Transcript IS/IT Strategic Analysis: Assessing and understanding the

IS/IT Strategic Analysis: Assessing and understanding the current situation
Assessing and understanding the
Business Needs
IS/IT Strategic Analysis: Assessing and understanding the current situation
LEARNING OBJECTIVES
• To understand the process in assessing and
understanding the current situation in an
organization, comprising of internal and
external environment strategic analysis of the
business and ICT.
• To utilize tools that can be used for
assessment of current situation.
IS/IT Strategic Analysis: Assessing and understanding the current situation
IS/IT Strategic Analysis: Assessing and understanding the current situation
Model of Strategic Planning Process
Planning element
Plan component
Mission
Key Question
What should we be doing ?
Strategic analysis
Goals
Strategic choice
Strategies
Policies
Strategic
implementation
Decisions
Actions
Where are we going ?
What routes have we selected ?
How do we guide our collective
decisions to get there ?
What choices do we have ?
Shall we do it ?
IS/IT Strategic Analysis: Assessing and understanding the current situation
Main Deliverables of the Business IS
Strategy
• Analysis of
– existing & expected future business;
– IS/IT environments & strategies;
• IS demand from current business strategy
– through alignment of IS requirements with
business needs and initiatives;
• Future potential from IS/IT
– through identification of opportunities to impact
the business strategy and significantly raise its
competitive performance.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Business Re-engineering and IS Strategy
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Most re-engineering initiative will spring from, and be part of, the business
strategy
The early work in developing IS strategy is first to flesh out the details behind the
headlines in the business strategy, this means working with the business areas to
helps determine what those business initiative will be and their expected
contribution to business objective.
Will accommodate in the IS strategy, and need to allocated the same priority that
the business places on the change program.
Common need in both IS strategy development business re-engineering to build
up a model of the business as it currently exist and other potential models of how
following transformation or evolutionary change.
Success re-engineering, as which the development and implementation of IS/IT
strategy, demands a strong business-IS function partnership.
Designing or redesigning business process to take advantage of IS/IT capabilities is
essential if the traditional problems of automating poorly-designed processes or
inefficient work practices through IT are to be avoided.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Business Re-engineering and IS Strategy
• IT is driver for re-engineering, an enabler or
one of means of implementation.
• Two key question should be asked:
– How can business processes be transformed using
IT (Based on a full understanding of the
capabilities of IT)?
– How can IT support business process?
IS/IT Strategic Analysis: Assessing and understanding the current situation
The role of IS/IT in BPR
Capabilities of IT
as an enabler of
Change
IT can be used to
model / simulate
/ prototype
option for change
IS and IT as a key
component of
achieving change
Develop options
for radical
change
Evaluation of
Option
Implementation
of chosen
Options
Identify need
for change in
development of
business
strategy
IS/IT Strategic Analysis: Assessing and understanding the current situation
Reconciling IS/IT in BPR
Questions
BPR
IS/IT strategy
formulation and
planning
Formulation
1.
How can we re1.
engineer our business
to provide advantage?
How can IS/IT be
exploited to
provide business
advantage?
(impact)
implementation
2.
How can we improve 2.
our process to ensure
success of the
strategy
How can IS/IT
ensure the
success of the
business strategy?
(alignment)
IS/IT Strategic Analysis: Assessing and understanding the current situation
Planning Components
SITUATION ANALYSIS:
Description of where we are today:
4 areas: IBE, EBE, IICTE, EICTE
(Internal, external, business, ICT)
STRATEGY FORMULATION:
Description of where we want to be:
Business & ICT Future
STRATEGY IMPLEMENTATION:
How to use ICT to get to where we want to be.
GAP ANALYSIS
IS/IT Strategic Analysis: Assessing and understanding the current situation
Phases of Planning Process
1. Visioning Phase
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Initiate & manage the
project
Understand business
situation and vision
Document and Confirm
business analysis
2. Analysis Phase
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Understand Current IS
situation
Analyze Current IS situation
Develop recommendations,
solution alternatives
3. Direction Phase
– Develop IS Vision and
direction
– Develop IS plan
– Identify IS project
4. Recommendation Phase
– Develop roadmap
– Develop business case
– Communicate the plan
IS/IT Strategic Analysis: Assessing and understanding the current situation
Visioning Phase
1.
Initiate & manage the
project
Understand business
situation and vision
2.
