Information Systems Strategy

Learning Objectives
 Describe IS project identification and selection process.
 Describe corporate strategic planning and information
systems planning process.
 Explain the relationship between corporate strategic
planning and information systems planning.

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 The process of Identifying and Selecting IS
Development Projects

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 Identifying and Selecting IS Development
Projects

Comprise of 3 Primary steps:

1. Identifying potential development projects

2. Classifying and ranking IS development projects

3. Selecting IS development projects

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Reasons for undertaking IS Development
Projects

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 1. Identifying potential IS projects
 Each stakeholder group brings their own perspective and
motivation to the IS decision

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Identifying potential IS projects (cont.)
Sources of an IS Project could be:

a. Top-down source are projects identified by

top management or by a diverse steering
committee.

a. Bottom-up source are project initiatives

stemming from managers, business units, or
the development group.

NB. The process varies substantially across organizations.

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Identifying potential IS projects (cont.)

Alternative approaches for IS identification & selection

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2. Classifying and ranking IS projects
 Criteria used by top management and steering committee
to classify and rank projects may vary
 Commonly used criteria are summarized below

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 Classifying and ranking IS projects (cont.)
 Value chain analysis-: the process of analyzing an organization’s
activities for making products and/or services to determine where
value is added and costs are incurred to ensure competitive
advantage.
 It is a chain of activities that build value and include primary and
support activities

 The business may be looked at as an input/output process:

 At one end are inputs (i.e. raw materials)
-These are integrated in a way that produces products and services
 At the other end are outputs (i.e. products & services)
-That are marketed, sold and then distributed to customers

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Classifying and ranking IS projects (cont.)

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 Primary Activities
Inbound logistics : goods obtained from the suppliers and to be used for
producing the end products.

Operations : processing raw materials (manufacturing) into the final

product. Value added to the product at this stage as it moves through the
production line.

Outbound logistics : Once the products have been manufactured they are
ready for distribution to wholesalers, retailers or customers.

Marketing and Sales: Marketing must make sure that the product is

targeted towards the correct customer group. The marketing mix is used to
establish an effective strategy, any competitive advantage is clearly
communicated to the target group through the promotional mix.

Services: support services offered to customers after goods are sold. This
may come in the form of after sales training, guarantees and warranties etc.
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Support Activities
Procurement: Sourcing of raw materials for the business and obtain the
best price for doing so and to obtain the best possible quality available (in the
market) for the organization’s budget.

Technology development: The use of technology to obtain a competitive

advantage in today’s technological driven environment. Can be used in many
ways including production to reduce cost thus add value, research and
production (R&D) and delivery of new products in 24/7 access to the firm.

Human resource management: The organization will have to recruit,

train and develop the correct people for the organization to be successful.

Firm infrastructure: Every organizations needs to ensure that their

finances, legal structure and management structure work efficiently and helps
drive the organization forward.

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Classifying and ranking IS projects (cont.)

Value chain analysis

NB. Information systems projects that provide greatest benefit to the value
chain would be given priority over those with fewer benefits

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3. Selection of IS development projects
 Consider both short and long-term projects.
 Select IS projects that are most likely to achieve
business objectives.

Selection is based on various factors (summarized

on the next slide)

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Selection of IS development projects (cont.)
Factors considered in IS project selection

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 Class Excercise: VALUE CHAIN
Wadosi Golf Course is an internationally known golf facility. It is not just an
eighteen hole world-class golf course, it has a five star hotel with 250 luxury
rooms, and private leisure center, indoor tennis courts, as well as a series of
top class restaurants.
Below are a series of nine activities that add value to the Wadosi experience. Print
out the value chain above (slide No. 11) and place the appropriate letter
(below) onto the value chain.
A. All staff are trained to the highest industry standards.
B. The hotel management team focus on goals set out in their strategic plan.
C. All golf course fairways are trimmed and watered daily.
D. Fresh fruit and vegetables are delivered and prepared every day.
E. The hotel has an advanced room reservation system.
F. Wadosi is promoted through magazines targeted at the wealthy and influential.
G. The whole experience is based upon high quality, professional service at every stage.
H. Limousines are available to take guests to airports as they finish their stay.
I. Wadosi has a series of contracts with suppliers of meat and fish.

