What’s Happening?!
Intel’s Crystal Ball article in the current issue of
InformationWeek.
“Our view has evolved from how to build a faster
microprocessor to looking at everything that goes
around a microprocessor.” Paul Otellini, President
and COO.
PeopleSoft was named enterprise software leader by two
healthcare industry publications.
Best Software, Inc. was named worldwide market
leader for small business CRM solutions by Gartner
Group with a 25% share.
Fortune Most Admired Companies
1. Wal-Mart Stores
Innovativeness
2. Berkshire Hathaway
Employee talent
3. Southwest Airlines
Use of assets
4. General Electric
5. Dell Inc.
6. Microsoft
7. Johnson & Johnson
Social responsibility
Management quality
Financial soundness
Long term investment
8. Starbucks
Quality of products or
services
9. FedEx
Globalness
10. IBM
Global Most Admired
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Wal-Mart
GE
Microsoft
Dell
Johnson & Johnson
Berkshire Hathaway
Procter & Gamble
IBM
Coca-Cola
FedEx
11. Toyota
12. BMW
13. Sony
14. Pfizer
15. Intel
16. UPS
17. Home Depot
18. Nokia
19. Nestle
20. PepsiCo
Other Rankings
21. Singapore Airlines
22. Cisco
26. Honda
28. Target
37. Volkswagen
38. Costco
43. Boeing
48. General Motors
Oracle
Sun
AMR
UAL
Wal-Mart
5.44
5.26
4.66
2.52
7.24
Apple and Agilent were
not part of the survey
Best for Minorities
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
McDonald’s
Fannie Mae
Denny’s
Union Bank of California
Sempra Energy
Southern Calif. Edison
SBC Communications
Freddie Mac
PepsiCo
PNM Resources
US Postal Service
Chapter 15 Introduction
Integrating IS
into
the Business Plan
Chapter Objective
Understand the importance of
integrating IS into the
business planning process.
Business Drivers Influence Planning
New Markets,
Opportunities
and
Competitors
Organization
• Decentralization
• Downsizing
• Outsourcing
• Business Partnering
• Corp. Alliances
Organizational
Response to
Business Drivers
Process
• Reengineering
• Redefining
• TQM
Employees
Time, Flexibility
• Skills
and
• Empowerment
Responsiveness
• Quality Circles
as Competitive
• Teams
Factors
Product Customization
• Value -added Services
• Markets
• Customers
• Global Standards
Figure 15-1
Two Major Planning Challenges

What to do
– Important to know where the company is
going.

Making it happen
– Can be difficult because it often involves
changes
Strategic Planning Model
Environment
(External)
Opportunities
Mission
Vision
Strategic
Plan
Threats
Enterprise
(Internal)
Strengths
Tactical
Plan
Goals
Business Unit
Objectives
Functional
Programs
Strategic
Positioning
Major
Projects
Business
Plan
Detailed
Projects
Resources:
Headcount,
Capital and
Expense
Budgets
Weaknesses
Culture
(Explicit/Implicit)
Figure 15-3
Beneficiaries of Good Business
and IS Planning
Those who are shaping the future of the
business benefit by better understanding the
business changes that technologies will drive
and support.
Barriers to Apply IS with Business
Planning

Management Authority and Responsibility
– Lack of support in the planning process
– Impatience of senior management
– System inflexibility

IS and General Business-related Issues
– Outcome is technology orientated other than
business results
– Lack of user understanding
– Lack of risk taking leads
positive
Business - IS Planning
Business
Strategy
Dictates
I/S Strategy
Benefits
Determines
Information
Technology
Figure 15-6
Planning Methodologies

Planning methodologies are like systems
with input, processing and output all being
key elements.

Key to planning is communicating the
intended direction through practice.
Conclusions
Planning is not to control but to guide and
direct.
 Planning is a tool used to identify the right
things to do, and to initiate action programs to
accomplish the things identified.
 IS managers are key players in making tough
decisions on resource allocations to pursue
new opportunities and orchestrate structural
change.

