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Section I

Developing
Business/Information
Technology Strategies
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Learning Objectives
 Discuss the role of planning in the business
use of information technology, using the
scenario approach and planning for
competitive advantage.

 Discuss the role of planning and business


models in the development of e-business
strategies, architectures, and applications.

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Learning Objectives (continued)

 Identify several change management


solutions for end user resistance to the
implementation of new e-business
strategies and applications.

 Identify the importance of business & IT


alignment

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Section I

Planning Fundamentals

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Organizational Planning (continued)

 Strategic Planning

 Strategic Visioning

 Tactical Planning

 Operational Planning

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Organizational Planning
The Planning Process
 Evaluating organizational
accomplishments
Analyzing the business,
economic, political, and
societal environment
 Anticipating and
evaluating the impact of
future developments

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IT Strategy
An I/T Strategy is a set of discrete actionable
interventions which ensure that the firm I/T
capabilities deliver value towards strategic
business objectives in a cost efficient manner
 Set of decisions made by IT and senior
management
 Deployment of technology infrastructures
 Relationship of technology choices to business
choices

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IT Strategy (ctd)
 I/T strategy may impact all aspects of the I/T portfolio :
applications, communication, infrastructure, processes,
governance, organization …

 Not a one-shot activity : needs to be constantly refined and


aligned with business priorities

 Impact of an I/T strategy must be measurable in terms of


business value - revenue/margin growth, cost reduction etc.

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The IT strategic plan process


1 2 Align IT 3 4 5
Define the
strategy to
Understand Determine the Define the budget to
business
business implementation IT strategic implement
within
issues strategy initiatives initiatives /
business
SLAs
context

• Input from the • Identify the • Implement a • Plan initiatives • Establish


Business evolution Project Office to within the periodic reviews
strategic plan scenarios that manage all the scenarios
impact the IT initiatives in
strategy Infrastructure • Identify benefits / • Define
Applications costs of the Application
• Understand the Processes initiatives service level
evolution in •Costs
terms of •Resources
Business •Timing • Short-term
Organization staffing needs
Relations • Select initiative
through the • Yearly budget
Master Plan tool

OBJECTIVES
OBJECTIVES IMPLEMENTATION
IMPLEMENTATION INITIATIVES
INITIATIVES DEFINITION
DEFINITION
IDENTIFICATION
IDENTIFICATION METHODS
METHODS

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2 Align IT10
strategy to
business

The Scenario Approach to within


business
context

Planning
 Teams participate in a “microworld”
 A variety of business scenarios are created
 Alternative scenarios are created by teams or
by business simulation software based on..
A variety of developments, trends, and
environmental factors

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2 Align IT11
strategy to

Scenario Planning Grid


business
within
business
context

IMPACT ON FIRM

HIGH MEDIUM LOW


HIGH

High Priority
Strategy A
FEASIBILITY

MEDIUM

Medium Priority
Strategy B
Strategy C
LOW

Low Priority
Strategy D

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2 Align IT12
strategy to
business

Planning for Competitive within


business
context

Advantage
 Especially important in today’s competitive, complex
environment
 Involves an evaluation of potential benefits and risks
 May include the competitive forces and competitive
strategies models, as well as a value chain model of
basic business activities
 Use a strategic opportunities matrix to evaluate
strategic potential

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strategy to
business
within
business
Planning for Competitive Advantage (continued) context

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strategy to
business
within
business
Planning for Competitive Advantage (continued) context

SWOT Analysis
 Recommend strategies that ensure best alignment
between external and internal environments

S W
Strengths Strategies Strategies
Weaknesses
Opportunities
O T
Threats
Strategies Strategies
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2 Align IT15
strategy to
business
within

Business Models and Planning


business
context

 A conceptual framework that expresses the underlying


economic logic and system that prove how a business
can deliver value to customers at an appropriate cost
and make money.

 Specifies how the business will organize and operate

 Focuses attention on how all the essential components


fit into a complete system

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3 16

Determine the
implementation
strategy

e-Business Planning
3 major
components

Strategy
development

Resource
management

Technology
architecture

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3 17

Determine the
implementation
strategy
e-Business Planning (continued)

 IT architecture major components


 Technology platform
 Data resources
 Applications architecture
 IT organization

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Examples of IT Planning
Process Results

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Define the
IT strategic
initiatives

IT Strategic Initiatives • Common applications


• Applications reference models
• Unique infrastructure
VVE
• New HR system • Common I/T policies and
TTI • New finance system
AA standards
TRR
S
S • Single engineering • Personal productivity
LUU
ILL releasing system • Mobile interconnectivity
• Virtual office for managers • Ubiquitous service availability
• Logistic harmonization
• Common e-mail system • Document/Project
• Company reporting system management
• Network separation and upgrade
• Parent companies applications
cloning
• Applications migration
• Different applications • Video-conferencing and mobile
• Lack of integration communication
• Missing communication
• Mix of owned and in-service
applications
• Islands of country I/T organizations
Year 0 Today Tomorrow Long-
term
TIME

