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					Chapter 8

IT Planning
   & BPR

                       IT Planning
    IT planning is essential for both planners & end-users
                      for several reasons:

 End-users do IT planning for their own units.

 End-users must participate in the corporate IT planning and
  therefore must understand the process.

 Corporate IT planning determines how the IT infrastructure will
  look. This in turn determines what applications end-users can

                      IT Planning (cont.)

 A Strategic information systems      Planning and control systems
  plan identifies a set of              for IT started in the late 1950s
  computer-based applications           and early 1960s.
  that will help a company reach
  its business goals.                      Initial mechanisms addressed
                                            operational planning, and
 IT planning identifies the                eventually shifted to
  applications portfolio, a list of         managerial planning.
  major, approved IS projects that
  are consistent with the long-
  range plan.

               IT Planning Issues
Basic IT planning addresses the following four general issues:

1. Aligning the IT plan with    3. Efficiently allocating
   the organizational              information systems
   business plan                   development and operational
                                   resources among competing
2. Designing an IT                 applications.
   architecture for the
   organization in such a
   way that users,              4. Planning information
   applications, and               systems projects so that they
   databases can be                are completed on time and
   integrated and                  within budget and include
   networked together.             the specified functionalities.

                        IT Planning Stages
Major IT Planning Activity    Description
Strategic IT planning         Establishing the relationship between the overall
                              organizational plan and the IT plan.

Information requirements      Identifying broad, organizational information
analysis                      requirements to establish a strategic information
Resource allocation           Allocating both IT application development
                              resources and operational resources.
Project planning              Developing a plan that expresses schedules and
                              resource requirements for specific information
                              systems projects.

Stage 1: Strategic Information Planning
 Strategic information planning (SIP) must be aligned with overall
  organizational planning and with e-business.

 To accomplish this alignment, the organization must execute the following:
    Set the IT mission.
    Assess the environment.
    Assess existing systems’ availabilities and capabilities.
    Assess organizational objectives and strategies.
    Set IT objectives, strategies, and policies.
    Assess the potential impacts of IT.
 An organization would conduct the same six steps for e-business.

           Business Systems Planning
 The Business systems planning (BSP) model, developed by
  IBM, is a top-down approach that starts with business strategies.

 It deals with two main building blocks as the basis of the
  information architecture;

     Business processes
     Data classes

 The recognition that processes could be a more fundamental
  aspect of business than departments or other organizational
  arrangements broke new ground.

                CSF & Scenario Planning
 The critical success factors (CSF) approach was developed to help
  identify the information needs of managers.
     Sample questions asked in the CSF approach are:
       • What objectives are central to your organization?
       • What are the critical factors that are essential to meeting these
       • What decisions or actions are key to these critical factors?
       • What variables underlie these decisions, and how are they

 Scenario planning is a methodology used in planning situations that
  involve much uncertainty, like that of IT in general and e-commerce.
    In this approach planners create several scenarios.               8
Stage 2: Information Requirements Analysis
  Step 1:   Define underlying organizational subsystems.

  Step 2:   Develop subsystem matrix.

  Step 3:   Define and evaluate information requirements for
            organizational subsystems.

  Step 4:   Define major information categories and map
            interview results into them.

  Step 5:   Develop information/subsystem matrix.

            Stage 3: Resource Allocation
 Resource allocation consists of developing the hardware, software,
  data communications, facilities, personnel, and financial plans needed
  to execute the master development plan defined in Stage 2.

 This stage provides the framework for technology and labor
  procurement, and identifies the financial resources needed to provide
  appropriate service levels to users.

 Funding requests from the ISD fall into two categories;
     Those necessary to stay in business
     Those for improving the information architecture

               Stage 4: Project Planning

 Project Planning provides an
  overall framework within which
  specific applications can be
  planned, scheduled, and

 This stage is associated with
  systems development (to be
  covered in Chapter 14).

          Infrastructure Considerations
 Broadbent et al. (1996) found the following four infrastructure
    Industry—manufacturing firms use less IT infrastructure services than
       retail or financial firms.
     Market volatility—firms that need to change products quickly use
       more IT infrastructure services.
     Business unit synergy—firms that emphasize synergies (e.g.,
       cross-selling) use more IT infrastructure services.
     Strategy and planning—firms that integrate IT and organizational
       planning, use more IT infrastructure services.

           IT Architecture Computing
 Centralized computing puts all processing and control authority
  within one computer and all other computing devices respond.

 Distributed Computing handles the choices for computing at
  the point of the computing need; individual needs are met with
  individualized computing.

 A Blended approach combines the two models above. The
  mainframe (centralized resource) can operate as a peripheral
  device for other (distributed) computing resources.

