Mit6e Ch14 by Firli

Managing Information Technology
6th Edition
CHAPTER 14
PLANNING INFORMATION
SYSTEMS RESOURCES
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1

Planning Information Systems Resources
• In addition to understanding the technical and

operation issues of the IS organization, IT
managers must also align IT investments with
the organization’s strategy
• Setting a clear direction for the organizational
information resources is a critical high-level IT
management activity

The Need for Direction
• An organizational plan for the development of
information resources helps organizations to:
– Share information among diverse parts of the
organization
– Communicate the future organizational plans to others
– Provide a consistent rationale for making individual
decisions
– Make decisions about how the “business” of IS will be
conducted
– Plan for and respond to traumatic incidents

Business and IT Alignment
• Alignment of IT strategy with the
organization's business strategy is a
fundamental principle
Business Strategy
Information
Technology
Strategy

Outputs of the Direction-Setting
Process
• Formally developing an overall information
resources plan may be new to many organizations
• There are several deliverables during the process
direction-setting process
– Information resources assessment
– Information vision
– Information architecture
– Strategic IS plan
– Operational IS plan

Process
Information Resources Assessment
●
● Includes inventorying and critically evaluating an organization’s technical and
human resources in terms of how well they are meeting the organization’s
business needs

Process
Information vision and architecture
• An ideal view of the future state of the
organization’s information resources
• Must be specific enough to provide policy
guidelines for individual decisions
• Must focus on the long term
• Although some firms combine them, there is a
difference between vision and architecture

Process
Information Vision
●
A written expression of the desired future about how
information will be used and managed in the organization
Information Technology Architecture
●
● Depicts the way an organization’s information resources will be deployed to
deliver that vision

Process
Information resources plans
Strategic IS plan
●
Contains a set of longer-term objectives that represent
measurable movement toward the information vision and
technology architecture and a set of associated major initiatives
that must be undertaken to achieve these objectives

Process
Information resources plans
Operational IS Plan
●
Contains a set of longer-term objectives that represent
measurable movement toward the information vision and
technology architecture and a set of associated major initiatives
that must be undertaken to achieve these objectives

The Process Of Setting Direction
IS and business planning
• IS decisions must be
tightly aligned with the
direction of the business
• Decisions should impact
the next step in the
process, but that is not
always the case

Assessment
• Current performance is compared to a
previous plan, competitors, or a set of past
objectives
• Comparisons made using:
– Operating data
– Survey of internal satisfaction with IS performance
– Benchmarks of what is being achieved at other
organizations

Vision
• Envision an ideal or intended state at some
point in the future
• At this point, no definition of how to achieve
the vision is included

Strategic planning
• The process of constructing a viable fit
between the organization’s objectives and
resources and its changing market and
technological opportunities

Operational planning
• Lays out the major actions the organization
needs to carry out in the shorter term to
activate its strategic initiatives

Traditional planning in the IS organization
• Needs-based (or project-oriented) planning
– Until recently, many IS organizations were not involved in
the organization’s business planning
– These organizations tended to adopt a needs-based
planning
• Bottom-up, immediate approach to information resources
planning
• Used when a specific, urgent business need called for a new
system
• Emphasis on project planning rather than overall organizational
planning

Assessing Current Information Resources
Measuring IS use
• Should measure current levels of information
resources use within the organization and
compare it to a set of standards
• Standards can come from:
– Past performance
– Technical benchmarks
– Industry norms
– “Best of class” estimates from other companies
Measuring Attitudes of Users

• IT managers should assess the attitudes of
users and IS staff about the performance of
the IS organization in relating its activities to
the needs and direction of the business

IS Organizational Mission Statement

• Should set forth the fundamental rationale (or
reason to exist) for activities of the IS department
• Can vary substantially from one organization to
another
• IS departments may take on different roles:
– Offensive
– Defensive
– Strategic

IS Organizational Mission Statement
• The mission, or role, of the IS organization
should align with the needs of the business

Assessing Performance Against Goals
• Annual assessment of actual performance
compared to previous goals should be conducted

