Practical Guide to Information Systems Strategic Planning

2 nd Edition
Purpose of Information Systems Strategic Planning
Strategy
 it is synonymous with “important”
 refers to a global level of thinking about the information
systems (IS) organization and its integration with the rest
of the enterprise
 must be coherent, consistent, and directional
Coherent
• it is clear to both the business and IS organization
Consistent
• Constructed to fit together
Directional
• it directs changes of some kind

Purpose of Information Systems Strategic Planning

Strategic Plan
• is more than a statement of strategy
• Its about planning process
• Defining strategic intent
• Developing a plan of action for achieving the
envisioned changes

Purpose of Information Systems Strategic Planning

Questions:
• Why do we need to complete strategic planning for the
IS function?

• What is the purpose of the planning process?

 The planning process enables IS to help the organization
meet its business objectives

Purpose of Information Systems Strategic Planning

Questions:
• Why do we need to complete strategic planning for the
IS function?
 The IS strategic planning process may be initiated in
an organization for a variety of reason

Purpose of Information Systems Strategic Planning

Some examples include:
 to determine how to meld the systems and processes
of two previously separate organizations
 to improved the quality, business processes, and key
measurements.
 to provide input into the direction and create a vision
of IS for the future
 to determine the cause of the problems, to link IS
closer to the business direction, and to determine the
proper solution.
Purpose of Information Systems Strategic Planning
Some examples include:
 to determine the best solution rather than simply following the
desired corporate direction.
 to prioritize the projects and align the IS priorities with the
business priorities.
 to determine ways to reduce costs and gain efficiencies
 to determine how to bring the information together so that it
could manage the new worldwide business.
 To determine and document its business vision, mission, and
objectives
 to obtain a complete inventory and understand its current
environment. to identify redundant systems, identify
opportunities to reduce its total cost of ownership, and identify
opportunities to improve its ability to respond to business
changes in a timely manner.
Purpose of Information Systems Strategic Planning
 The benefits of IS strategic plans include:
IS Responsibilities • Effective management of an expensive
and critical asset of the organization
• Improving communication and the
relationship between the business and IS
organization
• Aligning the IS direction and priorities to
the business direction and priorities
• Identifying opportunities to use
technology for a competitive advantage
and increase the value to the business
• Planning the flow of information and
processes
• Efficiently and effectively allocating IS
resources
• Reducing the effort and money required
throughout the life cycle of systems

Purpose of Information Systems Strategic Planning

A strategic plan is a key component to the success of any IS function and
an important factor in assisting a company in meeting its business objectives,
as shown in Figure 1.2.

Purpose of Information Systems Strategic Planning

Effective Management of an Expensive and Critical Asset
 IS are an expensive asset
 Many companies spend more money on their IS, yet business management
may not know as much about their systems as they do about their building!
 Does management know how much money the company is spending on IS?
 Do managers realize how much each business application is costing and if they
are worth maintaining?
 Do they know the cost per e-mail, the cost per help desk call, and the cost per
server?
 What is the company really getting for its investment, and will the systems meet
the company’s needs in the future?
 Do managers know the level of service quality and responsiveness that IS
delivers?
 Do they know how to manage IS costs through demand planning, capacity and
resource planning, and monitoring as they would any other asset?

Management must have a clear understanding of the

IS environment to manage this asset as effectively as
it would any other business asset

Purpose of Information Systems Strategic Planning

Effective Management of an Expensive and Critical Asset

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

 Proper alignment can have a considerable impact on a

company’s financial performance.

Purpose of Information Systems Strategic Planning

 Aligning the IS Direction and Priorities to the Business Direction and Priorities

Symptoms of poor alignment include:

 Canceled projects
 Redundant projects
 Projects that do not deliver the intended value
 Lack of coordination between the business and IS
 Systems that do not meet the needs of the business
 Systems that cannot respond quickly to the demands of the business
 Business users unsatisfied with IS services
 Reactive, constant fire fighting
 Never enough resources; fighting for resources
 Churning of priorities; slow progress
 Uninvolved business management
 High IS costs with a sense of low value
 Systems and tools not fully utilized
 Lack of integration of systems
 IS decisions made as a result of emotion or opinions

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

Purpose of Information Systems Strategic Planning

 Aligning the IS Direction and Priorities to the Business Direction and Priorities

 Operational Excellence
 the business focus is on operating and business process
efficiency, and on controlling costs
 They focus on high quality, easy and quick customer
service, quick delivery and purchasing, and products
with limited choices

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

 Customer Intimacy
 A customer-intimate company supplies the best total
solution for the customer, builds a strong relationship
with the customer, and provides custom solutions at a
reasonable cost.
 The business strategy focuses on customer satisfaction
and customer needs

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

Purpose of Information Systems Strategic Planning

 Aligning the IS Direction and Priorities to the Business Direction and Priorities

 Product Leadership
 A product leader continually improves products and
product offerings. Creativity, research and development,
efficient engineering, and time to market are critical.
 The business strategy is future driven and focused on
solving problems and anticipating customer needs

