IS & KM (INFO 640) L2: IS Planning GP Dhillon, PhD Associate Professor of IS School of Business, VCU

IS & KM (INFO 640)IS & KM (INFO 640)

L2: IS PlanningL2: IS Planning

GP Dhillon, PhDGP Dhillon, PhDAssociate Professor of ISAssociate Professor of ISSchool of Business, VCUSchool of Business, VCU

Inputs to IS planning Inputs to IS planning

Competitiveanalysis

Value Chainanalysis

Mission; CSFs

Data flowmodel

Strategic options

Organizationmodel

External BusinessEnvironment

Internal BusinessEnvironment

External ISEnvironment

Internal ISEnvironment

A Portfolio of ISApplications

Expanding the portfolio - aExpanding the portfolio - a

Degree of dependence of the business on IS/IT application in achieving overall business performance objectivesH L

H

L

Pot

enti

al c

ontr

ibut

ion

of I

S/I

T a

ppli

cati

onto

ach

ievi

ng f

utur

e bu

sine

ss g

oals

Corporate Local

Strategic (attack) High Potential (Beware)

Key Operational (Explore) Support (Safe)

Opportunity seekingCritical Success FactorsDemand Management

Supply ManagementOpportunity taking

Current problem solving

Competitive/Effectiveness focus

Complex - organizational planning, ideal,multiple methods based ongoal seeking- coalition

Competitive focus (Proactive)

Federation - Business ledDecentralization, Entrepreneurial orTechnology driven

Backbone-Integrated (top down)Planning, Centralized control

Reactive- CurrentEffectiveness Focus

Traditional- Stage of growth, isolate applicationsdecentralized control

Reactive-Technology focus- Efficiency focus

Business issuedriven

IT issuedriven

Expanding the portfolio - bExpanding the portfolio - b

High PotentialStrategic

Key Operational Support

Applications which are critical to

achieving futurebusiness strategy

Applications upon which the

organization currentlydepends

Applications which are valuable but

not critical tobusiness success

Applications whichmay be importantin achieving futurebusiness success

High potential applicationsHigh potential applicationskey featureskey features

A new business idea or technological opportunity

The rapid evaluation of prototypes, withan ability to reject failures, before they waste resources

An individual initiative in one part of the business, the idea being owned by someonewho champions it

The objective, which is to demonstrate the value, and then decide whether and how to exploit it for business

To understand the potential of theapplication in relation to the businessstrategy and the likely economic s

To identify the best way to proceed - what to do next, how that should be done and by whom

Driving forces Requirements

Strategic applicationsStrategic applicationskey featureskey features

Market requirements and/or competitive pressures, essentially externally driven (perhaps by suppliers or customers)

Rapid development to meet the businessobjective, and realize the business benefits within the window of opportunity

Business objectives, success factorsand management vision of how to achieve them

Obtaining an advantage and then sustaining it by further developmentsif possible

A flexible solution which can be adapted further to meet changes in the business environment

Links to an associated business initiative or change to sustain the business commitment to IS development


Key operational applicationsKey operational applicationskey featureskey features

Improving the performance of existingactivities, in terms of speed, accuracy,effectiveness and economies

High quality solutions and effective data management, to ensure a degree of stability and reduced costs of change over time

Integrating systems and data to avoidmisinformation and duplication of tasks, to minimize the risk of activities being inconsistent or ineffective

Avoiding a business disadvantage or preventing a business risk frombecoming critical

Balancing costs with benefits and business risks, to identify the best solution to the business problem

The evaluation of options available to select the most effective, by means of an objective analysis of the feasible alternatives


Support applicationsSupport applicationskey featureskey features

Improved productivity and efficiencyof specific (often localized) existing tasks

Lowest cost, long term solutions which often lead to package software and evencompromising user needs to the solutions available

Legal requirements which have to bemet to avoid prosecution

Most cost effective use of IS funds and resources, to find the most business efficient solution

Avoiding obsolescence by evolutionat the pace of the IT industry

Objective cost benefit analysis to reduce financial risk, and ensure the costs of development are easily controlled


Application portfolio in different IS/IT environmentsApplication portfolio in different IS/IT environments

ComplexOpportunistic

Traditional Backbone

Dif

f us i

o n(A

b ili

ty t

o d e

v ol v

e IS

/IT

de c

i sio

ns)

Infusion (impact of IS/IT on a business)L

L

H

H

St Hp

Ko Su

St Hp

Ko Su

St Hp

Ko Su

St Hp

Ko Su

Application portfolio Application portfolio

Application portfolio Application portfolio

Key questions in an application Key questions in an application portfolioportfolio



Why? - not clear

What? - not certain

How? - not yet known

Why - do we want to doit in strategic terms?