Chapter 15
Business
and
Information Systems
Planning
Questions that the Topic of
Planning Raises
• How important is planning?
• What is its purpose (Objective)?
• Who needs to do what?
• What is the impact on the organization?
• How can the process be kept dynamic?
• What is the relationship with information
systems?
• Is there a right planning methodology?
• Are the consistent planning success factors?
Importance of Planning?
Nothing seems more logical, more
reasonable or more appropriate than
planning.
A Planning Job?
How many of you would like a job
where your primary responsibility
deals with planning?
Planning
Plans are nothing.
Planning is everything!
Dwight D. Eisenhower
Business and IS Planning
1. Is information systems a legitimate high priority
consideration in the development of business
strategic plans?
2. Who needs to play a key role in integrating the role
of information systems with the business strategy?
3. Why is this even an issue?
4. What are major barriers to linking information
systems with the business strategies?
Business and IS Planning
5. What would be an ideal role for an information
systems executive to play relative to business
strategies?
6. What planning methodologies really work? Why?
Integrating IS into the Business Plan
It all starts with business planning, so answers
are needed to the following questions:
1. Why plan?
2. What to plan?
3. How to plan? (Best methodology?)
Planning
Doing things today to make us better
tomorrow.
Because the future belongs to those who
make the hard decisions today.
Business Planning
An effort that tells people within the
organization where to put their emphasis,
priorities and resources.
The issue is not methodologies but one of
priorities--where the people running the
business spend their time.
Business and IS Planning
• Doesn’t the unpredictability of the future preclude the
planning and implementation of computer systems that will
be appropriate and responsive to a company’s needs?
• Can a company really innovate and computerize at the
same time?
• With so much happening with technology how can a
company stay current?
Strategic Planning
Strategic planning is the systematic examination of
opportunities and threats in the business environment
so that you are in the position to identify those
opportunities that should be exploited and the threats
that should be avoided.
George Steiner
To create opportunity that can be leveraged to create
differential advantage in the marketplace.
N. Les Clark
New Markets,
Opportunities
and
Competitors
Employees
• Skills
• Empowerment
• Quality Circles
• Teams
Organization
• Decentralization
• Downsizing
• Outsourcing
• Business Partnering
• Corp. Alliances
Organizational
Response to
Business Drivers
Process
• Reengineering
• Redefining
• TQM
Time, Flexibility
and
Responsiveness
as Competitive
Product Customization Factors
• Value-added Services
• Markets
• Customers
• Global Standards
Figure 15-1
The objective of business planning is not to control but
to guide and direct.
The same is true for IS planning but this needs to be
directed by plans for the business.
Strategy Versus Planning
Strategy is thinking through a company’s
basis for competitive advantage.
Planning is a means of establishing a strategy
but it also focuses on making the strategy work.
Planning Focus
Performance Control
Objectives
Budgets
Action Planning
Strategies
Tactics
Do people rely on data or market
instincts to make judgments?
Criticism of Planning
Control
 Politics
 Conservatism
 Conformity
 Inflexibility
 Non-responsive to Market Demands
 Leads to Generic Change

Worth Remembering!
Business planning becomes
meaningful when accompanied
by prompt execution.
Planning Myopia
Be careful not to develop planning
myopia where the plan becomes
more important than execution.
Strategic Planning
Vision
Formulation
Strategies
Budgets
Tactics
Implementation
Actions
Traditional Approach in IS Planning
Vision
Strategy
Tactics
Traditional I/S Role
Figure 15-2
Strategic Planning Model
Environment
(External)
Opportunities
Mission
Vision
Strategic
Plan
Threats
Enterprise
(Internal)
Strengths
Tactical
Plan
Goals
Business Unit
Objectives
Functional
Programs
Strategic
Positioning
Major
Projects
Business
Plan
Detailed
Projects
Resources:
Headcount,
Capital and
Expense
Budgets
Weaknesses
Culture
(Explicit/Implicit)
Figure 15-3
SWOT Analysis
Strengths
Weaknesses
Opportunities
Treats
Suggest
Strategies
That Should
Be Tested
Against
Vision and Goals
Company Values
Current Strategies
Financial Status
Cash Position
ROI Potential
Customer Values
Competition
Societal Demands
Core Competencies
People Skills
Overall Resources
What to Plan?
Strategic Enterprise
Planning
Enterprise Strategies
Strategic Information
Planning
Information Strategies
Architecture Planning
Architecture
Tactical Planning
Implementation Planning
Time Oriented
Objectives
Project Plans
Figure 15-4
Business - IS Planning
Business
Strategy
Dictates
I/S Strategy
Benefits
Determines
Information
Technology
Figure 15-6
Business - IS Planning
Opportunities
Corporate
Strategy
Business
Strategy
Dictates
Technology
Environment
I/S Strategy
1) Strategic Capability
Benefits
2) Technology Driven
Business Change
Determines
Information
Technology
Figure 15-7
Marion Merrell Dow
1. An unusual ability to execute plans.
2. Management of risks.
Plan Process
Not a plan but a plan process:
Work at it.
Change it.
All of the time!
Barriers to Aligning IS with Business Objectives
Business Plan?
I/S Track Record
and Credibility?
Communication of
Business Plan?
Senior Management
Perception of I/S?
Executive Skills
of I/S Executive?
Clear I/S Role?
Effective
I/S Management?
I/S Organization?
Is keeping I/S aligned
with the business
objectives someones
high priority objective?
I/S Policies?
A Problem with
I/S Capacity?
I/S Skills and
Capabilities?
Does the I/S
Organization Have a
User/Business Focus?
Managing I/S to
Business Objectives?
Figure 15-5
Enterprise-Wide Information Systems
Strategic Planning Process
Organization
Strategic Plan
Business Processes
and Organization
Information Technology
Domain
Impact
Information Technology
Opportunities
Opportunity
Business Domain
Alignment
Information Systems
Architecture and
Organization
Parker/Trainor/Benson, INFORMATION STRATEGY AND ECONOMICS, (c)1989, p.5.
Adapted by permission of Prentice Hall, Upper Saddle River, New Jersey
Figure 15-8
Strategic Plan
Vision – Do we have a clear vision of where the organization
is going?
Decisions – Do we make major decisions based on our vision
and strategies?
Innovations – Do the values and goals of the organization call
for innovation?
Risk Taking – Does the reward system support employees and
management risk taking?
Change – Do we respond quickly to changes that affect our
organization?
Competitors – Are our strategies based on market intelligence
and competitive information?
Strategic Plan
External Factors – Do we regularly review the economic,
social and demographic trends that can affect our
performance?
Management Teamwork – Are our interactions
characterized by openness, candor and teamwork?
Quality – Do we emphasize and measure quality throughout
the organization?
Fundamental Strategic Planning
Issues
Can the strategy formulation be reduced to a
consistent process?
 How stable is the context for the strategy?
 How close to the actual situation should the
planners be?
 How much hard data is available to assist in
formatting the right strategy?
 What are the consequences of an incorrect
strategy?

