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-
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
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
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
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).
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
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
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
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.
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
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:
inappropriate change management
failure to plan for internal politics
high cost of retooling
lack of participation and leadership
lack of motivation
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
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.
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
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.