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Strategic Uses of IT and Strategic IS Planning.

Table of Content

l Introduction
l Strategic Uses of IT
l Strategic IS Planning
l Background and Assumption
l What is Strategic Uses of IT?
l The strategic role of information systems
l IT Doesn't Matter
l Internet Revolution
l We can find it in the 3 ways of working
l Business To Employee (B2E) - Working Inward
l Business To Customer (B2C) - Working Outward
l Business To Business (B2B) - Working Across
l Real example in B2E B2C B2E analysis:
l The strategy of ERP (Enterprise Resource Planning) analysis (SAP):
l Electronic data interchange
l B2B Net Marketplaces
l What is Strategic IS Planning?
l Why IS Strategic Planning is important?
l Five Competitive Strategies
l Seven Planning Techniques in IS Planning
l IT-Business Value Matrix
l Some characteristics of strategic IS planning are
l Key issues for IS Strategic Planning:
l Strategic Information Systems Planning Methodologies:
l Cost Advantage and the Value Chain
l Linkages Between Value Chain Activities
l Critical Success Factor Analysis(CSF)
l Stages of growth model
l Critical Success Factors
l SWOT analysis
l Scenario planning
l Linkage Analysis Planning
l Competitive forces model
l Three Emerging Forces
l Business Strategies to IS Strategies
l Benefit of Strategic Information Systems Planning
l Drawbacks of Strategic Information Systems Planning
l IS Lite
l Information Systems and Organizations
l Management Control and IT Governance
l What is Management control?
l What is IT Governance?
l Purpose of IT Governance:
l Objectives of IT Governance:
l Key issues for IS Strategic Planning:
l Process of IT Governance:
l IT Governance Framework:
l The Advantages of IT Governance
l Managing IT Operations and Outsourcing
l Why need Outsourcing?
l Benefits of outsource and Operations
l Risks of outsourcing and operators
l Following th guideline to outsource service
l The Difference Between ' Strategic Planning' And 'Operational Planning'
l Identify and describe several reasons why strategic systems planning is so difficult
l What is Strategic Planning
l Conclusion of Strategic Planning
l What is Linkage Analysis Planning
l Priorities & Planning
l example of IS strategy successful
l The IS Management apply at Logistic
l Planning Types
l Working Inward B-to-E
l Working Outward B to C
l Chapter 2 review question and sample answer by g2-2397
l Refer to the difference between Strategic Planning, Tactical Planning and Operational Planning.
l Scenario Planning
l Steps in scenario planning
l Five key sources of Critical Success Factors
l Strategic IS Planning
l Two Basic Approaches to Strategic IS Planning
l Strategies for Providing an Information Technology Planning Capability
l Strategic planning using Mind Maps
l Business Insight - Michael Porter's Five Forces Model Concept


Strategic Uses of IT

Today success or failure of an organization is highly competitive and technological business world which depends on the manage streamline flow of information between departments and the outside world.

This is why IT comes into action. It use the technology to automate organizate the automate flow of information system.
The main areas to be considered to study the effects of IT are: 1. Developing an information technology strategy, 2. Strategic use of information technology and 3. Quality management

References http://ezinearticles.com/?Information-Technology-and-its-Strategic-Uses&id=41637561616262636264

Strategic IS Planning

Strategic IS planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy by using IT, including its capital and people. Strategic IS planning looks three to five years ahead.

Nowadays, IS management is becoming more difficult and more important because IT technology is changing so fast that is very difficult for us to set some planning to guide the growing. IS planning is quite hard to identify the strategic to help the operations of business that is lots of reasons to affect the IS planning, but we can focus our views on business values. In fact, we need to clearly know the business models of the organization, then, we can take an IT or IS changing which have critical risks.

Background and Assumption

What is Strategic Uses of IT?

The strategic role of information systems

It means using information technology to develop products, services, and capabilities that give company major advantages over the competitive forces it faces in the global marketplace. A strategic information system can be any kind of information system that helps an organization:
  • Gain a competitive advantage(e.g. decrease the cost of product)
  • Reduce a competitive disadvantage(e.g increase the cost of competitive companies)
  • Meet other strategic enterprise objectives

IT Doesn't Matter
An article by Nicholas Carr in Harvard Business Review May 2003, "IT Doesn't Matter" stated that IT doesn't matter anymore, at least not strategically.
- IT is an infrastructure technology, like rail, electricity, telephone etc.Such technology can create a strategic advantage for an individual firm at the beginning of its life cycle when it is expensive and risky.
- IT is now at the end of buildout and is neither proprietary or expensive. So it won't give any individual firm a competitive advantage.

Some point we can find out for the IT buildout:
  • outstrips of IT's power for needs of business
  • IT prices have dropped and affordable
  • Network bandwidth has caught up /over the demand (badnwidth remaining)
  • Many vendors want to be seen as utilities
  • Information technologies bubble has burst

IT does matter with good management, it depends on the resources that a firm have.
And the management of IT should become focussing on the following points:
1. Manage the risks
- Focus on vulnerabilities (which are more common with open systems) rather than opportunities
2. Keep costs down
- Only pay for use and limit upgrading to avoid overspending. For example, don't upgrade PCs when not needed
3. Stay behind the technology leaders, but not too far behind!
- Delay investments until there are standards and best practices and prices drop
- Only innovate when risks are low

References PowerPoints prepared by Michael Matthew Visiting Lecturer, GACC, Macquarie University – Sydney Australia

Nicholas Carr's article entirled "IT doen't Matter" has lef noons indifferebt. One wishes to open a debate on the subject of the commoditisation of information Technology and the future of the industry which employs millions of highly quailified staff.

Internet Revolution

It appears the Internet frenzy peaked in 2000, notes Brian Arthur, Citibank Professor at the Santa Fe Institute. The Metcalfe's law will explain that.

Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2). First formulated in this form by George Gilder in 1993, and attributed to Robert Metcalfe in regard to Ethernet, Metcalfe's law was originally presented, circa 1980, not in terms of users, but rather of "compatibly communicating devices" (for example, fax machines). Metcalfe's law characterizes many of the network effects of communication technologies and networks such as the Internet, social networking, and the World Wide Web. It is related to the fact that the number of unique connections in a network of a number of nodes (n) can be expressed mathematically as the triangular number n(n − 1)/2, which is proportional to n2 asymptotically. [Referenced by: Wiki: http://en.wikipedia.org/wiki/Metcalfe's_law69]


The value of Internet is the square of browser, so the amount of brower is very important. Lots of successful cases today include Facebook, Yahoo, Google which are no need to pay heavy costs, can get much more business value on the Internet, so nowadays the strategic uses the Internet is most imprtant.


From a research base of over several hundred examples and case studies spanning 20 years of claimed ‘strategic systems’, the following classification
can be shown to be helpful in considering the implications of strategic IS/IT use. In general, the examples can be classified into one of four types, although some of the examples clearly exhibit the characteristics of more than one type.
The four main types of strategic system appear to be:
1. those that share information via technology-based systems with customers/ consumers and/or suppliers and change the nature of the relationship;
2. those that produce more effective integration of the use of information in the organization’s value-adding processes;
3. those that enable the organization to develop, produce, market and deliver new or enhanced products or services based on information;
4. those that provide executive management with information to support the development and implementation of strategy (in particular, where relevant external and nternal information are integrated in analysis).

(ref book: Strategic Planning for Information Systems (Third Edition), John Ward and Joe Peppard)

The Information Systems Strategy Triangle is a simple framework for us to understand the impact of IS on organizations. Successful firms have an overriding business strategy which drives both organizational and information strategy. Generally, all decisions are driven by the firm’s business objectives, so we have to some knowledge of scale of business models.
Business Strategy dives all other strategies. IT and IS Strategy are dependent upon the Business Strategy that changes in any strategy requires changes in the others to maintain balance. IS Strategy is affected by the other strategies a firm uses. IS strategy always involves consequences.

IS Strategy
Basically, we need provide faultless Information Services to our organization and allows business to implement its business strategy. Actually, IS can helps determine the company’s capabilities.
Four key IS infrastructure components are sufficient to allow the general manager to assess critical IS issues.

Information Systems strategy matrix:

List physical components of the system
Individuals who use it / Individuals who manage it
Physical location
List of programs applications, and utilities
Individuals who use it / Individuals who manage it
What hardware it resides upon and where that hardware is located
Diagram of how hardware and software components are connected
Individuals who use it / Individuals who manage it / Company service obtained from
Where the nodes are located, where the wires and other transport media are located
Bits of information stored in the system
Individuals who use it / Individuals who manage it
Where the information resides

We can find it in the 3 ways of working
Ref:web.njit.edu/~egan/CIS455/McNurlin_03.ppt(also part of our lecture notes)

Fig. Building customer value via Internet :


ref: www.dp201it.googlepages.com/Chap002.ppt71
1.1 Business To Employee (B2E) - Working Inward
- The meaning of B2E is electronic commerce which uses an intrabusiness network and it allows companies to provide products or services to their employees. When company(s) use B2E methods or networks to automate employee-related corporate processes.

Here is some sample of B2E applications include:
- Online insurance policy management
- Corporate announcement dissemination
- Online supply requests

B2E is also an approach which usually focus on the employee, rather than the consumer or other business. This approach is implemented because of the ongoing shortage of well-qualified staff. B2E also performs some strategies and tactics to attract and retain good staff in a competitive market such as aggressive recruiting tactics, benefits, education opportunities, flexible hours and bonuses, etc.

B2E is often used to refer as a B2E portal (sometimes called "people portal") which is a customized home page of organization for staff. The function of B2E portal is very similar to intranet but has some difference. The Intranet is focus on the organization but B2E portal on individual. The contents of B2E portal is not include only on intranet, but but also any personal information and links that the employee might want.

The brief conclusion of business portal:
"The B2E portal is a customised, personalised mix of news, resources, applications and e-commerce options that becomes the desktop destination for everyone in an organisation – and the primary vehicle by which people do their work" – FastCompany

The following figure show the example of business to employee portal's architecture:
Ref: HP B2E datasheet72

A B2E portal has three characteristics:
  • A single point of entry: one URL for everyone within an organization.
  • A mixture of organization-specific and employee-defined components.
  • The content to be highly customized and easily altered to suit the particular employee.

For some special requirements, B2E can give the online training to employees. This training can be provided through the Company’s intranet or directly to employees in a classroom (with a Power Point presentation as support, for example). Proof of the training performed shall be recorded. Additional optional means of dissemination of such information can be implemented through:
- Internal mail: important information can be sent personally to each employee
- e-mail: news, relevant documents, notification can be sent electronically
- The Company’s intranet: a permanent space dedicated to the environment can be created on the intranet, to be available to employees

Working Inward (B2E) - Building an Intranet
  • The primary e-business way to reach employees is via ‘Intranets’
  • Intranets are private company networks that use Internet technologies and protocols, and possibly the Internet itself

Benefits of using intranets:
  • Wider access to company information More efficient and less expensive systems development
  • Decreased training (due to browser interface)
  • By using an intranet’s open-system architecture, companies can significantly decrease the cost of providing companywide information and connectivity

Examples of B2E applications include:
  • Online insurance policy management
  • Corporate announcement dissemination
  • Online supply requests
  • Special employee offers
  • Employee benefits reporting
  • 401(k) Management

(ref website : http://en.wikipedia.org/wiki/Business-to-employee ) (Add by g2-4060)

1.2 Business To Customer (B2C) - Working Outward
- B2C, sometimes also called Business-to-Consumer, the meaning of B2C is describes activities of businesses serving end consumers with products or services.

