Is Strategy Development

8/4/2019 Is Strategy Development

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IS Strategy development


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The formulation of approaches andplanning needed to deploy

information systems resources to

support organizational strategy

Information systems strategy


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Definition of the future direction andactions of an organization specified

as approaches and allocation of

resources to achieve specificobjectives

Organizational strategy


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the process of identifying a portfolio of

computer-based applications to be

implemented, which is both highly

aligned with corporate strategy and has

the ability to create an advantage overcompetitors.

IS strategy development


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An information systems strategy brings together

the business aims of the company, an

understanding of the information needed to

support those aims, and the implementation of

computer systems to provide that information. It is a plan for the development of systems

towards some future vision of the role of

information systems in the organization.

Purpose of IS strategy development


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information systems strategy emphasis is

on delivering an applications portfolio of

appropriate software tools and systems

that support the future direction of an

organization and achieve advantage for theorganization (strategic objectives).

Emphasis of IS Strategy


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A framework for approachingstrategy development in a series of

logical steps

IS Strategy development process


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Achieves alignment of IS strategy with business

strategy while identifying competitive

opportunities available through IS.

Simplicity through well-defined stages.

Continuous process with evaluation andimprovement built-in.

Flexibility.

The IS strategy development process must

have these characteristics:


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Long-term IS strategy

Specifies broad strategic approaches over a

three- to five-year period

Short-term strategy

Details of strategy over a six- to twelve-month

period

Long-term VS short-term scope of IS strategy


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Example long term


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Business-led approach.

IS strategy is led by the business and based onbusiness plans or strategies which are analyzed to

identify where IS are required.

Method-driven approach.

In this approach, a formal method such as IBMsBusiness System Planning (BSP) method or other

proprietary methods devised by IS consultants is used

to develop IS strategy based on best practice.

The five main approaches to the IS strategy

development process


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Administrative approach

Technological approach.- This approach tends to focus on technical plans as

outputs, such as business process models, standards,

information audits and data models and IT architectures.

Organizational approach.- The organizational approach is often a response

to failure in the other approaches. This approach aims to

engender collaboration between the business and IS

managers.


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A common approach in organizations is to have

a single person responsible for informationsystems. The role is usually referred to as IS

manager, IT manager or chief information

officer (CIO)

Although the IS/IT manager/CIO will oftendevelop the IS strategy, other members of the

organization are needed to input to the

strategy, review it and authorize investment

Responsibilities and controls for IS strategy


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The stages of IS strategy development


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It assesses the current status of an organization

with respect to a particular strategy.

It asks Where are we now?

Situation analysis includes not only the status of

the organization itself, the internal businessenvironment, but also the external business

environment.

Strategic situation analysis


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1 Internal organizational environment.

This includes different characteristics of the

organization which affect its strategy. These are

summarized well by the McKinsey 7S model (Waterman et

al. (1980)) which refers to an organizations strategy,

structure, systems, staff, style, skills and superordinate

goals.2 Internal IS environment.

This reviews the sophistication of IS usage within

an organization including the current portfolio of

applications and the IT infrastructure.

Focus of Situation Analysis


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3. External micro-environment (IS perspective).

This reviews the IS capabilities and informationneeds of an organizations external stakeholders including

customers, suppliers, other partners and competitors.

4. External macro-environment (IS perspective).

The social, legal, economic, political andtechnological developments of the environment. These

may place constraints on IS strategy for example, legal

barriers, but may also create opportunities as new

technologies are introduced.


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An organizations internal environment

includes the different characteristics

which form its identity and character.

1. Internal organizational environment


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A useful framework for assessing the linkage

between the internal organizational

environment and IS is the McKinsey 7S model

(Waterman et al., 1980) which refers to an

organizations strategy, structure, systems, staff,

style, skills and superordinate goals.

IS analytical tool 1: The 7S model


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developed by Tom Peters and Robert

Waterman in response to the lack of a

cohesive and useful definition of

organizations

7S model


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Strategy.

The organizations strategy its plan for allocation of

resources to achieve its objective is the mostsignificant input to the IS strategy from an

organizations internal environment.

Structure.

Structural changes to a business are nowcommonplace as new strategies are adopted or with

mergers and acquisitions with other companies. In

such cases, the IS strategy may need to focus on

accommodating these changes.


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Systems.

This applies to operating procedures or business

processes rather than information systems.

Style.

The style of a company or its culture does not

typically directly affect information systems. If a

company is relatively conservative, then this maycause difficulties with the introduction of a new

system.

also refers to the managerial style and this may also

be relevant.


