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Information Systems Planning

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Opening Case: Kmart

Issue: whether & how extending e-business capabilities would revive the

companys competitive position The IT initiatives must be based onplanning issues

Aligning information systems with businessstrategyDeciding what projects to do, etc.

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The Process of InformationSystem Planning

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Challenges in Business Planning

Foreseeing and assessing opportunities Assuring consistency with organizationalplans and objectivesBuilding systemsMaintaining information systemperformanceCollaborating with IT professionals

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Principles for IS Planning

Support the firms business strategy withappropriate technical architecture

Evaluate technology as a component of alarger systemRecognize life cycle costs, not justacquisition costs

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Design information systems to bemaintainable

Recognize the human side of technologyuseSupport and control the technical system

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Planning Role of the IS and UserDepartments

The IS department is responsible forproducing the IS plan in conjunction withthe user departmentsChief information officer (CIO)

Leads the IS function, and is responsible formaking sure that the IS plan supports thefirm's business plan

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User roles in IS planning roles:Sponsors senior managers who make sure

resources are allocated for building andmaintaining the systemChampions individuals that recognize theimportance of an IS, and exert effort to make

sure that others share that recognitionIS steering committees make sure that theIS reflects business priorities

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Allocating Resources BetweenNew and Old ISs

Maintaining existing ISs and supportingusers

User support projectsEnhancementsBug fixes

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New development, infrastructure, andother projects

Major new applications projectsIT infrastructureResearch projects

Pilot project

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Project Roles of IT Professionals

Project managers ApplicationprogrammersSystem analystsProgrammer-analystTechnical writers

Computeroperators

DatabaseadministratorsSystem managers

SystemprogrammersUser support staff

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Strategic Alignment ofBusiness and IT

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Figure 11.3

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Consistency With BusinessPriorities

Critical success factors (CSF) thethings that must go right for a business tosucceed

Identify the firms primary mission and theobjectives that determine satisfactory overall

performanceExecutives identify a relatively small numberof CSFs

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Reengineering and Downsizing

Business process reengineering (BPR) thefundamental rethinking and radical redesign

of business processes to achieve dramaticimprovements in critical measures of

performance

Difficult and riskyDownsizing improve process efficiency byreducing the number of people involved in the

process

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Enterprise-wide andInterorganizational Systems

Interorganizational systems reflect thecustomer and supplier aspects of the

integration issues addressed by ERPsystemsIntegration between ERP packages andsupply chain management

Virtual organizations major aspects ofcore processes are outsourced tocompanies that specialize in these areas

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Information System Architecture

The basic bluepr in t showing how thefirms data processing systems, networks,

and data are integratedMust incorporate legacy systemsOld, and often obsolete systems that are stillin use

Computing platformThe basic types of computers, operatingsystem, and network

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Centralization vs. Decentralization

Location of hardware and dataCorporate headquarters

Regional processing centersSite processing centersDepartment processors

Work group processorsIndividual workstations

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Standards, ownership, and guidelines foraction

Position of the IS staff

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Describing a Business-drivenInfrastructure Figure 11.5

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Outsourcing

A long-standing practice in IS departments Application service provider (ASP)

Operate a firms application on remote serverson a WAN

Advantage: the firm no longer needs to install

and maintain the softwareDisadvantage: the firm has less control overthe application, and may have difficultytransferring to another ASP if needed

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International Issues

Technical incompatibilitiesSocial and political issuesTelecommunication issues

Transborder data flow

Economic issues

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Selecting Systems to Invest In

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Cost/Benefit Analysis

The process of evaluating proposedprojects by comparing estimated benefits

and costsKey issues:

Tangible and intangible benefits

Tendency to understate costsTiming of costs and benefits

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Risks

Desired benefits are not achievedThe project is late and/or over budgetThe systems technical performance isinadequateUser acceptance is lowShifting priorities reduce the projectsimportance, etc.

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Financial Comparisons

Some common criteria used for comparingand ranking projects:

Net present value (NPV)Internal rate of return (IRR)Payback

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Project Management Issues

Division of labor between the ISdepartment and users

Keeping the project on scheduleGoals, deliverables, schedulesChallenges in information system projects

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Systems Analysis Revisited

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Information Sources for AnalyzingSystems

InterviewsInputs, outputs, and documentation ofexisting systemsOn-site observationQuestionnairesBenchmarking