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Aris Tjahyanto. PSSI. 1 arist@its-sby.edu

What is Strategy?

Consists of the combination of competitive moves

and business approaches used by managers to run

the organization

Management‟s “game plan” to:

Attract and please customers

Stake out a market position

Compete successfully

Grow the business

Achieve targeted objectives

The Role of Strategy

Corporate Mission & Objectives

Strategy: Corporate Business Functional

Operating Plans

A Company‟s Strategy Is Partly

Proactive and Partly Reactive

strategy --> evolve

A plan

A plan is the articulation of strategic choices, which

provides information on how an organization

intends to achieve its priorities and associated

results.

Planning Strategic Planning

Deals with the development of an organization‟s

mission, goals, strategies, and policies

Begins with strategic visioning questions

Tactical Planning

The setting of objectives and the development of

procedures, rules, schedules, and budgets

Operational Planning

Done on a short-term basis to implement and control

day-to-day operations

What is Strategic Planning?

Strategic planning is a disciplined effort to produce

fundamental decisions and actions that shape and

guide what an organization is, what it does, and why

it does it, with a focus on the future.

(Bryson's Strategic Planning in Public and Nonprofit Organizations)

What is Strategic Planning?

Proses untuk menentukan program- program yang

akan dilakukan beserta alokasi sumber daya pada

setiap program pada beberapa periode yang akan

datang

Strategic information systems plan

A vision with directional statements and comprises

a set of both broad and detailed guidelines that

provide a framework for strategic, tactical and

operational decision-making. An IS Strategy

should also clearly link the IS goals to the

strategy of a business, and provide a detailed

blueprint for acquisition, development,

deployment and retirement of IS/IT assets over a

multi-year time horizon. (Long et al, 2003)

Type of IS Strategy

●Information Systems strategy : Focuses on systems or business

applications of IT and is primarily concerned with aligning

business needs to derive strategic benefits

●Information Technology strategy : Concerned with technology

policies including architecture, technical standards, security levels

and risk attitudes

●Information Management strategy : Concerned with roles and

structures for the management of IS and IT, and is focused on issues

such as relationships between the specialists and users, management

responsibilities, performance measurement processes and

management controls

IS Strategic Plan

●Proses memutuskan sasaran organisasi SI/TI dan

mengidentifikasi aplikasi SI/TI potensial yang harus

diimplementasikan oleh organisasi secara

keseluruhan. (Lederer & Sethi)

●Proses identifikasi portofolio aplikasi berbasis

komputer untuk diselaraskan dengan strategi

perusahaan dan memiliki kemampuan untuk

menciptakan keunggulan atas para pesaing.

Sasaran umum IS Strategic Plan

●Menyelaraskan SI/TI dengan bisnis guna mengidentifikasikan

di mana SI/TI memberi kontribusi paling besar, dan penentuan

prioritas investasi

●Memperoleh keunggulan kompetitif dari peluang bisnis yang

diciptakan dengan memanfaatkan SI/TI

●Membangun infrastruktur masa depan yang fleksibel dan hemat

●Memperkuat sumber daya dan kompetensi dalam

memanfaatkan SI/TI dengan sukses di organisasi.

IS Strategic Plan

●Application Architecture Strategic Planning: Comprises the set of IT

applications (bought or built) that delivers the business process, and

technology that integrates the various applications and links them with a

coherent data model

●Technical Architecture Structure Planning: the technical architecture is

the foundation upon which the application architecture was built. The

technical architecture should be further decomposed into “layers”, such as

applications systems, database, IT service, network and platform.

●Organizational Strategic Planning: the organizational

architecture is the remaining component, which is important but often

ignored in practice. The organizational architecture refers to the IT

organizational structure, as well as the set of management process or

governance rules.

IS Strategic Plan Application Architecture

Technical Architecture

●Application system,

●database, network,

●etc.

Organisational Structure

Application Portfolio

Project Portfolio

Strategic Planning Process

Strategic Direction :

Vision

Mission

Values

Strategic Analysis (Internal and

External Analysis) :

Force Field Analysis

Goals Gris

Action (Operational) Planning :

Objectives

Strategies to achieve these

Objectives

Long Term Goals

Short Term Goals

Action Plan

4 Questions of Strategic Planning

Where are we now? (AS-IS)

Where do we want to be?

