Strategic Planning for Information Systems

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Strategic Planningfor Information Systems

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Learning Objectives

• Discuss the importance of linking the development
  of IS to the strategic business objectives of the
  organization
• Discuss the components of business strategic
  planning
• Discuss factors that are crucial to the success
  of the business strategic planning process
• Discuss various methods for IS strategic planning
• Identify strengths and weaknesses of various IS
  strategic planning process
• Identify critical components of an IS strategic
  planning process
• Given an IS strategic plan, critique its
  strengths and weaknesses

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Key Terms

• Critical success factors (CSFs)
• Environmental analysis
• Gap analysis
• Internal analysis
• Strategic planning
• SWOT analysis

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Outline

• Strategic Planning for Information Systems
• Introduction
• Health-Care Organizational Strategic Planning
  Process
• Organizing resources
• Environmental and internal analyses
• Generating options and developing an enterprise
  strategy
• Information System Strategic Planning
• Information system strategic planning methods
• Developing a customized IS planning methodology
• The Health Information Managers Role in
  Strategic IS Planning

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Introduction

• In order for any organization to be successful
  and competitive, its information resources must
  support critical functions and strategic
  objectives
• Planning for IS must be based on knowledge of
  health-care organization and its critical goals
  or success factors
• Goodness of an IS is measured by its
  effectiveness and its efficiency

• Information engineering is one of the primary
  domains of practice of the HIM.
• The domain includes tasks associated with
• Planning
• Analysis
• Design
• Development
• The tasks include
• Strategic planning
• Data modeling
• Process modeling
• Data administration
• Strategic planning involves identifying the goals
  and critical success factors of the enterprise

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Introduction
Administrator
Practitioner
Patient
Client
Policymaker
Physician
Health Information Manager (Information Broker)
Information Services

• Information Engineering
• Strategic Planning
• Data Modeling
• Process Modeling
• Data Administration
• Interface Design
• Screen
• Reports

• Information Retrieval
• Search Strategies
• Database Languages
• DSS Development
• DSS Use

• Information Analysis
• DSS Use
• Statistical Analysis
• Data Presentation

• Policy Development
• Security
• Information Engineering
• Information Retrieval
• Information Use

Figure 4-1. Information Engineering Function
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Health-Care Organizational Strategic Planning
Process

• Although the particular methods of strategic
  business planning processes may vary, planning
  for strategic positioning of the organization
  usually includes four areas of focus
• Assessing the enterprises competitive position
• Determine ways or alternatives for the enterprise
  to move ahead
• Assessing the feasibility of various alternatives
• Selecting alternatives and implementing them
• The culmination of the business strategic
  planning process results in the development of a
  plan that sets the direction of an organization

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Health-Care Organizational Strategic Planning
Process

• Hiring a facilitator
• To be a neutral participant
• To compensate the lack of internal expertise to
  coordinate the planning process
• To draw on the variety of expertise within their
  firm
• To bring a big picture to the planning process

• Organizing resources
• The planning team
• Minimally should include CEO, COO, CFO, CIO, and
  senior vice president or executives of the
  various function areas
• In some cases, stakeholders may be included
• Ideally, the team should consists of no more than
  12 individuals

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Health-Care Organizational Strategic Planning
Process

• Development of task groups
• The planning effort is much too complex for the
  planning team to work alone
• Usually several groups are formed, but at a
  minimum two task groups are formed one to
  perform an external or environmental analysis and
  another to perform an internal analysis

• Organizing resources
• Other resources
• Sufficient clerical support is an absolute
  necessity by conducting exhaustive information
  searches
• Office equipment to support the process will be
  needed
• Space for the facilitator and clerical support
  staff to work as well as conference room for
  members to meet

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Health-Care Organizational Strategic Planning
Process

• Internal analysis
• To gain an understanding about the way the
  organization functions with a goal to develop a
  factual portrait of the organization
• The most significant outcome is identifying the
  critical success factors (CSFs)
• CSFs are the limited number of areas in which
  results will ensure successful competitive
  performance for a business

• Environmental and internal analyses
• Environmental analysis
• Changes in the economy, demographics, politics,
  legislation, or other factor will directly
  determine opportunities and threats
• The external analysis usually includes an
  assessment of the health-care industry
  specifically as well as the organizations direct
  competitors

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Internal Analysis
OrganizationCSFs
BusinessUnit CSFs
BusinessUnit CSFs
BusinessUnit CSFs
BusinessUnit CSFs
Figure 4-2. Relationship Among Business Unit and
Organizational Critical
Success Factors
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Health-Care Organizational Strategic Planning
Process

• Environmental and internal analyses

• Bringing the external and internal analyses
  together
• The summary document reports results of internal
  and external analyses by emphasizing areas of
  agreement and disagreement and identifying goals,
  CSFs, strengths and weaknesses, and providing an
  assessment of implications of trends for future
  direction and success of the organization

• Various tools and techniques used to compare and
  analyze the results of internal and external
  analyses
• Gap analysis
• Situation or SWOT analysis
• Driving force
• Competitive forces
• Value chain analysis

• Summary paper preparation
• To focus on the SWOT for the enterprise by
  providing a realistic appraisal of the true state
  of the organization

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Bringing the external and internal analyses
together

• Driving force analysis
• Concentrate on how best to optimize the one most
  important focus of the business
• Competitive forces analysis
• Focus on the organizations CSFs in relation to
  new entrants to the market place, substitute
  products or services, customers, and suppliers
• Value chain analysis
• A way of looking at the contribution of various
  primary and secondary functions of a business
  unit to the development of a product

• Gap analysis
• A structured analysis that results in the
  identification of discrepancies between the way
  the organization sees itself and its true
  position facing its competitors and other driving
  forces in the external environment
• Situation or SWOT analysis
• Help the organization assess its current position
  in relation to the competitive market