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5
Define the
budget to
implement

IT Strategy Implementation
initiatives /
SLAs

 Execute the strategy


 Commitment and engagement of senior
business management
 Must occur prior to implementation planning
 Strategic Alignment Maturity
 Ability to adapt in harmonious fashion
 Adoption of Measurement Criteria
 Measure effects in several different dimensions

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5
Define the
budget to
implement

Periodic Review
initiatives /
SLAs

 Define budget / time / resources for projects


selected
 Ensure initial assumptions are correct
 Ensure implementation of plans are on schedule

 Measurements are captured and reported

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Section II

Implementation Challenges

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Implementation

 A process of carrying out the plans for


change in e-business strategies and
applications that were developed during
the planning process.

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Implementing IT
 Requires managing the effects of major
changes in key organizational dimensions
such as
 business processes
 organizational structure
 Managerial roles
 Employee work assignments
 Stakeholder relationships

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Comparing application portfolio


with business requirements
VE
IIV E
T R
RAATT APPLICATION PORTFOLIO ANALYSIS
USST
IILLLLU
Company Strategy
HIGH

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Business Requirements Migration Maintain/
to New platforms Improve
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Alignment to Business

• Application A • Application D
• ... • ...
• ...
IT Implications

Current portfolio evaluation Dismissal Align


2 to business:
Function evolution
• Application C
• Application B
• ...
• ...
Gap identification 1
LOW 1 2 3 4 5 HIGH
Technological Alignment

NEW APPLICATIONS DEVELOPMENT


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Change Management
 People are a major focus of organizational
change management
 Developing innovative ways to measure,
motivate, and reward performance
 Designing programs to recruit and train
employees in the core competencies
 Also involves analyzing and defining all
changes facing the organization

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End User Resistance and


Involvement

 Change can generate fear and resistance to


change
 Keys to countering end user resistance
 Propereducation and training
 End user involvement in organizational changes

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Ensuring Strategic Alignment


Jerry N. Luftman model

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Information Systems for


Competitive Advantage
 The Technology/Strategy Fit
 An IS implementation should create a
significant organizational change consistent
with the business strategy
 IT needs to be aligned to the business goals

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Strategic Alignment Model


Business Strategy IT Strategy
–Business Scope –Technology Scope
–Distinctive Competencies –Systemic Competencies
–Business Governance –IT Governance

Organization IT Infrastructure &


Infrastructure& Processes Processes
–Architecture
–Administrative Structure
–Processes
–Processes
•Skills
–Skills
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Alignment Maturity
 Process which evaluates the IT/business
alignment status of a specific organization
 Ithas a defined number of levels and
representations (5 levels)

 Itis based on a defined set of criteria (six key


criteria)

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Strategic Alignment Maturity Levels


1. Initial/Ad Hoc Process
 Business and IT not aligned
1. Committed Process
 Organization commits to becoming aligned
1. Established Focused Process
 Established and Focused on business objectives
1. Improved/Managed Process
 Reinforcing concept of IT as “Value Center”
1. Optimized Process
 Integrated/Co-adaptive business and IT strategic
planning

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Strategic Alignment Maturity Criteria

1. Communications
2. Competency/value measurements
3. Governance
4. Partnerships
5. Scope and Architecture
6. Skills

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Strategic Alignment Template


IT Business Alignment Maturity Criteria

Weight
Communication
Understanding of business by IT

Understanding of IT by business
Inter/Intra organization learning / education
Protocol rigidity
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W eigh
Partnership

Business perception of IT value

Role of IT in strategic business planning

Shared goals, risk, rewards, penalties


IT program m anagem ent

Relationship / Trust style


Business sponsor / cham pion 35
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Discussion Questions
 Planning is a useless endeavor, because developments
in e-business and e-commerce, and in the political,
economic, and social environments are moving too
quickly nowadays. Do you agree with this statement?

 “Planning and budgeting processes are notorious for


their rigidity and irrelevance to management action.”
How can planning be made relevant to the challenges
facing an e-business enterprise?

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Discussion Questions (continued)

 What planning methods would you use to


develop e-business and e-commerce strategies
and applications for your own business?

 What are several e-business and e-commerce


strategies and applications that should be
developed and implemented by many
companies today?

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Discussion Questions (continued)

 How can a company use change management


to minimize the resistance and maximize the
acceptance of changes in business and
technology?

 “Many companies plan really well, yet few


translate strategy into action.” Do you think this
is true?

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Discussion Questions (continued)

 What major business changes beyond


e-business and e-commerce do you
think most companies should be planning
for the next ten years?

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