Here are some types and sample of B2C applications include:
- E-tailer - Online version of retail store. eg: amazon.com75647663776578, dell.com79668064816782
- Portal - Offers an integrated package of content services and content-search, news email etc. eg: yahoo.com83688465856986, msn.com87708866897190
- market creator - Web-based businesses that use internet technology to create markets that bring buyers and sellers together (auctions). eg: ebay.com91729267937394, amazon.com95749668977598
- content provider - Information and entertainment providers. eg: sportsline.com99761006910177102, espn.com103781047010579106

There is a picture about simple B2C structure:

Two B2C IT strategies uses:
- A new Experience Curve
- Emergence of Electronic Tenders

To concern with Experience Curve, it is a graph107801087110981110 with a downward curve that depicts the 'experience111821127211383114 effect' (increases in productivity115841167311785118) as reflected in reduced average119861207412187122 and marginal costs123881247512589126. Also, one new curve represents one new technology.


References http://www.NetMBA.com127901287612991130

When a company create a new experience curve initially and successfully, it can have a first-mover advantage.
First-mover advantage is the competitive edge gained by the first significant company to introduce a product or service in a market.
Actually, the company requires substantial investment in a new technology. Therefore, a drawback may be existed such as high risk, high costs, etc.

Apart from experience curve, "Electronic Tenders" should be introduced in order to let the company to provide high quality service. For example, a electronic logistics system can let the customers to keep track in the delivery processes. As a result, service can be kept at a highest level and customer satisfaction can be reached. Also, the company can remove the need of time-consuming and costly middle men.

Here are some benefits of Electronic Tenders:
  • Provides complete audit ability and the ability for customers to track and find their products
  • Vast quantities of paperwork can be eliminated
  • Turnaround times are reduced dramatically
  • The quality of responses increases

The advantages of Business to Customer
Global accessibility:
The Internet eliminates geogaphic boundaries.
Reduced order processing: Automated order processing improves efficiency.
Greater availability: The company is available online 24 hours a day, 7 day a week.
Closer customer relationships: With a direct link to customers, the company can quickly address concerns and customize reponses.
Increased customer loyalty: With improved customer service and personalized attention comes greater customer loyalty.
New products and services: With direct links to customers, the company can provide information-based products and services.
Direct marketing: Manufacturers can bypass retailers and distributors, selling directly to customers.
(Added by g2-8464)

Example of B2C
An example of a B2C transaction would be a person buying a pair of shoes from a retailer. The transactions that led to the shoes being available for purchase, that is the purchase of the leather, laces, rubber, etc. as well as the sale of the shoe from the shoemaker to the retailer would be considered (B2B131) transactions.

(ref website : http://en.wikipedia.org/wiki/Business-to-consumer ) (add by g2-4060)

1.3 Business To Business (B2B) - Working Across
- The meaning of B2B is describes the commerce of transacrions between businesses and businesses, (e.g. manufacturer and wholesaler, wholesaler and retailer). The main different between B2B and B2C is the Volume transacrions, B2B 's transactions is much larger (or higher) than B2C 's. It is because so many transaction in B2B which involving subcomponent or raw materials,

Here is a sample of B2B applications include:
An automobile manufacturer makes several B2B transactions such as buying tires, glass for windshields, and rubber hoses for its vehicles.

References http://en.wikipedia.org/132921337713493135

- E-Distributor - Single-firm online versions of retail and wholesale stores, supply maintenance, repair, operation goods. eg: staples.com136941377813895139
- E-Procurement - creating digital markets where thousands of sellers and buyers transact for indirect inputs. eg: ariba.com140961417914297143

As a result, some merits can be gained by coordinating with co-suppliers such as:
- Providing an easy way of sharing information: evolution from a mono directional to a collaborative solution.
- Externally, by building one interface towards suppliers. Internally, by harmonised information sharing and flows.
- Managing by exception to allow early detection of problems.
- Enabling aggregation.
- Consolidated visibility on stock and demand.
- Avoiding time consuming researches through user friendly and central interface.
- Data maintenance automation & externalization to suppliers.

There is a picture about simple B2B structure:

Real example in B2E B2C B2E analysis:

Customer interaction (B2C) refers to the extent to which you virtually interact with the market defined at three levels of greater virtual progression:
Remote product/service experience
Product/service customer solution
Shaping customer solutions

Asset sourcing (B2B) refers to competency leveraging from:
Efficient sourcing of standard components
Efficient asset leverage in the business network
Create new competencies through alliances.

Knowledge leverage (B2E) refers to access to expertise from:
Maximizing individual experience
Harnessing organizational expertise
Leveraging of community expertise

The strategy of ERP (Enterprise Resource Planning) analysis (SAP):
A brief overview is provided of each of these six cases and a summary analysis provided against the change management framework before we look at one case in detail (Dell and partner) chosen because of its scope in terms of organizational size and project content.

Case 1: Bank (large) B2E “Employee Intranet”
Case 2: Biotech (medium) B2B “e-Procurement”
Case 3: Society (small) B2B “Online ordering”
Case 4: Engineer (large) B2E “Employee tracking”
Case 5: Dell & Customer (large) B2E “e-Procurement”
Case 6: Comptec (large) B2B “Order and request”

All case organizations interviewed

Criterion of project
Dell & Cust
Major e-business project
Project completed
Expected breakthrough
Cross functional focus

Interorganisational focus
Unambiguous outcomes
Size of organization
Significance of project
Very High
Case 1: Bank is one of the world’s leading financial services groups, with head-quarters in Switzerland. The SAP Internet solution (employee portal) for internal address management covers all organizational information within the bank and it’s the most used Web application, available for all 45,000 employees, with 300,000 transaction calls per day. This e-business application has proven to be a major tool banks into a new Bank.com.
Case 2: Biotech is a research and development pharmaceutical company based in UK. Its mission is to create partnerships with pharmaceutical companies to complete the development and marketing of complete the development and marketing of its research worldwide. Founded in 1986, Biotech currently employs approximately 250 staff and is listed on London and NY stock exchanges.
Case 3: Established in 1937, Society is a not-for-profit Australian company serving its members with wine products and services. The immediate focus is to try and make the Society more relevant to members and to overhaul the society’s total business processes from sales order to inventory and delivery. This e-business project uses SAP R/3 with Internet integration and is designed to achieve management goals: total integration of the society’s business processes aging R/3; the ability to utilize membership data in the selecting and marketing of products; improved inventory accuracy to maintain a competitive advantage with growth of at least 50%.
Case 4: A large global engineering company with headquarters in the USA. Engineer is a global leader in energy equipment, energy equipment, energy services, engineering, and construction. It had three main goals to achieve with its initial three main goals to achieve with its initial SAP R/3 implementation: (1) to standardize business processes globally across business units and functional lines; (2) to move engineer to a process-driven organization, and (3) to provide managers across engineer with easy access to decision-quality information. It has about 17,000 SAP users worldwide, with the potential for this figure to increase to about 26,000 users (SAP, 1990a). The specific country group examined was based in Norway.
Case 5: Dell is a leading PC and server provider in the United States, no. 2 server providers in the US and no. 3 worldwide. Customer.com is one of the largest customers of Dell (the largest at the time of interview). They are one of the fore most global suppliers of custom, high-performance semiconductors and partner with customers to build complete systems on a single chip.
Case 6: Comptec is a global leader in IT equipment, has its headquarters in Amsterdam Netherlands. With extensive European manufacturing facilities, customer-focused companies in 25 European countries and more than 9000 experienced employees, Comptec is aiming to be the “no. 1” computer company in its home market in Europe, by the year 202. Comptec provides the industry’s most complete portfolio of best-in-class IT products, from the smallest notebooks to the most powerful data centre solutions. Developed and manufactured in Europe for European customers, the product portfolio benefits from the technologies and wordwide sourcing networks of the parent companies. The specific country group examined was based in England.
Referenced by: A strategic framework for the management of ERP enabled e-business change: C.G. Ash, J.M. Burn – School of Management Information Systems, Edith Cowan University, Churchlands Campus, Perth, WA 6018, Australia

b2b-g28464.jpg(Added by g2-8464)
(Source: Marcus Blosch and Roger Woolfe, Linking Chains: Emerging Interbusiness Processes, Gartner EXP, August 2001.)

Electronic data interchange

Today 80 percent of B2B based on Electronic Data Interchange(EDI). EDI refers to the structured transmission of data between organizations by electronic means. It can enables two companies exchange shipping data, payment data and order data in the same document standard.

However, the EDI system needs high cost to build up. So the small to medium-sized companies use web-based EDI. The most popular protocols are File Transfer Protocol Secure (FTPS), Hyper Text Transport Protocol Secure (HTTPS), and AS2.

It is because Internet provides a much more flexible and low-cost platform communicate to global companies. The information and the documents can transfer with the web browser, using a friendly user interface.

Advantages of using EDI
EDI save company money
by reducing the human interaction and materials such as paper documents, meetings and faxes etc. Reduce the cost of organizing or searching the documents. Also EDI can reduce errors, because the files do not need to change the format or the human do not type the file again.

Disadvantages of using EDI

The disadvantage of EDI is the cost in time and money in the initial set-up. The preliminary expenses for build up EDI, implementation, customization etc. Also training the staffs know how to use the EDI.

References: Management Information Systems Managing The Digital Firm (Kenneth C. Laudon, Jane P. laudon)

B2B Net Marketplaces

A B2B Net marketplace is a commerce site that enables communities of buyers and sellers to meet on the Internet and to conduct trade. It can improve the relationship between buyers and suppliers. The relationship between buyers and suppliers not one-to-one again, there are thousand buyers and suppliers in Net marketplaces.

Because all suppliers show the details of the goods on the Net marketplace, so the suppliers need to reduce the cost to attract buyers.
It can reduce supply chain costs.

There are four types net Marketplaces:

    1. E-distributor
    2. E-procurement network
    3. Exchange
    4. Industry consortia

References: Management Information Systems Managing The Digital Firm (Kenneth C. Laudon, Jane P. laudon)


What is Strategic IS Planning?

Strategic IS planning deals with at least one of three key questions:
"What do we do?"
"For whom do we do it?"
"How do we excel?"
References http://en.wikipedia.org/145981468014799148
Why IS Strategic Planning is important?
  • To arrange the resource more efficiently such as Financial, Facilities, Staff
  • To align I/S with the business
  • To identify needed applications
  • To establish goals, schedules, and milestones in order to track progress
  • To provide an opportunity for communication with top management and user management

Five Competitive Strategies
-Cost Leadership
Becoming a low-cost producer of products and services in the industry, or finding ways to help its suppliers or customers reduce their costs or to increase the costs of their competitors.