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Review business
documentation
Develop instruments
Collect Data
Document findings
3. Document and Confirm
business analysis:
Document:
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Current business
description, vision, values,
goals, strategies, directions,
operating vision, projects &
initiatives
Industry business trends,
business and customer
requirements
Business SWOT analysis
Business Impact
IS/IT Strategic Analysis: Assessing and understanding the current situation
UNDERSTANDING THE CURRENT
SITUATION
• Understand/Obtaining in depth
– the business strategy
– the business and technology
environments
– Current status of IS/IT in the
business
• Determine the opportunity,
threats and requirements
inherent in the business
strategy
• Recognize the strength and
weakness of the business and it
IS/IT operations.
Determining IS Demand
Fact Finding
IS/IT Strategic Analysis: Assessing and understanding the current situation
Understanding the current situation
Determine the IS/IT Requirement:
The IS Demand
– Wish list of business requirements of each area;
– Absorb every written strategy statements, and
interpret into relevant IS/IT principles and CSFs,
application requirements associated with the major
planned initiatives, and a set of supply criteria to
deliver the services
• possible if have comprehensive documentations of current
and planned business activities and environment
• In practice, this documentation is rarely exists, unless it was
build up earliest business or IS strategy cycle and has been
updated to reflect the current situation and requirements.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Understanding the current situation
Determine the IS/IT Requirement:
The IS Demand
• Develop IS Strategy and IS Demand in parallel
with the Business Strategy;
– feed trends / opportunities / ideas into top level
business strategy, and work closely with the
business to build up IS/IT initiatives to deliver the
targeted performance;
IS/IT Strategic Analysis: Assessing and understanding the current situation
Understanding the current situation
Determine The IS Demand
SWOT
CSFs.
Value Chain
Business Model
Current and Expected
Business and
Technical
Environment
Business
Strategy
Current Status
of IS/IT
Determine
the IS
Demand
Proposed
Business
initiatives
Impact and role of IS/IT
Potential Status
Of IS/IT
Proposed
IS/IT
Initiatives
IS/IT Strategic Analysis: Assessing and understanding the current situation
Understanding the current situation
Gathering the Relevant Data
• Value of IS/IT strategy is dependent upon
– the depth of understanding of business and its needs, and
– the constructive interpretation of these needs into beneficial
information, systems and IT services.
– Thus, facts need to be recorded so as to facilitate analysis;
• The approach relies on
– building up a clear structured set of information, and where
suitable,
– constructing models showing the organization, business and
information requirements.
• Requirement of fact finding –
– understanding of business and information environments
– to be able to develop sensible and realistic strategies.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Understanding the current situation
Gathering the Relevant Data
• Start with Documentation Review of:
– business strategy, objective, mission, annual plans, budgets,
forecasts, KPIs (key performance indicator).
– prospectus supporting the raising capital,
– annual report providing the official financial view of the company’s
objective and general direction,
– additional sources such as job description for management level
staff,
• This is followed by
– discussion, interview, workshop, or other information and issues
not available in the documentation.
IS/IT Strategic Analysis: Assessing and understanding the current situation
The IS/IT Strategic Model
External
Business
Environment
External
IS/IT
Environment
Internal
Business
Environment
Internal
IS/IT
Environment
IS/IT Strategy
Process
Business
IS Strategies
IS/IT
Management
Strategies
Current
Applications
Portfolio
IT Strategies
Future Application
Portfolio
Planning Approaches,
Tools and
Technique
IS/IT Strategic Analysis: Assessing and understanding the current situation
BUSINESS STRATEGY ANALYSIS
• Download the blueprint document for your Case
Study.
• Identify the following business strategy elements
from the document:
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History and Background
Business Description
Vision and Mission
Goals, Objectives
Strategies
Growth Objectives: geography, market, customers,
products, channels.
– SWOT Analysis
IS/IT Strategic Analysis: Assessing and understanding the current situation
INTERPRETING THE BUSINESS STRATEGY
• Two input from business perspective (Internal
business environment & External business
environment) should be identified and
analysed.
• IS demand can be derived; exploiting
opportunities or countering threat can be
determined.
• The majority of information need are
internally.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Interpreting The Business Strategy
Internal Business Environment
• Three Element
– The business strategy
– The current business processes, activities and main information
entities
– The organisational environment, covering its structure, assets
and skill, and also the less tangible factor such as values style,
culture and relationship.
