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                                   (All Sections/Groups)

                                  XX JANUARY 2008
                                 XX:XX am – XX:XX am
                                      (2 Hours)


1. This examination paper consists of 2 sections (Section A and Section B). The total
number of pages for this document is 4 pages including the cover page.

2. Section A consists of 2 questions while Section B consists of 3 questions. Each
question carries an equal score of 15 points.

3. You are required to answer a total of 4 questions. You must answer 2 questions in
Section A. You are to choose 2 out of 3 questions in Section B.

4. The total score for this examination paper is 60 points.

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A1        DIKAR model in ICT Strategic Planning

(a) Describe the entire process steps in the DIKAR model implemented in an
                                                                  [7 points]
          The term DIKAR is the abbreviation for Data, Information, Knowledge, Actions
          and Results. The DIKAR model is a process model that links data, information,
          knowledge and strategic actions into business results. The entire process
          steps in the DIKAR model are as follows:

          (1) Data – The first step is obtaining raw data. This activity forms the initial
              source of information in the model. It is collected, for example, through
              the manual method from frontline sales personnel or in real-time and
              online through electronic point of sales (EPOS) machines. This raw data is
              gathered and normally stored in a centralized database or in a collection
              of report files. Raw data is truly raw, like the volume of sales of a
              particular brand of product of a certain specification.

          (2) Information – The raw information from the previous step is analyzed,
              processed, grouped and transformed into information. For example, the
              customer purchasing patterns for a particular product is the “information”
              obtained in this analysis. We get information like northern customers
              prefer a particular brand, while southern customers prefer a competing
              brand. Raw data is not very useful, that is, until it is processed into this
              type of information.

          (3) Knowledge – Based on the information in the previous step, we analyze
              and process again to obtain “knowledge” about our business. We know we
              are in a certain market environment, and we begin to obtain knowledge
              about our product acceptance in the market, its competitors, customer
              preferences and wishes, etc.

          (4) Actions – Out of the knowledge accumulated in the previous step, we
              begin to formulate strategies and strategic “actions” to undertake in order
              to succeed in the competitive market. We seek advice from experienced
              staff; we conduct customer surveys, we get advice from consultants, or
              conduct internal brainstorming sessions in groups, making sure that we
              include our smartest and most dedicated employees in the discussions.

          (5) Results – After implementation of the strategic actions, we monitor
              whether we get the expected performance or reached our targets based
              on our actions, i.e. the results. It tells us over a period of time whether
              we are in the right direction, i.e. successful in our action plans or we are
              not successful. We then have to review, analyze and find reasons for the
              results. The successful actions are normally enhanced, the unsuccessful
              actions stopped completely or amended appropriately.

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(b) In ICT strategic planning, it was said that “The forward direction of DIKAR is
    actually the BSC process viewed from technology or data processing’s
    perspective”. What is meant by the statement?
                                                                          [4 points]
          The Balanced Score Card (BSC) process is a strategy evaluation and control
          technique. The name BSC is derived from the perception of an organization’s
          need to “balance” financial measures, usually used exclusively in strategy
          evaluation, and control with non-financial measures such as product quality,
          customer service, volume of sales, business process and operations, internal
          learning and growth, etc.

          The above statement means: In the context of the five (5) steps of DIKAR
          moving in the forward direction and viewing it from technology or data
          processing aspects, we will reach the final three (3) steps of DIKAR (i.e.
          Knowledge, Actions and Results). These three steps can be considered the
          “BSC portion” of DIKAR. Essentially, as an example, it means we have to
          balance our choice between “what strategic actions to implement” against the
          “financial burdens to get those actions implemented” and finally to the
          extents of results achieved. In another example, we also must balance “our
          financial and resource costs” against the “expected levels of improvement in
          business results”. The BSC process is therefore a useful tool to help make
          these decisions. No organization in the world have unlimited money and
          resources, so some important decisions must be made.

(c) It was also said that “The reverse direction of DIKAR is actually the CSF process
    viewed from the business or management’s perspective”. What is meant by the
                                                                            [4 points]
          The Critical Success Factors (CSF) technique is a process that determines a
          limited number of areas (and therefore strategic actions for those areas) such
          that when successfully executed, will result in the successful performance of
          the organization. These few key areas “must go right” for the organization to
          be successful in the competitive environment.