-Differentiation Strategy
Developing ways to differentiate a firm's products and services from its competitors' or reduce the differentiation advantages of the competitors. this may allow a firm to focus its products or services to give it an advantage in particular segments or niches of a market.

-Innovation Strategy
Finding new ways of doing business. This may involve the development of unquire products and services, or entry into unique markets or market niches. It may also involve making radical changes to the business processes for producing or distributing products and services that are so different from the way a business has been conducted that they alter the fundamental structure of an industry.

-Growth Strategy
Significantly expanding a company's capacity to produce goods and services, expanding into global markets, diversifying into new products and services, or integrating into related products and services.

-Alliance Strategy
Establishing new business linkages and alliances with customers, suppliers, competitors, consultants, and other companies. These linkages may include mergers, acquisitions, joint ventures, forming of "virtual companies," or other marketing, manufacturing, or distribution agreements between a business and its trading partners.


References: Management Information Systems 7 Ed. Ch 2.

Seven Planning Techniques in IS Planning
  • Stages of Growth
  • Critical Success Factors
  • Competitive Forces Model
  • Value Chain Analysis
  • E-business Value Matrix
  • Linkage Analysis Planning
  • Scenario Planning

IT-Business Value Matrix

New Fundamentals
Operational Excellence
Rational Experimentation
Breakthrough Strategy
The Perspective of Strategic Information Systems Planning
In order to put the planning for strategic information systems in perspective, the evolution of
information systems according to the three-era model of John Ward, et al.(1990) is pertinent.
According to this model there are three distinct, albeit overlapping, eras of information systems,
dating back to the 60's. The relationship over time of the three eras of information systems is
shown in the following table:

Data Processing (DP)
Standalone computers, remote from users, cost reduction
1970s & 1980s
Information Systems
Distributed process, interconnected, regulated by
management service, supporting the business, user driven.
1980s & 1990s
Strategic Information
Systems (SIS)
Networked, integrated systems, available and supportive to
users, relate to business strategy, enable the business -
business driven.
Applications in the overall Data Processing (DP), Management Information Systems (MIS)
and Strategic Information Systems (SIS) area need to be planned and managed according to their
existing and future contribution to the business. Traditional portfolio models consider the
relationship of systems to each other and the tasks being performed rather than the relationship with
business success.
Reference: http://viu.eng.rpi.edu/publications/strpaper.pdf149

Some characteristics of strategic IS planning are:
Main task: strategic/competitive advantage, linkage to business strategy.
Key objective: pursuing opportunities, integrating IS and business strategies
Direction from: executives/senior management and users, coalition of users/management and
information systems.
Main approach: entrepreneurial (user innovation), multiple (bottom-up development, top down
analysis, etc.) at the same time.

References: (http://viu.eng.rpi.edu/publications/strpaper.pdf15010015181152101153)

Key issues for IS Strategic Planning:
  • Executive’s strategic orientation - the direction and priority of the company's future development
  • Future organization of the company
  • Strategic requirement of users - business rules and functionality of information solutions to support their value chains
  • Spatial diversification of business activities
  • Information technology - determine possible computer architecture
  • Global view on company data
  • Available information solutions on the market
  • Comparison of information support provided by the competition
  • Project plan - defines objectives, tasks, financial, human and other resources

With the help of Hartman and Sifonis Matrix and the issue described above, a priority list of areas between business and planning is shown below:


Strategic Information Systems Planning Methodologies:

Strategic Information System Planning methodology is comprised of one or more techniques where each technique is defined by a set of practises, procedures, and rules. The main selection criteria of the methodology to use include resource availability, method/technique complexity, internal policy, historical reasons, a prefered supplier, familiarity,etc.

For all the packaged methodologies that described below, it is required to customize for a client's specific requirements to achieve the best efficiency in every situation.

Classify into two categories: "impact" and "alignment".

Impact methodologies help create and justify new uses of IT.
Alignment methodologies align IS objectives with organizational goals.
References: (http://viu.eng.rpi.edu/publications/strpaper.pdf15410215582156103157)

Impact Methodologies
1. Value Chain Analysis: The concept of value chain is considered at length by Michael Porter
Every firm is a collection of activities that are performed to design, produce, market, deliver, and support its product. All these activities can be represented using a value chain.
A typical value chain is summarized as following chart:


The primary value chain activities are:
  • Inbound Logistics: the receiving and warehousing of raw materials, and their distribution to manufacturing as they are required.
  • Operations: the processes of transforming inputs into finished products and services.
  • Outbound Logistics: the warehousing and distribution of finished goods.
  • Marketing & Sales: the identification of customer needs and the generation of sales.
  • Service: the support of customers after the products and services are sold to them.

These primary activities are supported by:
  • The infrastructure of the firm: organizational structure, control systems, company culture, etc.
  • Human resource management: employee recruiting, hiring, training, development, and compensation.
  • Technology development: technologies to support value-creating activities.
  • Procurement: purchasing inputs such as materials, supplies, and equipment.

The goal of these activities is to offer the customer a level of value that exceeds the cost of the activities, thereby resulting in a profit margin.

Value Chain Analysis:
(a) is a form of business activity analysis which decomposes an enterprise into its parts.
Information systems are derived from this analysis.
(b) helps in devising information systems which increase the overall profit available to a firm.
(c) helps in identifying the potential for mutual business advantages of component businesses, in the
same or related industries, available from information interchange.
(d) concentrates on value-adding business activities and is independent of organizational structure.

Strengths : The main strength of value chain analysis is that it concentrates on direct value adding
activities of a firm and thus pitches information systems right into the realm of value adding rather
than cost cutting.

Weaknesses: Although a very useful and intuitively appealing, value chain analysis suffers from a
few weaknesses:

(a) it only provides a higher level information model for a firm and fails to address the
developmental and implementation issues.
(b) because of its focus on internal operations instead of data, it fails to define a data structure for the firm.
(c) the basic concept of a value chain is difficult to apply to non-manufacturing organizations where
the product is not tangible and there are no obvious raw materials.
(d) it does not provide an automated support for carrying out analysis.
Value chain analysis, therefore, needs to be used in conjunction with some other methodology
which addresses the development and implementation issues and defines a data structure.

References: (http://viu.eng.rpi.edu/publications/strpaper.pdf15810415983160105161)

Cost Advantage and the Value Chain
Once the value chain is defined, a cost analysis can be performed by assigning costs to the value chain activities. The costs obtained from the accounting report may need to be modified in order to allocate them properly to the value creating activities.
Porter identified 10 cost drivers related to value chain activities:
  • Economies of scale
  • Learning
  • Capacity utilization
  • Linkages among activities
  • Interrelationships among business units
  • Degree of vertical integration
  • Timing of market entry
  • Firm's policy of cost or differentiation
  • Geographic location
  • Institutional factors (regulation, union activity, taxes, etc.)
A firm develops a cost advantage by controlling these drivers better than do the competitors.
A cost advantage also can be pursued by reconfiguring the value chain. Reconfiguration means structural changes such a new production process, new distribution channels, or a different sales approach. For example, FedEx structurally redefined express freight service by acquiring its own planes and implementing a hub and spoke system.

Linkages Between Value Chain Activities

Value chain activities are not isolated from one another. Rather, one value chain activity often affects the cost or performance of other ones. Linkages may exist between primary activities and also between primary and support activities.
Consider the case in which the design of a product is changed in order to reduce manufacturing costs. Suppose that inadvertantly the new product design results in increased service costs; the cost reduction could be less than anticipated and even worse, there could be a net cost increase.
Sometimes however, the firm may be able to reduce cost in one activity and consequently enjoy a cost reduction in another, such as when a design change simultaneously reduces manufacturing costs and improves reliability so that the service costs also are reduced. Through such improvements the firm has the potential to develop a competitive advantage.

References: http://www.netmba.com/strategy/value-chain/162

2. Critical Success Factor Analysis(CSF)
Critical Success Factors (CSF) in the context of SISP are used for interpreting more clearly the objectives, tactics, and operational activities in terms of key information needs of an organization.
CSFs can exist at a number of levels. They represent the few key areas where things must go right for the business to flourish. i.e., industry, organizational, business unit, or manager’s. CSFs at a lower level are derived from those at the preceding higher level. The CSF approach introduces information technology into the initial stages of the planning process and helps provide a realistic assessment of the IT’s contribution to the organization.

(1) very powerful method for concentrating on key information requirements of an organization, a business unit, or of a manager.
(2) allows the management to concentrate resources on developing information systems around these requirements.
(3) easy to perform and can be carried out with few resources.

(1) is not enough to perform comprehensive SISP - it does not define a data architecture or provides automated support for analysis.
(2) to be of value, the CSF analysis should be easily and directly related back to the objectives of the business unit under review. It has been the experience of the people using this technique that generally it loses its value when used below the third level in an organizational hierarchy
(3) focus primarily on management control and thus tend to be internally focused and
analytical rather than creative
(4) CSFs partly reflect a particular executive’s management style. Use of CSFs as an aid in
identifying systems, with the associated long lead-times for developing these systems, may lead to giving an executive information that s/he does not regard as important.
(5) CSFs do not draw attention to the value-added aspect of information systems. While CSF
analysis facilitates identification of information systems which meet the key information needs of an organization/business unit, the value derived from these systems is not assessed.

References: (http://viu.eng.rpi.edu/publications/strpaper.pdf16310616484165107166)

3. Stages of growth model The stages-of-growth model is a theoretical model for the growth of information technology in a business or similar organization. It was developed by Richard L. Nolan167108168 during the 1970s, and published by him in the Harvard Business Review. There are six stages as below.
Stage 1: Initiation
User awareness is characterized as being "hands off".
IT planning and control is not extensive.
Stage 2: Contagion
There is a proliferation of applications.
Rapid growth of computer use occurs throughout the organization's functional areas.
Stage 3: Control
There is no reduction in computer use.
Applications are often incompatible or inadequate.
Stage 4: Integrations
A larger data processing budget growth exists.
Data processing has better management controls and set standards.
Stage 5: Date administration
Data administration is introduced
The applications portfolio is integrated into the organization
Stage 6: Maturity
Systems now reflect the real information needs of the organization
Data processing now emphasizes data resource strategic planning.

external image nolans-stages-of-groth-model%20%281%29.jpg

Rerference by http://en.wikipedia.org/wiki/Richard_L._Nolan169109170

4. Critical Success Factors
Identifying the things that really matter for success
There are four basic types of CSFs.
-Industry CSFs resulting from specific industry characteristics
-Strategy CSFs resulting from the chosen competitive strategy of the business
-Environmental CSFs resulting from economic or technological changes
-Temporal CSFs resulting from internal organizational needs and changes

Below is the example
external image CriticalSuccessFactors.gif
Rerfenence (http://www.e-competitors.com/index.htm171)

5. SWOT analysis

SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a projector in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.