• Identify
– The activities that can contribute to the achievement of
business objectives and their supporting information needs;
– Secondary activities that have to be performed in order to
measure performance towards achieving those objectives, and
which may then be used to modify goals.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Interpreting The Business Strategy
The Business Strategy
• The business strategy
– Identify the current strategy, and, in particular, any new elements
added since the previous strategy development cycle
– If necessary, investigate, extend and analyse the strategy, and
document it in a structured manner. The best to tackle is by mixed
group of both business and IS disciplines and skills
– Compile and confirm the IS requirements, and document the IS
demand
• The business strategy may exist in a variety of forms. It may
be accessible through formally recorded corporate, business
unit or functional area strategy documents, or less formally in
other documents and in people’s heads. It can usually be
confirmed and expanded through discussions with senior
management.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Interpreting The Business Strategy
The Business Strategy
• IS strategy development and implementation
– Deriving the strategy alongside all other component
strategies, such as marketing or product development,
or within a business re-engineering programme or
redesign of business processes
– Implementing a programme of initiatives to deliver the
business strategy, which is coordinated to include the
critical IS/IT development alongside and within other
business initiatives.
• Possibility to business strategies & objective
– Not recorded formally
– Not well constructed
– Not well communicated
IS/IT Strategic Analysis: Assessing and understanding the current situation
Interpreting The Business Strategy
The Business Strategy
• No business strategy at all;
– Analyse and record current activities, tactics, and operational
needs from top-down viewpoint.
– The analysis of the business and of its critical components will
provide invaluable input into any future formulation of business
strategy. Short-term planning can focus on supporting current high
priority business needs, and on identifying and alleviating critical
problems, which threatens the business with competitive
disadvantage.
– The main technique used in this case is critical success/ failure
factors
• Information needs may arise from all elements in the business
strategy and they are significant sources of requirements and
compilation of IS strategy.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Interpreting The Business Strategy
Business Process, Activities and Key
Entities.
• Another deliverable derived from analysis
current situation, are models that depict the
processes, activities and main information
elements and how they relate to one another.
• These models make up the business model;
together with supporting IS models, comprise
an IS architecture for business.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Architecture Model
Business Model
Business
Process Model
Business
Data Model
Process/Entity
Matrix
IS Model
Entity Life
History
IS
Process Model
IS/Entity
Matrix
IS
Data Model
IS Functional
Model
IS/IT Strategic Analysis: Assessing and understanding the current situation
IS/IT Strategic Analysis: Assessing and understanding the current situation
IS/IT Strategic Analysis: Assessing and understanding the current situation
Interpreting The Business Strategy
Organizational Environment
• Must have clear understanding of the
organization’s current structure, relationships and
people composed
• Organization is dynamic form an important input
into the planning process.
• Necessary to understand the environment, and it
skills, resources, values, culture and social
interaction, management style and it’s relationship
with the external environment.
IS/IT Strategic Analysis: Assessing and understanding the current situation
EXAMINING CURRENT IS/IT
ENVIRONMENT
• Examination of external IT environment
– enables the strategist to take account of trend and opportunities from
emerging technologies
– To investigate how competitive or complimentary organizations are applying
IT.
• Assessment of the internal IS/IT environment:
– an evaluation of current application portfolio and the applications under
development to determine their content, coverage and contribution
– a similar evaluation of current databases and those under construction
– ascertaining the user’ perception of the value of portfolio
– an evaluation of current infrastructure and IT supply provisions,
accomplished through a technology assessment and IT infrastructure review.
• The result are the basis assessment of the gap between the current and
required provisions.
IS/IT Strategic Analysis: Assessing and understanding the current situation
EXAMINING CURRENT IS/IT
ENVIRONMENT
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Current Portfolio Evaluation
Current/Previous Strategies and Policies
IS Organization and processes
Current Assets, Resources and Skills
Method and training provisions
External IS/IT environment
IS/IT Strategic Analysis: Assessing and understanding the current situation
TECHNIQUES FOR INTERPRETATION AND
ANALYSIS
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Business strategy analysis
Critical success factor analysis
SWOT Analysis
Balance Scoreboard Analysis
Business portfolio and competitive strategy analysis
Value chain analysis
Process analysis/ BPR
Organizational modeling
Business modeling – information analysis technique
Current portfolio evaluation
Technology assessment and IS/IT infrastructure review
IS/IT Strategic Analysis: Assessing and understanding the current situation
TECHNIQUES FOR INTERPRETATION AND ANALYSIS
Balanced Scorecard Analysis
• Financial: how do we look our shareholders and those with a
financial interest in the organization?
