Chapter 6
Strategic Information Systems Planning
Learning objectives
• To explain why managers must be involved in information systems planning decisions despite their
lack of technical expertise.
• To discuss the purpose that strategic information systems planning serves in modern
organizations.
• To identify the key components of the strategic information systems planning process, including
information systems assessment, information systems vision, and information systems guidelines.
• To explain how to perform an information systems assessment.
• To explain how to decide what role information systems resources should play in your firm using
available analytical tools to develop an information systems vision.
• To explain what role information systems guidelines play in the planning process and how to
develop them upon having established an information systems vision.
• To help you evaluate how well positioned your organization is to achieve its information vision
following the guidelines and to develop consistent strategic initiatives.
Introduction
• With information technology (IT) increasingly embedded in all aspects
of business operations, the most successful organizations are those
that are able to establish a productive partnership between IT
executives and their functional counterparts.
• Whether or not you are able to establish a productive partnership
with the information systems (IS) professionals in your organization,
you must be involved in the strategic planning and management of
information systems in your firm
Strategic and Operational Planning
• The realm of strategy pertains to the decisions that an organization
makes with respect to how it will develop and deploy its resources
over time in an eff ort to achieve its long- range objectives
• As a consequence, the realm of strategic planning, is concerned with
long- range decisions about resource development and deployment
• Conversely, operational decision making is concerned with local
decisions in the present
• Focus on how the firm will build and deploy its IS resources in an
effort to achieve its long- range business objectives
Strategic Alignment
• A firm that has been able to achieve a high degree of fi t and
consonance between the priorities and activities of the IS function and
the strategic direction of the firm has achieved strategic alignment
• Alignment has a direct impact on firm performance, and alignment is
perennially on the top- 10 list of CIO priorities
• Strategic alignment is very difficult to achieve and maintain, particularly
in those highly competitive environments where opportunities arise
and fade quickly, and strategic priorities change constantly. Thus
ensuring a high degree of strategic IS alignment requires as much
improvisation as careful planning
Six Decisions Requiring Managerial
Involvement
The Purpose of Strategic Information
Systems Planning
• General and functional managers need to be involved in the decision making that
affects their organization’s investment in, and use of, information systems and
information technology resources
• You must understand the planning process, its purpose, and the type of decisions
to be made as it unfolds
• The planning process must occur as a partnership among those with technical
skills, the information systems group, and general and functional managers
• The planning process has a number of objectives, chief among them that of
clarifying how the firm intends to use and manage information systems resources
to fulfill its strategic objectives.
• The planning process requires discussion, clarification, negotiation, and the
achievement of a mutual understanding
Advantages of the Planning Process
• Plans Enable Communication: it enables and supports intraorganizational
communication This communication is critical since individuals typically have different
expectations, speak different languages, and often have different objectives and
priorities
• it is critical that consultants serve as members of the planning team rather than as delegates of
the firm
• Plans Enable Unity of Purpose: Organizations achieve their best results when a clear
strategy and clear goals have been identified and lead to concerted efforts from the
organizational units and employees. The information systems plan serves as a contract of
sort, wherein the objectives of information systems deployment are specified and clear
responsibilities are agreed upon
• Plans Simplify Decision Making over Time: the firm will not be in the common situation
in which it has to select projects to fund as part of the yearly budgeting process, with
little sense of overall direction and purpose
The Strategic Information Systems
Planning Process
• Strategic business planning: consists of an
organization’s mission and future direction,
performance targets, and strategy
• Information systems assessment: consists of taking
stock of the firm’s current IS resources and
evaluating how well they are fulfilling the needs of
the organization
• Information systems vision: consists of a concise
statement that captures what the planning team
believes should be the role of IS resources in the firm
• Information systems guidelines: represent a set of
statements, or maxims, specifying how the firm
should use its technical and organizational IS
resources
• Strategic initiatives: are long- term (three- to five-
year) proposals that identify new systems and new
projects or new directions for the IS organization
Know Who You Are: Strategic
Business Planning
• Information systems are enablers of business strategy and operations
• Effective information systems planning can only occur in concert with
business planning
• Unless the planning team has developed a clear understanding of the
firm and what makes it successful, as well as a deep understanding of
the business strategy and its future goals and objectives, planning for
the use and management of information systems resources is an
exercise in futility
Know Where You Start: Information Systems
Assessment
• The team needs to perform an information systems resource assessment that
includes taking an inventory of the IS resources the firm is currently using and
critically evaluating them in terms of how well they are meeting the business
needs of the organization
• The objective is to understand what resources are available and whether they
are currently satisfying organizational objectives:
• Technical resources are composed of hardware, software, and networking components
that make up the firm’s IT infrastructure
• Data and information resources are composed of databases and other information
repositories
• Human resources are composed of IS professionals (those individuals who are
responsible for creating and managing the IT resources) and the user community
(including general and functional managers as well as end users).