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SWOT Analysis by CSF
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SWOT Analysis by Functional Area and Efficient
Operation CSF
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An Example
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Health-Care Organizational Strategic Planning
Process

• Generating options and developing an enterprise
  strategy
• The planning team should generating a small
  number of options for pursuing and evaluating
  these options in terms of required resources,
  costs, risks, and value
• Options should link to the goals and CSFs
  previously identified through the internal and
  external analyses
• The final part of strategic planning is the
  development of the enterprise strategy itself in
  which all elements of the process are brought
  together and organized in a plan for action

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IS Strategic Planning

• IS strategic planning (ISSP) methods

• Provide for the development of an information
  model critical to the development of
  enterprise-wide IS
• Stress the importance of integrating the IS plan
  with the overall business strategic plan
• Do not stress evaluating the IS unit as a
  critical business unit
• Development of the information model is
  accomplished through entity relationship diagram
• An entity (patient, physician, supplier,
  physician order, and nursing progress note) is
  anything about which data can be stored

• Martin and Leben (1989)
• Process (1) Performing a linkage analysis (2)
  Creating an overview entity relationship
  enterprise model (3) Performing a technology
  impact analysis (4) Performing CSF analysis (5)
  Performing goal and problem analysis (6)
  Refining the entity relationship diagram (7)
  Clustering entities into business areas (8)
  Establishing priorities for business area analysis

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IS Strategic Planning

• IS strategic planning (ISSP) methods

• Goldberg Sifonis (1994)
• Called dynamic planning
• Tightly integrating IS planning into the overall
  strategic business planning, that is both are
  planned at the same time
• Alignment occurs after options have been
  generated in the overall strategic planning
  processes

• The strength is that IS planning is intricately
  entwined in the total strategic business planning
  of the organization
• More conceptual and doesnt specifically provide
  for information modeling techniques that are
  crucial to the development of enterprise-wide IS

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IS Strategic Planning

• IS strategic planning (ISSP) methods

• Outputs derived from (1) an IS management
  strategy that manages IT supply and demand and
  (2) a business IS strategy that states how IS
  will be deployed to support business functions
• Attempt to integrate a view of the IS unit as a
  critical business unit with its function as a
  support unit
• Recognize the importance of using tools and
  techniques such as CASE and entity relationship
  models

• Ward et al. (1990)
• A strategic IS planning process described in a
  framework of inputs and outputs
• Inputs include (1) an internal business
  environment (2) an external business
  environment (3) an internal IS environment
  assessment (4) an external IS environment
  assessment

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IS Strategic Planning

• IS strategic planning (ISSP) methods

• Advocate using the tools and techniques employed
  in business planning to assess the IS business
  unit, evaluating the organization in which the
  unit residues, developing options, and developing
  a grand plan for the IS unit
• Emphasize evaluation of the IS unit from the
  standpoint of a critical unit
• Do not emphasize the importance of information
  modeling

• Boar (1993)
• View the IS department as a strategic unit and as
  a collection of related business having (1) a
  distinct mission (2) a clear set of customers or
  market (3) a set of competitors (4) a set of
  products (5) a profit and loss responsibility
  and (6) a distinct management team

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IS Strategic Planning

• Developing a customized IS planning methodology
• Each ISSP method has its own specific philosophy,
  steps, techniques, and methods
• A general framework of ISSP elements is provided
  by drawing from the various methodologies and
  should be considered for incorporation in any
  ISSP effort

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IS Strategic Planning

• Developing a customized IS planning methodology

• Top management understanding and support
• Without the support from executive management, no
  IS strategic planning will be successful
• Top management must understand the value of ISSP
  process in two perspectives
• New business opportunities can be identified and
  exploited by the use of IT
• IT should be deployed do that the critical
  business functions are enhanced

• View of IS as a strategic business unit
• Not merely a support unit for other business
• Strategic planning techniques and analyses used
  to develop overall business plan must also be
  applied to IS unit
• An external analysis for IS should also be
  assessed

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IS Strategic Planning

• Developing a customized IS planning methodology

• Integration of the strategic plans of the
  business and IS
• IS planning should be integrated into the
  business strategic planning process (Goldber
  Sifonis 1994)
• In the worst case, at least the IS can support
  the business requirements of high priority areas
• An understanding of the competitive forces,
  threats, and opportunities from a business-wide
  perspectives will be useful in identifying areas
  in which IT can provide competitive advantage

• Development of an enterprise-wide information
  model
• The model of entity relationships that provides
  the foundation for integration of all enterprise
  IS
• Its a high-level general description of the
  relationship between organization entities
• An entity is any person, object, or abstraction
  concept about which data are stored
• This type of modeling ensures that all
  enterprise-wide IS conforms to the same data
  definitions so that data can be easily exchanged
  from one IS to another within the organization

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IS Strategic Planning

• Developing a customized IS planning methodology
• Conclusion
• Table 4-3 provides an outline of functions that
  may be used for ISSP development
• Not necessary performed sequentially, for example
  the internal and external IS analyses and
  identification of strategic goals and threats can
  be performed concurrently
• Table 4-4 is a generic outline for an IS plan.
  Actually IS plan will vary from organization to
  organization

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Table 4-3.Elements of Development of an ISSP
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Table 4-4. Generic Outline of an Information
System Strategic Plan
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The Health Information Managers Role in
Strategic IS Planning

• The health information manager possesses a skill
  in data retrieval and knowledge of databases that
  can be helpful to external analyses efforts
• Participate in both overall business planning
  strategy and the IS strategic planning process
• Internal and external business analyses
• Internal and external analyses of IS unit