CISB444 - Strategic Information Systems Planning Chapter 4 : IS/IT Strategic Analysis: Assessing and Understanding the Current Situation

CISB444 - Strategic Information CISB444 - Strategic Information Systems PlanningSystems Planning

Chapter 4 : Chapter 4 : IS/IT Strategic Analysis:IS/IT Strategic Analysis:

Assessing and Understanding theAssessing and Understanding theCurrent SituationCurrent Situation

Chapter 4 : Main TopicsChapter 4 : Main Topics

• Techniques for Interpretation and Analysis• Information Requirements in meeting the Current

Business Objectives - using Critical Success Factors and Balanced Scorecards techniques

• Business Process Analysis• Evaluating the Gap between Current and Required

IS/IT Environments

CISB414 - Strategic Information Systems PlanningCISB414 - Strategic Information Systems Planning 22

Business Process Re-engineeringBusiness Process Re-engineering

• Business process re-engineering (BPR) is about taking a fundamental look at how the company operates.

• The focus of BPR is not on efficiency– Taking what is already being done and doing it

better• BPR focus on effectiveness and innovation– Are we doing what we should be doing in the first

place?


Business Process Re-engineeringBusiness Process Re-engineering

• BPR identifies key business processes and ensures that these processes are designed to be as effective and efficient as possible

• The role of BPR increases as IT/IS are increasingly embedded in organisational operations or in the product/service being produced

• Business processes are being transformed using IT


The integration of IS/IT and BPRThe integration of IS/IT and BPR


Assessing and Understanding theAssessing and Understanding theCurrent SituationCurrent Situation

• Involves obtaining an in-depth understanding of the :– business strategy,– business and technology environments, and– current status of IS/IT in the business

• This is vital, because the current situation represents the starting point for any changes


Fact Finding and Analysis Tasks and DeliverablesFact Finding and Analysis Tasks and Deliverables


Fact Finding and Analysis Tasks and DeliverablesFact Finding and Analysis Tasks and Deliverables


Fact Finding and Analysis Tasks and Fact Finding and Analysis Tasks and DeliverablesDeliverables


Interpreting the Business StrategyInterpreting the Business Strategy

• Internal Business Environment– The current business processes, activities and the main

information entities (e.g. customer, stock item, account) and how they relate to other entities

– The organisational environment, covering its structure, assets and skills, and the less tangible factors such as knowledge, competencies, values, style, culture and relationship


Interpreting the Business StrategyInterpreting the Business Strategy

• External Business Environment– It is essential to understand and analyse the environment,

so that opportunities for IS/IT to impact the business and contributing to the shaping of the business strategy can be identified and explored.


Examining the Current IS/IT Environment Examining the Current IS/IT Environment (Internal)(Internal)

• In order to assess and prioritise IS actions, it is also necessary to examine the current IS/IT environment

• Questions need answers:– To determine whether the infrastructure can sustain the

changes required or itself needs changing.– An evaluation of the current IT services and resources– To establish the gaps which relate to the targeted portfolio,

either by enhancement of existing applications or by developing new ones.

– To establish a business manager’s perception of the role and current effectiveness of IS/IT


Examining the Current IS/IT Environment (Internal)Examining the Current IS/IT Environment (Internal)

• The assessment of IS/IT is conducted in the context of what the business wants to achieve.

• The current application portfolio– Represents the starting point from which future development

will begin– A key determinant of how the business community in the

organisation perceives the value and contribution of IS/IT


Examining the Current IS/IT Environment Examining the Current IS/IT Environment (external)(external)

• Examination of the external IT environment enables the strategist to take account of trends and opportunities from emerging technologies and to investigate how competitive or complementary organisations are applying IT.

• This will lead to a more objective appraisal of current effectiveness, as well as to new ideas for potential application of IT.

• This outer view is also useful to obtain measure of the relative maturity of the business’s own IS/IT contribution.


Techniques for Interpretation and AnalysisTechniques for Interpretation and Analysis






Information Requirements to Meet the Current BusinessInformation Requirements to Meet the Current BusinessObjectives: The Use of Critical Success Factors andObjectives: The Use of Critical Success Factors and

Balanced ScorecardsBalanced Scorecards

• In combination, they provide a way of obtaining agreement as to the priority of IS investments relevant to achieving the business objectives for the next 6-12 months.