Know Where You Want to Go:
Information Systems Vision
• Spell out the role that information • Some organizations’ success in the
systems should play in the marketplace depends heavily on their
organization ability to introduce IT innovations and
manage information systems
• With more and more organizations strategically (Google, Apple). For these
relying on computer-based firms, information systems must play a
information systems and cloud strategic role, and the organization
applications, protracted disruptions must constantly look for applications of
to the firm’s IT infrastructure are IS that enable it to be more competitive
certainly going to create problems. • For others, typically those organizations
However, the impact of these in more mature and less IT-intensive
disruptions can vary dramatically industries, being cutting edge is less
from organization to organization important
What the Role of IS should be for the
Firm?
• The IS vision is a concise statement that captures what the planning
team believes should be the role of information systems resources in
the organization. It provides an articulation of the ideal state the firm
should strive for in its use and management of IS resources
• The information systems vision must be aligned with and reflect the
firm’s business strategy and, as a consequence, will be unique and
highly specific to your company
• How to decide what the role of information systems in your
organization:
• critical success factors (CSF) methodology
• strategic impact grid
Critical Success Factors
• Critical success factors are defined as the limited number of areas,
typically three to six, that executives must effectively manage to
ensure that the firm will survive and thrive
• The CSF methodology asks that you identify what the firm must do
right (not what the IS department must do right) to ensure the
ongoing success of the organization
• With the CSFs identified, it becomes easier to think about the role of
IS in achieving them
The Strategic Impact Grid
• The main advantage offered by the strategic impact grid is its ability
to enable simultaneous evaluation of the firm’s current and future
information systems needs.
• This is achieved by plotting the firm on the following two dimensions:
• Current Need for Reliable Information Systems: focuses on current day-to-day
operations and the functionalities of the existing systems
• Future Needs for New Information System Functionalities: forward looking
dimension that is concerned with the strategic role that new IT capabilities
play for the organization
The Strategic Impact Grid Quadrants
• Support Quadrant: IS are not mission critical for
current operations, and this state of affairs is not
likely to change in the foreseeable future
• Factory Quadrant: the company currently has a
technology infrastructure that enables the business
to operate with the needed degree of efficiency
and effectiveness
• Turnaround Quadrant: IS are not considered
mission critical for current operations. But the
planning team believes that in the near future a
new information systems or new functionalities of
existing systems will be critical for the business’s
future viability and continued (or expected) success
• Strategic Quadrant: outstanding IS operations and
a relentless attention to information systems
innovation are a must for companies in this
quadrant
Know How You Are Going to Get
There: Information Systems Guideline
• Identifying a parsimonious set of guidelines that, if followed, will enable
the firm to achieve its information vision. This set of guidelines,
sometimes referred to as the information systems architecture, is
prescriptive in nature—identifying the guiding principles that the firm will
follow when using and managing information systems resources
• The firm executives have a vision for what they want the business to
achieve and how they want it to operate. Working in partnership with
information systems professionals, as part of the planning team, they will
refi ne their vision and establish a blueprint that will enable
communication, establish responsibility, and guide future decision making
Objectives of the Information
Systems Guidelines
• Communication: simplify tactical and operational decision making and to ensure that
future decisions are aligned with the information systems vision
• Identify Responsibilities: set expectations for behavior, serving a similar binding
purpose as policy rules or the custom blueprints and schematics described above
• Decisions that are made in accordance with the information systems guidelines are in line
with expectations and will typically be deemed appropriate
• Decisions that are made outside of the guidelines are treated as exceptions and will typically