Planning Methodologies




There are many planning methodologies.
Methodologies are seldom the reason for
planning success or failure.
Planning methodologies are like systems
with input, processing and output all being
key elements.
Key to planning is communicating the
intended direction through practice.
Planning Methods
• Planning sessions
• Critical success factors
• Vision process
• Business Systems Planning
• Reengineering
• Linkage analysis
• Etc.
Planning Session
• Facilitator
• Sponsor (top executive)
• 6-8 people
• Off premise and casual clothes
• 3-5 days
• Schedule discipline
• Question set is a key factor
Competitive Analysis Question Set
1. What is the fundamental nature of our products and services,
our dealings with our customers and the way they make their
purchasing decisions?
2. How do our customers measure the value of our products and
services?
3. How does our business systems serve our customers?
4. What key activities or decisions significantly affect the cost
of serving our customers and how they place a value on this?
5. To what extent could these decisions or activities be changed
in a way that would improve services or reduce total costs
through the availability or more, better or more timely
information?
6. Would such changes involve one part of a current business
process, cut across multiple processes or require direct
linkages with groups outside of our own organization?
7. How quickly and easily could such initiatives be duplicated
by a competitor as an assessment of the durability of the
competitive advantage?
8. How would the extent and durability of the competitive
advantage be affected by decisions about following a
proprietary or non-proprietary approach to building the
information systems?
9. How would we spend $10 million to improve our
competitive position?
10. How would our primary competitor spend $10 million with
the same objective?
11. Would the answer to the last two questions be any different
if computers and networks were free?
Planning Session Approach
• Commitment
• Consensus
• Conflict
• Creativity
• Communication
Critical Success Factors (CSF)
• “The few key areas of the job that must go right in order
for an organization to flourish.”
• Focuses on individual managers and their current
informational needs.
• Can be used as part of a planning methodology to identify
information systems that are needed to run the business.
• Includes keeping abreast of ongoing operations
(monitoring) and tracking change progress (building).
• Vary from organization to organization, from time period
to time period and from manager to manager.
Source: Rockart and Crescenzi
Critical Success Factor Sources
1. The business environment.
2. The industry.
3. The company’s situation within the
industry.
4. Organizational activity that is currently
unacceptable and needs attention.
The True Benefactors
of IS Planning
• Those who are shaping the future of the
business.
• Those with profit and loss responsibilities.
Why IS Planning Fails
Management Authority and Responsibility
1. A lack of support of the planning process.
2. A failure to support the final plan through actual
implementation.
3. The unexpected happens that was not anticipated by
the plan. The key here is systems flexibility.
4. Too much time is spent on “turf battles” or other
political issues and not enough on the desired
results.
5. Impatience by senior management for results.
Why IS Planning Fails
IS and General Business-related Issues
1. Its outcome is stated in terms of technology and
not business results.
2. A lack of user understanding of how IS relates to
the business objective or a failure to accept or
support the proposed approach.
3. Tends to place blame on today’s environment
rather than project a new and better way of doing
things.
4. A lack of risk taking leads to an incremental
approach that fails to motivate people.
Final Thoughts on IS Planing
Planning is a tool. There is an organizational
learning curve regarding methodologies.
A good plan with no execution borders on a waste
of the entire effort.
A relatively weak plan with a few strong thoughts
followed by tenacious implementation can provide
major business benefits.