These attributes are judged in the following aspect :

  • Strengths: attributes of the person or company that are helpful to achieving the objective.
  • Weaknesses: attributes of the person or company that are harmful to achieving the objective.
  • Opportunities: external conditions that are helpful to achieving the objective.
  • Threats: external conditions which could do damage to the objective

The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key pieces of information into two main categories:
  • Internal factors – The strengths and weaknesses internal to the organization.
  • External factors – The opportunities and threats presented by the external environment to the organization.

The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all of the 4P's; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix.
SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.

Reference :http://en.wikipedia.org/wiki/SWOT_analysis172

Real Example on SWOT
Dell Computer is using SWOT Analysis:
Dell Computer Corp. is a good example of how a company can use SWOT analysis to carve out a strong business strategy to meet a strategy to meet a strategic opportunity: the huge demand for PCs by Internet-connected consumers and business. Dell recognized that its strength was selling directly to consumers and businesses and keeping its costs lower than those of other hardware vendors. As for weakness, the company acknowledged that it lacked solid dealer relationship.
Identifying opportunities was an easier task. Dell looked at the marketplace and saw that customers increasingly values convenience and one-stop shopping and that they knew what they wanted to purchase. Dell also saw the Internet as a powerful marketing tool. On the threats side, Dell realized that competitors like IBM and Compaq Computer Corp. had stronger brand names, which put Dell in a weaker position with dealers.
Dell put together a business strategy that included mass customization and just-in-time manufacturing (letting customers use the Web to design their own computers, and then custom- building their systems). Dell also struck with its direct sales plan and developed a world-class e-commerce website to showcase and sell its products.
Copied by: Book – Management Information Systems (Edition: 2006) (James A. O’Brien & George M. Marakas)

Dell online order

In my real experience, my company and home is using lots of Dell computer comparing with server. Choosing the Dell in workstation has two reasons: 1. Can see up-to-date information of PCs, especially the price lists and configurations. 2. Can make the order directly through the Internet that can be fast to transfer ordered PCs to your destination (from order to customer will not be more that 7 days). I know the parts-components (hard disk, ram, CPU, motherboard) of PCs in mainland and the installed the parts-components in Xiamen, so you can know Dell really have a just-in-time inventory to make the just-in-time from suppliers to customers that when customer order a PC, Dell start to order the parts-component of PCs from manufacturers, so that Dell can reduce the risks in inventory (zero risk), because the parts-components of PCs are changed with each passing day which will becomes lower value on day-by-day. I do believe that Dell have a good IS and IT strategies (and an Information System) to make the effect in SWOT.

6. Scenario planning

Scenario planning is a discipline for rediscovering the original entrepreneurial power of creative foresight in contexts of accelerated change, greater complexity, and genuine uncertainty.
Benefits of Scenario Planning
Early Warning: The majority of winning business strategy results from awareness of the impending change. Knowing when to advance or retreat keeps your business alive and flourishing.
New Opportunities: As your competitors struggle with changing conditions, your business will be poised to survive and thrive.
Risk Reduction: Running your small business with the assumption that change cannot impact your business will impact your business. Preparing for possible changes can reduce over exposure of capital and resources to uncertain risks.

Reference (http://www.weforum.org/en/initiatives/Scenarios/index.htm173)

7. Linkage Analysis Planning

Examines the links organizations have with one another with the goal of creating a strategy for utilizing electronic channels
Methodology includes the following steps:
Define power relationships among the various players and stakeholders:
- Identify who has the power
- Determine future treats and opportunities for the company
Map out your extended enterprise to include suppliers, buyers, and strategic partners.
-The enterprise’s success depends on the relationships among everyone involved.
-Some 70% of the final cost of goods and services is in their information content.
Plan your electronic channels to deliver the information component of products and services.
-Create, distribute, and present information and knowledge as part of a product or service or as an ancillary good.
Reference (http://www.csulb.edu/web/journals/jecr/issues/20022/paper7.pdf174)

8. Competitive forces model

The model is mainly used by firms analysing whether they should enter a market or assessing whether they should be in the market at all.
However as firms operate in a dynamic environment, it can also be used to try and figure out what areas of the industry can be improved to make it more profitable.
The Competitive Forces analysis is made by the identification of 5 fundamental competitive forces:
-The entry of competitors (how easy or difficult is it for new entrants to start to compete, which barriers do exist)
-The threat of substitutes (how easy can our product or service be substituted, especially cheaper)
-The bargaining power of buyers (how strong is the position of buyers, can they work together to order large volumes)
-The bargaining power of suppliers (how strong is the position of sellers, are there many or only few potential suppliers, is there a monopoly)
-The rivalry among the existing players (is there a strong competition between the existing players, is one player very dominant or all all equal in strength/size)

external image eom_0005_0001_0_img0142.jpg
Reference (http://www.rapidbi.com/created/porterfiveforces.html175)

9. Three Emerging Forces
Porter’s Value Chain & and Competitive Forces Model become the useful planning technique for the manager. However, the rise of the Internet and the e-business application led the economy condition have been changed. Some of the critics point out that the Porter’s Competitive Forces Model is no longer useful to analyze today’s dynamic changes that have the power to transform whole industries.
Larry Downes in his article “Beyond Porter” states Porter’s assumption are no longer viable. Downes also identify the three “new” forces that can predict the future is required a new strategic framework.

Digitalization: Since the new information technologies are introduced, this may give a chance to all parties in the market to access the information in a more effective and efficient way. So a new business model is required to adopt the parties even outside the industries may be affect the competition in the market
Globalization: The more mature Internet technology and logistic communication, the company can cooperate on a global level, other than that, customer can also source their goods all over the world. As a result, the company cannot position oneself as a price-leader or quality-leader. They may also need to manage the far-reaching network of partners to obtain more mutual advantages.
Deregulation: As the government applies less restriction in their industry plus the new opportunities of information technology, some industries like airline, banking…etc were forced to restructure their business to find other alternatives to grow their business. Consequently, a new business model is required

Reference (http://www.themanager.org/Strategy/BeyondPorter.htm176)

Business Strategies to IS Strategies

The Five Competitive Forces model of Porter is an outside-in business unit strategy tool that is used to make an analysis of the value of an industry structure.The Competitive Forces analysis is made by the identification of 5 fundamental competitive forces:
n Entry of competitors. How easy or difficult is it for new entrants to start competing, which barriers do exist.
n Threat of substitutes. How easy can a product or service be substituted, especially made cheaper.
n Bargaining power of buyers. How strong is the position of buyers. Can they work together in ordering large volumes.
n Bargaining power of suppliers. How strong is the position of sellers. Do many potential suppliers exist or only few potential suppliers, monopoly?

n Rivalry among the existing players. Does a strong competition between the existing players exist? Is one player very dominant or are all equal in strength and size.


Michael Porter describes how businesses can build a sustainable competitive advantage who identified three primary strategies for achieving competitive advantage: Cost Leadership (lowest-cost producer); Differentiation (product is unique); Focus (limited scope)

Porter’s Competitive Advantage
Porter’s Competitive can help us to scale the business strategy which will drive IT and IS strategies. Actually, Porter defined these competitive advantages to represent various business strategies found in the marketplace, including Cost leadership: Walmart, Suzuki, Overstock.com; Differentiation: Coca Cola, Progressive Insurance, Publix; Focus: Ritz Carlton, Marriott.
You need to know the differentiation strategy variants that Shareholder value model which create advantage through the use of knowledge and timing (Fruhan); and Unlimited resources model: companies with a large resource can sustain losses more easily than ones with fewer resources (Chain Store vs Mom & Pop). It point out the problem with Porter and these variants are that rate of change is no longer easily managed and sustained.

D’Aveni developed a model that stated that sustainable competitive advantage could NOT be sustained, called the “hypercompetitive and the New 7 Ss Framework”. Competitive advantage is rapidly erased by competition and the market.


The 7 Ss are useful for determining different aspects of a business strategy and aligning them to make the organization competitive in the hypercompetitive arena
The 7 Ss are:
1. Superior stakeholder satisfaction: maximize customer satisfaction by adding value strategically
2. Strategic soothsaying: use new knowledge to predict new windows of opportunity
3. Positioning for speed: prepare the org. to react as fast as possible
4. Positioning for surprise: surprise competitors
5. Shifting the rules of competition: serve customers in novel ways
6. Signaling strategic intent: communicate intensions in order to stall competitors
7. Simultaneous and sequential strategic thrusts: take steps to stun and confuse competitors in order to disrupt or block their efforts
Referenced by: Copyright 2006 John Wiley & Sons, Inc.

How to apply Hypercompetitive? General Electric applied the Hypercompetition Model to its business units in the Destroy Your Business (DYB) project. GE recognized that if they didn’t understand and recognize their own weaknesses they could not remain competitive. Employees ware tasked to determine ways to “destroy their business unit”. Once they have identified these areas of weakness they apply the Grow Your Business (GYB) strategy to find fresh ways to reach new customers and better serve existing customers.

General Managers cannot afford to rely solely on IS personnel to make IS decisions. Otherwise, IT professionals can help bridge this gap between the technology and its users. You need to remember one thing that business strategy drives IS decision making but you change IS potential should trigger business reassessments, especially the Internet, so we need to take the balance. Information Systems Strategy Triangle shoes the proper balance of strategies. Those models are helpful in discussing the role of IS in building and sustaining competitive advantage.

Key Idea
Application to Information Systems
Porter’s generic strategies framework
Firm achieve competitive advantage through cost leadership, differentiation, or focus
Understanding which strategy is chosen by a firm is critical to choosing IS to complement that strategy
D’Aveni’s hyper-competition model
Speed and aggressive moves and countermoves by a firm create competitive advantage
The 7 Ss give the manger suggestions on what moves and countermoves to make. IS are critical to achieve the speed needed for these moves
Referenced by: Copyright 2006 John Wiley & Sons, Inc.

Benefit of Strategic Information Systems Planning
The Strategic Information Systems Planning (SISP) process has many advantages to the organization. They are:

1) Senior management can via the review of the enterprise in terms of key business functions and data to decide what the organization business direction.

2) Identifies information and systems needed to support the business priorities.

3) Set up or replace a technology platform and a framework for information systems development which may speed up the daily process

4) Anchors system development to business plans

5) Sets priorities and expectations for systems projects which can be more effective and efficiency

6) improved information sharing

7)cost reduction, growth, and seamless end-user functionality.
References http://it.toolbox.com/blogs/enterprise-solutions/strategic-systems-planning-methodology-519717711017885179111180

References http://it.toolbox.com/blogs/enterprise-solutions/strategic-systems-planning-methodology-519718111218285183113184

Drawbacks of Strategic Information Systems Planning
Besides the organization can gain the benefits. SISP also have some drawbacks to the organization.

