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CISB444 - Strategic Information Systems Planning

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CISB444 - Strategic Information Systems Planning Chapter 2 - An Overview of Business Strategy Concepts and the IS/IT Strategy Implications Part I – PowerPoint PPT presentation

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Title: CISB444 - Strategic Information Systems Planning


1
CISB444 - Strategic Information Systems Planning
  • Chapter 2 - An Overview of Business Strategy
    Concepts and the
  • IS/IT Strategy Implications
  • Part I

2
Course Overview
  • Chapter 2 considers approaches and techniques
  • involved in business strategy formulation and
    strategic
  • management and their implications for IS/IT
    strategy
  • development.

3
Main topics
  • The evolving nature of strategy and strategic
    planning in organisations
  • The strategic framework
  • Strategy implementation
  • Strategy tools and techniques

4
Introduction
  • Most organisations are today aware that
    information systems strategies must be developed
    within the wider context of the corporate and
    business strategy formulation and implementation
    processes.
  • It has become increasingly important that
    investments made in information systems and
    technology throughout an organisation are
    directed toward the achievement of business
    objectives and plans.
  • IS/IT can also be an enabler of new business
    strategies that are not possible without the
    application of IT

5
Introduction
  • In the past, a significant proportion of the
    money spent on information systems and technology
    has had little relationship with meeting
    corporate objectives.
  • This is one of the many reasons why the potential
    benefits from investments made in IT have
    frequently not been realised.
  • Therefore, it is vital that business managers are
    involved in the process of developing information
    and systems strategies - It must be related to
    their business issues

6
What is Strategy
  • Metaphorically
  • A strategy is concerned with
  • setting out the purpose of the journey (i.e. what
    we want to be when we get there),
  • where we want to go (including any intermediate
    destinations that we might visit in order to
    measure our progress),
  • when we are going to get there, how we are going
    to achieve it, and what factors will influence
    our ability to complete the journey successfully.

7
What is Strategy
  • The strategy therefore specifies ends and
    path-ways, with intermediate milestones which we
    can use to measure success.
  • Strategy can therefore be defined as
  • an integrated set of actions aimed at increasing
    the long-term well-being and strength of the
    enterprise relative to competitors

8
Strategic Management
  • Strategic Management is concerned with the
    management, control, and monitoring of these ends
    and pathways in order to ensure success
  • Effective combination of coherent planning,
    incisive thinking, and astute opportunism
  • Include not only setting the strategy but also
    implementing and adapting it

9
Strategic Planning
  • Strategic Planning on the other hand, is
    concerned with developing the
  • plans,
  • projects, and
  • initiatives
  • which will allow the strategic intent to be
    translated
  • into operational achievement.
  • Systematic, comprehensive analysis to develop a
    plan of action

10
Strategic Thinking
  • Creative, entrepreneurial insight into the ways
    the enterprise could develop.

11
Strategic Thinking
  • Strategic Thinking is concerned with
  • challenging,
  • evaluating, and
  • shaping
  • strategy in order to ensure that the
    enterprise is optimally positioned in terms of
    its
  • markets,
  • competitors, and
  • other environmental factors.

12
Thinking StrategicallyThe Three Big Strategic
Questions
  • Where are we now?
  • 2. Where do we want to go?
  • Business(es) to be in and market positions to
    stake out
  • Buyer needs and groups to serve
  • Outcomes to achieve
  • 3. How will we get there?

13
The Strategic Framework
  • The framework considers the factors involved in
    business strategic management in three layers
  • The external environment
  • Pressure groups and stakeholders
  • Internal business strategising and planning

14
External Environment
  • Businesses operate within a broadly-defined
    external environment which need to be thoroughly
    analysed, understood, and interpreted early in
    the business strategy process.

15
External Environment
  • The 6 factors that are of enduring importance and
    relevant to most industries and organisations
    because of the speed with which they are changing
    and the effect they have on an increasingly
    global business marketplace include
  • Economic
  • Social
  • Political
  • Legal
  • Ecological
  • Technological
  • Careful monitoring of these factors may lead
    to significant business opportunities or
    identification of potential threats in time to
    take action to mitigate the effects.