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Staff.

With the introduction of new IS, we need to question

whether the appropriate mix of staff is available. Skills.

Are the correct skills available internally? What

training is required? Do we need to outsource some

services? Superordinate goals.

This refers to the higher goals of the company that

may be encapsulated in the mission statement. The IS

strategy should naturally support these goals.


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7S Model


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Structure - How is the business organised/divided up?

Strategy - What plans does the business have in

response to the external environment? Systems - What formal and informal procedures does

the business have in place?

Shared Values/Superordinate goals - What is most

important to us? Skills - What does the business do best?

Style - How does management come across and what is

true of the culture?

Staff - Who are the people and how are they treated?

7S Questions


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Strategy:

* What is our strategy, in real terms?

* What are our strategic objectives?

* What will we do about the competition?

* What will our customers demand from us inthe future?


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Structure:

* How is the company set up?

* What is the organisational structure?* How do the teams work together to achieve goals?

* How do the team members work together?

* What is the quality of communication?

Systems:

* What are the main systems we use in the company?

* How do we monitor and measure the systems?

* What processes do we currently use?


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Shared Values:

* What are the values we keep to within the

business?* What is the corporate culture?

* What is the strength of these values?

* How are we communicating those values?

Style: * What style does the management team adopt?

* How effective is it?

* How would we rate the teamwork among our

staff?


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Staff:

* How do our teams specialise in their roles or are they moregeneral in their responsibilities?* Have we the right people in the right places?* What development do they need?

Skills:

* What are the strongest skills we have in the company?* What skill gaps are there?* Do we have staff who can do the job competently?* How do we measure and reward success?


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Analysis of the internal IS involves the

sophistication of IS usage within an organization

including the current portfolio of applications andthe IT infrastructure.

The gap analysis approach is an effective approach

to assessing the internal IS environment.

Analysis of business processes will also identify

areas where information systems can increase

process efficiency and effectiveness.

Internal IS environment


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Identification of the requirements from

information systems by comparing thecurrent systems and information availability

to what is required by users

Gap analysis


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IS stages of growth model

A six-stage evolutionary model of how IS can

be applied within a business

Enable companies to compare the

sophistication of their IS strategy to other

organizations. They can also be used to identify future IS

requirements.

The best-known model is a six-stage model

developed by Nolan (1979).

IS analytical tool 2: Stages of growth models


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1 Initiation.

The first use of applications within an organization.

Characterized by lack of senior management interest,operational or simple office systems and transactional

systems to reduce costs.

2 Contagion.

Widespread use of applications as benefits aresought from automation and information management.

Characterized by rapid growth in use of application with

enthusiasm from departmental managers, overall control

is limited.

The characteristics of the six stages are as

follows:


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3 Control.

This stage is a reaction against excessive

and uncontrolled expenditures of time andmoney on computer systems from the contagion

stage. It is characterized introduction of plans,

methodologies and expenditure controls, often

resulting in an applications backlog.


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4 Integration.

This is a reaction against the use of

departmental applications arising from earlierpoor control. Traditionally characterized by use of

databases, today by the use of middleware and

enterprise resource planning systems. Control

continues to improve at this stage.


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5 Data administration.

A change of emphasis to information management

rather than focus on technology and applications.Databases and document or content management

systems are introduced to help achieve this.

6 Maturity.

Information systems are put in place that reflect the

real information needs of the organization.

Characterized by planning and development of IS

closely linked to business strategy.


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Source: Galliers and Sutherland (1991)

Stages in adoption of different models


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Quelch and Klein (1996) developed a five-stage model

referring to the development of sell-side e-commerce.1. Image and product information. A basic

brochureware Website with no interactivity.

2. Information collection. Interactivity is introduced.

3. Customer support and service.4. Internal support and service.

5. Transactions.

E-business adoption stages model


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IS applications portfolio

The range of information systems deployed

within an organization

A widely applied framework for assessing the IS

applications portfolio is that of McFarlan andMcKenney (1993).

IS analytical tool 3: IS applications portfolio


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Strategic IS the business depends on

these IS to achieve or sustain competitiveadvantage.

Turnaround IS the application does not

currently deliver significant competitivebenefits, but it has the potential to

positively affect the businesss competitive

position.

Categories of Applications portfolio


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Factory IS. Currently of competitive

importance, but less relevant in the future.

Support IS. No significant competitiveadvantages are derived from these IS,

although they may be important foroperational purposes.

Categories of Applications portfolio

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Is Strategy Development