1) The strategic planning process only best suited for stable environments. A drawback of top-down approach is that it may not be responsive enough for rapidly changing competitive environments. In times of change, some of the more successful strategies emerge informally from lower levels of the organization, where managers are closer to customers on a day-to-day basis.

2) Another drawback is that this strategic planning model assumes fairly accurate forecasting and does not take into account unexpected events. In an uncertain world, long-term forecasts cannot be relied upon with a high level of confidence. And generally, the forecasts period is between 3 to 5 year. Therefore, many firms have selected scenario planning as a tool for dealing with multiple contingencies instead of strategic information system planning.

References http://www.netmba.com/strategy/process18511418686187115188

3) SISP may be very costly due to its comprehensive nature of data analysis. And then it requires
4) SISP requires Skilled management expertise and IS technical competent staff.
5) It is the limitation of the sisp itself. It fail to effectively establish strategies in such areas as the organizational , technological , legal and environments. Existing SISP doesn't adequately address architectural issues.
6) It is the lengthy process of information requirements determination. It often fail to assess the organization and it environments, structure, constraints and polices

references to book Managing social and economic change with information technology

IS Lite


The clear message is that the organization and management of IS/IT resources are going to get more complex. GartnerGroup contends that sharper demarcation between centralized and decentralized IS activities, specialization in centres of excellence, process-based work and outsourcing will lead to what they refer to as IS Lite. With this structure for the management of IS/IT, much conventional IS/IT work is either outsourced or embedded in the business, with the IS function remaining as an intermediary to perform an important valueadding service between suppliers, on the one hand, and users, on the other. In addition, the IS function concentrates on driving IS/IT-based innovation in the business. Similarly, Earl and Khan note that the key change in the role of the IS function in the so-called ‘digital economy’ is that it has become a key contributer and builder of the business, particularly as business processes become even more dependent on IT, distribution channels become electronic and products become digital.

(ref book: Strategic Planning for Information Systems (Third Edition), John Ward and Joe Peppard)

Information Systems and Organizations
As we know, there is no one information system can be applied to all organization since the difference in levels, interests and specialists. Therefore, IS planning is aim at built a customized system to fulfills the organization needs.Information system can be divided into categories of Operational, Management and Strategic in order to serve different organizational interests.

Operational-level system consists of daily elementary activities and transaction like handling sales order from placing new order, prepare receipt, cash deposit and inventory flow.This sysem supported by line manager.

Management-level system is designed to suppor the controlling, decision making and monitoring activities of the middle managers. It provides periodic reports such as income and expenses for all division in the company.

Strageic-level system is aim at addressing the strageic issues of the organization, and the long term trends in both internal and external environment.Catching up the changes of external environment with their capabilities.

The above information systems have inter-relationship since opreational-level system provides information for the management-level, while the management-level system provides information for strageic-level system.It create an enterprise-level view of how the organization is operating.However, integration of systems is costs money, and time consuming.

Management Control and IT Governance

What is Management control?
  1. Management control can be defined as a systematic effort by business management to compare performance to predetermined standards, plans, or objectives.
  2. To determine whether performance is in line with these standards and presumably in order to take any remedial action required
  3. To ensure that human and other corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives

(Source: Robert J. Mockler (1970). Readings in Management Control. New York: Appleton-Century-Crofts.)

What is IT Governance?
(1) IT Governance is a subset of a company’s corporate governance strategy.
(2) Focuses on information technology systems and their performance and risk management.
(3) The primary goals are to assure that the investments in IT generate business value.
(4) To mitigate the risks that are associated with IT.

Purpose of IT Governance:
to ensure that IT's performance meets the following objectives:
(1) For IT to be aligned with the enterprise and realize the promised benefits
(2) For IT to enable the enterprise by exploiting opportunities and maximizing benefits
(3) For IT resources to be used responsibly
(4) For IT-related risks to be managed appropriately


Objectives of IT Governance:
(1) to understand the issues and the strategic importance of IT
(2) to ensure that the enterprise can sustain its operations
(3) to ascertain that it can implement the strategies required to extend its activities into the future.
(4) aim at ensuring that expectations for IT are met, IT's performance is measured, its resources are managed and its risks are mitigated.

References: (http://www.itgi.org/template_ITGI.cfm?Section=Objectives&Template=/ContentManagement/HTMLDisplay.cfm&ContentID=19661198)

Key issues for IS Strategic Planning:
(1) Strategic Alignment - linking and configuring the strategic elements, key organization systems, processes and structure in such a way that their implementation achieves the organization's shared vision and results beyond expectations.
(References: http://www.strategicalignment.ca/saihome.php199)
(Other references reading: http://www.valuebasedmanagement.net/methods_venkatraman_strategic_alignment.html200)
(2) Performance Measurement - is the process whereby an organization establishes the parameters within which programs, investments, and acquisitions are reaching the desired results.
(References: http://en.wikipedia.org/wiki/Performance_measurement201)
(3) Risk Management - is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor and control the probability and impact of unfortunate events.
(References: http://en.wikipedia.org/wiki/Risk_management202)
(4) Value Delivery - is the process of ensuring that maximum business results are realized from IT investments, beginning with requirements definition all the way to systems retirement.
(References: http://www.bain.com/bainweb/LocalOffices/custom.asp?office_id=130&language=1&menu_id=870203)
(5) Esource Management - is the efficient and effective deployment for an organization's resources when they are needed.
(References: http://en.wikipedia.org/wiki/Resource_management204)

Process of IT Governance:
Step 1: Setting objectives for the enterprise's IT, providing the initial direction
Step 2: A continuous loop is established. performance is measured and compared to objectives
Step 3: Resulting in redirection of activities where necessary and change of objectives where appropriate.
Step 4: While objectives are primarily the responsibility of the board and performance measures that of management, it should be developed in concert so that the objectives are achievable and the measures represent the objectives correctly.
The process of IT governance then can be completed as indicated below figure:


References: (http://www.itgi.org/template_ITGI.cfm?Section=Process&Template=/ContentManagement/HTMLDisplay.cfm&ContentID=19660205)

IT Governance Framework:
In response to the direction received, the IT function needs to focus on:
(1) realizing benefits by increasing automation
(2) making the enterprise more effective
(3) decreasing cost
(4) making the whole enterprise more efficient
(5) managing risks (security, reliability and compliance)
The IT governance framework then can be completed as indicated below figure:


References: (http://www.itgi.org/template_ITGI.cfm?Section=Process&Template=/ContentManagement/HTMLDisplay.cfm&ContentID=19660206)

The Advantages of IT Governance
  • To ensure each element of the mission and strategy are assigned and managed.
  • Defining and encouraging desirable behavior in the use of IT and in the execution of IT outsourcing arrangements.
  • Implementing and integrating the desired business processes into the organization.
  • Providing stability and limitations of organizational structure can be overcame.
  • Improving customer relationships and satisfaction.
  • Integrating the customers, business units, and external IT providers into a holistic IT governance framework with clarity and transparency to reduce internal territorial strife.

Reference: (http://www.itsmwatch.com/itil/article.php/3514011207)


The formulation of strategy is only the first step on the road to successful IS/IT management. The strategy must be implemented, and delivering the results and updating the strategy to reflect changing business and IS/IT environments are obviously critical to eventual success. Failure to achieve the intended strategy is often the result of organizational, political and cultural issues being inadequately addressed.
The basic IS/IT strategy development model (reproduced in Figure IS_IT Strategic model.jpg)

ignores explicit reference to the inevitable ‘refinement’ of strategy during planning and implementation, and its continuing adaptation as achievements (or otherwise) occur or any environmental input changes. Strategic management is a combination of formal planning, creativity, innovation, informal thinking and opportunism, all of which must be effectively exploited and integrated. From establishing the strategic direction, through defining specific strategies to eventual achievement of results, the balance moves from formality to relative informality and opportunism. This set of activities also requires some feedback or control mechanism to ensure that plans and their implementation are appropriate for the strategic direction or to enable changes of direction should achievement prove impossible. Sometimes, the strategy as originally formulated has to be revisited as a new strategic context emerges; at other times, the implementation processes have to be
reconsidered in the light of the strategy itself. (Figure Strategic management processes.jpg) depicts these relationships.

(ref book: Strategic Planning for Information Systems (Third Edition), John Ward and Joe Peppard)

Managing IT Operations and Outsourcing

Outsourcing should base your decision on a vendor's industry knowledge, technical competency, financial solvency and service-delivery infrastructureis a long-term relationship, and choosing the right vendor is crucial to meeting your technology, business and financial objectives. we should base our decision on a vendor's industry knowledge, technical competency, financial solvency and service-delivery infrastructure to choose Outsourcing provider

Due to companies mergers, the Internet and e-commerce become more popularize, and the September 11 terrorist attacks, that make computer operations has been receiving a lot of attention. So, systems operations are important, if they are not professionally run and backed up properly, a computer or network crash could shut down a company’s business for some period of time.

The main change in operations is the shift the viewpoint towards:

1. Traditional
– Traditionally managing inward, i.e.: most company own and managing operations staff

2. Today

– Managing outward which mean managing relationships with external service providers
– Outsourced IT service providers who have taken over the day-to-day operational work

3. Back to the future?

– Benefits not realised
– Unexpected costs - money, time, manpower and otherwises


Why need Outsourcing?

Since so many operational problems are obvious to the entire company, "Response times are slow", "Networks are down", "Data isn't available" and "Data is wrong"...etc.

The following 3 strategies is talk about how operations do the improve.
1. Buy more equipment
2. Continuously fight fires and rearrange priorities, getting people to solve the problems at hand
3. Continually document and measure what you are doing, to find out the real problems, not just the apparent ones. Then set standards and manage to them = the preferred solution

Also, we need to measure the Operational. Here is two directions we can focus on:

1. External measure <What the customer sees>
- System uptime
- Response time
- Turnaround time
- Program failures (which mean Customer Satisfaction)

2. Internal measure <interest to systems people>
- Computer usage as % of capacity
- Disk storage used
- Job queue length
* We can analysis the problems reported to get the finding of deviations on external measures vs internal measures. *

Outsourcing changing Customer-Vendor Relationships

Outsourcing change the relationships, which have expanded from buying professional services, to buying products and transactions, to integrating systems, to outsourcing the most bundled approach to contracting. [FIGURE 8-2, 3]

gr2-2634-02-02s.JPG gr2-2634-02-03s.JPG

References PowerPoints prepared by Michael Matthew Visiting Lecturer, GACC, Macquarie University – Sydney Australia

IT Outsource

IT Outsourcing services are designed to deliver high quality service at a very competitive cost which in turn helps internal IT departments free up time from day to day tasks and concentrate on strategic IT projects, then it can save a cost on IT Service.

