Establishing an Effective Process for

Developing Information Systems and

Technology (or Digital) Strategies
Overview
• Describe the Some Definition Clarity
• Describe the The Evolution of the IS/IT Strategy Process: from
Technology Deployment to Strategic Focus
• Describe the The Business Context for Developing and Managing
the Strategy
• Describe the Establishing an Effective Process : Continuous and
Flexible
• Describe the Setting the Scope for Strategy
• Describe the A Framework for IS/IT Strategy Formulation
• Describe the Other Deliverables From the IS/IT Strategy Process
Objectives
• understanding the different formulation of SI / IT
strategy with IT / IT Planning,
• understanding the evolution of the SI / IT strategy
process,
• understanding the development and management
context of business strategy including SI / TI,
• understanding the approaches to assess the strategy
and planning of SI / IT, to limit the scope of the strategy
and what strategies are appropriate to the scope,
• understanding how to do the SI / IT strategy
formulations
Contents
Some Definition The Evolution of the
The Business
Clarity IS/IT Strategy
Context for
Process: from
Developing and
Technology
Managing the
Establishing an Deployment to
Strategy
Effective Process : Strategic Focus
Continuous and
Flexible
A Framework for
Setting the Scope
IS/IT Strategy
for Strategy
Other Deliverables Formulation
From the IS/IT
Strategy Process
Introduction
• Alignment of IS/IT with the business where IS/IT
contribute most
• Determination of priorities for investment
• Gaining competitive advantage from business
opportunities created by using IS/IT
• Building a cost-effective, yet flexible technology
infrastructure for the future
• Developing appropriate resources to deploy
IS/IT successfully
Some Definitional Clarity
The Evolution of IS/IT Strategy
Process : From Technology
Deployment to Strategic Focus
• Stage 1
• IT deployed in an ad hoc
• Interface between application developed
• project by project
• make work effectively and efficiently
• both business operations and the utilization of technology
• Stage 2
• Top down review of IS/IT in light of business dependence
• Prioritised list of key operational applications for operations and
MIS
• Approaches used are very methodological, normally based on
derivatives of IBM’s ‘Business Systems Planning’
The Evolution of IS/IT Strategy
Process.., cont..
• Stage 3
• Centres around detailed IS/IT planning
• Better balanced portfolio
• More attention to key operational systems and less to support
applications

• Through stages 1-3 evolution is from isolated ‘efficiency’

applications to integrated ‘effectiveness’ systems
• The main propose is to stop IS/IT being problematic and to
ensure that it is causing no disadvantages.
The Evolution of IS/IT Strategy
Process.., cont..
• Stage 4
• User information
• Systems and technology take the reins
• Endorsed by senior management
• Entrepreneurial use IS/IT
• Using information and system in new ways to provide business
leverage/competitive advantage
• Freedom to innovate
• High potential ideas, driven by business
• Stage 5
• Most difficult stage to reach
• Innovative ideas from Stage 4 need evaluation
• Linking IS/IT potential to business strategy
• Strategic applications identified and agreed upon in context of business
strategy
The Evolution of IS/IT Strategy
Process.., cont..
The Evolution of IS/IT Strategy
Process.., cont..
Approaches to IS/IT Strategy Development :
1. Technology led – carried out by IT specialist to establish
technology, foundations, architectures, capability to expected
application needs of business users
2. Method Driven - Uses techniques to identify IS needs by analyzing
business processes – an engineering philosophy based on top
down analysis of information needs and relationships
3. Administrative - Establish IT capital & expense budgets & resource
plans to achieve IS application, based on prioritized list form
users
4. Business led – business plan, at a functional level, identify where
IS/IT is most critical
5. Organization led - Develop themes for IT investment based on
business agreement of how IT can help achieve business
objectives, Agreed on by senior management team
Problem and Barries
IT Strategies fail due to – Failure to obtain top management
support.
Reasons failure:
1. lacked awareness of the impact IS/IT
2. perceived a credibility gap between the ‘hype’ of the IT
industry as to what IT can actually do and how easy it
is to do it
3. did not view information as a business resource to be
managed for long-term benefit
4. despite the difficulty in expressing all IS benefits in
economic terms
5. Top managers had become action oriented with short
term focus
Enablers and Inhibitors of Strategic
Alignment
The Business Context for Developing
and Managing the Strategy
 External Internal
environment Determine environment
business
strategy

Develop high-level Propose Investigates

‘functional’ development potential major
strategies programme change projects

Construct/
Develop Consolidate
‘functional’ Develop change
development project plans
plans programme