The Balanced Scorecard identifies the information required to measure performance against the business objectives.

CSF analysis identifies what has to be done, or changed, in order to achieve the objectives, including new information and/or systems needed.

Balanced ScorecardBalanced Scorecard

• Developed by Kaplan and Norton (1996, 2001)• Based on the premise that financial measures only report the

results of past decisions and that, if performance measurement is to have any real meaningful impact, a more balanced set of objectives and measures is required.


Balanced ScorecardBalanced Scorecard

• Promotes the examination of performance from 4 interrelated perspectives:

– Financial: How do we look to our shareholders and those with a financial interest in the organisation? (shareholder value, revenue per employee etc)

– Internal business perspective: What do we have to excel at if we are to meet the expectations of our employees and trading partners? (productivity, quality, cost effectiveness and cycle time)

– Customer perspective: How do our customers perceive us in term of products, services, relationships, and value-added? (How do customers perceive us. 4 categories - time; quality; performance and service; and cost)

– Innovation and learning perspective: To achieve our future vision, how will we continue to improve and create future value for our stakeholders? (how well does an organisation learn from the past)


Critical Success Factor AnalysisCritical Success Factor Analysis

• CSF analysis is used for the purpose of interpreting the business objectives in terms of:– actions required to achieve them– the key information and application needs of the

organisation and its managers– for assessing the strengths and weaknesses of

existing systems



• Definition:– The limited number of areas in which positive results

will ensure successful competitive performance for the organisation (Rockart,1979).

- They are the few key areas where ‘things must go right’ for the business to flourish.



• The determination of CSFs should only be started when objectives have already been identified.

• First stage: to identify CSFs against each objective• Second stage: to consolidate them across objectives, since

many CSFs will recur• Third stage: the importance of information or systems in

achieving those CSFs should be considered.• Important questions to consider:– How can IS/IT help achieve the CSFs?– How do existing systems restrain achievement of CSFs?


The Use of Critical Success Factors andThe Use of Critical Success Factors andBalanced ScorecardsBalanced Scorecards

• The outputs from the construction of the Balanced Scorecard and the CSF analysis can be combined to provide a more comprehensive set of IS requirements.


Business Process AnalysisBusiness Process Analysis

• Business process analysis is a technique for assessing the effectiveness of core business processes in support of business objectives

• The assessment of business processes is aimed at defining the areas where the greatest opportunities exist to improve performance.

• Ultimately, as a result of process analysis, a decision may be made to embark upon major redesign of one or a number of business processes.


Evaluating the Gap Between Current and RequiredEvaluating the Gap Between Current and RequiredIS/IT EnvironmentsIS/IT Environments

• The IS/IT requirements that results from this process form the basis of a framework within which we can critically assess the IS strategy itself.

• It consists of candidate developments to build or enhance applications and schemes to upgrade the provision of IT resources.

• The IS demand is the main deliverable to come out of the analysis of the current situation and the business needs, stemming from its strategy and the collection of demands from the current business operations.

• The assessment of the current IS/IT environment indicates the capabilities of existing IS/IT resources in relation to the known business strategy.


Evaluating the Gap Between Current and RequiredEvaluating the Gap Between Current and RequiredIS/IT EnvironmentsIS/IT Environments

• The gap between the current resources and competencies and those needed to satisfy the future IS demand identifies the requirement for change:– Processes in need of recognition, simplification, streamlining or

redesign – all with significant IS/IT requirements– New or upgraded information resources– Changes in IT supply resources and competencies to support the

role IS/IT needs to play.• By analysing the coverage of systems across the core business

processes, it is possible to consider and compare a disparate set of information systems requirements across the whole organisation and put them into proper context related to the benefit to the business.


SummarySummary

• To establish a strategic information systems planning, it is important that some analysis is conducted on the current business and technology situation

• Facts finding should cover understanding of – business strategy, – business and IT/IS environment (external and internal)

• There are different techniques to interpret and analyze businesses – we are looking at Balanced Scorecard analysis and Critical Success Factor Analysis, what are they and how do we use them?


Documents

CISB444 - Strategic Information Systems Planning Chapter 4 : IS/IT Strategic Analysis: Assessing and Understanding the Current Situation