Longer resolution time: If any problem with a server that you can control in internal IT department, but it will relying on a long time on outside company to solve it.
Patch management: Nowadays, a lot of important patches and updates are always need to applied to your servers and clients, support teams from outsource are always constrained by a contract, that is the customer to keep operating system and applications patched to degree that sometimes may not sit well with 3rd party application vendors.
Exposure: Outsourcing exposes a certain part of your business to a third party. Unless you completely shield your offshore operation, you might expose your company to a breech of confidentiality, malicious use of system access, and other vulnerabilities in your organization.
Negative Reputation: Outsourcing has gained a negative reputation and even though studies have proven otherwise, the general public opinion remains that off shoring eliminates domestic jobs. Your employees, clients, and partners might not appreciate the fact that you are off shoring certain business processes especially if that means that you are terminating a part of your domestic operation.

http://searchwinit.techtarget.com/news/article/0,289142,sid1_gci1212417,00.html208 Add by g2-3445

Benefits of outsource and Operations

First of all , outsourcing lets our company focus on broader our business issues while having operational details assumed by an outside expert. We can improve business focus.
Most of the outsourcing providers are world-class capabilities nowadays. They can provide extensive worldwide resource to meeting the needs of their customer. Outsourcing are focusing on their professional to offer new technology and techniques support to each customer. For personnel, it can increased career opportunities to make the transition to the outsourcing company.
Outsourcing can let us to shared risk. It is more re flexible, dynamic, and adaptable to changing opportunities. The risk is tremendous when the investments an organization makes.
Finally organization has resources limitation. Outsourcing can allow us to redirect the recourses to a suitable place instead of non core activities. it has great return in serving customer

reference to http://www.businessforum.com209120210

Risks of outsourcing and operators
It have been pointer out that there are various potential problem and risk associated with outsouring . these include :

  1. Loss of control over the information system technical decision and costs of information system. it's because the organization is noe locked in a must pay what ever is demanded by the vendor providing ther services.
  2. Loss of trade or secret information and competitive advantage
  3. Dependency upon weak vendor with poor result and services

Following th guideline to outsource service
  1. not outsourcing propriestary or strategic systems that make an organization competitive.
  2. 2. Maintain capabilitiy in innovate with information systems and maintaining qualifies personnel.
  3. 3. Negotiate carfullu to avoid excessive outsourcing fees
  4. consider the need to reverse the outsourcing decision if the arrangement doesn't work
  5. manage the outsourcing arrangement
  6. long term corporate partnerships ma emerage from such arrangements of outsourcing organizations and vedors can refrain from opportunities behavior and develop trust and mutual satisfaction. And then management of outsourcing is necessary. The campany constantly reevaluate outsourcing decision. Vendors in light of changing business condition and services.

The Difference Between ' Strategic Planning' And 'Operational Planning'

Strategic planning is a company define the company direction and future strategic.it is top level planning in a company this is make a decision and . Its sets out the vision, mission and values of a company. It plans out what target to be achieved in the long term like 10 years or longer than 10 year.On the other hand, Operational planning is part of the strategic planning. It is actually levels down from strategic planning. It is short term planning. It sets out to achieve the milestones set out in strategic planning by making operational goals, targets and plans to achieve those targets. It sets out the activities and budgets for the next 1-3 years in future

reference to http://www.blurtit.com/q932922.html211121212
Add by(g2-0500)

Identify and describe several reasons why strategic systems planning is so difficult

The SISP methodlogies may often produce satisfactory plans but that organiztions lack the management commitment and control mechanisms to ensure that they follow the plans.

Strategic systems plans need to align with business goals and support those objectives.
Will be difficult if CIO is not part of senior management.

Continuous planning based on monitoring and experimenting new technologies.

reference to http://www.jstor.org/pss/249212213122214
Add by(g2-0500)

What is Strategic Planning
1.predict the future is possible and develop successful plans based predictions
2.Rigidly scheduled and time-bound (“once every two years”; “looking three to five years into the future”); assumes that strategy needs to be newly developed, deployed, and implemented each time you do strategic planning.

3.Planning is done by a select group of leaders and so-called experts in a rigid(such as CIO), hierarchical organization that uses strategy as a political tool to maintain the status quo or jockey for more power, prestige, and resources. After a few face-to-face interactions, a small group develops the final strategic plan. This select group uses a linear planning process, producing a static document that is meant to serve as the complete expression of the organization’s strategic direction.

4.Like an all-knowing, all-powerful patriarch of old, the organization assumes responsibility for the future of its members and other stakeholders. Yet much of the organization’s strategy for dealing with the future is its planned response to external forces that it doesn’t understand and over which it has little control. Democracy and free speech get lip service, at best, even in many organizations that call themselves member organizations.

5.Strategic planning is mainly an academic exercise with little relevance to the daily work of the association, as people must refer to a cheat sheet, wall chart, or Web page to even remember this year’s plan.

Conclusion of Strategic Planning

the Strategic Planning always is predict the long term future.the Strategic need to monitor developed ,deployed in the each time.because of Strategic is Planning long term target.The CIO is necessary, because the duty of CIO is manage the all resource for the planning,and then scatter the big target to assign the target for the under for CIO department.Strategic Planning is core of company Planning.
reference to: http://www.asaecenter.org/PublicationsResources/JALArticleDetail.cfm?ItemNumber=16603&pg=2215
What is Linkage Analysis Planning
Linkage Analysis Planning is a group exercise that uses brain storming and interactive techniques to spur decision making and identify and prioritize strategies for realizing a vision. Originally developed by IBM Corporation, LAP allows users to recognize seemingly unconnected ideas, link them in a logical way and analyze them to help make sound decisions.
refer to:http://www.partnershipsforolderadults.org/resources/resource.aspx?resourceGUID=b52a2cfc-baa2-4117-9152-4bac336cde6f§ionGUID=753922c9-ded1-4921-82cc-b087db71bc8c216
Add by:( g2-0500)

Priorities & Planning
After strategic information has been gathered about the community’s long term care and supportive services system—including the needs and preferences of older adults—it is time to analyze the information, set priorities, develop strategies and create the plan.
First, take into account the |internal and external factors]] influencing the partnership’s efforts. Keep in mind that priorities should be aligned with the interests and goals of the partners, and that an honest assessment of partnership and community strengths and weaknesses will help ensure an ambitious, yet realistic plan.
Then, consider anticipated changes in the community’s political, economic and regulatory environment. Studying these factors can help determine the likelihood of success of selected strategies.
Balancing and aligning internal and external factors is crucial to prioritizing the improvements you envision for the community’s long term care and supportive services system.
Once priorities have been set, you will want to|develop strategiesthat will lead to desired improvements. This involves creating multiple potential strategies, comparing them, and then choosing the best ones.
To transform these strategies to action, develop|implementation plans ]]that spell out steps, timelines, roles, resources and connections between plan components. Finally, you will want to communicate your plan to stakeholders such as older adults, the general public, policy makers and service providers.


refer to: http://www.partnershipsforolderadults.org/resources/leveltwo.aspx?sectionGUID=66d74f7e-c55d-4379-a833-7a8755f46319217

What made Wal-Mart so big, powerful and successful? Let's look at some of its strategies, including its sophisticated use of technology, its corporate culture of watching every expense, and above all else, its mission to keep prices low.
example of IS strategy successful
Wal-Mart Strategy

Let's start with technology. Wal-Mart pushed the retail industry to establish the universal bar code218, which forced manufacturers to adopt common labeling. The bar allowed retailers to generate all kinds of information -- creating a subtle shift of power from manufacturers to retailers. Wal-Mart became especially good at exploiting the information behind the bar code and is considered a pioneer in developing sophisticated technology to track its inventory and cut the fat out of its supply chain.

external image barcode4.jpg
A universal bar code

Recently, Wal-Mart became the first major retailer to demand manufacturers use radio frequency identification technology (RFID)219. The technology uses radio220 frequencies to transmit data stored on small tags attached to pallets or individual products. RFID tags hold significantly more data than bar codes. During the first eight months of 2005, Wal-Mart experienced a 16 percent drop in out-of-stock merchandise at its RFID-equipped stores, according to a University of Arkansas study (as reported in Fortune Small Business]] magazine).


The IS Management apply at Logistic
Traditional legacy system, Probably ERP systems, cannot handle the integrated information requirements across the chain.But ,firstly, lets take a look at what strategic uses an integrated SC system can bring.For sure, such a system can improve operational efficiencies (by basically eliminating all double handling of documents) and the use of capital assets(by reducing inventory), thus reducing expenses. At the same time, increasing service levels can enhance the customer relationships and supply chain efficiencies (in terms of time and costs) can be increased. With the improvements in customer services and operating expenses(total SC can be operated at an optimum level), more sales can be generated.

Taiwan have a semi-conductor company uses integrated SC information to transform from a physical to a virtual manufacturer.The company is called Taiwan Semconductor Manufacturing Company, the worlds largest contract manufacturer of integrated circuits, which offer its customers turnkey services from design and fabrication through test and assembly.The annual revenue is in excess of US 1.5 billion. As other company,TSMC faces the same problems such as shrinking product life cycles,growing customer demand, and an increasing need for product differentiate for over 400 customers of unique products, proprietary system infrastructures.

Before the conversion to a real time information exchange system,TSMC used web sites, fax,e-mail,FTP,and EDI as the methods of communicating which have that disadvantages:

Slow, time-consuming , and limited both in the amount of information they could transmit to customers

Timeliness with wich they could transmit the information.

These inefficient communication were creat delay along the supply chain

The integration project covers 5 different areas of data or information exchanges:
  • Engineering design:Product developmenet specifcations are sent back and forth between TSMC and its customers until the prototype passes the tests successfully
  • Forecast sharing:Customers automatically provide TSMC with demand forecasts on a regular basis via system-to-system connection that allows TSMC to improve capacity planning and service for its customers.
  • Order management: Purchase orders directly from the enterprise systems of TSMC's customers into TSMC's Total Order Management system, which generates, extracts, and delivers to the customers' systems an order acknowledgement to complete the process.
  • WIP updates:4 types of WIP are extracted per day from TSMC and formatted to meet each customer is requirements and sent. This process provides customers with up to hour visibility into manufacturing status of their products, so they can make better operational decisions.

The released information is that there is business to business integration software to connect to TSMC's suppliers, contract manufacturers, and customers in an integrated virtual supply-chain base that allows customers to tailor the steps in interactions to fit individual needs and implement unique processes.

refer by:http://www.hkctl.vtc.edu.hk/hkctl/servlet/ctlGetFile?file=/hkctl/public/bulletin/newsletter+issue+7_p6-8.pdf222

In order to make a success IS planning, we have to look beyond and target the customer’s need with information technologies, but the frequently change of I.T. also a trouble to the organization. Therefore, the web site must be accessible and provide supportive information to the customer like the status of the order goods by keeping update the content of the site.