need substantial justification
• Long-Range Decision Support: guidelines must be general enough to provide
direction over a number of years. Yet it is crucial that they be actionable. Thus they
need to be specific enough to clearly spell out what the firm should do and, as a
consequence, what it should not do when it comes to the deployment of
information systems resource
Technical and Organizational
Guidelines
• Technical Information Systems Guidelines: focus on the technical
components of the firm’s information systems must address future
decisions pertaining to the hardware and software infrastructure,
networking services, and the storage and protection of organizational
data and information
• Organizational Information Systems Guidelines: focus on the
organizational components of the firm’s information systems must
address those decisions that pertain to human resources, the
organization of the information systems function, reporting and
hierarchical structures, and the like
Know How Well Equipped You Are to
Get There: Information Systems SWOT
• The planning team must now review how well equipped the firm is to
achieve their vision in accordance with the stated guidelines
• This step is the last piece of analysis before the team develops an
action plan and proposes tangible initiatives. It consists of a strengths,
weaknesses, opportunities, and threats (SWOT) analysis focused on
the firm’s current information systems resources and capabilities
• Having read the SWOT analysis and given the proposed vision and the
guidelines, it should become clear what the firm needs to do during
the current planning cycle
From Planning to Action: Proposed
Strategic Initiatives
• The last component of the strategic information systems plan is the
identification of strategic initiatives
• Strategic initiatives are long-term (three-to-five-year) proposals that
identify new systems and new projects or new directions for the IS
organization
• These initiatives need not be precisely articulated, but they do need
to identify a set of future avenues for exploitation of the IS resources.
They also must be tightly aligned with the information systems vision
and the proposed role of IS in the organization
Summary
Strategic information systems planning is the process by which the firm, by way of
the planning team, develops a shared understanding of the role of information
systems resources use in the organization.
General and functional managers play a crucial role on the planning team, despite
the fact that they typically lack technical knowledge. Their role is to help identify
the firm’s strategy and, in light of that business strategy, to help decide how
information systems resources should be used to achieve it.
Summary
General and functional managers should also take the lead in answering questions,
such as how much money should be spent on IT, to what business processes these
funds should be directed, what IT capabilities should pervade the organization,
what levels of IT service should be achieved, what degree of IT risk the firm will
accept, and who is responsible for IT initiatives.
As critical members of the planning team, general and functional managers will
help in crafting the firm’s information systems vision and guidelines. The
information systems vision provides an articulation of the ideal state of information
systems resource use, while the guidelines offer a context for decision making.
Summary
With the basic planning mechanisms in place, the firm moves to action and
identifies strategic initiatives to be implemented in order to achieve the stated
information systems vision. These strategic initiatives often stem from what the
organization believes are available opportunities, as well as weaknesses that must
be managed.
What we learned
• To explain why managers must be involved in information systems planning decisions despite their
lack of technical expertise.
• To discuss the purpose that strategic information systems planning serves in modern
organizations.
• To identify the key components of the strategic information systems planning process, including
information systems assessment, information systems vision, and information systems guidelines.
• To explain how to perform an information systems assessment.
• To explain how to decide what role information systems resources should play in your firm using
available analytical tools to develop an information systems vision.
• To explain what role information systems guidelines play in the planning process and how to
develop them upon having established an information systems vision.
• To help you evaluate how well positioned your organization is to achieve its information vision
following the guidelines and to develop consistent strategic initiatives.