Management Information Systems

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12
Chapter
SESSION 11
Strategic Alignment
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SESSION 12 OBJECTIVES

• Describe ways of interpreting the strategic
  impact of information systems
• Describe IT enabled strategies that companies can
  use to achieve competitive advantage in their
  industry
• Describe information technology skills and
  resources as as they relate to the achievement of
  sustained competitive advantage.
• Explain the four-stage model of information
  systems planning, and discuss the importance of
  aligning information systems plans with business
  plans.
• Describe information requirement analysis,
  project payoff and portfolios, resource
  allocation, and project planning.
• Discuss the meaning and importance of IT
  alignment
• Identify the different types of IT architectures
  and outline the process necessary to establish
  and information architecture
• Discuss the major issues addressed by information
  systems planning
• Distinguish the major-related IT planning issues
  and understand application portfolio selection.

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Even if you are on the right track, youll get
run over if you just sit there.
Will Rogers
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What Does It Mean?

• Dont stop
• Enterprise Architecture is a new way of thinking
  about a obvious way of structuring the IT
  landscape.
• The job will never be done ever-moving goal
• Change is an ongoing process, not an event that
  takes you by surprise
• BUILD TO CHANGE, NOT TO LAST

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Dells Direct Path to Success

• The problem
• The solution
• The results
• Lessons learned

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Strategic Advantage and IT

• The competitive forces model
• Strategies for competitive advantage

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The Competitive Forces Model

• IT investments should support the business
  strategy, i.e. it should create strategic
  advantage for the firm
• Porters five forces
• Threat of new entrants
• Bargaining power of suppliers
• Bargaining power of customers ( clients, buyers)
• Threat of substitute products or services
• Rivalry among existing firms in the industry

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Strategies for Competitive Advantage

• Apart from understanding the impacts of systems
  on industry, managers have to develop strategies
  aimed at establishing a profitable and
  sustainable position agains the Porter five
  forces, hence the quest for differentiation
• Cost leadership strategy Produce products or
  provide services at the lowest cost in the
  industry. Thrifty procurement practices,
  efficient business processes, forcing up prices
  paid by competitors, and helping customers or
  suppliers reduce their cost.
• Differentiation strategy
• Niche strategy
• Growth strategy
• Alliance strategy
• Innovation strategy
• Entry barriers strategy

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Can IT provide sustainable competitive advantage?

• People, processes, procedures and policies are
  necessary to provide a sustainable competitive
  advantage.
• The key point that technology that can be bought
  off the shelf does not provide a sustainable
  competitive advantage.
• Advances in systems development and the short
  time that technology has before it becomes
  obsolete helps to explain why it is difficult to
  sustain a competitive advantage.
• Without the ability to properly interpret and
  apply the knowledge and information gathered from
  the information system, an organisation will be
  unable to succeed.
• Information systems are merely tools to be used
  by their human counterparts

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Porters Value Chain Model

• Porters model in the digital age
• Figure 12.2, page 515

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Strategic Resources and Capabilities

• Table 12.3, page 518

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IT Planning a Critical Issue for Organisations

• Business importance and context
• The evolution of IT planning
• Four stage model in IT Planning
• Strategic IT Planning
• Information requirements analysis
• Resource allocation
• Project planning

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Strategic IT Planning

• IT Alignment with organisational plans
• Challenges with IT alignment
• Tools and Methodologies of IT Planning
• Business systems planning model
• Stages of IT growth model
• Critical success factors
• Scenario planning (see Table 12.4)
• A closer look 12.1

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Information Requirements Analysis

• Information requirements analysis, table 12.5,
  page 528
• Identifying high-payoffs
• Providing an architecture

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Resource Allocation

• Guidance in resource allocation

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Project Planning
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Planning IT Architectures

• IT infrastructure considerations
• Choosing the Architecture options
• Centralised vs. distributed computing
• Information architectures and end-user computing
• Impact of utility computing
• Harvesting legacy systems
• Holdovers of earlier architectures that are still
  in use after an organisation migrates to a new
  architecture are described as legacy systems.
  These systems may continue in use even after an
  organisation switches to an architecture that is
  different from, and possibly incompatible with,
  the architectures on which they are based

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IT Planning

• Inter-organisational systems
• Multinational organisations
• IT Planning
• E-Planning
• Tjans portfolio strategy
• Risk analysis
• Strategic planning issues
• Planning in a turbulent web-environment

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Why Do We Have to Align IT With Strategy?

• Relates to the business architecture of the
  organisation
• A strategic information system (SIS) is a system
  that is aligned with business goals and
  strategies and has an impact on organisational
  performance.
• Therefore, it is any system that supports or
  shapes a business units competitive strategy and
  that gives a competitive advantage to the
  organisation.
• It usually has the ability to significantly
  change the way an organisation does business.
• If the plan is not aligned with organisational
  strategies, it may result in sub-optimisation

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Architectural Blueprint Framework

• Performance
• Loyalty Rewards
• Compensation
• Strategy
• Measurement
• Support
• Service Level
• Agreements

• Strategy
• Vision
• Mission
• Drivers
• Objectives
• Critical Success
• Factors
• Target Market
• Customers
• Delivery Channels
• Products
• Services
• Capabilities
• Sourcing Approach

• Organisation
• Cluster
• Channels
• Competency
• Structures
• Teams
• Roles

• Facilities Layout
• Location
• Buildings
• Support Systems

• Process
• Events
• Sub Process
• Guiding Principle
• Constraints
• Exceptions
• Information

• Product
• Types
• Features
• Fee Structure

• Application
• Suite
• Sub System/
• Component
• Modules/
• Classes
• Data

• Equipment
• Equipment
• Category
• Client
• Hardware
• Machinery
• Tools

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Managerial Issues

• Sustaining competitive advantage
• Importance.
• Organising for planning
• Fitting the IT architecture to the organisations
• IT architecture planning
• IT policy
• Ethical and legal issues
• IT strategy

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