The strategic use of IT can affect the following:
The value chain more customer centric from demand-pull to pull-push model
The Intranet or the portal can cohesion the employess and increase their working efficiency
I think a few companies have used IT strategic's (e.g. from traditional strategy making to sense and respond approach) and take advantage from it. Although this is the model for a lot of companies but few of them have resources or skill can support their execute

Strategic planning is a concern for and laying out of the directions for the long-term future.Add by(g2-0500)
Operational Planing is a concern for and laying out of the directions for the short-term future.Add by(g2-0500)
IS planning typically use a combination of planning techniques presented , no single technique or strategic is the best using in business. (author by g2-9128)

Planning Types
Primary Responsibility
3 – 5 years
Vision Architecture Business Goals
Senior management CIO
1 – 2 years
Resource allocation Project selection
Middle managers IS line partners Steering committees
6 months – 1 year
Project management Meeting time Budget targets
IS professionals Line managers Partners

PS: You can add any new Table of Context and Context

Strategic Planning Model added by gt-654

If you don't have a good plan, then you must be failed in future, the strategic plan is help to improve the performance and communication with every one that what is critical success factor
(my word)


Establish a regular review cycle using your balanced scorecard.
Analyze and compare trends using graphs for rapid communication of performance.
Don't be afraid to change your metrics – life cycle (inputs to outputs to outcomes)
Work back upstream to revise your plans: Action Plans > Operating Plans > Strategic Plans
Planning is very dynamic – must be flexible to change.
Recognize and reward good performance results
Brainstorm and change – take corrective action on poor performance results.

Automating the Process

Dialog (www.balancedscorecard2.com)
Ergometrics (www.ergometrics.com)
ExecDash (www.idashes.net)
Scorecard Hosting (www.scorecardhosting.com)

High End Best of Breed Tools
PB Views (www.pbviews.com)
QPR (www.qpronline.com)
Rocket (www.rocketsoftware.com/portfolio/epm)

Reference www.exinfm.com/workshop_files/strategic_planning_model.ppt

Case example

Information Systems that Support Environmental Management

IT is actively promoted for efficient environmental management in the NEC Group.
"Ecology through IT" is also implemented using our in-house management system.
And the Internet is fully utilized to distribute environmental management information and information on environmentally sound products.
Information Systems That Support Environmental Business

  • Environmental Management Information System: Eco Station 2
  • Green Procurement Support System
  • lectronic Auditing System: Net Audit
  • ISO Acquisition Support System: NEC Net EMS
  • Environmental Law and Regulation Search Service: net Environmental Laws and Regulations
  • Environmental e-Learning

Information Systems That Support Transmission of Environment Information

  • NEC's External Environmental Web Site
  • NEC's Internal Environmental Web Site
  • Environmentally Sound Product Information Search
  • Development of ecoPortal Product (Environmental Information Management System)


Development of ecoPortal Product (Environmental Information Management System) and EPIWS (Environmental Information Transmission System)

Until now, the management and transmission of information related to environmentally sound products was beset by a host of problems,
including duplicate processing and insufficiencies in the information transmission contents (Fig. 1)
NEC has newly developed ecoPortal Product and EPIWS to solve these problems (Fig. 2).
ecoPortal Product is a system that makes it possible to manage product assessments done by divisions
(Eco Product standard, Eco Symbol standard compliance judgment) as well as assessment approval and progress verification in the system.
Moreover, this system allows users to grasp in a timely manner the status of the mid-term environmental program
(Eco Action Plan) based on the product assessment results.
Based on such information, information regarding products that have been approved for the Eco Symbol
is released in both Japanese and English through EPIWS, and customers can search and view environmental
soundness information regarding all NEC products by entering keywords such as model numbers or environmental labels.


reference: http://www.nec.co.jp/eco/en/management/information/index.html

Working Inward B-to-E
Building the intranet that NEC group employees can access the company's information through the internet and
provide e-learning to them for increasing their value.
The ecoPortal System can centralize the information that can be managed easily.
Empolyees can work more efficiently. They don't need to do duplicate jobs. This system handles all the information and can be updated by divisions.

Working Outward B to C
Customer can get updated product's information through this system easily and globally.

Linkage Analysis Planning advantage

LAP is well suited for use by community partnerships. It provides an effective way to identify and organize diverse viewpoints, while ensuring optimal participation. The exercise is flexible and can accommodate strategy development at varying levels of detail. When a partnership has completed the LAP exercise, it will have a diagram of prioritized strategies that may prove useful in developing a strategic plan.

Add by:g2-0500
refer link:http://www.partnershipsforolderadults.org/resources/resource.aspx?resourceGUID=b52a2cfc-baa2-4117-9152-4bac336cde6f§ionGUID=753922c9-ded1-4921-82cc-b087db71bc8c223

I don't know what can I post on this fourm, But I try my best to use my own english and what i understood in the chapter , to answer some of the review question at the lastest slide of chapter 2 .


An operational planning is the simple version of strategic planning. It plans for short-term milestones, say 6 months or 1 year. Line manager, IS professionals…etc. mostly use this type planning. It’s because the above positions relatively low level in a company. They may only need to help company for a short-term. Tactical Planning is the planning which breaks down into specific. It plans for mid- term milestones, say 1 to 2 years. Middle managers, IS line partners…etc. mostly use this type planning. Strategic planning is for long – term milestones, say 3 or 5 years. Senior management, CIO …etc. mostly use strategic planning. It’s because they have more experience and authority to plan more for the company.
The relationship between operational planning and strategic planning :
Operational planning explains how, or what portion of, a strategic plan will be put into operation during a given operational period. An operational plan is use to justification of an annual operating budget request. Therefore, a five-year strategic plan would need five operational plans funded by five operating budgets.
Operational plans should establish the activities and budgets for each part of the organization. It links the strategic plan with the activities the organization will deliver and the resources required to deliver them.


Critical Success Factors are the essential areas of activity that must be performed well by an executive’s job; it helps to get the goals for business or project. We all can create a common point of reference to help us direct and measure the success of our business or project.
CSFs help us to know exactly what's most important. And it helps us perform our own work in the right context and so pull together towards the same overall aims.

In our lecture notes, Four sources for CSFs are :
1. Industry that the business is in (specific)
2. Company itself and its situation within industry
3. Environment (e.g. consumer trends, economy)
4. Temporal organizational factors

I found Critical Success Factors of other people, let’s see what are they :
Six Critical Success Factors
Critical Success Factor 1
Move out of your comfort zone—today’s paradigms—and use new and wider boundaries for thinking, planning, doing, evaluating, and continuous improvement.
Critical Success Factor 2
Differentiate between ends (what) and means (how).
Critical Success Factor 3
Use all three levels of planning and results (Mega/Outcomes; Macro/Outputs;
Critical Success Factor 4
Prepare all objectives—including the Ideal Vision and mission—to include precise statements of both where you are headed, as well as the criteria for measuring
when you have arrived. Develop “Smarter” Objectives.
Critical Success Factor 5
Use an Ideal Vision (what kind of world, in measurable performance terms, we want for tomorrow’s child) as the underlying basis for planning and continuous
Critical Success Factor 6
Defining “need” as a gap in results (not as insufficient levels of resources, means, or methods).

Reference :


Example of using Critical Success Factor :


Reference : http://hk.image.search.yahoo.com/images/view?back=http%3A%2F%2Fhk.image.search.yahoo.com%2Fsearch%2Fimages%3Fp%3DCritical%2BSuccess%2BFactors%26b%3D1%26ei%3DUTF-8%26meta%3Drst%253Dhk%26pstart%3D1&w=960&h=720&imgurl=pierresemaan.com%2Fb2evolution%2Fmedia%2FCriticalSuccessFactors.gif&rurl=http%3A2F2Fpierresemaan.com2F&size=12k&name=CriticalSuccessF...&p=Critical+Success+Factors&oid=d67a1c2844bf0806&fr2=&no=2&tt=990&b=1&sigr=10osk1j33&sigi=11t2rlo2u&sigb=13dv95pkg&type=gif224


Linkage Analysis Planning – By using electronic channels, organizations links together to create a strategy.

In our lecture notes, the methodology involves three steps are

Define power relationships among the various players and stakeholders

Map out the extended enterprise to include suppliers, buyers, and strategic partners

Plan electronic channels to deliver the information component of products and services


Add by:g2-2397


Refer to the difference between Strategic Planning, Tactical Planning and Operational Planning.
The aim of the planning is to define the goal or direction of the year, and let staff to follow the direction of the plan. Also, it acts as the linkage/step of next year direction and an index to plan the budget.

< Strategic Planning>
The objective of a strategic plan is to setup the direction of a business and create its shape so that the products or services it provides can meet the overall business objectives.
Strategic planning also involves decision-making about production and operations, finance, human resource management and other business issues.
Through strategic planning, managers establish the general view of their organization's purpose, courses of action, and allocations of resources. In order to implement the Strategic Plan, managers normally will focus on short-term decisions and actions, including budgeting and operational improvement.

< Tactical Planning >
The Objective of tactical planning deals with the HS Agency's internal capability and capacity to perform and addresses resource allocation in a more detailed way and concentrating on short-term decisions. Manager will consider what to do, who will do it, and how it will be done.
The level of planning is the primary responsibility of first-line or higher-level management depending on the scope of the area being managed. Unlike Strategic planning typically addresses subjective risk and uncertainty, tactical planning typically addresses risk and uncertainty that is more objective. Strategic planning is done primarily to ensure overall mission success and organizational survival; tactical planning is done primarily as a means of implementing the Strategic Plan.
< Operational Planning >
An operational planning is a part of strategic plan. It describes short-term ways of achieving milestones and explains how, or what. Partial strategic plan will be put into operation plan during an operational period. An operational plan is the basis for justification of an annual operating budget request. Therefore, a five-year strategic plan would need five operational plans funded by five operating budgets.
Operational plans should establish the activities and budgets for each part of the organization for the next 1 – 3 years. They link the strategic plan with the activities the organization will deliver and the resources required to deliver them. An operational plan draws directly from agency and program strategic plans to describe agency and program missions and goals,
program objectives, and program activities. Like a strategic plan, an operational plan addresses four questions.

Reference link:

(added by g2-0944)


Scenario Planning
- Scenario Planning is designed for the uncertain shifts in the firm's environment.
- Herman Kahn was an early founder of scenario-based planning in his work.
- The result of a scenario analysis is group of distinct futures.
- Always take place in workshop.

Benefits of Scenario Planning
- Managers can break out of their standard world view and exposing their weakness that might otherwise be overlooked in the generally accepted forecast
- Decision-makers are better able to recognize a scenario in its early stages, should it actually be the one that unfolds.
- Managers are able to understand the source of disagreements that often occur when they are envisioning different scenarios without realizing it.

