Strategic Information SystemsPlanning

© Gabriele Piccoli

Chapter 6

The Changing Face

• The changing face of who the CIO reports to

© Gabriele Piccoli

Executive 2005 2006 2007 2008 2009 2010 CEO 40% 42% 41% 41% 47% 43% CFO 30% 23% 24% 23% 16% 19% COO 13% 14% 14% 16% 16% 13%

© Gabriele Piccoli

Strategic Alignment

• A high degree of fit and consonance between the priorities and activities of the IS function and the strategic direction of the firm

Creating Value with IT

© Gabriele Piccoli

© Gabriele Piccoli

Six Key IS Decisions & Their Actions

1. How much should we spend on IT?– Define what the role of IS and technology should be

2. Which business processes should receive the IT dollars? – Define which business processes are most important

3. Which IT capabilities need to be companywide? – Focus on the cost/benefits of standardization and flexibility

4. How good do our IT services really need to be?– Decide on the degree of service the firm needs and is willing to

pay for

Describe Reliability Needs for…

• Retailer with POS system that’s connected to inventory management system

• NASDAQ• Restaurant with electronic ticketing system

(no paper)• Nail Salon that uses scheduling book and

a cash register (Quickbooks for accounting)

Six Key IS Decisions & Their Actions Ctd.

5. What security and privacy risks will we accept? – Decide on which risk the firm is willing to accept, based upon

the controls we have in place 6. Whom do we blame if an IT initiative fails?

– Allocate resources and assign responsibility for IS projects

© Gabriele Piccoli

© Gabriele Piccoli

Who Should be involved in Strategic IS Planning?

• A partnership between – Those with technical skills– The information systems group– General and functional managers

• Objective:– Define how the firm plans to use and manage

IS resources to fulfill its strategic objectives

© Gabriele Piccoli

Strategic IS Planning Process

• Strategic business planning• IS assessment • IS vision • IS Guidelines • Strategic Initiatives

An Iterative Process

© Gabriele Piccoli

Information Systems Assessment

Know Where You Start • The process of

– Taking stock of the firm’s current IS resources – Evaluating how well they are fulfilling the needs of the organization

• IS resources IT resources– Technical resources: hardware, software and networking

components of the IT infrastructure – Data and information resources: databases and other information

repositories – Human resources: skills, attitudes, preconceptions, reporting

structures and incentive systems of IS professionals and the user community

• Output: a snapshot of the current “state of IS resources” in the organization

© Gabriele Piccoli

Information Systems Vision

Know Where You Want To Go • Based on the role that information

systems should play in the organization • Defines the ideal state the firm should

strive for, in its use and management of its resources

– More IT-intensive firms: IS may play a strategic role

– Less IT-intensive firms: IS may be a “necessary evil”

© Gabriele Piccoli

Information Systems Vision

The Information Systems Vision

The Firm’s Business Strategy

• Two analytical tools:– Critical Success Factors (CSF) methodology – Strategic impact grid

aligned and reflect

© Gabriele Piccoli

Critical Success Factors

• The limited number of areas which managers must effectively control to ensure that the firm will survive and thrive

• It ensures that the planning team is able to prioritize

• It focuses on business objectives, not on information systems

© Gabriele Piccoli

The Strategic Impact Grid

• Enables simultaneous evaluation of the firm’s current and future information systems needs

Impact On CoreCapabilities

Impact on Core Strategy

Strategic Impact Grid

• Impact on Core Capabilities– Processes and infrastructure– People and partners– Organization and culture– Leadership and governance

• Impact on Strategy– Product– Market– Business network– Boundary positioning– Differentiation– Sustainable advantage– Development of proprietary assets

IBM IT Impact Map

Business ProcessOutsourcing

52% of business1 of IBM’s 3 core businesses

Medtronic IT Impact Map

Can IT change the Basis of Competition?

• Sometimes big ideas start with automating mundane back office internal business processes– AHCS– AA

Facing Outward

• AHSC– Gave card readers to hospitals– Trained hospital staff– Helped hospital redesign internal purchasing processes– Result: Save $11M per year and add $5 M additional

revenue• AA

– Gave computer terminals to large travel agencies– Allowed access to AA scheduling information

Jeff Bezos

• Amazon.com’s platform includes its brand, customers, technology, distribution capability, deep e-commerce expertise, and a great team with a passion for innovation and serving customers well…We believe that we have reached a “tipping point,” where this platform allows us to launch new e-commerce businesses faster, with a higher quality of customer experience, a lower incremental cost, a higher chance of success, and a clearer path to scale and profitability than perhaps any other company.

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