(TO-BE)

How do we get there? How will we

close the gap (Strategic Plan)

How will we monitor our progress

(Balanced Scorecard)

Where Are We Now?

Where Do We Want To Be?

How Do We Get There?

How Do We Measure Progress?

4 Questions of Strategic Planning

A Good Strategic Plan should . . .

●Address critical performance issues

●Create the right balance between what the organization is

capable of doing vs. what the organization would like to do

●Cover a sufficient time period to close the performance gap

●Visionary – convey a desired future end state

●Flexible – allow and accommodate change

●Guide decision making at lower levels – operational, tactical,

individual

Strategic Plan Components

Mission

Vision

Objectives

Measures

Why we exist

What we want to be

Indicators and

Monitors of success

Desired level of performance and timelines

Planned Actions to

Achieve Objectives

AI1 AI2 AI3

M1 M2 M3

T1 T1 T1

Specific outcomes expressed in measurable terms (NOT activities)

Strategic Plan

Action Plans

Evaluate Progress

Targets

Initiatives

What we must achieve to be successful

Define a Strategic IT Plan

COBIT PO1

●Output :

–Strategic IT Plan

–Tactical IT Plans

–IT project portfolio

–IT sourcing strategy

–IT acquisition strategy

PO1 Define IT Strategic Plan

●Strategic IT Plan

●Tactical IT Plans

●IT project portfolio

●IT sourcing strategy

●IT acquisition strategy

●Cost benefit reports

●Risk assessment

●Updated IT project portfolio

●Performance input to IT planning

●Report on IT governance status

●Enterprise strategic direction for IT

●Business strategy and priorities

●Programme portfolio

Input Output

Vision

... is the ability to “see”

where the organisation wants to go in the future

provides a “picture” of the future as seen through

the eyes of the clients, stakeholders, employees,

and the public.

framed by the Board and developed by the CEO

Importance of Vision

What do you expect from your leader?

1- Honest.

2- High IQ

3- Forward Looking……….VISION.

4- Experience.

5- Inspiring………….Related to Vision.

Mission

Description and purpose of the organization.

A mission statement succinctly identifies what the

organization is and why it exist

Developed by the CEO and Executive Team and

approved by the Board

Mission Statement

Statement must have what you do, for whom, and your

uniqueness

NASA: To Explore the Universe and Search for Life

and to Inspire the Next Generation of Explorers

DOT: Serve the United States by ensuring a fast, safe,

efficient, accessible and convenient transportation

system that meets our vital national interests and

enhances the quality of life, the American people, today

and into the future

Mission Statement

What business are you in?

Who are your customers?

What added value do you bring to your

customers?

How is your group distinctive and unique?

Values

Principles that shape your culture

Organizational Culture

A general set of attitudes, beliefs, customs, value

systems, behavioral norms, and ways of doing business

that set a general pattern for organizational activities

and actions

Values

Principles or standards considered inherently

worthwhile or desirable

The essence of one‟s philosophy for achieving success

Provides a sense of common direction and guidelines

for day-to-day behavior

Values

Examples of Values (DOT)

Professionalism: As accountable public servants, we

exemplify the highest standards of excellence, integrity,

and respect in the work environment

Teamwork: We support each other, respect differences in

people and ideas and work together in ONE DOT fashion

Customer Focus: We strive to understand and meet the

needs of our customers through service, innovation and

creativity. We are dedicated to delivering results that

matter to the American people.

Deploying Vision, Mission, and

Values

Dialogue and participation are key

Success comes with understanding and buy-in

Include in performance agreements

Communicate – listen, talk, act

Vision, Mission, Values

Vision is a snapshot of the future desired state

Mission describes your current purpose or business,

and uniqueness

Values are principles that shape the culture

All are key to successful achievement of Vision,

delivery of Mission

Strategic objectives

Strategic objectives are expected results with

specific targets for improved performance

(measure, target) in achieving long-term goals.

