Revision for Strategic Information Planning

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Revision forStrategic Information Planning
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IT Evolution and its Strategic Impact
Transformate
Era 3
Transformation
Strategic
Informate
Effectiveness
Era 2
Tactical
Automate
Era 1
Efficiency
Operational
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Strategic Framework- Methods and techniques

• IS applications portfolio management
• Strategic Grid
• Business opportunities to use IS/IT
• Porters ICA
• Wisemans strategic option generator
• Value Chain Analysis
• Business benefits of IS/IT
• Index Matrix
• Business transformation
• 5-Level Transformation Graph
• Alignment of business and IS/IT strategy
• Strategic Alignment Process

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Measuring the Strategic Impact of IT- Strategic
Grid (McFarlan)
High
Strategic
Factory
Dependence
Support
Turnaround
Low
Low
High
Impact
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Strategic Grid Quadrants

• Support (e.g., Cement company)
• requiring average or below average investment
• occasional senior management attention
• Factory (e.g., Steelworks)
• crucial to current operations and management
• Turnaround (e.g., retailer on-line and real-time
  systems)
• crucial to current operations and management
• sensitive to productivity and effectiveness
• Strategic (e.g., Credit card company)
• determining the business survival and growth
• foreseeing future opportunities

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Methods for Identifying IS/IT Opportunities

• Porters Industry Competition Model / Analysis
  (ICA)
• understand a basis for IS/IT planning
• use the method to develop IT mechanisms in
  support of business strategies
• Wisemans Strategic Options Generator
• use the method for IS/IT planning
• define IS/IT opportunities
• Porter's Value Chain Model / Analysis (VC)
• understand the role of primary and secondary
  activities in a typical business
• identify IS/IT opportunities to support business

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Opportunity Frameworks
Business strategy frameworks - using Porters
Industry Competition Model/Analysis (ICA)
Threat of new entrants
The industry jockeying for position among
rivals
Bargaining power of suppliers
Bargaining power of customers
Threat of substitute products / services
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Opportunity Frameworks (cont.)
business strategy frameworks - Wisemans
Strategic Options Generator
strategic target
supplier customer competitor
strategic thrust
differentiation cost innovation growth
alliance
mode
offensive defensive
use provide
direction
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Wisemans Strategic Options Generator

• Identify target using Porters ICA model
• supplier, customer, competitor
• Plan strategic thrust from generic strategies
• differentiation, cost-leadership, innovation,
  growth, alliance
• Decide on mode of IS/IT use
• offensive proactive
• defensive reactive
• Decide direction of IS/IT use
• use use IS/IT internally to affect target
• provide provide or share IS/IT with target

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Generic Value Chain Model (Porter, 1985)
Firm Infrastructure
Human Resource Management
Support Activities
Technology Development
Margin
Procurement
Inbound Logistics
Operations
Outbound Logistics
Marketing Sales
Service
Primary Activities
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The Index Matrix - benefit dimension

• Efficiency - doing the thing right
• objective of DP era
• use of software engineering, CASE tools, systems
  development methods
• Effectiveness - doing the right thing
• objective of systems planning approach
• identifying IT opportunities
• IT applications portfolio management
• Transformation - doing things differently
• rather than automation
• changing the scope and nature of the business
• new opportunities ways of using IT

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The Index Matrix - beneficiary dimension

• Individual
• stand-alone
• limited benefit
• Function
• applying to functional area/division
• Organisation
• whole organisation benefits

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The Index Matrix
Beneficiary Individual Function Organisation Bene
fit
Efficiency Effectiveness Transformation
Task automation
Process automation
Organisational integration
Work improvement
Functional improvement
Service enhancement
Role enhancement
Functional redefinition
Product innovation
Zone 1 stand-alone applications Zone 2 DP
factory applications Zone 3 strategic
applications
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5 Level Transformation Graph
High
Business scope redefinition
Business network redesign
Degree of transformation
Business process redesign
Revolutionary Evolutionary
Internal integration
Localised exploitation
Low
Low
High
Range of potential benefits
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Transformation Benefits

• Localised exploitation
• islands of automation
• lack of integrated infrastructure
• Internal integration
• data sharing, communications
• common applications
• Business process redesign
• limited/controlled business transformations
• Business network redesign
• new value webs / alliances
• Business scope redefinition
• new business ventures, new markets
• new ways of doing business

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• Figure 5 Push and pull approaches to supply chain
  management