        Reengineering Legacy Systems
 Legacy Systems are holdovers of earlier architectures that are
  still in use after an organization migrates to a new architecture.
     The decision—to keep, improve, or replace—can present
      management with agonizing alternatives.
 Reverse engineering is the process of examining systems to
  determine their present status, and to identify what changes are
  necessary to allow the system to meet current and future
  business needs.

                    Issues in E-Planning
 Who and where? Should the EC initiatives be conducted in a completely
  independent division or even a separate company?

 Use of metrics. It is desirable to use industry standards, also known as
  metrics, for executing various steps of the planning process.

 Learn from failures. During 2000/2001 there were many EC failures, both
  major initiatives and whole companies.

 Use a different planning process. The Web environment requires a different
  planning process.

 Integration. Information systems strategic planning must integrate, in many
  cases, e-business and knowledge management.

      Business Process Reengineering
 Business process reengineering (BPR) refers to a situation in
  which an organization fundamentally and radically redesigns its
  business process to achieve dramatic improvement.
     Initially, attention was given to a complete restructuring of
     Later, the concept was changed due to failures of BPR projects and
      the emergence of Web-based applications.
     Today, BPR can focus on anything from the complete restructuring
      of an organization to the redesigning of individual processes.
     Major objective of BPR = Information Integration.

                Mass Customization

 One of the most successful     Mass customization can be
  models of e-Commerce is         facilitated by the Web in four
  mass customization.             different approaches;
    the production of large         Collaborative customizers
     quantities of customized
     items.                          Adaptive customizers
 It supplements or even
  replaces one of the most           Cosmetic customizers
  innovative concepts of the
  Industrial Revolution, mass        Transparent customizers
             Mass Customization & EC

 EC transforms the supply chain from a traditional push model to
  a pull model.
     Push model - the business process starts with manufacturing and
      ends with consumers buying the products or services.
     Pull model - the process starts with the consumer ordering the
      product (or service) and ends with the manufacturer making it.

 The pull model enables customization since orders are taken

                 Cycle Time Reduction

 Cycle time refers to the time it    IT helps to contribute to cycle
  takes to complete a process          time reduction.
  from beginning to end.

 Time is recognized as a major
  element that provides
  competitive advantage.

                             BPR Failures
 During the 1990s there were just as many cases of BPR failures as
  there were success stories.
 A survey conducted by the PROSCI organization (prosci.com) indicates
  a failure rate of 50 to 80%.
 Some of the reasons cited for failures are:
       high risk
       inappropriate change management
       failure to plan for internal politics
       high cost of retooling
       lack of participation and leadership
       inflexible software
       lack of motivation
              Networked Organizations
 Today some organizations are turning away from the hierarchical
  organization toward the networked organization.
     Networked organizations refer to organizational structures that
      resemble computer networks and are supported by information

 In the information-based economy, most people do knowledge work,
  and the subordinate often has more expertise than the “hierarchical”

 A flattened organization has fewer layers of management and a
  broader span of control than the hierarchical organization.

Networked Organizations (cont.)

               Empowerment Using IT
 Empowerment is the vesting of decision-making or approval
  authority in employees where, traditionally, such authority was a
  managerial prerogative.
 Empowerment can be enhanced through IT.
     Empowered employees are expected to perform better.
 In addition to empowering employees, companies are
  empowering their customers, suppliers, and other business
     E.g. Federal Express uses the Internet to empower its customers.

    Some process reengineering insights

   Mission : Purpose of business.
   Business objectives:
   Functional objectives:
   Key performance indicators (KPI)
   Measurement of KPIs
   Monitor, Feedback and improve

           Process Improvement steps

   Identify Core process.
   Draw process flow diagram
   Process improvement vision : Cost, Quality, Flexibility, Time
   Process measurement parameters
   Process problems :Process study, Identifying bottleneck
   Process Improvement and Implementation
   Feedback and refining

                   Managerial Issues
 Importance. IT planning is one
  of the most challenging and
  difficult tasks facing all of

 Organizing for planning. What
  should be the role of the ISD?
  How should IT be organized?       Fitting the IT architecture to the
  Staffed? Funded?                   organization is important.

                 Managerial Issues (cont.)

 IT architecture planning. IT              IT strategy. Leadership, listening
   specialists & business users must          and experimentation are important.
   jointly determine the present and
   future needs for the IT architecture.    Integration. The role of IT in
                                              redesign and BPR.
 Ethical and legal issues.

 IT policy. IT architectures should        Failures. Very big projects have a
   be based on corporate guidelines.          tendency to fail when expectations
                                              exceed real capabilities.


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