Chapter 11 - Bond Wetherbe

Chapter 11
Business/IT Strategies
for Development
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
Discuss the role of planning in the business use
of information technology, using the scenario
approach, and planning for competitive
advantage as examples.
Discuss the role of planning and business
models in the development of business/IT
strategies, architectures, and applications.
Identify several change management solutions
for end-user resistance to the implementation
of new IT-based business strategies and
applications.
11-2
Section 1
IT Planning Fundamentals
11-3
I. Introduction
 Simply knowing the importance and structure of ebusiness is not enough. A Plan is needed to transition
from an old business design to a new e-business
design.
11-4
II. Organizational Planning
Enterprise-wide plans are required to
introduce IT/IS-based solutions to the entire
firm.
Strategic Planning – develop a firm’s mission,
goals, policies
Tactical Planning – develop objectives,
procedures, rules, schedules, budgets
Operational Planning – implement/control
day-to-day operations
11-5
III. The Scenario Approach
A less rigid but more realistic strategic
planning methodology; combine known
facts about the future with plausible
alternatives
Knowledge:
Trends – Things we think we know
something about
Uncertainties – Elements we consider
uncertain or unknowable
11-6
III. The Scenario Approach
Components of an Organizational
Planning Process
11-7
III. The Scenario Approach
Strategic Visioning Questions for e-Business
11-8
III. The Scenario Approach
Converging Trends in Strategic Business/IT
Planning
11-9
Risk Assessment and Mitigation
What are the four types of IT risks listed?
Describe each risk.
What could a firm do to mitigate each risk?
11-10
IV. Planning for Competitive
Advantage
Evaluation of potential benefits/risk of using IT
for competitive advantage
SWOT ( strengths, weaknesses, opportunities,
threats) Analysis – evaluate impact of each
possible strategic opportunity
Strengths – core competencies and resources
Weaknesses – areas of substandard performance
Opportunities – potential for new markets or
innovation
Threats – potential for losses
11-11
Bristow Helicopters: Technology-Supported
SWOT and Much More
What needs did Bristow have?
What key goal is identified?
What software technology was used to make
these changes?
How did the software work to accomplish this?
11-12
V. Business Models and Planning
Conceptual framework of how a business can
deliver value to customers at a cost and still
turn a profit
11-13
V. Business Models and Planning
Questions for All Business Models
11-14
V. Business Models and Planning
Questions for e-Business Models
11-15
Iridium Satellite: Finding the Right
Business Model
What product/market did Iridium originally
service?
What product/market have they moved to?
Why is this different from the way they
previously competed?
11-16
VI. Business/IT Architecture Planning
Plans on how to use IT to support customer
value and business value goals
Strategic Development – business strategies
that support a firm’s business vision
Resource Management – strategic plans for
managing or outsourcing a firm’s IT resources
Technology Architecture – strategic IT choices
reflecting an IT architecture that supports a
firm’s e-business and other IT initiatives
11-17
VI. Business/IT Architecture Planning
Information Technology Architecture –
blueprint that contains:
Technology Platform – complete infrastructure
supporting strategic use of IT for e-commerce and
business/IT applications
Data Resources – databases and data warehouses
Application Architecture – business applications
IT Organization – organizational structure of the IS
function within a firm
11-18
VI. Business/IT Architecture Planning
 Balanced Scorecard – measuring a company’s activities
in terms of its visions and strategies; not based on
proven economic theory or decision sciences
 Financial Perspectives – measures of financial performance
 Customer Perspective – measures directly impacting
customers
 Business Process Perspective – measures performance of key
business processes
 Learning and Growth Perspective – measures the firm’s
learning curve
11-19
VII. Identifying Business/IT Strategies
To optimize strategic impact, firms must
continually assess the value of IT/e-commerce
applications
Cost and Efficiency Improvements – low
internal/external connectivity and low use of IT
Performance Improvement in Business
Effectiveness – high internal but low external
connectivity, need to improve collaboration
Global Market Penetration – high external
connectivity and use of IT
Product and Service Transformation – extensively
networked internally and externally
11-20
e-Business Strategy Examples
Describe each example listed.
Discuss each example and how it could
be used in a particular business.
Identify businesses (not those listed)
that could utilize each example.
11-21
VIII. Business Application Planning
IT proposals for addressing strategic
business priorities and planning for
application development
Business/IT Architecture Planning –
combines strategic planning methods
(SWOT, etc.) with recent modeling and
development methodologies
11-22
VIII. Business Application Planning
E-Business Architecture Planning
11-23
KI: The Importance of Strategic Planning
Why is forming a strategic IT plan difficult at
most companies?
What was the problem at KI?
How has developing a strategic IT plan helped
the firm overall?
What pitfalls, resistance, and cultural issues
might have been stumbling blocks along the
way?
11-24
The Role of IT in Business Process Design
Why might IT personnel be in a better position
to see organizational needs than other
personnel?
Why would IT be in the right place to provide
solutions to these needs?
What organizational and cultural issues might
be stumbling blocks to adopting these
solutions?
11-25
Section 2
Implementation Challenges
11-26
I. Implementation
Carrying out the strategic plans developed in
the planning process
11-27
II. Implementing Information Technology
Moving to e-business involves major
organizational change
11-28
II. Implementing Information Technology
Impact and Scope of Business Change
Caused By IT Implementation
11-29
III. End-User Resistance and Involvement
New ways of doing things always generates
some resistance from those affected; end-user
involvement in the change process can help
minimize the resistance
11-30
III. End-User Resistance and Involvement
Obstacles to Knowledge Management
Systems
11-31
Société de Transport de Montréal: Smooth
Ride after a Bumpy Start
What problem did STM have?
Why did this problem occur?
How did the IT staff work to resolve this
problem?
What other issues/areas might this same
problem arise within?
Why would the same problem manifest
itself in other ares?
11-32
Understanding the Science Behind Change
What was the problem in IT at Blue
Cross?
What causes these problems?
How does understanding the problem
help?
How did Blue Cross address the
problem?
11-33
IV. Change Management
Managing organizational change is
important and can be difficult; people
are a major focus here
A Change Management Process – these 8
steps are just one way of visioning
change management
11-34
IV. Change Management
Key Dimensions of Change Management
11-35
DHL Express: The Challenges of Global
Change
What are the two extremes of the
pendulum for IT?
What as the problem at DHL?
What solution did DHL provide for this
problem?
How does this affect the IT department?
How does it affect DHL?
11-36
Reuters: Implementing Global Shared
Services
What problem did Reuters have, and
why?
What solution did they adopt?
Discuss the meaning of this solution.
How did this work out for Reuters?
11-37