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3. Introduction to Strategic Information Systems Planning (SISP)

• Title: Strategic Information Systems Planning

– Historical development of IS

– Define SISP and its purpose

– Business/IS Strategy linkage

– IS Strategy problems

– IS,IT and IM

– Traditional Vs Sense and Respond Approach

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• Strategic Potential of IT

• Replacing The Legacy Systems of today with ?

• Linking IT/IS Strategy With Business Strategy

• IT Architecture

• Strategic Information Systems

• Sustainable Competitive Advantage

IS/IT Issues

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Strategic Use Of IS/IT

• CHANGE WHAT THE COMPANY DOES• PRODUCTS• SERVICES (Manchester buses - wireless)• DELIVERY CHANNELS (www)

• CHANGE HOW THE COMPANY OPERATES• ORGANISATION • DECISIONS• COMMUNICATIONS

• CHANGE PATTERNS OF INVESTMENT• MORE INVESTMENT FOR MARKET LEADERSHIP

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Strategic Potential of IT

• To gain competitive advantage• To improve productivity and performance• To enable new ways of managing and

organising• To develop new businesses • To change distribution channels

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IS Historical Development

• Historically IS planning has been neglected– Systems have been developed to meet individual function or department

needs (applications planning)

– The companies IS Strategy was simply a dept aggregation...

– Traditional IS Planning was on a project by project basis

– No coherent corporate or SBU IS/IT plan in place

– IS had minimal influence on Business Strategy

• Failures– incompatible systems, poor functional IT and business integration, financial

losses, lost business opportunities (for SIS)

– implementation lags, continuous management fire-fighting

– customer dissatisfaction

• If we fail to plan for IS, then we plan to fail with IS !

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IS Strategy Linkage

• The IS Strategy must be linked to the business strategy. Possible linkages are– The IS strategy may be aligned with the

business goals by translating them into IS goals– The IS strategy may impact on the business

goals by competitively enhancing them– The IS strategy may require the redesign of

business processes in order to achieve the business goals

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IS Portfolio

• Mandatory• Strategic• Traditional• Infrastructure• Renewal• R & D• Maintenance

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IS Strategy Positioning

Business Strategy

Divisional Strategy Divisional Strategy Divisional Strategy

Production Strategy IS Strategy Marketing Strategy

IT Strategy Manual Systems Strategy Communications Strategy

Software Hardware Planning Staffing Data Voice

Policies, implementation decisions

Robson, ch 4, page 96

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Strategic Information Systems Planning (SISP)

• Definition– Strategic systems planning deals with

planning for the use of IT for strategic purposes.

– It attempts to form a view of the future 3 to 5 years out to help determine what should be done now.

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SISP contin…

• Objectives– To identify strategic applications– To develop an organisational IS architecture– To Identify new applications which provide a

greater return on investment– To determine more opportunities for improving

information systems provision– To improve resource requirements forecasting– To improve communications with users

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SISP contin..

• Some fundamental reasons why IS planning is difficult include:– Business goals and System Plans need to

Align– Technologies are rapidly changing– Companies need portfolios rather than

projects– Infrastructure development is difficult to fund– Responsibility needs to be joint– Other planning issues

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Traditional ApproachThree Levels of Strategy

IS STRATEGY•Division/Function•Demand Oriented•Business Focussed

IT STRATEGY•Activity based•Supply oriented•Technology focussed

•IM STRATEGY•Organisation Based

•Relationships Oriented•Management Focussed

How?

What?

Architecture

Applications

Delivery

ManagementWhere?

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IS STRATEGY

• The long term directional plan which determines what to do with IS

• It is concerned primarily with aligning IS development with business needs and with seeking strategic advantage from IS

• It is formulated at the level of the SBU or the level of business where specific customer needs, unique competitors and autonomous resources can be delineated

• In large complex organisations there may be more than one IS strategy.

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IT STRATEGY

• The technology framework or architecture which drives, shapes and controls the IT infrastructure to support the IS strategy

• The IT strategy is concerned primarily with technology policies

• It deals with questions of architecture,vendor policies and technical standards

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IM STRATEGY

• The management framework( i.e. the policies procedures aims and actions) which guides how the organisation should run IS/IT activities.

• The IM strategy is concerned with

– the role and structure of IT activities in the organisation

– management controls for IT, performance measurement and management processes

– wherefore-which way?,who does it?,where is it located?

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AN INFORMATION MANAGEMENT MODEL

PLANNING

CONTROL ORGANISATION

MANAGING THE IT FUNCTION

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Problems in IS Planning

• Inadequate Business Plans• Agreeing Priorities• Lack of Planning Experience• Rate of Business/User Change• Organisation Structure• Discovering Competitive Advantage• No Standards for what an IS strategy plan should

contain

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Traditional IS Planning Assumptions

• Traditional stance based on assumptions:– The future can be predicted– Time is available to progress through this 3 part

sequence– IS supports and follows the business– Top management knows best, because they have

the broadest view of the firm– The company can be viewed as an army:

• * due to the internet etc, these assumptions no longer hold true

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Sense and Respond Approach

• What came out of this is a move towards a new approach:– Let strategies unfold rather than plan them

• e.g. Microsoft

– Formulate strategy Closest to the Action• E.g. Skandia

– Guide strategy making with a strategic envelope• E.g. Shell

– Be at the table– Test the future– Put the infrastructure in place

• Case Study - Microsoft

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Where are we today?

Where do we want to go?

How do we get there?

Assessment of

current technology & IT organisation

Benchmarking competitors and IT trends

Business directions

IT opportunities

IT strategic direction

IT architecture

IT deployment plan

Projects

Quick Hits

IT organisational

alignment plan

SISP

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Toolkits for Strategic Planning

• There is a range of tools and techniques which have been developed to assist in formulating an explicit business strategy

• Similarly there is a range of tools, techniques and principles to guide management in exploiting IS for strategic advantage.