• Internal business perspective: how do we have to excel at if
we are to meet the expectations of our employees and
trading partner?
• Customer perspective: how do our customer perceive us in
term of products, service, relationships and value-added?
• Innovation & learning perspective: to achieve our future
vision, ho will we continue to improve and create future value
for our stakeholders?
IS/IT Strategic Analysis: Assessing and understanding the current situation
TECHNIQUES FOR INTERPRETATION AND ANALYSIS
Balanced Scorecard Analysis
DATA
obtain
process
INFORMATION
interpret
defines
KNOWLEDGE
require
Critical
Success
Factors
decisions
Balanced
scorecard
ORGANIZATION drive
ACTIONS
measure
BUSINESS
RESULTS
IS/IT Strategic Analysis: Assessing and understanding the current situation
Information and Balanced
Scorecard
Financial Perspective
Objective
Measures
Ho do
customer
see us?
What must we
excel at ?
Customer Perspective
Objective
How do we look to
shareholders?
Measures
Internal Business Perspective
Objective
Innovation and learning Perspective
Objective
Measures
Measures
How can we
continue to improve
and create value?
IS/IT Strategic Analysis: Assessing and understanding the current situation
Critical Success Factor Analysis
• For any business, the limited number of areas
in which results, if they are satisfactory, will
ensure successful competitive performance
for organisation Rockart (1979)
• Thing must go right for business to flurish.
IS/IT Strategic Analysis: Assessing and understanding the current situation
CSF Identification
• Identify CSF against each objective
• Consolidate them across objectives, since
many CSFs will recur
• Ranking of objective and the number sharing
the same CSF
• Number of CSF: 5 – 8 per objective
– Too many, objective is unachievable
– Too few, not ambitious enough
IS/IT Strategic Analysis: Assessing and understanding the current situation
CSF
• CSF Should be easily and directly related back to the
objectives of the business units.
• CSF focus primarily on management control and tend to be
internally focused and analytical, rather than creative.
• Nature of CSFs and KPIs reflect a particular executive
management style.
• Involve top management in the IS/IT strategy process and
gaining their commitment
• Developing concensus view of IS aplication in the business
• Linking IS activity to business strategy
• Providing guidance for defining executive information needs.
IS/IT Strategic Analysis: Assessing and understanding the current situation
Level of CSFs
INDUSTRY
CSFs
Help define
Oganizational
Objective
ORGANISATIONAL
CSFs
Set
Business
Unit or Functional
Objective
BUSINESS UNIT
OR FUNCTION CSFs
Help define
Manager’s
Objective
MANAGER’S
CSFs
IS/IT Strategic Analysis: Assessing and understanding the current situation
CSF basic process
MISSION
Business
Objective
Balanced
Scorecard
Information
To measure
performance
CSFs
CSFs
CSFs
CSFs
Options
for
Evaluation
SWOT
CSFs
IS/IT Strategic Analysis: Assessing and understanding the current situation
Two types of IS requirement derived from CSF analysis
Information
System to
Manage
the
Business
Control
Information
System to
Produce and
Deliver the
Product / Service
Focus /Select
Critical
Success Factor
Objectives
Define
To be prioritised
Application Identified AS
Required to support
Business Activities
IS/IT Strategic Analysis: Assessing and understanding the current situation
Understanding the Current Situation
CSF analysis process
Understand
mission
and Objective
Determine CSF for
Each Objective
Conduct a SWOT
on each CSF
Develop
Measures
Result: Guides for
the executive
Information System
Consolidate
Across Objectives
and identify
Information
Dependencies
Result: Outline
plan of IS
Requirement
IS/IT Strategic Analysis: Assessing and understanding the current situation
Example of BSC & CSF Analysis
• Manufacturing company
• For each perspective, construct scorecard of
Objectives & KPI/Measures
• Use CSF Analysis to identify CSF for each
objective.
• Determine Information and Systems
requirements to support the CSFs
• Consolidate the output of the BSC and CSF