Chapter 4

IS/IT Strategic Analysis:

Current Situation

Agenda

• Business re-engineering and IS strategy• Understanding the current IS/IT requirements• Understanding IS/IT needs of the business strategy• Examining current IS/IT supply• Analysis techniques

– Critical success factors

– Process effectiveness

– Organizational model

Business Re-engineering and IS Strategy

• Re-engineering initiatives spring from business strategy

• IS demand supports business strategy

• Re-engineering needs IS/IT element

• Re-engineering and IS strategy forms potential models of the business

Understanding the Current IS/IT Requirements - I

• Business strategy analysis for information needs

• External environment, current and future business portfolio, and competitive strategy for IS/IT competitive contribution

• Critical success factor identification for finding the information change drivers

Understanding the Current IS/IT Requirements - II

• Current process effectiveness evaluation for IS/IT to improve the performance

• Internal and external value chain analysis for information flow and IS/IT opportunities

• Conceptual architecture of information and processes restructuring to reach IS/IT maximum contribution

Understanding the Current IS/IT Requirements - III

• Hardware and software functions for future plan migrating

• Current application portfolio evaluation for assessing contribution and potential

• IS/IT principles, organization, processes, services, and capabilities evaluation for meeting current and future business needs

Understanding IS/IT Needs of Business Strategy - I

• Information, system, and technology for– The achievement of the business objectives– The measurement of the performance towards

achieving the business objectives

Understanding IS/IT Needs of Business Strategy - II

• Internal business environment– Business strategy– Current business processes, activities, and main

information entities– Organizational environment: structure, assets

skills, values, style, culture, and relationship

• External business environment– Opportunities

Business Strategy - I

• Components of business strategy– Mission: an unambiguous statement of what the

business does and its long-term purpose– Vision: an easy identify picture of what the

business will be in the future, and how it will operate

– Goals: the set of major achievements that will accomplish the vision

Business Strategy - II

• Components of business strategy– Objectives: the targets (unambiguous and

measurable) for accomplish the business vision– Strategies: the methods to meet the business

objectives– Critical success factors (CSFs): a few areas

have to be right in order for the business to flourish

Business Strategy - III

• Components of business strategy– Business drivers: a set of critical forces for the

business to change– Business area plans: document the response or

information needs to the business strategy

Business Process, Activities and Key Entities - I

• Business processes: the sets of interlinked activities to deliver specific outputs to customers

• Activities: the elements of processes– To produce, promote and distribute products or

services– To develop, support, and administer the

infrastructure– To measure the performance against objectives

Business Process, Activities and Key Entities - II

• Key entities: important data and information associated with business processes

• Models– Process flow models or process dependency charts

– Hierarchical activity models or functional decomposition diagrams

– Entity relationship models

Business Process, Activities and Key Entities - III

• Models– Data flow diagrams (DFDs)– Activity/entity matrices– Class diagram

Examining Current IS/ITSupply - I

• Objectives– Categorize in terms of strategic, high potential, key

operational, and support

– Contribution to business needs

– Assessment of effectiveness, robustness, and unrealized potential

– Potential improvement

– Risks and opportunities

– Strength and weakness in terms of CSFs

Examining Current IS/ITSupply - II

• Evaluate:– Application portfolio and applications under

development: content, coverage, and contribution

– Current databases and those under construction– Users’ perception of the value of the portfolio– Current infrastructure and IT supply provisions

Examining Current IS/ITSupply - III

• Evaluate– Current infrastructure and IT supply

provisions• Current/previous strategy and policies

• IS/IT organization and processes

• Current assets, resources, and skills

• Methods and training provisions

Analysis Techniques - I

• Business strategic analysis

• CSF analysis

• SWOT analysis

• Business portfolio and competitive strategic analysis

• Value chain analysis

• Process effectiveness

Analysis Techniques - II

• Business process redesign

• Organizational modeling

• Business modeling-information analysis techniques

• Current portfolio evaluation

• Technology assessment and IS/IT infrastructure review

Critical Success Factors - I

• Levels– Industry – Corporate– Business unit or function– Manger

• Usages in management– IS opportunities to achieve Objectives– Information needed by executives

Critical Success Factors - II

• Analysis process for IS requirements– Understand mission and objectives– Determine CSF for each objective– Conduct a SWOT on each CSF– Consolidate across objectives and identify

information dependencies– Outline plan of IS requirements

Critical Success Factors - III

• Analysis process for executive information system– Understand mission and objectives– Determine CSF for each objective– Develop measures– Guides for the executive information systems

Process Effectiveness

• Identify core processes• Assess effectiveness of processes against

their drivers• Assess risks of not improving the processes• Investigate urgency of opportunities for

improvement• Establish future vision of the business

processes

Organizational Model

• The formal organizational arrangements

• Employees and other tangible assets

• Social structure

• Technology employed

• The external environment

• The dominant coalition

• The key processes

Points to Remember

• Business re-engineering and IS strategy• Understanding the current IS/IT requirements• Understanding IS/IT needs of the business strategy• Examining current IS/IT supply• Analysis techniques

– Critical success factors

– Process effectiveness

– Organizational model

Questions

• What are the critical success factors associated with an e-business?

• How do you conduct a strategic analysis for an e-business?