          The above statement means: Moving in the reverse direction of DIKAR and
          viewing it from the business and management’s perspective, we start from
          the “results”, then to “strategic actions”, to “knowledge”, to “information” and
          finally to “raw data”. In this context, the management will first look at the
          results and then determines which of those strategic actions produce the good
          (successful) results. The CSF process is therefore, the act of selecting the few
          strategic actions that gave successful results, high value, high impacts and
          are essentially “critical to the success” of the organization in the competition.

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A2        Strategic ICT Systems for Organizations – Profit & Non-Profit

(a)       Describe the four (4) important categories of strategic ICT systems in which high
          value information have been used extensively for the benefit of the organization.

                                                                                 [8 points]
          The four (4) categories of strategic ICT systems are categorized as follows:

          (1) Sharing information – these are ICT systems that share information via
              technology-based systems with customers and/or suppliers and changed
              the nature of the relationship. An example: The “Sabre” software
              application where American Airlines share flight scheduling, seating
              reservations and confirmations, etc, with clients like travel agents and
              ultimately the customers (flyers). Another example: The controversial
              “CTOS” software application in Malaysia where participating financial
              institutions (banks, credit companies, etc) share credit rating information
              on companies and individuals.

          (2) Integration of internal information – these are ICT systems that integrate
              the diverse information from various branches and operating subsidiaries
              around the world into a centralized system, or a distributed system with
              data integration and connectivity. An example: One particular Oil and Gas
              company with offices around the world share information and operating
              experience so that any one office can get information whenever they are
              needed to solve some problems previously solved by others in the group.

          (3) Develop new products - these are ICT systems that contain information
              which allows the organization to develop, produce, market and deliver
              new or enhanced products or services based on those information. An
              example: A global food and beverage company with offices around the
              world can capitalize on customer buying patterns and customer tastes to
              develop new food products customized to local eating preferences.

          (4) Executive Information – these are ICT systems that provide executive
             management (Board of Directors, Senior Managers, etc) with information
             to support the development and implementation of strategy, particularly
             with both internal and external information integrated in the analysis.
             There are currently many commercial software offerings for these
             Executive Information Systems (EIS).

(b)   Provide two (2) reasons why some organizations share information with their
customers and/or suppliers.
                                                                       [4 points]
          (1) In the case of an airline company, Air Asia, customers can do flight
              bookings and payments online. It is very convenient for the customer as
              they can plan their travel arrangements confidently. This facility resulted
              in a significant increase in flyers using Air Asia compared to those
              competitors still using the traditional travel agents, ticket booking and

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              purchasing counters. This was made possible because the flight schedule
              and seat reservation information for Air Asia has been shared directly
              with the clients (flyers). Therefore, this information sharing is one of the
              critical success factors for Air Asia.

          (2) Large hospitals require continuous supplies, in various quantities and
              varieties, of materials like medicines, tissue paper, gloves, disposable
              syringes, sample bottles, test tubes, etc. There are usually many
              suppliers for these materials. Instead of worrying about availability of
              these supplies the hospital administration decided to share this vital
              information with suppliers online and in real time. That way suppliers can
              access information directly, will look at remaining stock and provide
              timely delivery of materials as needed. In essence the hospital does not
              need to keep a lot of stock of materials that occupy a lot of precious
              space. In addition supplies may exceed their expiry dates in storage.
              Therefore, by sharing vital information, suppliers working together with
              hospital administrators make each others’ job much easier to manage.

(c) List three (3) differences of ICT Strategic Plans in profit and non-profit
                                                                    [3 points]
          (1) Nature of competition - Profit making organizations must develop ICT
              strategic plans, for example, to increase sales volume and customer/user
              acceptance of products and services in the intensely competitive market.
              Normally, non-profit making organizations do not have much competition
              because their receivable funds are mostly voluntary contributions. There
              may be some competition for donations and funds with other non-profit
              organizations, but the nature of that competition in the usual sense is not
              for “customers/users”. It is more of the competition for “donors”. We
              develop different strategies for different target groups.