Purpose of Information Systems Strategic Planning

Aligning the IS Direction and Priorities to the Business Direction and Priorities

Purpose of Information Systems Strategic Planning

 Identifying Opportunities to Use Technology for a Competitive Advantage
and Increase the Value to the Business

 To ensure IS provides a competitive advantage, a robust

planning process is required in which the IS department is
a true business partner and identifies business
opportunities using technology. Today, technology is
integrated into every aspect of a business, business
processes, and business interfaces.
 To obtain value and a competitive advantage, IS must
partner with the business so they are one. Projects are not
IS projects, but business projects. Technology by itself does
not provide a competitive advantage, but redefining or
aligning with the business strategy and optimizing
business processes with the use of technology can provide a
competitive advantage

Purpose of Information Systems Strategic Planning

Identifying Opportunities to Use Technology for a Competitive Advantage
and Increase the Value to the Business

Purpose of Information Systems Strategic Planning

 Planning the Flow of Information and Processes

 Information is a valuable resource, and it is important

to maximize its value for the corporation.
 Planning and managing the flow of information
throughout the organization can minimize labor, data
redundancy, and inconsistency, in addition to
increasing the quality and accuracy of the information.

Purpose of Information Systems Strategic Planning

 Efficiently and Effectively Allocating Information Systems Resources

 the focus must be to develop systems that provide the largest

business benefit and provide a competitive advantage.
 Planning will direct the effective allocation of IS resources and
minimize the costs of redesign, rework, or correction of errors.
 The IS department must manage both tangible and intangible
resources, design flexibility and sourcing skills into the plans,
and become businessfocused consultants who help the company
optimize all resources, not just computing resources. IS must
utilize both computing and human resources to obtain the most
value for the corporation

Purpose of Information Systems Strategic Planning

Efficiently and Effectively Allocating Information Systems Resources

Purpose of Information Systems Strategic Planning

 Reducing the Effort and Money Required Throughout the Life Cycle of
Systems

 When a company has decided one of its systems no

longer serves its needs and needs to be replaced, the
company may jump right into a vendor review of
business application packages. Typically, organizations
will follow the steps outlined in Figure 1.16.

Purpose of Information Systems Strategic Planning

Reducing the Effort and Money Required Throughout the Life Cycle of
Systems

Purpose of Information Systems Strategic Planning

Reducing the Effort and Money Required Throughout the Life Cycle of
Systems

Purpose of Information Systems Strategic Planning

Reducing the Effort and Money Required Throughout the Life Cycle of
Systems

Purpose of Information Systems Strategic Planning

Reducing the Effort and Money Required Throughout the Life Cycle of
Systems

Purpose of Information Systems Strategic Planning

 The purpose of the planning process is to help the IS
organization determine how to add optimum value to
the company.
 For a large complex organization, think about your
planning approach from a corporate or divisional
scope.

Purpose of Information Systems Strategic Planning

There are several different approaches to IS strategic planning in a
large corporate environment with multiple divisions:
 Top-down approach: This is where the corporate unit completes
the initial plan, establishes the areas of leverage, and
recommends standards across business units. This planning
approach works best in a company with a strong corporate entity
with more autocratic power over the operating units.
 Bottom-up approach: In this approach, the business units
complete their strategic plans first. The corporate entity then
completes its plan by identifying areas common across the
business units. This planning approach works best in a company
with autonomous divisions.
 Combination: This is where the business unit plan is done
jointly with a corporate entity, or initial high-level guidelines are
developed as the basis for the business unit plans.

Purpose of Information Systems Strategic Planning

 Recognizing the need for an IS strategic plan and beginning the
process is the most difficult step in the journey.
 Strategic planning will help establish IS as a key resource and enabler
to meeting business goals.
 Completing an IS strategic plan adds value to the organization. The
plan can improve the management of the IS asset, improve
communication between the business and IS department, align the IS
direction with the business, provide business opportunities and
increase the value to the business, and plan the flow of information and
processes. A plan can also result in the proper allocation of resources
and reduce the cost of the life cycle of systems. A company should
think through what it hopes to accomplish with its strategic planning
project.
 The business strategies of operational excellence, customer intimacy,
or product leadership require different IS strategies and priorities.
 For a large complex organization, think about your planning approach
from a corporate or divisional scope.

Purpose of Information Systems Strategic Planning

 Treacy, Michael and Wiersema, Fred, The Discipline of
Market Leaders, Perseus Books, New York, 1995.
 Carr, Nicholas G., “IT Doesn’t Matter,” Harvard
Business Review, Harvard Business School Publishing
Corporation, Product Number 3566, 2003.
 Collins, Jim, Good to Great, Harper Business, New
York, 2001.
 O’Rourke, Shawn, “More than a Handshake:
Integrating IT Is Key to Corporate Success,” DM
Direct, October 2004, printed from DMReview.com.

Purpose of Information Systems Strategic Planning