IS577 IS Strategy and Policy

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IS577IS Strategy and Policy
Strategic Planning Misc. Course Material DePaul
University CTI John Fisher
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Strategy

• What is strategy?
• How do you create one?
• How do you implement one?
• Why do you need one?

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How to create a strategy

• Some examples and tools
• SWOT Analysis
• How to we add value?
• Who are our customers?
• Who should be our customers?
• What business are we in?
• What business should we be in?
• Nokia, Encyclopedia Britannica, e-Bay
• Enterprise visualization
• Make the strategy a picture its worth 1,000
  words
• Apply Porters Value Chain, 1-to-1 Marketing,
  etc..

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What business are we in?From The Discipline of
Market LeadersMichael Treacy and Frederik D.
Wiersema
Product Innovation
Lucent Sony 3M
Disney Nordstroms
Dell Wal-Mart
Low Cost Provider
Customer Intimacy
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New Value Discipline

• Fred Wiersemas follow on book
• Companies in todays environment must now focus
  on more than one
• Some companies can focus on all three value
  disciplines
• What role does IT play in making this possible?

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Implementing the strategy

• We dont do what we propose
• 1999 Fortune cover story on CEO failures 70 due
  to flawed execution versus strategy
• What about throwing technology at the problem?
• If a company is not performing well, adding
  technology will make things worse
• You can only manage what you can measure
• Measuring financial performance is often not
  enough, you must also measure strategic
  performance

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Key Strategy Questions

• What business are we in?
• Who are our customers?
• What do our customers need?
• How can we deliver what they need?
• What value do we bring to the table?
• Where are we relative to our competition?

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Sears vs. Wal-MartExcellence in Operation

• Layers of management chairman to cash register
• Wal-Mart 3
• Sears 12
• Introduction of a new product
• Wal-Mart 60 days
• Sears 60 days to form a committee to study a
  new product

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An Architectural Framework for Linking all the
Business Processes to Information Technology and
for Working the Necessary Critical Partnerships
Column 1
Column 3
Column 4
Column 5
Column 6
Column 7
Column 8
Column 9
Column 10
Column 2
Technical Architecture Long Term Systems Plan
Vendors, Other Networks Internet, Strategic Part
ners
External Environment Outside World, Market,
Organization, Company Goals, Long Term
Strategies
Profit Centers Divisions Market Functions Geograp
hic Divisions
This Years Goals Hot Buttons, Critical
Success Factors
Process, Tasks Job Description
Information Requirements What is needed For
1,2,3,4
Data Data Flow Files, Data Warehouse Peoples
Minds
Systems Manual Automated Packages, Custom
Industry Macro-Econ
Organization Direction
Data
Information
Personal Responsibility
Operating Plans
Formal Unit Objectives
Future Technology
Current Technology
Partner Technology
Use
Delivery
Value
The columns link together, with Column 1
connected to Column 10 Each column is a different
perspective, view, opportunity, influence Each is
about one lunch worth of discussion
Source The Dooley Group
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Change Management

• Organizational transformation requires change
• Change is not easy or welcomed in most cases
• Technical change is easy, organizational change
  and cultural change are very difficult

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Important factors in managing change

• Common vision of the future
• What does the future look / feel like?
• To the company, to me..
• Widespread belief in the need for change
• Technology champion
• Communication, communication, communication
• Consistent top management vision and support
• Feedback to alleviate fears, build trust

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CNA Insurance Change Example

• September 1994 Centralized IS Department
• October 1994 Decentralized IS Function
• December 1994 Continental Insurance
• February 1995 Initial Management Shift
• May 1995 New IT Management
• December 1996 Outsourced IT to CSC
• December 1998 Eliminated CSC as
  outsourcer

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Other Examples

• Amoco - SAP Implementation
• Your company?
• Summary
• Technology is organizationally neutral
• The more flexible and distributed the IT
  architecture, the more organizational options are
  available

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Evolution of IT Approaches

• Initial business application of technology
  focused on Data Processing
• As the business environment changed, the use of
  IT within the business also changed
• Moving from the Industrial Age to the Information
  age changed the focus from Data Processing to
  Information Technology
• Framework for understanding IT/business
  interactions over the past 40 years

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Business/Technology Time Line
1970s
1980s
1990s
2000s
Information Age Value Added Sales Automation Data
Warehouse
Knowledge Banks Data Retailing Interactive
Feedback Intelligent Agents
Automation Cost Efficiencies Back Room Statistics
Data Processing Cost Efficiencies Front
Office Reporting
Components
Server PC Mainframe Internet
Ubiquitous PC Remote Internet Server/Mainframe
Mainframe Midrange
Mainframe Midrange PC
Platform
Reporting
Discovery/Analysis
Action
Operations
Focus
Operations Business Technology Specialists Needed
Operations Business Analysis
Operations Business Processes Some Technology
Specialists
Operations Back Office Analysis
Staffing Needs
Business Information Drivers
Consolidated Invoice
Information Needs Business Drivers
Automated Invoice
Customer View
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Information Architecture

• Each decade has a different Information
  Architecture focus
• Earlier decades produced individual systems
  centered on product lines
• Later decades emphasized the importance of
  integrated information
• In each case, an architecture needs to be
  developed
• Focus on the WHAT before the HOW

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Architecture Examples

• Centralized
• Decentralized
• Product Focused
• Information Focused
• Infrastructure needs versus business applications
  needs