16
Pressure Groups and Stakeholder
  • Businesses also operates and functions under the
    direct influence of two sets of forces
  • Pressure groups
  • Characterised by making demands of the
    organisation
  • Shareholders, Competitors, Customers/Suppliers
  • Stakeholders
  • Have a direct financial interest in the
    organisation, and demand a fair share of the
    wealth created
  • Shareholders, Competitors, Customers, Suppliers,
    Government, Employees, Unions, The Public,
    Financial Institution, The Media

17
Business Strategy Formulation andPlanning
Processes
  • Having considered the external environment as
    well as the threats and opportunities posed by
    the pressure groups, the organisation has to
    identify, evaluate and decide the strategies it
    is going to pursue.
  • It then has to establish how to achieve these
    strategies by planning for the required actions
    and by effective development and use of
    resources.
  • The key components of a business planning
    process
  • Objectives
  • Situation analysis
  • Future strategies

18
Strategy Implementation
  • Strategy implementation requires adequate
    resources that are allocated effectively,
    appropriate organisation and responsibilities are
    in place, and people are motivated to contribute
    to the achievement of the strategies.
  • It is also important to monitor performance and
    to control activities to ensure actions taken are
    producing the specific results that will lead to
    achievement of the overall set of objectives.
  • The results of this performance measurement will
    be used in a feedback loop to refine the
    objectives of the organisation.

19
Companys Strategy
  • A companys strategy will be affected by
  • Regulatory regime
  • Adverse economic conditions
  • Disruptive technologies
  • New entrants
  • Strategy must be periodically reviewed, to
    assess
  • whether it is necessary to make minor short-term
    alterations to the strategy, or
  • whether more radical by-passing is required in
    the face of unforeseen obstacles

20
Strategy Is Partly Proactive and Partly Reactive
  • A companys strategy is typically a blend of
  • Proactive and purposeful actions on the part of
    company managers
  • As-needed reactions to unanticipated developments
    and fresh market conditions.

21
Why Do Strategies Evolve?
  • A companys strategy is a work in progress
  • Changes may be necessary to react to
  • A failing strategy
  • Shifting market conditions
  • Evolving customer preferences
  • Fresh moves of competitors
  • Technological breakthroughs
  • Crisis situations?

22
Emergent Strategy
  • The strategy develops over time in response to
    change
  • mapped out expected journey
  • ready to reoriented the journey with new
    destination (if there are better opportunities or
    the old destination is no longer relevant to the
    enterprise)

23
Strategy Tools and Techniques
  • Business analysis framework a frequently used
    tool which allows users to demonstrate a summary
    of complex issues in graphical form
  • Often comes in 2x2 or 3x3 matrix
  • E.g. The Boston Consulting Group Business matrix
    which categorises business according to
  • Present market share
  • Future growth of that market
  • Once we know the category of our business, we can
    start with the strategic planning, can be used as
    a predictive device

24
The Boston Consulting Group Business matrix
  • Y axis shows market growth rate for that
    industry.

X axis shows the market share relative to the
industry leader
25
The Boston Consulting Group Business matrix
Source http//www.brs-inc.com/models/model14.asp
26
Implication of IS/IT strategy
Quadrant IS/IT strategy
Star System to support a leading role Focus should be toward customer (know them, understand better of their requirement) Also focus on allowing more growth , such as handling greater order volumes or variety product mixture or types of customer services. To aim for business innovation satisfy market requirement and stand out among competitors
Cash Cow System used to milk the business To defend current strong position in market share and keep expenditure low or at least match to that of the competitors System focus is on the control of business activities and relationships, not on innovation
27
Implication of IS/IT strategy
Quadrant IS/IT strategy
Wild cat Focus on product and process development Be used to indentify potential customers, ensure affective information exchanges to enable exact specification of service and product requirement
Dog Unlikely to attract much corporate investment funding dying in market Divestment may be the aim Undesirable to consider integration of IS/IT strategy.
28
Questions
  • ?
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