is/it strategic analysis: assessing and understanding the current situation assessing and...
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Assessing and understanding the Business Needs
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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.
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Model of Strategic Planning Process
Planning element Plan component Key Question
Goals
Mission
Strategies
Policies
Decisions
Actions
What should we be doing ?
What routes have we selected ?
Where are we going ?
What choices do we have ?
Shall we do it ?
How do we guide our collective decisions to get there ?
Strategic analysis
Strategic choice
Strategic implementation
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ion 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.
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Business Re-engineering and IS Strategy
• 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.
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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?
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The role of IS/IT in BPR
Develop options for radical
change
Evaluation ofOption
Implementation of chosen
Options
Capabilities of IT as an
enabler of Change
Identify need for change in development of business
strategy
IS and IT as a key component
of achieving change
IT can be used to model / simulate / prototype option for change
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Reconciling IS/IT in BPR
Questions BPR IS/IT strategy formulation and planning
Formulation 1. How can we re-engineer our business to provide advantage?
1. How can IS/IT be exploited to provide business advantage? (impact)
implementation 2. How can we improve our process to ensure success of the strategy
2. How can IS/IT ensure the success of the business strategy? (alignment)
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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
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Phases of Planning Process1. Visioning Phase
– Initiate & manage the project
– Understand business situation and vision
– Document and Confirm business analysis
2. Analysis Phase– 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
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Visioning Phase1. Initiate & manage the
project2. Understand business
situation and vision– Review business
documentation– Develop instruments– Collect Data– Document findings
3. Document and Confirm business analysis: Document:
– Current business description, vision, values, goals, strategies, directions, operating vision, projects & initiatives
– Industry business trends, business and customer requirements
– Business SWOT analysis– Business Impact
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ion 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
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ion 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.
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ion 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;
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ion Understanding the current situation
Determine The IS Demand
SWOTCSFs.
Value ChainBusiness Model
Current and ExpectedBusiness and
TechnicalEnvironment
Potential StatusOf IS/IT
Current Statusof IS/IT
Determinethe IS
Demand
Business Strategy
Proposed IS/IT
Initiatives
ProposedBusinessinitiatives
IS/IT Opportunities
Impact and role of IS/IT
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ion 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.
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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.
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The IS/IT Strategic Model
IS/IT Strategy Process
External Business
Environment
InternalBusiness
Environment
External IS/IT
Environment
InternalIS/IT
Environment
Current Applications
Portfolio
Planning Approaches,Tools andTechnique
IS/IT Management
StrategiesIT Strategies
Future ApplicationPortfolio
Business IS Strategies
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BUSINESS STRATEGY ANALYSIS
• Download the blueprint document for your Case Study.
• Identify the following business strategy elements from the document:– History and Background– Business Description – Vision and Mission– Goals, Objectives– Strategies– Growth Objectives: geography, market, customers,
products, channels.– SWOT Analysis
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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.
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ion 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.
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ion 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.
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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
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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.
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ion 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.
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Architecture ModelBusiness Model
Business Process Model
Business Data Model
Process/EntityMatrix
ISProcess Model
Entity LifeHistory
IS/EntityMatrix
IS Data Model
IS FunctionalModel
IS Model
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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.
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ion 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.
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ion EXAMINING CURRENT IS/IT
ENVIRONMENT • 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
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ion TECHNIQUES FOR INTERPRETATION AND
ANALYSIS• 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
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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?
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TECHNIQUES FOR INTERPRETATION AND ANALYSIS
Balanced Scorecard Analysis
DATA
INFORMATION
KNOWLEDGE
ORGANIZATIONACTIONS
BUSINESSRESULTS
Balanced
scorecard
Critical Success Factors
TECHNOLOGY VIEW
obtain
interpret
defines
decisions
require
drive
measure
process
BUSINESS VIEW
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ion Information and Balanced
ScorecardFinancial Perspective
Objective Measures
Customer Perspective
Objective Measures
Internal Business Perspective
Objective Measures
Innovation and learning Perspective
Objective Measures
What must we excel at ?
Ho do customer see us?
How do we look to shareholders?
How can we continue to improve and create value?
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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.
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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
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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.
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Level of CSFs
Oganizational Objective
BusinessUnit or Functional
Objective
Manager’s Objective
INDUSTRYCSFs
ORGANISATIONALCSFs
BUSINESS UNITOR FUNCTION CSFs
MANAGER’SCSFs
Help define
Set
Help define
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CSF basic processMISSION
Business Objective
CSFs
Balanced Scorecard
Information To measure performance
Options
for Evaluation
CSFs CSFs
CSFs
SWOTCSFs
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Two types of IS requirement derived from CSF analysis
Application Identified ASRequired to supportBusiness Activities
Critical Success Factor
Information System toManage
the Business
Information System to
Produce and Deliver the
Product / Service
Objectives
Focus /Select
Define
To be prioritised
Control
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Understand mission
and Objective
Determine CSF forEach Objective
Conduct a SWOT on each CSF
Develop Measures
Result: Guides for the executive
Information System
Consolidate Across Objectives
and identifyInformation
Dependencies
Result: Outlineplan of IS
Requirement
Understanding the Current Situation
CSF analysis process
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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