Strategic Initiatives

Strategic initiatives are specific courses of action

undertaken to accomplish goals and objectives of

the strategic plan.

Strategic Measures

Strategic measures or indicators are expressed in a

quantifiable form and indicate the degree to

which an organization is achieving its objectives

Early Views and Models of IS/IT

in Organizations

Three Era Model

The prime objective of using IS/IT in

the eras ● Data processing (DP)

– To improve operational efficiency by automating

information-based processes;

● Management information systems (MIS)

– To increase management effectiveness by satisfying

their information requirements for decision making;

● Strategic information systems (SIS)

– To improve competitiveness by changing the nature or

conduct of business (i.e. IS/IT investments can be a

source of competitive advantage).

The four main types of strategic

system ● Those that share information via technology-based systems

with customers/consumers and/or suppliers and change the nature

of the relationship;

● Those that produce more effective integration of the use of

information in the organization‟s value-adding processes;

● Those that enable the organization to develop, produce, market

and deliver new or enhanced products or services based on

information;

● Those that provide executive management with information to

support the development and implementation of strategy (in

particular, where relevant external and internal information are

integrated in analysis).

Different views of strategic

information systems

Success factors in strategic

information systems

● External, not internal, focus: looking at

customers, competitors, suppliers, even other

industries and the business‟s relationships and

similarities with the outside business world.

● Adding value, not cost reduction: although cost

reductions may accrue due to business expansion

at reduced marginal costs, „doing it better, not

cheaper‟ seems to be the maxim.

Success factors in strategic

information systems

● Sharing the benefits: within the organization,

with suppliers, customers, consumers and even

competitors on occasion.

● Understanding customers and what they do

with the product or service: how they obtain

value from it, and the problems they may

encounter in gaining that value.

● Business-driven innovation, not technology-

driven: the pressures of the marketplace drove

developments in most cases.

The relationship between business, IS

and IT strategies

An Applications Portfolio for the

„Combined Era‟

What is an is/it strategy?

● An IS/IT strategy is composed of two parts: an IS

component and an IT component.

● The IS strategy defines the organization‟s

requirement or „demand‟ for information and

systems to support the overall strategy of the

business.

● The IT strategy is concerned with outlining the

vision of how the organization‟s demand for

information and systems will be supported by

technology.

The strategic alignment model

Simple Model

● Analysis : the situation

analysis, self analysis,

environmental analysis

● Goal Setting : the goals

should conform to

objectives of the organization.

● Finding a path to attain the

goals and thus to objectives

Situation

Analysis

Goal setting

Finding

a path

Another Framework

Implementation

Internal

Analysis

External

Analysis

Control

Monitoring

Strategy Formulation

at various levels

Corporate Business Functional

Objectives

Vision

Mission

ABCDE Model

•Environmental Scan

Assessment

•Background Information

•Situational Analysis

•SWOT – Strength’s, Weaknesses, Opportunities, Threats

•Situation – Past, Present and Future

•Significant Issues

•Align / Fit with Capabilities

•Mission & Vision

•Values / Guiding Principles

•Major Goals

•Specific Objectives

•Performance Measurement

•Targets / Standards of Performance

•Initiatives and Projects

Baseline Components

•Performance Management

•Review Progress – Balanced Scorecard

•Take Corrective Actions

Down to Specifics Evaluate

Where we are Where we want to be How we will do it How are we doing

•Gaps •Action Plans •Feedback upstream – revise plans

S A R Model

Alternatives Analysis

Strategic Issues

Identifying Strategic Alternatives

Arguing For and Choosing a

Preferred Strategy

Recommendations

1. What is the current situation?

2. Where do we want to go?

3. How can we get there?

External Review Industry Analysis

Competitive Analysis Market Analysis Environmental

Analysis

Internal Review Financial Analysis

Strengths & Weaknesses

Opportunities & Threats

Short-Term Plans Goals & Objectives

Strategic Intent Programs

Contingencies

Long-Term Plans Goals & Objectives

Strategic Intent Programs

Contingencies

Situation Analysis

The Four Interrelated

Domains of COBIT

Plan and Organise (PO)

●Covers strategy and tactics, and concerns the

identification of the way IT can best contribute to

the achievement of the business objectives. The

realisation of the strategic vision needs to be

planned, communicated and managed for different

perspectives.