Creating an Information Vision
• Information vision represents how senior
management wants information to be used and
managed in the future
• Steps:
1. Speculation on how the business’s competitive
environment will change and how the company
should take advantage of it
2. Business vision is specified and written
3. Implications for information use are outlined
4. Information vision is written
Designing the IT Architecture
• IT Architecture
– Specifies how the technological and human assets
and the IS organization should be deployed in the
future to meet the information vision
– Two components:
• Technological
• Human

• Four stages of IT architecture maturity:
1. Business Silos – companies seek to maximize
individual business unit or functional needs
2. Standardized Technology – companies seek to
enable IT efficiencies through shared services
and application rationalization, resulting in
enterprise-wide IT standardization

• Four stages of IT architecture maturity:
3. Optimized Core – companies implement
enterprise-wide business processes and data
with tightly linked systems and processes (such as
with ERP systems)
4. Business Modularity – companies seek global
flexibility with loosely coupled IT-enabled
business process components, which enable local
differences but also preserve enterprise-wide
standards

The Strategic IS Plan
• Strategic IS Plan
– Statement of the major objectives and initiatives
that the IS organization and business managers
must accomplish over some time period in order
to enable the information vision and the IT
architecture, and to be aligned with the strategic
plan for the overall business

The Strategic IS Planning Process
• This planning process includes:
– Setting objectives
– Conducting internal and external analyses
– Establishing strategic initiatives
• Most planning processes involve iterations
through these steps

• Setting objectives
– Measures are identified for each of the key result
areas for the organization
– IS objectives can be established for:
• IS department service image
• IS personnel productivity
• The appropriateness of technology applications
• Increased effectiveness
• Access to external resources

• Conducting internal and external analyses
– Review external environment and internal
capabilities
– Called a SWOT (strengths, weaknesses,
opportunities, and threats) analysis
– Identifies leverage points or limiting factors for
new strategic initiatives

SWOT Analysis
Strengths
Strengths
Weaknesse
Weaknesse
s
s
SWOT Analysis
Threats
Threats
es
es
Opportuniti
Opportuniti

• Establishing strategic initiatives
– Identifying important initiatives needed to
enhance the role of IT
– None of the initiatives is spelled out in enough
detail to be immediately translated into action
– These initiatives will be translated into actual
projects in the operational planning step

Strategy Agenda

Tools for identifying IT strategic opportunities
• Critical success factors (CSFs)
– Information needs and processes critical to the
success of a business function like sales or to the
entire organization
• Analysis of competitive forces
– Competitive advantage can come about by
changing the balance of power between a
business and the other actors in the industry

• Analysis of competitive forces (cont’d)
– A company can create strategic advantage by:
• 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

• Value chain analysis
– IT can be used in each activity of the value chain
to capture, manipulate, and distribute the data
necessary to support that activity and its linkages
to other activities
– Idea-generation and action-planning sessions can
be used to generate strategic applications of IT


• Scenario planning
– Used by business leaders to address an uncertain
future
– Alternative scenarios for what the future might
look like are developed
– Typically a few major drivers are focused on to
create a “scenario space” and then characteristics
of the scenarios are used to help plan for the
future
The Operational IS Plan
• The initiatives in the strategic IS plan are
translated into an action plan incorporating:
– Precise expected results
– Due dates
– Priorities
– Responsibilities

• Multiyear operational IS plan developed for up
to a three-year time period
• Focus is on project definition, selection, and
prioritization
• Steps:
1. Define multiyear IS operating objectives
2. IS development or acquisition projects then
defined and selected

• Portfolio view of IS operational plan allows for
a balance between risks and return of IS
projects

• Shorter-term operational IS plan developed
for up to a one-year period
• Focus is on specific tasks to be completed on
projects that are currently underway or ready
to be started
• Linked to the firm’s business priorities by the
annual budget

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. A unified approach to delivering IT services
should be used
5. An effective IS plan will also take into
consideration potential barriers and constraints
Benefits of Information Resources Planning
• Better IS resource allocation

• Communicating budget needs with top
management
• Creating a context for IT decisions
• Achieving both integration and innovation
• Evaluating vendor options
• Meeting management expectations

All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2009 Pearson Education, Inc.

Publishing as Prentice Hall

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Managing Information Technology

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• In addition to understanding the technical and

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Information Resources Assessment

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Information Technology Architecture

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Measuring Attitudes of Users

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IS Organizational Mission Statement

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• Better IS resource allocation

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