LECTURE 4

PLANNING INFORMATION
SYSTEM RESOURCES

Learning Objectives
Why do we need IS planning?
We need IT in our modern organizations but
systems planning is so difficult
Business goals and systems plans need to align
Technologies are rapidly changing
Infrastructure development is difficult to fund
Responsibilities needs to be joint
Can we keep up? Is it worth it?

How to resolve this apparent paradox?

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Introduction
We need a plan!
Stating the direction in which you want to
go and how you intend to get there
Develop a view of the future that guides
your decision-making today

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PLANNING INFORMATION
SYSTEMS RESOURCES
IS and business managers need to work together to guide their
organization in the planning and management of IS resources
Information resources will position organization to achieve
competitive advantage
A superiority gained by an organization when it can provide
the same value as its competitors but at a lower price, or can
charge higher prices by providing greater value through
differentiation

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BENEFITS OF INFORMATION
RESOURCES PLANNING
Creating a context for IS resource decision-making
Aligning IS and business goals
Balancing the tradeoffs between standardization and
agility
Obtaining IT capital investment approvals
This requires both a periodic strategic planning process,
as well as an ongoing monitoring of the appropriateness
of IS plans in response to changes in the business and its
environment.
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MULTI-STEP PLANNING PROCESS

( from an Enterprise perspective)
1.
2.
3.
4.

Assessment of current Information resources

Establishment of an Information Vision
Establishment of an IT Architecture for that vision
Formulation of an IS Strategic Plan (roadmap) to evolve
an organizations information resources from their
current status toward the desired vision and IT
architecture
5. Formulation of short-term Operational IS Plans based on
the IS Strategic Plan
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ALIGNING BUSINESS AND IS

PLANNING
IS decisions should be tightly
aligned with the direction of the
business
IS steps ideally impact the next
step in the business planning
process, but in practice this is not
yet typically found

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Fig 12.1 The Information Resources Planning Process

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ASSESSING CURRENT
INFORMATION RESOURCES
Inventorying and critically evaluating an organizations technical
and human resources in terms of how well they are meeting the
organizations business needs
Current performance is compared to a previous plan, competitors,
or a set of past objectives
Comparisons are made using:
- Operational data (usage of IS resources)
- Survey of client satisfaction with IS performance
- Benchmarks of what is being achieved at other organizations
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INFORMATION RESOURCES
ASSESMENT:
Examples of Assessment Statements

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ASSESSING CURRENT INFORMATION

RESOURCES
Assessing IS Performance
Example: comparing actual performance to goals

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ASSESSING CURRENT INFORMATION

RESOURCES
Measuring Attitudes of Users
IT managers should also consider assessing the attitudes of
users about the performance of the IS organization in relation
to the current needs & future direction of the business

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ASSESSING CURRENT INFORMATION

RESOURCES
IS Organizational Mission Statement
Sets forth the fundamental rationale (or reason to exist) for activities
of the IS organization
Can vary substantially from one organization to another because
some IS departments play more support roles than strategic roles
The extent to which the IS organization plays a strategic role can be
measured by:
the degree to which the organization is dependent on IT for business
operations
the degree to which IT is enabling the current business strategy

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ASSESSING CURRENT INFORMATION

RESOURCES

Assessing the IS Mission involves reconciling any differences

between IS manager and business manager views

Conflicting Mission Statement

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CREATING AN INFORMATION VISION

Information Vision
A written expression of the desired future about how
information will be used and managed in the organization
- Specific enough to guide policy decisions
Developing a vision requires both an understanding of the future
direction of the business and an understanding of the role
information can best play in enabling that future business strategy
- Focus is on the long term
Example of vision: Business managers will know how to use
information to make decisions and how to use the capabilities of
our information resources effectively
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DESIGNING THE IT ARCHITECTURE

Information Technology Architecture
Depicts the way an organizations information resources will be
deployed to deliver its vision
Specifies how the Technological and Human assets of the IS
organization will be deployed in the future to meet the
information vision
.

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FORMULATING THE STRATEGIC IS

PLAN
Strategic IS Plan
Long-term objectives (often three to five years) that represent
measurable movement toward the Information Vision and IT
Architecture
and
Major initiatives that must be undertaken to achieve these
objectives

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FORMULATING THE STRATEGIC IS PLAN

4 Steps in Strategic IS Planning Process
1. Setting objectives
2.

Conducting an external analysis

3.

Conducting an internal analysis

4.

Establishing strategic initiatives

Most planning processes involve iterations through these 4 steps

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FORMULATING THE STRATEGIC IS PLAN

1. Setting objectives
Measures are identified for each of the key result areas
IS objectives may be established for:
- IS department service image
- IS personnel productivity
- The appropriateness of technology applications
- Increased effectiveness
- Access to external resources

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FORMULATING THE STRATEGIC IS PLAN

2&3
Conducting internal and external analyses
Review external environment and internal capabilities
One approach: SWOT analysis
(strengths, weaknesses, opportunities, and threats)
Identify leverage points or limiting factors for new
strategic initiatives

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FORMULATING THE STRATEGIC IS PLAN

4. Establishing strategic initiatives
Establish high-level initiatives for IS organization
These initiatives will be translated into actual projects as
part of the operational IS planning

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FORMULATING THE STRATEGIC IS PLAN

Example: Strategic IS Plan for mid-sized company
(Sample Strategy Agenda)

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OTHER TOOLS FOR IDENTIFYING

STRATEGIC IT OPPORTUNITIES

Value Chain Analysis

- Based on the value chain of Porter, analysis of Primary and
Support activities of the business
- Examine how data can be captured, manipulated, and
distributed to better support each activity and its linkages
to other activities
- Idea-generation and action-planning sessions with business
and IT managers can be used to generate ideas for strategic
applications of IT

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TOOLS FOR IDENTIFYING STRATEGIC IT

OPPORTUNITIES
Strategic IT Application Opportunities in the Value Chain

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OTHER TOOLS FOR IDENTIFYING

STRATEGIC IT OPPORTUNITIES

Critical Success Factors (CSFs)

- Information needs and processes critical to the success of an entire

organization or a specific business function (e.g., sales)

Analysis of Competitive Forces

- Using Porters 5 Forces model to analyze potential changes in competitive
advantage due to changes in balance of power between a business, its
competitors, and other key stakeholders in the industry
- Examples of ways a company can create competitive advantage:
- Raising the stakes for competition in the market
- Providing difficult-to-duplicate product/service features
- Providing unique product features or customer services
- Making it easier for customers to do business with the company and more
difficult to switch to a competitor
- More strongly linking with suppliers to obtain lower-cost, higher-quality
materials
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FORMULATING OPERATIONAL IS
PLANS
Operational IS Plan
Details the major initiatives the organization needs to carry
out in the short term to achieve its strategic initiatives
Action plans for one or more years based on Strategic IS
Plan, with a focus on prioritizing projects currently
underway and new projects
Specifies for current and newly defined IS projects:
- Expected benefits and risks
- Due dates
- Responsibilities
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FORMULATING OPERATIONAL IS
PLANS
Balancing the risks and returns of the Portfolio of IS Projects

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GUIDELINES FOR EFFECTIVE IS

PLANNING
1. Early clarification of the purpose of the planning process is
essential
2. The information resources planning effort should be viewed as an
iterative effort
3. The plan should reflect realistic expectations
4. An effective IS plan will also take into consideration potential
barriers and constraints

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Q&A