CISB444 - Strategic Information Systems Planning Chapter 6 – Managing The Applications Portfolio

CISB444 - Strategic Information CISB444 - Strategic Information Systems PlanningSystems Planning

Chapter 6 – Chapter 6 – Managing The Managing The Applications PortfolioApplications Portfolio

Course OverviewCourse Overview

• Chapter 6 describes ways in which the current and future applications of IT can be assessed in terms of their business contribution, both individually and as an overall portfolio of IS/IT investments.

• The appropriate management of each element in the portfolio

CISB414 - Strategic Information Systems PlanningCISB414 - Strategic Information Systems Planning 22

Main TopicsMain Topics

• Classifying the applications in the portfolio• Generic application management strategies• Applying portfolio management principles on the

application portfolio

IntroductionIntroduction

• The applications portfolio concept bringing together existing, planned and potential information systems and assessing their business contribution.

• The main purpose in classifying applications is to ensure that they are managed successfully and that the expected contribution is delivered.

• The application portfolio provide relevant guidance to enlighten and support management decision making.

Classifying the Applications in the PortfolioClassifying the Applications in the Portfolio

• Classifying existing and future applications in the portfolio helps the task of obtaining a consensus among executive management, line managers, and the IT management on the use of resources and the selection of the most effective sources– Which aspects should be managed in-house and which can

and should be outsourced.

Classifying the Applications in the PortfolioClassifying the Applications in the Portfolio• It is important to understand the role of and value of the existing

application to the organisation : – Some applications may be obsolete and no longer required– Others may need significant investment to avoid future

business problems– Some may be underexploited– Others may be consuming undue amounts of resource in

relation to their business value

Recap – types of ISRecap – types of IS

• Support - Applications that are valuable but not critical to success, IT/IS is used essentially for administrative systems to improve internal efficiency

• Key Operational - Applications on which the organisation currently depends for success IT/IS is critical to current operations and management

• High Potential - Applications that may be important in achieving future success, however, there is a degree of uncertainty as the capabilities of the company in terms of delivery ands upport are untested.

• Strategic - Applications that are critical to sustaining future business strategy

Classifying the Applications in the Portfolio:Classifying the Applications in the Portfolio:Questions to AskQuestions to Ask

Is the application delivering benefits that:1. Result in a clear competitive advantage for the business?2. Enable the achievement of specific business objectives and/or critical

success factors?3. Overcome known business disadvantages in relation to competitors?4. Avoid foreseeable business risks becoming major problems in the

near future?5. Improve the productivity of the business and reduce long-term costs?6. Enable the organisation to meet statutory requirements?

- Will failure to comply lead to significant business risks?

7. Provide benefits not yet known, but may result in 1 or 2 above?

Classifying the Applications in the Portfolio:Classifying the Applications in the Portfolio:InterpretationInterpretation

1. Result in a clear competitive advantage for the business?2. Enable the achievement of specific business objectives and/or critical success factors?

3.Overcome known business disadvantages in relation to competitors?4. Avoid foreseeable business risks becoming major problems in the near future?

.5 Improve the productivity of the business and reduce long-term costs?6 Enable the organisation to meet statutory requirements?.7 Provide benefits not yet known

Generic Application Management StrategiesGeneric Application Management Strategies

• Parsons (1983), described 5 common strategies by which organizations link the management of IS/IT to the business management processes.– Centrally Planned, Leading Edge, Free Market, Monopoly and Scarce

Resource• These ‘linking strategies’ are general frameworks/generic strategies

which will guide the opportunities for IT identified, the IT resources developed, the rate at which new technologies are adopted, the level of impact for IT within the firm, etc.

• The strategies define roles and responsibilities for 3 key parties– Executive management– Line management – operational– IS/IT specialist – internal/external

Centrally PlannedCentrally Planned

Leading EdgeLeading Edge

Free Market Free Market

MonopolyMonopoly

Scarce ResourceScarce Resource

Generic Application Management Strategies - Generic Application Management Strategies - summarysummary

Relationship of Applications PortfolioRelationship of Applications Portfolioand Generic IS Strategiesand Generic IS Strategies

Portfolio Management Principles Applied to thePortfolio Management Principles Applied to theApplications PortfolioApplications Portfolio

• The main reason the product portfolio model offers useful input to the application portfolio is that it reflects the competitive business environment.

• The model was developed to assist in managing and planning in an uncertain, market-driven environment, where management decisions are made within a total environment that can only be influenced, not determined.

• IS/IT is also subject to the forces of the marketplace – external parameters now define the effectiveness of an organisation’s IS/IT management.

The Business/Systems Portfolio MatrixThe Business/Systems Portfolio Matrix

Management StylesManagement Styles

QuestionQuestion

CISB444 - Strategic Information Systems Planning Chapter 6 – Managing The Applications Portfolio

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