Manage Manage
‘functional’ development Implement change
plans programme projects

Business as Incremental Breakthrough

usual change change
Establishing an Effective Process :
Continuous and Flexible
• Early, industry change and the resulting Threats and
Opportunities do not always arrive at times to suit the
organizations strategy and planning cycle.
• Some of theme may be IS/IT generated
• Organization – be agile, responsive to be prepared to respond and
change its business plans accordingly, and the IS strategy needs to
be able to respond in the same way
Establishing an Effective Process :
Continuous and Flexible, cont..
Establishing an Effective Process :
Continuous and Flexible, cont..
• IS/TI strategy may need reviewing and amending due to internal
business changes and technology developments or issues
• Internal Business Factors - changes in the nature of the business
or the structure and organization of the enterprise may result in
the need to revisit or reconsider the IS/IT strategy:
• takeover by a new owner(s) or the appointment of a new CEO or
management team
• major rationalization caused by
• Restructuring
• new products or markets or channels-to-market
• Technology Factor
• Competitive opportunities and threats (real or potensial) based on
new IT Development
• New product or markets by IS/IT
• Technology cost-factor changes
Assessment of Current
Organizational Environment
• Broad overview of business
– Long term mission
– Goals
– Vision for future
- Driver for change
– Strategy
– And more…
• Effectiveness of IT, strengths and weaknesses
of applications
• Current role of IT, and in comparison with external
organizations in the same industry
• How IS/IT strategies were developed in the past
Establishing Success Criteria
• Implementation IS/IT process concerned with
IT development, e.g.
– Object orientation
– Relational database technology
– HTML
– Hardware specification
• End-user development
• Objectives are similar to those for the business
e.g.
– Improving customer service
– Enhancing productivity
• Providing the means for product differentiation
Establishing Success Criteria
• Efficiency – efficient use and management of resources,
e.g people and finance
• Enrichment – ability of the process to achieve ongoing
alignment and synchronization with evolving business
strategy
• Effectiveness – how well the process achieves the
intended goal for both the deployment of IS/IT, and role
of the IS/IT function in the organization
Establishing Success Criteria

Success Dimensions
• Improved the contribution of IS/IT to the performance
of the organization
• Extent of alignment of IT investment with the business
strategy
• Gaining competitive advantage through deployment of
IS/IT
• Identifying new and higher payback applications
• Identifying strategic applications
• Increasing top-management commitment
• Improving communications with users
• Better forecasting of IT resource requirements
Setting the Scope for Strategy : The
Strategic Business Unit (SBU)
Consolidation across Business
units
A Framework for IS/IT Strategy
Formulation
The strategy formulation and planning
framework has three building blocks:
– Inputs
– Outputs
– Essential activities
IS/IT Strategy Framework - Inputs
• Internal business environment: current strategy, product –
service, objective, resources, processes, culture and value business
• External business environment: economic, industrial, social,
regulatory, and competitive climate
• Internal IS/IT environment: current IS/IT perspective in the
business, portfolio
• External IS/IT environment: technology
trends and opportunities
IS/IT Strategy Framework -
Outputs
• Business IS strategy: use information and IT application
–business objectives and/or creating new business
strategies and options
• IS/IT management strategy: policies and governance
mechanisme to enable the formulation and successful
implementation strategy
• IT strategy: technology investment , service plans,
strategies for acquisition and management of technology,
supplier relationships, and specialist resources
Selecting a Strategy Approach
key characteristics of the approach chosen:
– Flexible, modular, and able to pick up deliverables
from earlier or parallel activities
– Emphasis on deliverables
– Clear checkpoints
– Recognition of the interactive and cyclic nature of the
process
– Recognition of the importance of the human side of the
process
– Simple diagramming tools
Other Deliverables From the IS/IT
Strategy Process –IS/IT
Management Strategy
• IS/IT Management Strategy is particularly
necessary where several strategic business units
develop their own business IS strategy
• Some issues are addresses in management
strategy:
 Scope and rationale
 Formal organizational and resource structure
 Investment and prioritization policies and practices
 Vendor or supplier policies
 Human Resources policies
 IS/IT acoounting policies
Other Deliverables From the IS/IT
Strategy Process - Hard and Soft
Output
• Hard outputs: Documents defining strategies and plans, and
frequently include computer-based material in the form of
dictionaries, matrices and information analysis models.
• The main purpose of the hard outputs is to document:
– The current situation
– The vision and rationale for what is being put into place- information,
systems, technology, people
– The plans for how it is going to be achieved

• Soft outputs: relate to human factors such as skills, awareness

and motivation.
The Audience for the Strategy

• The audience should include:

– Senior management
– IS/IT management staff
– All participants in the planning activities
– Functional management and users
– Individuals in existing project teams
Summary
• This chapter has focused on an overall approach to strategizing
and planning for IS/IT and emphasized the continuous nature of
that process, involving the combined knowledge of key business
and IS/IT staff, thus facilitating genuine, lasting and productive
partnerships between business and IT
• Experience has shown that the most effective strategy process
takes place at the strategic business unit level, with appropriate
rationalization 176 Developing an IS/IT Strategy: Establishing
Effective Processes and consolidation across the whole
organization
• Key aspect of the formulation process is ensuring the organization
is both willing and able to implement its chosen strategy. This will
depend as much on how the strategy was derived
Question & Answers