Plan and Organise (PO)

● PO1 Define a Strategic IT Plan

● PO2 Define the Information Architecture

● PO3 Determine Technological Direction

● PO4 Define the IT Processes, Organisation and

Relationships

● PO5 Manage the IT Investment

● PO6 Communicate Management Aims and

Direction

● ...

● PO10 Manage Projects

PO1 Define a Strategic IT Plan

● IT strategic planning is required to manage and

direct all IT resources in line with the business

strategy and priorities. The IT function and

business stakeholders are responsible for ensuring

that optimal value is realised from project and

service portfolios.

General Considerations

●Select an approach

●Timing

●Who does assessment?

●Communicate results

●Feedback/Action

Analysis of

current (AS-IS) IS/IT systems

must include:

●An evaluation of existing application portfolio and ones

which are in development process

●An evaluation of existing database and ones which are

being developed

●An evaluation of value of the existing IS/IT portfolio

●An evaluation of existing infrastructure

●An evaluation of technology usage policies

●An evaluation on IS/IT organization

Approach/tools/techniques

●Informal interviews

●Questionairre

●Statistically-based surveys

●SWOT-TOWS analysis

●Force field analysis

●PEST

●BSC

SWOT Analysis

External Assessment: Marketplace, competitor’s, social trends, technology, regulatory environment, economic cycles .

Internal Assessment: Organizational assets, resources, people, culture, systems, partnerships, suppliers, . . .

SWOT Analysis

Internal

External

Positive Negative

SWOT Analysis

Strengths – identifying existing organisational

strengths

Weaknesses – identifying existing organisational

weaknesses

Opportunities – what market opportunities might

there be for the organisation to exploit?

Threats – where might the threats to the future

success come from?

SWOT Analysis

● Gunakan kalimat yang menjelaskan kondisi atau

memotret AS-IS

● Gunakan kata benda atau keterangan atau sifat.

● Jangan gunakan kata kerja aktif

SWOT Analysis

How can we Use each Strength?

How can we Stop each Weakness?

How can we Exploit each Opportunity?

How can we Defend against each Threat?

SWOT-TOWS

S-O strategies pursue opportunities that

are a good fit to the companies strengths.

W-O strategies overcome weaknesses to pursue opportunities.

S-T strategies identify ways that the firm can use its strengths

to reduce its vulnerability to external threats.

W-T strategies establish a defensive plan to prevent the firm's weaknesses

from making it highly susceptible to external threats.

TOWS Matrix To develop strategies that take into account the SWOT profile

SWOT-TOWS Example

Force Field Analysis

Force Field Analysis is a useful technique for

looking at all the forces for and against a

decision.

PEST Analysis

A scan of the external macro-environment in

which the company wants to operate (or

operates) and can be expressed in terms of the

following factors:

Political

Economic

Social

Technological

PEST Analysis Political: local, national and international political

developments – how will they affect the organisation and in

what way/s? [regulations, political stability, ...]

Economic: what are the main economic issues – both

nationally and internationally – that might affect the

organisation? [economic growth, interest rate, ...]

Social: what are the developing social trends that may impact

on how the organisation operates and what will they mean

for future planning? [health, safety, ... ]

Technological: changing technology can impact on

competitive advantage very quickly! [technological change,

automation, ...]

Critical Success Factor

●CSF is defined : A feature of an organization or its

environment which, by its nature, has such an

impact on such an impact on success that its

tracking, measurement, achievement, or avoidance,

becomes critical to success

●Candidate CSFs: Political, environmental,

Customer, supply chain, People,

Industry/competitive, Cost drivers, Product

differentiation/development, ...

Critical Success Factors

●What are the few key areas of the job where things must go right for

the organization to thrive?

●What‟s going on right now in the organization that needs to be

addressed or may pose a serious threat in the future?

●How can we align IT to ensure CSFs are met?