          (2) Customer targets – The targets in ICT strategic plans for profit making
              organizations are the consumers and users of products and services. It is
              common that most banking facilities nowadays include online and real
              time transactions (e.g. make payments, transfer funds, etc) on a “24 by 7
              by 365 basis”, anywhere and anytime. On the other hand, non-profit
              making organizations do not need to provide those ICT services as their
              target customers do not do transactions on their own money. They just
              donate (give away money) to the non-profit organization, and that’s it.
              After the donation, all the money collected will be in the control of the
              organization and not the donors.

          (3) Environmental changes – Strategic plans for profit making organizations
              must be revised regularly to adapt to the fast changing business and
              customer environment. Even though they may have a long duration
              master plan (e.g. 10 years), they also have short term strategic plans for
              say 2 years, organized in line with the master plan. For non-profit making
              organizations, the social and demographic environments do not change
              abruptly and significantly, so their strategic plans are usually set for a
              much longer duration when compared to profit making organizations.

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B1 Strategy Evaluation System

(a)       Describe five (5) characteristics of an effective strategy-evaluation system.

                                                                                    [5 points]
          The five (5) characteristics we look for refer to activities for evaluating or
          measuring performance of organizations against their set strategic targets,
          which we call the “strategy-evaluation” system. The characteristics are listed

          (1) Meaningful activities – strategy-evaluation activities must be meaningful
              and relate directly to the organization’s objectives and goals. We do not
              go out to “measure” activities that are not related to the business.

          (2) Sufficient and Accurate information – there must be sufficient, accurate
              and reliable information for strategy-evaluation. Too much information is
              bad (confusing) while too little information is also bad (incomplete
              coverage of crucial facts). Information used in strategy-evaluation must
              reflect the true picture of the organization.

          (3) Adequate Control information – managers must be provided with useful
              information for tasks over which they have control and influence in
              strategy-evaluation. We should not include irrelevant, unrelated or
              unimportant information in strategy evaluation.

          (4) Timely information – information must be provided at the appropriate
              times for strategy-evaluation activities, like quarterly, monthly and
              sometimes daily to monitor and evaluate organization’s performance and

          (5) Cooperation – the strategy-evaluation process should not dominate
              decision-making. It will only suppress good ideas or strategies surfacing
              from the inter-departmental discussions. In evaluating strategies, every
              department should cooperate with each other. The evaluation process
              must be in an environment that fosters mutual understanding, trust and
              common sense.

(b)       Explain how contingency plans are being used in ICT strategic planning. You
          may illustrate with a suitable example.

                                                                                    [5 points]
          A contingency action plan is normally drawn up by organizations as a strategy
          to be undertaken when unforeseen events occur; such as employee strikes,
          boycotts, protests, natural disasters, sudden arrival of new competitors,

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          sudden change in laws and regulations, etc. Contingency plans are also drawn
          up as alternative plans to be activated and implemented when key events do
          not occur or performance is not achieved as expected.

          For ICT strategic plans, for example, most organizations nowadays provide
          secondary or backup networking solutions like wireless communications
          linking their critical IT centers in order to cater for uneventful fixed line
          communication disasters. This contingent strategic action will ensure
          continuity of networking services.

(c)       Provide three (3) reasons why auditing is considered a useful tool in strategy

                                                                                   [5 points]
          The three (3) reasons why auditing is considered a useful strategy evaluation
          tool are as follows:

          (1) Auditing is a systematic process for objectively obtaining and evaluating
              evidence regarding successes/failures for actions taken in a strategic plan

          (2) Auditing requires an organization to prepare their strategy evaluation
              procedures complying to acceptable standards in the industry

          (3) Auditing requires that the organization includes parameters for evaluation
              that are being used by similar organizations for the same market segment
              in order to generate meaningful comparisons.

B2 General ICT Strategic Planning Issues

(a)       Given the rapid rate of change in ICT capabilities, explain why you would believe
          that strategic information system (IS) planning is a worthwhile effort. Or if you
          believe otherwise, explain why it is not worthwhile. (Note: For this question, just
          answer with one (1) opinion and not both).