The Scenario Planning Process
1. Specify the scope of the planning and its time frame.
2. Develop the common starting point for each scenario.
3. Identify predetermined elements that are virtually certain to occur and that will be driving forces.
4. Identify the critical uncertainties in the environmental variables.
5. Identify which element is more important.
6. Consider a few possible values for each variable, ranging between extremes while avoiding highly improbable values.
7. Find out the interaction between the variables and develop a matrix of scenario.
8. At this point there is not any detail associated with these "first-generation" scenarios. They are simply high level descriptions of a combination of important environmental variables. Specifics can be generated by writing a story to develop each scenario starting from the present. The story should be internally consistent for the selected scenario so that it describes that particular future as realistically as possible. Experts in specific fields may be called upon to devlop each story, possibly with the use of computer simulation models. Game theory may be used to gain an understanding of how each actor pursuing its own self interest might respond in the scenario. The goal of the stories is to transform the analysis from a simple matrix of the obvious range of environmental factors into decision scenarios useful for strategic planning.
9. Quantify the impact of each scenario on the firm, and formulate appropriate strategies.

reference http://www.netmba.com/strategy/scenario/

Real Example in Scenario Planning
Royal Dutch Shell and Denny’s – Scenario Planning shell.gif DENNYs.jpg
Royal Dutch Shell, one of the world’s largest oil companies, changed their planning process to a scenario approach over 20 year ago. They shifted from the idea that planning involves “producing a documented view of the future” to a scenario approach where planning involves “designing scenarios so managers would question their own model of reality and changes it when necessary.” Royal Dutch Shell believes this change to scenario-based planning was a major reason for their successful business decisions during the oil market upheavals of the 1970s and 1980s.
Denny’s, the nationwide restaurant corporation, use scenario-based planning to develop five-year plans for the business use of information technology. Department managers gather off-site for several days to create business and IS scenarios. They asses the success of scenarios from the past to help them anticipate what the company might be like five years into the future. The managers create several most-likely business scenarios, and develop a high-level IS plan for the information technology needed to support each one. Then the IS director analyzes these IS plans to identify the common IT resources required by each one. The managers then reconvene to discuss these findings, and decide on one IS plan for Denny’s

Copied by: Book – Management Information Systems (Edition: 2006) (James A. O’Brien & George M. Marakas)

Scenario Planning

Developed scenarios have two roles:
The first is in the area of risk management where scenarios enable
strategies and decisions to be “tested” against possible futures.
The second is in the area of creativity and sparking new ideas.

Steps in scenario planning
There is no one way to “do” scenario planning. The most common steps are:
Step 1
A focus issue or question is identified that will anchor the rest of the scenario
planning process.

Step 2
Identify the drivers of change in the external environment that will affect the key
question. Probe the sub-structure of influence.

Step 3
Decide which are the key developments whose outcome is uncertain.
The objective should be to identify the two most important trends or outcomes
whose consequences are uncertain.

Step 4
Scenario building involves erecting a number of possible scenarios, typically starting
with the present as the fixed point and erecting scenarios around 2 or 3 “driving

Step 5
Establish provisional scenario (stories) by creating a number of alternate possible

Step 6
Check out the scenarios for plausibility and consistency. Testing the futures for
plausibility, road testing strategy and deciding on future actions.

Step 7
Modify, polish and present the scenarios. Engaging with stakeholders on preferred

Step 8
Continued monitoring. The last phase deals with continual monitoring of external
drivers and trends to facilitate adjustments to agreed strategy should be reviewed.

Systematic framework for thinking about the future
Challenge orthodoxy and “official” futures
Insights about drivers and uncertain elements
Experiential, leading to shared view and language
Strategic planning and strategy testing
Identify signposts for emerging futures

Inappropriate application (eg a forecast would do)
Blind spots from “believing” scenarios
Creates an informed elite
Hard to communicate
Can operate in isolation from decision making

Reference http://www.valuebasedmanagement.net/methods_scenario_planning.html226 Added by g2-3445

Critical Success Factor (CSF) is the term for an element which is necessary for an organization or project to achieve its mission227. They are the critical factors or activities required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology228 (IT) project is user involvement.[1229]
A plan should be implemented that considers a platform for growth and profits as well as takes into consideration the following critical success factors:[5230]
  • Money: positive cash flow, revenue growth, and profit margins.
  • Your future: Acquiring new customers and/or distributors.
  • Customer satisfaction: How happy are they?
  • Quality: How good is your product and service?
  • Product or service development: What's new that will increase business with existing customers and attract new ones?
  • Intellectual capital: Increasing what you know is profitable.
  • Strategic relationships: New sources of business, products and outside revenue.
  • Employee attraction and retention: Your ability to do extend your reach.
  • Sustainability: Your personal ability to keep it all going.

Five key sources of Critical Success Factors
Main Aspects of Critical Success Factors and their use in analysis
CSF's are tailored to a firm's or manager's particular situation as different situations (e.g. industry, division, individual) lead to different critical success factors. Rockart and Bullen presented five key sources of CSF's:

  1. The industry,
  2. Competitive strategy and industry position,
  3. Environmental factors,
  4. Temporal factors, and
5. Managerial position (if considered from an individual's point of view). Each of these factors is explained in greater detail below.


Reference http://hubpages.com/hub/Nothing-succeeds-like-success231 Added by g2-3445

Strategic IS Planning

... a process conducted within the contexts of scope, perspective, time frame, and level of abstraction, with any or all of the following agenda: (1) supporting and influencing the strategic direction of the firm through identification of value-adding computerized information systems, (2) integrating and coordinating various organizational technologies through development of holistic information architectures, and (3) developing general strategies for successful systems implementation.

Segars, Grover and Teng.1998

Context Characteristics of Strategic IS Planning

Favorable coalignment will lead to effective planning

1. Comprehensiveness
Comprehensiveness is “the extent to which an organization attempts to be exhaustive or inclusive in making and integrating strategic decisions”.
2. Formalization
Formalization is “the existence of structures, techniques, written procedures, and policies that guide the planning process”.
3. Focus
Focus is “the balance between creativity and control orientations inherent within the strategic planning system”. An innovative orientation emphasizes innovative solutions to deal with opportunities and threats. An integrative orientation emphasizes control, as implemented through budgets, resource allocation, and asset management.
4. Top-down flow
SISP should be initiated by top managers, with the aid of support staff.
5. Broad participation
Even though the planning flow is top-down, participation must involve multiple functional areas and, as necessary, key stakeholders at lower levels of the organization.
6. High consistency
SISP should be characterized by frequent meetings and reassessments of the overall strategy.
The recommendations found in the SISP literature have been echoed in the operations management literature. It has been suggested that firms should institutionalize a formal top-down planning process for linking information systems strategy to business needs as they move toward evolution in their management orientation, planning, organization, and control aspects of the IT function.

Two Basic Approaches to Strategic IS Planning

l Top-down approach- alignment between IS and business objective

l Bottom- up approach- taking care of user-needs


Strategic IS planning systems that reflect a profile of rational adaptation will be positively associated with planning effectiveness. The structure or internal coalignment of a rational adaptive planning system includes:

l higher levels of comprehensiveness

l higher levels of formalization

l a focus on control vs. creativity

l a top-down vs. bottom-up planning flow

l higher levels of participation

l higher levels on consistency


Coalignment strongly associated with planning effectiveness

l If dimensions of strategic planning systems favorably align, the planning system as a structure should be more successful than its individual dimensions

l Effectiveness may beyond performance measurement (e.g., ROI, ROE)

Alternative: value-added approach

n Improved management making

n Lower costs of development

n Plans that are actionable and implemented

Implications for Strategic IS Planning

l Planning must be designed, evaluated, and refined such that the overall activity of planning does not become dysfunctional

Emergent systems of planning should reflect the environmental and organizational context within which they function

Ref: Strategic information systems planning: Planning system dimensons, internal coalignment, and implications for planning effectiveness232 Albert H. Segars, Varun Grover, and James T. Teng. Decision Sciences (journal), vol. 29, no. 2 (Spring 1998).
Segars, A.H., Grover, V., and Teng, J.T.C. (1998), “Strategic information systems planning: planning system dimensions, internal coalignment, and implications for planning effectiveness”, Decision Sciences, Vol 29 No 2, pp. 303-345.

(Added by g2-3798)


Information Technology Planning is a discipline within the Information Technology domain and is concerned with making the planning process for information technology
investments and decision-making a quicker, more flexible, and more thoroughly aligned process.[1] According to Architecture & Governance Magazine, (Strategic) IT planning
has become an overarching discipline within the Strategic Planning domain in which enterprise architecture is now one of several capabilities

Some our classmates explained how to make the strategic , and the benefit of IT strategic that can provide.So I would like to focus on the other side, the planning tools.

Strategies for Providing an Information Technology Planning Capability

There are several recognized strategies for providing an information technology planning capability[1].
A repository of application data. Planning tools provide a common inventory of application data including costs, life cycles, and owners, so that planners have easy access to the information that drives their decisions.

Capability maps. Forrester recommends using capability maps to link IT’s capabilities to the critical business processes they support. These software tools provide a graphical tool that clearly outlines how the business capabilities that IT provides to the business are linked to IT’s efforts.

Gap analysis tools. Alongside capability maps, planning tools capture information about the future state of business capabilities as dictated by business strategy. Users leverage this functionality to identify the areas where IT capabilities need to be built, enhanced, or scaled back — driving IT’s strategy.

Modeling and analytic capability. These tools enable planning teams to create a variety of plans, which can then be compared to one another to weigh the pros, cons, and risks of each. In addition, their impact on architecture and current initiatives becomes visible. This keeps plans relevant, provides teams with the foresight to plan holistically, and enables IT to communicate the plan clearly.

Reporting tools. Reports guide the planning team’s decisions — for example, which applications have redundant capabilities, have not been upgraded, or are plagued with costly issues. IT’s strategic decisions are therefore more easily justified.
The following video is a good example to explain how we can use the IT techniques to make the strategic planning quckly:

Strategic planning using Mind Maps

Business Insight - Michael Porter's Five Forces Model Concept

The concepts that most influenced the development of Business Insight were published in Competitive Strategy and Competitive Advantage by Michael Porter.
In these works,Michael Porter described a concept that has become known as the "five forces model".

This involves a relationship between competitors within an industry, potential competitors,
suppliers, buyers and alternative solutions to the problem being addressed. It used the five-forces model as a basic structure and built on it with concepts from the works of many
other authors. The result was a model with over 5,000 relational links.

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http://www.planware.org/salebi.htm(Added by g2-4354)

In our lecture notes, Extranet is mentioned.
In Wikipedia, an extranet means a private network that uses Internet protocols (TCP/IP), network connectivity, and the public telecommunication system to securely share part of an organization's information or operations with suppliers, vendors, partners, customers or other businesses which is B2B & B2C models.
Extranet can be achieved by using virtual private network (VPN) with special security protocols. Extranet can be understood as an intranet mapped into the Internet, but it is not accessible by the public users. Only the users connected with VPN is able to access the network and use the service or information provided in the network.
Normally it is managed by administrators from more than one company which could be a disadvantage as not all companies have capability to maintain a large network. Or it could take a huge training cost for training employee to maintain the network. Therefore, some companies may host the extranet through application service provider.
But extranet also has its advantages. Extranet can be used to exchange a lot of information with partners. (E.g. product catalogs, news, business development information) Extranet also allows one company to access services provided by other company(s) like online banking services. It is very important for e-trading company.
Source: http://en.wikipedia.org/wiki/Extranet