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 IS Project Deliverables and Outcomes

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Deliverables and Outcomes
1. Schedule of specific IS development projects
-the primary deliverable from the first part of the planning phase

2.Assurance
-ensuring that careful consideration was given to project
selection and each project can help the organization reach its
goals
3. Incremental commitment
-a strategy in systems analysis and design whereby the project is
reviewed after each phase and continuation of the project is re-
re-justified
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Decision making process in IS project development

Figure 4-4.Information
systems development
projects come from both
top-down and bottom-
up initiatives

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Corporate Strategy and Information Systems
Planning

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Corporate and Information Systems
Planning

In order to benefit from a planning-based approach for

identifying and selecting IS projects, an organization
must:

 Analyze its information needs thoroughly.

 Plan its projects carefully.

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Corporate Strategic Planning

 A Corporate strategy- is the overall scope and

direction of an organization and the way in which its
various business operations work together to
achieve certain goals

 Corporate strategic planning- a systematic process of

determining goals to be achieved in the future.
-An ongoing process that defines mission, objectives, and
strategies of an organization.

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Corporate Strategic Planning (cont.)

 A corporate strategy involves:

1. Mission statement
2. Objective statements
3. Description of a competitive organizational strategy

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Corporate Strategic Planning (Cont.)
Mission statement:
A statement that makes it clear what kind of business a
company is in.

 E.g. SU’s mission statement is:

“To provide all round quality education in an atmosphere of

freedom and responsibility; excellence in teaching, research
and scholarship; ethical and social development; and service to
Society”.

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Corporate Strategic Planning (Cont.)

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Corporate Strategic Planning (Cont.)
Objectives statement:

A series of statements that express an organization’s

qualitative and quantitative goals for reaching a desired
future position.

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Corporate Strategic Planning (Cont.)

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Corporate Strategic Planning (Cont.)

Competitive strategy:
Is the method by which an organization attempts to achieve
its mission and objectives.

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Types of competitive strategy

Main types of competitive strategies:

 Low-cost producer
 Product differentiation
 Product focus or niche

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Corporate Strategic Planning (Cont.)

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 Information Systems Planning (ISP)

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Information Systems Planning (cont.)

 ISP is an orderly means of assessing the information needs

of an organization and defining systems, databases,
technologies and other resources that will best meet those
needs

 ISP must be done in accordance with the organization's

mission, objectives, and competitive strategy.

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Information Systems Planning (Cont.)

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Information Systems Planning (Cont.)

NB. IS planning must be kept in line with corporate

strategic planning.

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Approaches to IS Planning

1.Top-down planning

Top management attempts to gain a broad understanding of

information system needs of the entire organization and offers:

 Broader perspective
 Improved integration
 Improved management support
 Better understanding

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Approaches to IS Planning (cont.)

2. Bottom-up planning:
Junior staff and middle level management identify IS
development projects based on solving specific operational
business problems or taking advantage of specific
opportunities.

 Can be faster and less costly, so may be beneficial in certain

circumstances.

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IS Plan Components

1. A brief description on mission, objectives, and

strategy of the organization.

2. A summary of current and future processes,

functions, data entities, and information needs of the
enterprise.

3. A description of the primary role the particular IS

will play in the organization to transform enterprise
from current to future state.

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IS Plan Components (Cont.)
4. A description of the limitations imposed by
technology and current levels of financial, technical,
and personnel resources

5. A detailed inventory of present projects and

systems with a detailed plan for the current year.

6. A summary of the overall information systems

needs in the company and set long-term strategies for
meeting those needs.

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IS Plan Components (Cont.)
7. A description of unknown but likely events
that can affect the plan, presently known
business change elements, and a description
of their impact on the plan.

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 END!

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