●Examples – University

–Recruit top students

–Recruit and retain top professors

–Obtain funding for research

–Build and maintain strong relationships with alumni

Porter 5 Forces

Model of Competition

●To diagnose the principal competitive pressures in a

market and assess how strong and important each

one is.

Porter 5 Forces

The five forces that shape

industry competition

As rivalry among competing

firms intensifies, industry profits

decline, in some cases to the

point where an industry becomes

inherently unattractive.

Porter 5 Forces

Forces that shape and influence the industry or market the

organisation operates in.

Strength of Barriers to Entry - how easy is it for new rivals to

enter the industry?

Extent of rivalry between firms – how competitive is the

existing market?

Supplier power – the greater the power, the less control the

organisation has on the supply of its inputs.

Buyer power – how much power do customers in the industry

Threat from substitutes – what alternative products and

services are there and what is the extent of the threat they pose?

Value Chain

●Breaking down business or business area into

natural functions and processes, and the

investigating the means by which the process

interact

●The art of effective use of value chain analysis lies

in picking a fairly small but useful set of business

functions, and concentrating on those

customer/supplier links in accessible ways

Value Chain

●To better understand the organization's core

competencies and the activities in which it can

pursue a competitive advantage.

? ? ? ? ?

Contoh: competitive advantage = jurusan

dengan rata-rata masa studi 7 smt

Value Chain

Identification of

client’s

necessities

Satisfaction of

Client’s

necessities

Innovation

Process

Operation Process Post Sales

Process

Market identification

products / services definition

products / services creation

Delivery products and services Services to the clients

Porter‟s Value Chain Analysis

Balanced Score Card

BSC Example

From BSC to Aplication Portfolio

Six Generic Process Steps

1.Clarify organization‟s purpose

2.Assess external and internal environment and

customer needs/feedback

3.Identify strategic issues, outcome-related goals

4.Formulate strategies, actions to manage issues

5.Deploy plan

6.Evaluate progress – continuous improvement

Traditional IS/IT Planning

Types of Strategy

● Competitive Advantage – something which

gives the organisation some advantage over its

rivals

● Cost advantage – A strategy to seek out and

secure a cost advantage of some kind - lower

average costs, lower labour costs, etc.

Types of Strategy

● Reengineering – thinking outside the box –

looking at new ways of doing things to leverage

the organisation‟s performance

● Contraction/Expansion – focus on what you are

good at (core competencies) or seek to expand

into a range of markets?

● Delayering – flattening the management

structure, removing bureaucracy, speed up

decision making

● ...

The four main types of strategic IS/IT

● Share information via technology-based systems with

customers/consumers and/or suppliers and change the

nature of the relationship;

● Produce more effective integration of the use of

information in the organization‟s value-adding

processes;

● Enable the organization to develop, produce, market and

deliver new or enhanced products or services based on

information;

● Provide executive management with information to

support the development and implementation of strategy.

John Ward and Joe Peppard, 2002

A better way – outside in

● Need a shift in planning

approach from “inside-

out” to “outside-in”

● Strategic development

should start from the

“organizational edges”

(front line)

● Start with the customers

and front-line employees

Success factors in strategic IS

● External (not internal) focus: looking at customers,

competitors, suppliers, even other industries and the

business‟s relationships.

● Adding value (not cost reduction): „doing it better, not

cheaper‟ seems to be the maxim.

● Sharing the benefits: within the organization, with

suppliers, customers, consumers and even competitors on

occasion.

Success factors in strategic IS

● Understanding customers and what they do with the

product or service: how they obtain value from it, and

the problems they may encounter in gaining that value.

● Business-driven innovation, not technology-driven: the

pressures of the marketplace drove developments in most

cases.

● Incremental development, not the total application

vision turned into reality.

● Using the information gained from the systems to

develop the business.

The relationship between

business, IS and IT strategies

Definition

● IT refers specifically to technology, essentially

hardware, software and telecommunications

networks.

● IS as the means by which people and

organizations, utilizing technology, gather,

process, store, use and disseminate information

● Application refers to the use of IT to address a

business activity or process.

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