What - does the system need to do for competitive advantage?

How - best to do it?

Why - to improve performance?

What - actually has to improve?


Why - to reduce cost?

What - of existing tasks?


Things to do in an application portfolioThings to do in an application portfolio

High Potential(Wild cats)

Strategic(Stars)

Key Operational(Cash cows)

Support(Dogs)

Process R & D

Minimal integration

Cost control

Continuous innovation

Vertical integration

High Value added

Defensive innovation

Effective resource utilization

High quality

Disinvest/rationalize

EfficiencySustained quality

Managing the evolution of an application over timeManaging the evolution of an application over time



Lose: individual ownership and freedom

Gain: senior management support;IT involvement;

project management

Re-engineer for long termuse

Fully integrated with other applications for effectiveness

Re-evaluate benefitsand costs

Return tostandards

Evaluate lower cost optionsto meet core needs

Avoiding the disintegration of the Avoiding the disintegration of the portfolioportfolio



How to resource andmanage?How to justify and reap benefits from business changes?How to ensureappropriate linkagesetc to avoid enormous rework later?

How to evaluate and select/reject?How to convert to strategic? Or restrict further risk?

How to release resources and ensure existing systems and infrastructure will support the strategic applications?

Business initiativesIndividual initiatives

Lack of definitionbetween HP and Support

Decisions aboutwhich to exploit

and when

Provision of resources

How and when to consolidate

Implementing IS PlansImplementing IS Plans

Organizational structuresOrganizational structuresbasic choicesbasic choices

Centralized StructureCentralized Structure One line manager directly responsibleOne line manager directly responsible Defined corporate wide procedures and controlsDefined corporate wide procedures and controls Data administration under singular controlData administration under singular control

Decentralized StructureDecentralized Structure Several individuals work independent of each otherSeveral individuals work independent of each other Each unit may conduct independent analysis and Each unit may conduct independent analysis and

designdesign Special purpose d/b and applications at each unitySpecial purpose d/b and applications at each unity

CentralizedCentralized

V P A d m in is tra t ion V P M an u fac tu rin g

P u rch as in g P ayro ll A ccou n tin g IS

V P F in an ce V P M arke tin g

C E O

DecentralizedDecentralized

IS D irec to r

V P D ivis ion A

IS D irec to r

V P D ivis ion B

IS D irec to r

V P D ivis ion C

C E O

Rationale for choosing particular Rationale for choosing particular organizational structuresorganizational structures

Central coordination of all requirements will Central coordination of all requirements will produce better decision makingproduce better decision making

Technology can create business advantages Technology can create business advantages and risks are worth takingand risks are worth taking

Market makes the best decision and users are Market makes the best decision and users are responsible for business resultsresponsible for business results

Information is a corporate good and a key Information is a corporate good and a key resource for users to employresource for users to employ

InformationInformation is a limited resource and its is a limited resource and its development must be clearly justifieddevelopment must be clearly justified

Rationale cont/- Rationale cont/-

Central coordination of all requirements will Central coordination of all requirements will produce better decision makingproduce better decision making

Technology can create business Technology can create business advantages and risks are worth takingadvantages and risks are worth taking

Market makes the best decision and users Market makes the best decision and users are responsible for business resultsare responsible for business results

Information is a corporate good and a key Information is a corporate good and a key resource for users to employresource for users to employ

Information is a limited resource and its Information is a limited resource and its development must be clearly justifieddevelopment must be clearly justified

Centrally planned

Leadingedge

Freemarket

Monopoly

Scarceresource

The ‘rationale’ takes the form of generic

information systemsimplementation strategies

Generic strategies and the Generic strategies and the application portfolioapplication portfolio



Leading edgeFree market

Free marketScarce resource

Centrally planned

Monopoly

Centralized Decentralized

Resourcing applicationsResourcing applications



Matrix/Team structure

Functional Structure withtask separation

Cross functional structurewith multi-skill resourcing

Individual initiative - competitive

Documents

IS & KM (INFO 640) L2: IS Planning GP Dhillon, PhD Associate Professor of IS School of Business, VCU