'Marketing' the Strategy