6. Determining IS Strategy

1
6. Determining IS Strategy

• Overview of IS planning process
• Framework for IS planning process
• Appraise IS relationship to business
• Determine short-term IS investments
• Identify long-term IS investments
• Multi-business unit organizations

2
Overview of IS Planning Process
Internal business environment
External business environment
External IS environment
Internal IS environment
Critical success factor analysis
Business process analysis
Product portfolio analysis
Competitive forces analysis
Strategic options generator
Organizational modeling
Value chain analysis
Value system analysis
Creative thinking
Applications portfolio
Resource life cycle analysis
High potential
Strategic
Opportunistic thinking
Key operational
Support
3
Framework for IS Planning Process
Understand business and structure of industries
Interpret business objectives and strategy
Consider potential IS impact on industry
Analyze value system and external information flow
Determine areas critical to business success
Consider potential of IS to change business
Analyze value chain and internal information flow
Identify critical business processes and
activities
Identify options for long-term IS investments
Analyze existing IS contribution to business
Determine focus of short-term IS investments
Existing
Required
Potential applications portfolio
4
Appraise IS Relationship to Business

• Characteristics of key players in the industry
• Strength-weakness-opportunity-threat analysis and
  product portfolio analysis

Understand business and structure of industries

• Current information flow (role of IS) among key
  players in the industry
• Value system analysis

Analyze value system and external information flow

• Current information flow (role of IS) among key
  business activities
• Value chain analysis

Analyze value chain and internal information flow

• External and internal information flow that can
  be improved using IS
• Creative thinking and opportunistic thinking

Analyze existing IS contribution to business

• IS currently in place or being developed
• 0 to 6 month time frame

Existing applications portfolio
5
Determine Short-Term IS Investments

• Things that the business may do, wants to do,
  must do, and can do
• Organizational modeling

Interpret business objectives and strategies

• Link IS and business strategies (with management
  involvement)
• Critical success factor analysis

Determine areas critical to business success

• Key activities are high value adding or high cost
  or linked to critical success factors
• Value chain analysis

Identify critical business processes and
activities

• Focus on key activities that can produce
  immediate benefits
• Creative thinking and opportunistic thinking

Determine focus of short-term IS investments

• IS that can make specific business contribution
• 6 to 12 month time frame

Required applications portfolio
6
Identify Long-Term IS Investments

• Bargaining power of customers and suppliers, and
  threat of competitors
• Strategic options generator and resource life
  cycle analysis

Consider potential IS impact on industry

• Possible impact of IS strategy on future business
  strategy and activities
• Value chain analysis and value system analysis

Consider potential of IS to change business

• IS options to change industry dynamics and
  improve the position of the business
• Strategic thinking and opportunistic decision
  making

Identify options for long-term IS investments

• IS that may make strategic business contribution
• 1 to 3 year time frame

Potential applications portfolio
7
Multi-Business Unit Organizations
Corporate headquarters
Business unit 3
Business unit 2
Business unit 1

• Strategic applications
• Capitalize on strategic benefits gained through
  applications

• High potential applications
• Communicate ideas and results of prototype
  evaluations

• Support applications
• Constrain by sharing applications and
  standardizing resources

• Key operational applications
• Control transfer of experience in usage of
  applications

8
Multi-Business Unit Organizations

• Benefits that can be derived from consolidation
  of applications depend on whether business units
• Compete in similar or comparable industries
• Are in similar competitive positions
• Have similar customers or suppliers
• Trade with each other
• Carry out similar business activities
• Have comparable objectives and strategies
• Must follow organization wide standards
• Have similar support activities