4' Determining Current IS Needs

1
4. Determining Current IS Needs

• Business environment
• Constituents of a business strategy
• Critical success factor analysis
• Business process analysis
• Organizational modeling

2
Business Environment

• Business strategy
• Purpose To ensure that IS strategy supports
  rather than contradicts business strategy
• Tools Critical success factor analysis, balanced
  scorecard analysis, and business strategy
  analysis
• Business processes, activities, and key entities
• Purpose To understand important business tasks
  and processes, and the flow of information
• Tools Business process analysis, process flow
  diagrams, data flow diagrams, and entity
  relationship models
• Organizational environment
• Purpose To understand organizational
  arrangements, value system, and key people and
  their relationships
• Tools Organizational modeling

3
Constituents of a Business Strategy

• Mission
• Statement of overall purpose for the organization
• Vision
• Brief description of the future that is
  consistent with the mission
• Objectives
• Measurable targets that take the organization
  towards achieving its vision
• Strategies
• Concrete ways to achieve the objectives (inputs
  from IS planning)
• Critical success factors
• Areas where things must go right for the
  organization to flourish

4
Critical Success Factor Analysis
Objective To achieve 1 growth in market share
Strategy
Critical success factors
IS implications
1. Improve sales in all stores at rates higher
than industry average
1A. Competitive product pricing 1B. Salary of
store managers
1A. Company product prices versus industry
average 1B. Manager salary versus industry average
2. Improve sales of under-performing stores
2A. Level of advertising 2B. Variety of products
2A. Amount spent versus regional average 2B.
Complements of high turnover products
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Critical Success Factor Analysis

• Hierarchy of critical success factors (industry,
  organizational, business unit, and manager)
• Derived from business strategy
• Key benefits
• Clear relationship of IS plan to business plan
• Involvement of top management in IS planning
  process
• Definition of executive information needs
• Helps to prioritize IS applications
• Can be used in conjunction with other tools
  (strengths-weaknesses-opportunities-threats
  analysis and balanced scorecard analysis)

6
Business Process Analysis

• To gauge the ability of business processes to
  contribute to meeting business needs
• Assess the effectiveness of each business process
  against each critical business driver
• A business process is a logical collection of
  related business tasks
• Examples of critical business drivers
• Production efficiency Removal of duplication,
  removal of unnecessary checking, reduced
  transfers of responsibility, simplified
  procedures, and streamlined information flows
• Customer satisfaction Reduced time to process
  orders, reduced time to answer queries, and
  improved quality of products delivered, and
  improved quality of services rendered

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Business Process Analysis
Driver 1
Driver 2
Driver 3
Driver 4
Total gap
Weight 3
Weight 4
Weight 1
Weight 5
Process 1
Current 0/0 Potential 4/12 Gap 12
Current 2/10 Potential 6/30 Gap 20
Current 2/2 Potential 2/2 Gap 0
Current 0/0 Potential 2/8 Gap 8
40
Process 2
Current 2/6 Potential 6/18 Gap 12
Current 2/10 Potential 4/20 Gap 10
Current 0/0 Potential 6/6 Gap 6
Current 0/0 Potential 6/24 Gap 24
52
Process 3
Current 0/0 Potential 2/6 Gap 6
Current 2/10 Potential 6/30 Gap 20
Current 4/4 Potential 6/6 Gap 2
Current 2/8 Potential 4/16 Gap 8
36
Contribution 0 nothing 2 minor 4
moderate 6 major
Risk factors 0 nothing 2 minor 4 major
6 critical
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Business Process Analysis
Potential improvement
60
Process 2
50
40
Process 1
Process 3
Priority band 1
Priority band 2
Priority band 3
Priority band 4
30
Potential risk
0
2
4
6
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Organizational Modeling

• Structured technique to ensure comprehensive
  examination of business and IS environments
• Documents environmental factors underlying each
  key business process
• Assesses the implications of changing each key
  business process
• Aid to decision making and communication
• Especially useful during business process
  re-engineering exercises

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Organizational Modeling

• Technology
• Hardware
• Software
• Methods

• Organizational
• arrangements
• Structure
• Operations
• Job descriptions

• Key business
• processes
• Acquisition
• Information gathering
• Decision making

• Employees and
• tangible assets
• People
• Plant
• Equipments

• External
• environment
• Task nature
• Competition
• Legislation

• Social systems
• Culture
• Attitudes
• Relationships

• Dominant coalition
• Characteristics
• Goals
• Strategies