Information Technology Planning

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Chapter 4

• Information Technology Planning

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Introduction

• Strategy establishes the broad course of action
  for the firm
• Establishes the destination and the general
  direction, but not the details
• Planning encompasses the specific information to
  reach goals and accomplish objectives
• These are the individual specific steps needed to
  reach the objective

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The Planning Horizon

• There are three general types of plans
• Strategic Plans
• Tactical Plans
• Operational Plans and Controls
• They are distinguished by their time span or
  planning horizon
• The planning horizons of each type of plan added
  together equals the firms extended planning
  horizon

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The Extended Planning Horizon
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Time Frames

• Operational plans cover about 90 days
• Tactical plans address the time frame ranging
  from 3 months to 2 years
• They describe the actions that begin the
  implementation of strategic plans
• Strategic plans cover a range of 2 to 5 years and
  concern themselves with laying out the firms
  missions, goals, and objectives

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Strategic Plans

• Attempt to convert strategies into plans
• Take information found in the strategy statement
  and add detailed actions and resources necessary
  to attain the stated goal
• They must convert assumptions in the strategy
  into reality
• They must mitigate known risks to the fullest
  extent possible

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Tactical Plans

• Intermediate range plans covering the current
  year in detail and the following in less detail
• These plans are used to help assess a managers
  performance
• They link near-term actions and long range goals

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Operational Plans

• Broad based and very detailed
• Attempt to deal with important activities
  occurring in the near-term
• Attempt to bridge the gap from the present to the
  tactical time period
• Contain detailed information used in the lower
  levels in an organization
• Provide a basis for taking short-term action and
  measuring short-term results

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Planning Schedules

• Planning is a continual process, tied to the
  calendar
• In organizations with well-established planning
  processes, the new tactical plan revises the
  second year of the previous plan and adds to it
  the first year of the previous strategic plan
• Revisions reflect changes due to changes in the
  business environment

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The Second Planning Iteration
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Rapid-Response Planning for Internet Applications

• The leverage businesses obtain with Internet
  technologies are maximized when they are deployed
  quickly
• In this climate, detailed plans quickly become
  dated
• Wise managers respond to these changes quickly,
  with planning keeping up with the current
  business environment, rather than slavishly being
  tied to a calendar

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Planning Model for IT Managers

• Planning time horizons vary greatly from industry
  to industry
• IT must work within the horizon constraints of
  the firm
• Organizational factors strongly influence ITs
  planning activity
• An effective plan is a detailed and thoughtful
  document describing actions for implementing
  strategy over the designated period

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IT Management Planning Model
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I. Application Considerations

• An applications portfolio consists of a complete
  set of application programs a firm uses to
  conduct its automated business functions
• Major difficulties surround project selection for
  the applications portfolio
• Arise from competition for resources
• Generally resolution requires intervention of
  senior executives

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II. System Operations

• Running the firms applications according to
  defined processes
• Processes may include online ERP systems, network
  e-commerce systems, scheduling systems, or a
  combination
• IT managers must plan system operations and
  service levels to satisfy customers both within
  and outside the firm

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II-a. System Operations Planning Elements
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II-b. Committed Service Levels

• Achieving committed service levels depends on
  having sufficient resources to process the
  applications in keeping with stated requirements
• Must possess sufficient computing and network
  capacity to handle the workload
• Physical resources such as CPUs, memory, and
  auxiliary storage
• Human resources to maintain the servers and other
  equipment 24 x 7, with low downtime

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III. Resource Planning

• IT resources consist of equipment, space, people,
  and finances
• The IT plan describes the critical dependencies
  on available resources throughout the planning
  horizon
• The plan must encompass all necessary obligations
  and expenses including leasing and finance costs,
  third party services, and capital equipment
  expenditures

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IV. People Plans

• The most crucial element of any plan
• People management is a necessary condition for
  success but not sufficient by itself
• Planning includes staffing, training and
  retraining costs, and time
• The personnel plan identifies requirements for
  people according to skill level
• At the level of line management, this includes
  formulation of individual development plans for
  employees

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V. Financial Plans

• For an IT organization, this summarizes the costs
  of equipment, space, people, and miscellaneous
  items
• Timing of expenditures reflect the rate at which
  the firm acquires or expends resources consistent
  with work product
• Planning is iterative, with the figures changing
  due to negotiations and discussions
• An IT managers performance is often judged
  against the financial plan

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VI. Administrative Actions

• The cooperation of managers in adjacent functions
  must occur to help coordinate the emerging plan
• Bringing others in helps develop win-win
  strategies among the participants
• Open lines of communication help to integrate
  participants across departments
• Measurement and tracking mechanisms must be
  developed to monitor progress and help management
  assert control

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VII. Technology Planning

• The IT organization must stay informed about
  progress in the field
• The rate of change in IT is enormous, with many
  enormous advances and technologic dead ends
• In larger organizations, a small advanced
  technology group is useful to better quantify new
  technologies and their applicability to the
  current environment

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VII-a. Technology Areas
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Critical Success Factors in Planning

• CSFs are critical tools in creating effective
  plans
• Improve planning by focusing on important
  managerial issues
• Audit the results of the planning process
• Four major categories
• Long, intermediate, and short range issues
• Business management issues

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Business Systems Planning

• Concentrates on a firms data resources and
  attempts to develop an information architecture
  that supports a coordinated view of the data
  needs of the firms major systems
• Attempts to model the firms business through its
  information resources
• Attention is shifted from the firms applications
  to the firms data

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The Integrated Approach

• Some planning strategies are more suited to
  certain situations than others
• Two factors correlate with planning effectiveness
• Infusion the degree to which IT has penetrated
  the operation of the firm
• Diffusion the extent to which IT has
  disseminated throughout the firm