Transcript Course Outline

Strategic Planning for
Information Systems
(IS 6003)
Masters in Business Information Systems 2004 / 2005
Programme in Professional Information System Practices
Dr. Tom Butler / Fergal Carton
Business Information Systems
Last lecture
• Case study example
– (IT strategy at UCC)
• IT Doesn’t matter (review)
MBS (BIS) / 6003 / Strategic Planning for Information Systems
This lecture
• UCC Finance Project
• Case study analysis
– (IT strategy at UCC)
• IT Doesn’t Matter (discussion)
• Course Assignments
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Case study example
• IT Strategy for UCC
– Meeting to discuss the structure the project team
– 5 roles
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Computer Center
Consultants
Users (Finance Office)
Governing body (college officers)
Students Union
– Prepare meeting agenda (one slide each)
MBS (BIS) / 6003 / Strategic Planning for Information Systems
The Value Chain Defines Indust ry Str ucture a nd Relationships
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Source: Applegate, Lynd a M., Rober t D. Austi n, and F. War r en McFarla n., Corporate I nfor mation Strategy and M anagement . Bur r Ridge, IL:
McGr aw-Hill/Irwin, 2002.
I ntroduction Figure I-2
Three Er as of IT Evolution
Era I
Mainframe
Era II
Microcomputer
Era III
Internetworking
Administrative
Framework
Target for IT
Use
Justification/
Benefits
Regulated
monopoly
Back office
automation
Organizational
productivity
Free
market
Individual
decisionmaking and
productivity
Individual
effectiveness
Shared
partnership
Electronic
integration and
learning
Business
advantage
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Source: Applegate, Lynd a M., Rober t D. Austi n, and F. War r en McFarla n., Corporate I nfor mation Strategy and M anagement . Bur r Ridge, IL:
McGr aw-Hill/Irwin, 2002.
I ntroduction Figure I-6
The Impact of IT
High
IT Impact on Core Operations
Factory
Low
Strategic
Goal: Improve performance of
core processes
Goal: Transform organization or
industry
Leadership: Business unit executives
Leadership: Senior executives & board
Project Management: Process
reengineering
Project Management: Change
management
Support
Turnaround
Goal: Improve local performance
Leadership: Local level oversight
Project Management: Grassroots
experimentation
Goal: Identify and launch new
ventures
Leadership: Venture incubation unit
Project Management: New venture
development
IT Impact on Core Strategy
High
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Source: Applegate, Lynd a M., Rober t D. Austi n, and F. War r en McFarla n., Corporate I nfor mation Strategy and M anagement . Bur r Ridge, IL:
McGr aw-Hill/Irwin, 2002.
I ntroduction Figure I-4
Evolution of Computing (IV)
Number of users (millions)
3,000
1,000
PCcentric
100
Contentcentric
Networkcentric
E-Infostructure
Systemscentric
10
1970
1980
1990
Source: Waves of Power, David Moschella
2000
2010
MBS (BIS) / 6003 / Strategic Planning for Information Systems
2020
2030
Information Growth Drivers
Internet applications
75%
Data warehousing
75%
Implementation of NT
50%
Electronic commerce
49%
Entering new markets
47%
ERP (Enterprise Resource Planning)
44%
41%
Mergers & acquisitions
Expanding international operations
Source: FIND/SVP 1999
35%
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Key Internet Challenges
Percent surveyed who say:
77%
56%
55%
Security
7x24
Disaster
recovery
Source: FIND/SVP 1999
50%
46%
36%
Demand spikes
Capacity
planning
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Load
balancing
Course assignments
• A group consulting assignment, 26th Nov 04
– (worth 20%)
• A business report (individual), 11th Feb 05
– (worth 20%)
MBS (BIS) / 6003 / Strategic Planning for Information Systems
IT Doesn’t Matter
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Huge spending in IT
IT for competitive advantage?
CIO
Strategic Consulting
Core functionality available to all
– Data storage
– Data processing
– Data transport
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Infrastructure build-out
• Proprietary technologies
• Infrastructure technologies: more value when shared
• Examples from past
– Railroads
– Telegraph
– Electricity
• Value of insight into the use of new technology
• Window for gaining advantage from an infrastructural
technology open briefly
• From competitive advantage to “millstone”
MBS (BIS) / 6003 / Strategic Planning for Information Systems
IT as a utility?
Universal
Data
Tone
Enterprise
Storage
Network
Acquired Technology
Epoch•McData
Celerra•Conley
Intelligent
Software Architecture
Mosaic:2000
Architecture
MBS (BIS) / 6003 / Strategic Planning for Information Systems
IT as an “Infrastructure”
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Transport mechanism
IT is highly replicable & scalable
Interoperability
Process homogenisation
Web services
Trend towards monopoly / oligopoly
MBS (BIS) / 6003 / Strategic Planning for Information Systems
The Winners’ Circle
Data Networking Equipment: Cisco
Telecom Equipment: Lucent
Storage: EMC
Systems: IBM, HP,
Compaq, Dell
Enterprise Applications: SAP
Relational Databases: Oracle
PC Software/Operating Systems: Microsoft
Processors: Intel
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Source: Morgan Stanley
Effect of build-out
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Technology accessible / affordable
Over capacity
Falling prices
More competition
Standardisation
Commoditisation of technology & its mode of use
Strategic potential of technology declines
(Transformational power decreases)
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Advantages
• Leapfrogging the competition
– Sabre
– FedEx package tracking
• Industry insight
– eBay
– Reuters
• Enduring position advantages
– Dell
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Evolution of Compu ting Performa nce
Computing performance
Price Performance Trends of Mainframes and PCs
$/MIPs
1,000,000
8:1*
100.000
Mainframe
10,000
286:1*
1,000
PCs and workstations
900:1*
100
10
1
1980
*Ratio of MIPs per Dollars (Mainframes:PCs)
1990
1996
Adapted from: McKenney, J., Waves of Change: Business Evolution
through Information Technology , Boston: Harvard Business School
Press, 1995.
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Source: Applegate, Lynd a M., Rober t D. Austi n, and F. War r en McFarla n., Corporate I nfor mation Strategy and M anagement . Bur r Ridge, IL:
McGr aw-Hill/Irwin, 2002.
I ntroduction Figure I-1
Other Infrastructures
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Telephone
Telex
Fax
ISDN
EDI
VANs / MDNS
VPN
Mobile phone
SMS
GIS
…
MBS (BIS) / 6003 / Strategic Planning for Information Systems
At the end of build-out?
• More power than required?
• Price of essntial IT functionality has fallen
• Capacity (internet) has caught up with
demand
• IT vendors positioning as utilities
• Investment bubble burst
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Two Data Tidal Waves
Internet
Data
Enterprise
Data
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Future?
• Spend less (NB. Vendor driven spending)
• Follow, don’t lead
• Focus on vulnerabilities, not opportunities
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Back to the Future?
Needs discourse –
Constantly evolving information requirements
High
CRM / SCM
CIM
MRP II
MRP
ERP
Diffusion – degree of
decentralisation of IS/IT
control in the
organisation
ERP II
Low
Low
Infusion – degree of dependence of the
business on IS/IT
High
MBS (BIS) / 6003 / Strategic Planning for Information Systems
Sales discourse
Constant re-packaging of
demand with new
technological capability
Course assignments
• A group consulting assignment, 26th Nov 04
– (worth 20%)
• A business report (individual), 11th Feb 05
– (worth 20%)
MBS (BIS) / 6003 / Strategic Planning for Information Systems