Strategic Information Systems CBSM4203 TOPIC 5: INFORMATION SYSTEM STRATEGIC PLANNING

1
Strategic Information Systems CBSM4203 TOPIC
5 INFORMATION SYSTEM STRATEGIC PLANNING
2
Introduction

• Improved strategic IS planning is one of the
  critical issues facing IS executives today.
• Effective strategic IS planning can help
  organisations use IT to reach business goals.
• It can also enable organisations to use IT to
  significantly impact their strategies.

3
IS strategic planning

• The essential requirement for effective IS
  planning is that the needs of the business should
  drive the planning for IS development and
  deployment.
• Business planning is the process of identifying
  the goals, objectives and priorities for the firm
  and of developing action plans for achieving
  these goals, objectives and priorities.
• IS planning is a part of business planning and
  focuses on deploying the firms IT resources and
  capabilities to facilitate the overall business
  plans for the firm.

3
4
Why strategic planning fails

• Failure to tie technology to institutional
  mission and priorities
• Failure to get the right people on board
• Excessive focus on technical details
• Lack of suitable leadership

4
5
Critical Success Factor (CSF) analysis

• Critical success factors are the limited number
  of areas in which satisfactory results will
  ensure competitive performance for the
  individual, department or organisation.
• CSFs include issues vital to an organisations
  current operating activities and to its future
  success.

5
6
What is CSF?

• Critical Success Factor (CSF) is the term for an
  element that is necessary for an organization or
  project to achieve its mission
• It is a critical factor or activity required for
  ensuring the success of your business.
• The term was initially used in the world of data
  analysis, and business analysis.
• For example, a CSF for a successful IT project is
  user involvement.

6
7
Following CSF should be considered

• Intellectual capital Create assets from the
  tools you make to run your business.
• Strategic relationships New sources of business,
  products and outside revenue.
• Employee attraction and retention Your ability
  to find, train, and keep employees and to let go
  employees that are not a good fit.
• Sustainability Your personal ability to keep it
  all going.

7
8
Following CSF should be considered

• Intellectual capital Create assets from the
  tools you make to run your business.
• Strategic relationships New sources of business,
  products and outside revenue.
• Employee attraction and retention Your ability
  to find, train, and keep employees and to let go
  employees that are not a good fit.
• Sustainability Your personal ability to keep it
  all going.

8
9
Importance of CSF

• Critical success factors are those few things
  that must go well to ensure success for a manager
  or an organization, and, therefore, they
  represent those managerial or enterprise area,
  that must be given special and continual
  attention to bring about high performance

9
10
Critical success factor analysis
10
11
Characteristics of CSF

• CSFs are quite different from Key performance
  indicators which have been used in the past for
  IS planning. They are not a standard set of
  measures that can be applied to all
  organisations. Rather, they are specific to a
  particular situation at a particular time.
• CSFs can also be categorised as monitoring and
  building.
• Monitoring CSFs involves the scrutiny of existing
  situations, such as monitoring the percentage of
  defective parts.

11
12
Characteristics of CSF

• Building CSFs is related to changes in the
  organisation for future planning, such as
  improving product mix.
• Managers who spend most of their time in control
  functions are concerned mostly with monitoring
  CSFs, whereas those who are concerned primarily
  with planning are concerned mostly with building
  CSFs.

12
13
Sources of CSF

• Industry-based factors - Each industry has a set
  of CSFs that are determined by the
  characteristics of the industry itself. Each
  organisation in the industry must pay attention
  to these factors.
• Competitive strategy, industry position, and
  geographic location Each organisation in an
  industry is in an individual situation,
  determined by its history and current competitive
  strategy. Differences in industry position,
  geographic location and strategies can lead to
  different CSFs from one company to another in an
  industry.

13
14
Sources of CSF

• Environmental factors - Environmental factors are
  those areas over which an organisation has little
  control GDP
• Temporal factors - They are areas of activity
  that are significant for an organisation because
  they are below the threshold of acceptability at
  that time. For example, inventory control is
  generally not a CSF for a chief executive but may
  become a very high level CSF under the
  circumstances of either very little or too much
  stock.

14
15
Sources of CSF

• Managerial position Each functional managerial
  position has a generic set of CSFs associated
  with it. For example, almost all manufacturing
  managers are concerned with product quality,
  inventory control and cash control.

15
16
Hierarchical nature of CSFs
16
17
Measuring CSF

• To measure is to know. CSFs must be measured in
  order to track the progress in achieving them.
• Such measures are only rarely provided by the
  traditional financial accounting systems and may
  be provided only sometimes by cost accounting
  systems (often with some additional improvements
  in them).

17
18
Measuring CSF

• A small proportion of CSFs require subjective
  assessment rather than being easily quantifiable.
  Some CSFs can have only soft measures.
• However, usually there is some means of creating
  numeric measures.
• Senior management is used to such situations and
  spends much time with subjective judgements and
  measurements.
• Therefore, they might not have problems with
  subjective measures.

