Making the Business Case

Achieving Strategic Alignment

Why

Establish team credibility Sell the project

New project Pilot project

Support design trade-off decisions Define evaluation metrics

What is the business case?

Alignment: How does the project fit into organization goals?

Impact: Where does the project impact organization processes?

Contribution: What contribution does the project make?

Metrics: How will we define success?

Strategic View:Who is the organization? Vision Mission Objective Tactic

Tactical Alignment

Business Objective

Business Tactic

IT Objective

IT Tactic

Firm Infrastructure(general management, accounting, finance, strategic planning)

Human Resource Management(recruiting, training, development)

Technology Development(R&D< product and process improvement)

Procurement(purchasing of raw materials, machines, supplies)

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InboundLogistics(rawmaterialshandlingandwarehous-ing)

Operations

(machineassembling,testing)

OutboundLogistics(warehous-ing anddistributionof finishedproduct)

Service

(installation,repair,parts)

Marketingand Sales(advertising,promotion,pricing,channelrelations)

Value Chain Model Chain of basic activities that add to

firm’s products or services Products can be services or goals

(particularly for public organizations) Each product has its own value chain

Primary activities Secondary activities

Value Chain Primary Activities Inbound Outbound Operations Marketing and Sales After-Sale Services

Value Chain Support Activities Technology development Procurement Human Resources Management Management Control

accounting/finance coordination general management central planning

Generic System Contributions

Automate* Informate*

Up Down

Transform* Discover

* Scott Morton (1991); and S. Zuboff, In the Age of the Smart Machine (New York: Basic Books, 1988).

Automation Information Systems

Replace human effort with machine effort Reduce the number of workers Expand the amount of work that can be done by

the current work force Expandable and non-expandable tasks

Move the automation boundary Improved accuracy Customer empowerment

Improve organization response time Increase focus on core competencies

Informating Information Systems

Provide information to upper management Reduce the layers of management Improve the span of control Improve decision making ability

Provide information to operational personnel Empower workforce

Transformational Information Systems Radical changes in an organization’s

business processes (Business Process Reengineering)

Radical changes in an organization’s structure

Radical changes in an industry’s value streams

Business Process Reengineering (BPR)

Completely changes manner in which business is done

Fewer steps, shorter cycle times Complete, more expert handling of events Not incremental improvement Typically uses IT as an enabler Involves discontinuous thinking

Characteristics of BPR

Combining jobs Empowering employees Jobs done simultaneously Customizing product/service Work performed where most logical Single point of customer contact

Transformational Information Systems

Radical changes in an organization’s structure reduce layers of management empower front-line workers loosely couple work units

Radical changes in an industry’s value streams disintermediation create new markets