                                                                                   [5 points]
          Worthwhile – Strategic information system planning is worthwhile when the
          information directly contributes to the operations of the business (e.g.
          strategic business plan), which ultimately translates into generating income
          and profits for the organization. For example, in the case of the Air Asia,
          sharing business information directly with flyers is a critical success factor for
          the airline company, so planning to provide real time, online, accurate and
          complete information to potential clients is a crucial activity. With
          technological changes, it is worthwhile for Air Asia to extend client access
          down further to mobile equipment, like hand phones and PDAs. We do not

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          know what future gadgets will appear but if it is strategic to the business we
          must consider them in our action plans.

          Not worthwhile – It is not a worthwhile effort to conduct strategic information
          system planning if for example, information requirements, information flows,
          information gathering, etc, within the organization, with suppliers or with
          customers are not one of your critical success factors. Essentially, it is not
          worthwhile if information needs are not part of your core business process.
          Information sharing and dissemination like the use of electronic mail for
          communication, the intranet and company website (internet presence) for
          information dissemination, and other office applications like word processors,
          spreadsheets and presentation applications are nowadays considered as
          standard IT applications for most businesses. Once it has been setup, it is not
          worthwhile anymore to spend time and effort in every future strategic
          information system planning exercises since these applications are not
          directly connected to the core business.

(b)       “Strategic advantages obtained by the effective use of ICT are not sustainable”.
          Explain why you agree with this statement. Or if you disagree with it, explain
          why you disagree. (Note: For this question, just answer with one (1) opinion and
          not both).

                                                                                [5 points]
          Agree with the statement – If the technology that provided the ICT strategic
          advantage is not owned by the company, i.e. available in the open market for
          other competitors to acquire and implement, then you cannot maintain the
          advantage because it is a matter of time before others catch up with you and
          create an even playing field.

          Disagree with the statement – On the other hand, if the technology that
          provided the ICT strategic advantage is owned by your company and you
          have patented it (i.e. others cannot copy/use it and you do not sell the
          related products/services to others), then you can sustain that advantage up
          to the point until your patent expires, normally 15 years. After that it
          becomes an even playing field again. This patent concept is the protection of
          intellectual property for a specified period. In life, there is no intellectual
          property that you can claim ownership forever.

(c.)Explain why in most cases, the strategic ICT plan is driven by the strategic
    business plan and not the opposite.
                                                                      [5 points]
          If ICT is not the core business of the company (e.g. manufacturing and sales
          of non-ICT products), then it is the business that brings in the money to pay
          for salaries and every other expense of the company. It is common sense that
          the strategic ICT plan follow, is aligned to, or support the strategic business
          plan. This is the situation in most cases where the ICT department is one
          important part of the larger organization.

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          On the other hand, if ICT is the core business of the company (i.e. provision
          of ICT products and services) then it is the strategic ICT plan that drives the
          strategic business plan. More often than not, the strategic ICT plan “merges”
          with the strategic business plan.

B3 Strategies to consider for ICT Implementation

(a)       Describe three (3) unique issues concerning ICT management for multinational
          firms doing business in many countries. You may illustrate using suitable

                                                                                [6 points]
          XXXThe Balanced Score Card (BSC) is a strategy evaluation and control
          technique. It is not a strategy formulation technique. The name BSC is
          derived from the perception of an organization’s need to “balance” financial
          measures, usually used exclusively in strategy evaluation, and control with.

(b) Explain three (3) advantages of outsourcing and three (3) disadvantages of
                                                                     [6 points]

          (1) XXX Organization financial performance – e.g. data in numbers regarding
              profits generated, manufacturing costs and other factors like borrowings,
              loans, etc to run the business.

          (2) Customer perception – e.g. customers believe that our products are of
              high quality standards, meet their diverse needs, priced accordingly, etc.

(c)       How is business re-engineering different from business improvement?

                                                                                [3 points]
          Business re-engineering is a radical, revolutionary and major change process.
          It is not a series of small and incremental changes. It is a total over haul,
          relook at every small piece of foundations ….

End of document.

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