18
19
Measuring CSF
19
20
CSF analysis

• There are three major uses of the CSF concept
  (Boynton and Zmud, 1984)
• To help an individual manager determine his or
  her information needs.
• To aid an organisation in its IS planning
  process.
• To aid an organisation in its organisational
  strategic planning process.

20
21
CSF analysis

• The CSF analysis process involves a series of
  interviews conducted in two or three sessions.
• In the first session, the manager is asked his or
  her goals and the CSFs that underlie these goals.
  
• The second session focuses primarily on
  identifying specific measures and possible
  reports.

21
22
CSF analysis

• CSF analysis has been widely used.
• Its purpose is to identify the most important
  ingredients for the IS strategy since they define
  the most important ingredients of the business
  success.
• CSFs keep a firm focus upon strategic issues but
  obviously their weakness is that it needs very
  skilled and very perceptive interviewers to
  determine CSFs from senior managers.

22
23
CSF analysis

• The main strengths of CSF analysis are that it
  provides effective support to planning since the
  consideration of critical activities develops
  management insights and CSF analysis may serve as
  the effective top level for a subsequent
  structured analysis.

23
24
Extended CSF analysis

• CSFs are time dependent. Thus, even if the
  appropriate factors are identified, events may
  alter the criticality of these factors.
• For example, the rise of crude oil prices in the
  1970s caused major changes in various
  organisations.

24
25
Extended CSF analysis

• This extended CSF analysis method uses the CSF
  analysis to provide the planning context in three
  critical domains information, decision and
  assumption.
• The Critical Information Set (CIS) defines those
  measures and associated data necessary to
  monitor, analyse and control the CSFs.
• This is the traditional product of a CSF analysis.

25
26
Extended CSF analysis

• The Critical Decision Set (CDS) defines those
  decision processes that will most affect the
  successful achievement of a CSF.
• For example, if the CSF is to retain highly
  skilled employees, the CDS might include the
  hire, promotion, merit, raise, job assignment or
  other decisions that directly affect a highly
  skilled employees decision to remain with the
  firm.

26
27
Extended CSF analysis
27
28
Business System Planning

• Business Systems Planning (BSP) is an IBM
  proprietary technique devised initially for IBM
  internal use later, it was sold as a service to
  its customers in the mid-1970s.
• BSP was perhaps the earliest formal IS planning
  method and is now the most widely known.

28
29
Business System Planning

• BSP offers a structured approach to IS planning
  via a number of fairly rigorously defined stages
  that lead from the identification of business
  processes to a definition of required data
  structures.
• Data are tracked as they flow throughout the
  organisation by the business activity support or
  from which they result.

29
30
Business System Planning
30
31
Major activities in BSP

• The BSP methodology consists of four major
  activities
• Documenting the business activities
• Defining the business processes
• Defining the data necessary to support the
  business processes
• Defining the information architecture

31
32
BSP study step by step
32
33
BSP study step by step
33
34
Review Questions

• Discuss why top management commitment is required
  for the BSP study.

34
35
Review Questions - answer

• BSP study requires the diversion of staff and
  other scarce resources from more immediate tasks.
  
• Therefore, it is important to gain top management
  commitment and involvement.
• This support is needed not only to get things
  started but also to measure adherence to the
  plans.

35
36
Review Questions - answer

• Discipline and constraints are imposed by BSP on
  managers and high-level business executives, who
  often view these constraints as
  counter-productive to their short-term interests.
  
• This is why top management support is critical
  for the BSP study.

36
37
Earls multiple methodology

• 1. Clarification of the business needs and
  strategy in IS terms - What is the business
  strategy and what is the IS strategy
• 2. Evaluation of current IS provision and use -
  How to integrate legacy
• systems and
• 3. Innovation of new strategic opportunities
  afforded by IT - What are the
• operational goals.

37
38
Earls multiple methodology

• Earls method is known as the Multiple
  methodology or Three-pronged
• Methodology as he tackles his three issues from
  different angles top-down, bottom-up and
  inside-out.

38
39
Earls multiple methodology
39
40
Top down classification
40
41
Bottom-up evaluation
41
42
Common weakness of IS planning methodologies

• Poor integration of business and IS planning
• Lack of planning for IS ongoing maintenance
  requirements
• Focus on tools and techniques instead of on real
  business needs

42
43
Common weakness of IS planning methodologies

• Inability to handle change or uncertainty
• Vision or architecture is too narrow and
  short-ranged
• Obscure or complex planning processes
• Problems without solutions in any current
  planning approach

43
44
Other Common weakness of IS planning methodologies
Failure to deal effectively with applications
integration Insufficient evaluation of
applications package options and tradeoffs Lack
of effective risk assessment and management
and Failure to make use of existing Best
practices already proven and public knowledge
from other firms in the industry.
44
45
HAVE A NICE DAY!