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V. LECTURE NOTES
Introduction:
We can learn a lot about the consequences of failure to properly plan for the use of information
technology from Real World Case on the U.S. Federal Aviation Administration.
Take a few minutes to read it, and we will discuss it (See U.S. Federal Aviation Administration in
section XI).
Planning is deciding what to do before you do it. Strategic business and IS planning lays the
foundation needed for long term success and survival. Organizations and their managers go
through an organizational planning process which involves:
Team building, modelling, and consensus
Evaluating what they have accomplished and the resources they have acquired
Analysing their business, economic, political, and societal environment
Anticipating and evaluating the impact of future developments
Building a shared vision and deciding on what goals they want to achieve
Deciding what actions to take to achieve their goals.
A plan is a result of this planning process. It formally articulates the actions we feel is necessary
to achieve our goals. Thus, a plan is an action statement for action. Plans lead to actions, actions
product results, and part of planning is learning from results. In this content, the planning process
should be followed by implementation, which should be followed by control measures, which
provide feedback for planning.
Planning Terminology:
Shared Vision - is a common sense of purpose and values shared by the members of a team
or organization.
Goals: - are broad statements of the ends the organization intends to accomplish in order to
fulfil its mission.
Objectives: - are more specific, measurable targets for the accomplishment of goals.
Strategies: - are general approaches that show how goals should be achieved.
Tactics - are more specific guides to actions that will implement established strategies.
Policies - are general guidelines that direct and constrain decision making within an
organization.
Rules and Procedures - are specific statements that direct and constrain decision making in
accordance with the organization's policies.
Types of Planning:
Planning is typically discussed in terms of the level of planning (strategical, tactical, and
operational) and the planning time frame. It deals with:
Tactical Planning: - Involves the design of tactics, the setting of objectives, and the
development of procedures, rules, schedules, and budgets.
Long-Range Planning: - Usually involves looking three to five years (or more) into the
future. Many organizations have a planning process that reviews and modifies their long-
range plans on a regular basis, such as six months to a year.
Short-Range Planning: - Can range from daily, weekly, or monthly planning to a one year
or two-year time frame.
Resource Management - Developing plans for the efficient and effective management of a
company’s information system resources, including IS personnel, hardware, software, data,
and network resources.
Data Resources - many types of operational and specialized databases, including data
warehouses, analytical databases, and external data banks store and provide data and
information for business processes and managerial decision support.
IT Organization - the organizational structure of the IS function within a company, and the
distribution of IS specialists among corporate headquarters and business units can be designed or
redesigned to meet the changing strategies of a business. The form of the IT organization
depends on the managerial philosophy, business vision, and business/IT strategies formulated
during the strategic planning process.
Many organizations have found that they need to use a formal information systems planning
methodology to ensure that all important planning activities and products are accomplished and
produced. Using a planning methodology helps a company translate its strategic business goals
Managers and planners continually try different approaches to make planning easier, more
accurate, and more relevant to the dynamic, real world of business. The scenario approach to
planning has gained in popularity as a less formal, but more realistic, strategic planning
methodology for use by planning teams.
Planing for competitive advantage is especially important in today’s competitive arena and
complex information technology environment. So strategic IS planning involves an evaluation of
the potential benefits and risks a company faces when using information technology for
competitive advantage. Models that are used for planning for competitive advantages included:
Competitive forces - (competitors, customers, suppliers, new entrants, and substitutes).
Competitive Strategies - (cost leadership, differentiation, growth, innovation, and alliances).
Value Chain - (basic business activities).
Strategic Opportunities Matrix - includes SWOT analysis (strengths, weaknesses,
opportunities, and threats) which is used to evaluate the impact that each possible strategic
opportunity can have on the business and its use of information technology.
The critical success factors (CSF) approach for information systems planning is based on the
premise that the information requirements of an organization should be determined by its critical
success factors, i.e., a small number of key factors that executives consider critical to the success
of the enterprise. These are key areas where successful performance will ensure the success of the
organization and the attainment of its goals. Thus, information systems are designed to
continually measure performance in each CSF and report this information to management.
Examples of the goals of critical success factors include:
1. Earnings Per Share
2. Market share
3. ROI
4. New Product Success
One of the basic premises of BSP methodology is top-down planning and bottom-up
implementation.
Top-Down Planning:
1. Requires that a group of top executives lay out the strategic mission and objectives of the
organization to a study team composed of managers, professionals, and information systems
specialists.
2. A study team to systematically interview managers throughout the organization to determine
how these objectives are implemented in the basic functions (marketing, manufacturing, etc.)
and processes (order entry, shipping, etc.) of the business.
3. The team examines the types or classes of data needed to support these basic processes.
4. The team designs an information architecture that defines the relationships between classes of
data and the business process. The information architecture specifies the basic structure,
content, and relationships of the organizational databases that provide the data needed to
support basic business processes.
Bottom-Up Implementation:
1. Involves application development activities that are performed by end users and information
systems professionals. These are specific information system applications (such as sales
transaction processing) that rely on databases whose design was determined by the information
architecture.
2. Each application should serve a business function that supports the mission and objectives of
the organization.
Computer-aided planning tools help ease the burden of information systems planning. A variety of
computer-aided planning tools are available for strategic planning. For example:
1. Business simulation software is frequently used in the scenario approach for teams to
experiment with plans to successfully confront a variety of business situations.
2. Computer-aided planning software provides generic planning features that can support other
planning methodologies such as the BSP and CSF methodologies. They are used to define a
planning environment (strategic, tactical, etc.) and planning structures such as critical success
factors, organizational units, business processes, data structures, and so on. The software
helps planners identify and experiment with ways to improve the planning process relationships
between planning structures.
“People don’t like change.” End user resistance can be minimized by formal technology
implementation programs which end user mangers and IS consultants can develop to encourage
user acceptance and productive use of reengineered business processes and new information
technologies. Some keys to solving problems of end user resistance include:
1. Proper end user education and training.
2. Improved communications with IS professionals.
3. End user involvement in the development and implementation of new systems.
Direct end user participation in systems development projects before a system is implemented is
especially important to reducing the potential for end user resistance. This involvement helps
ensure that end users “assume ownership” of a system, and that its design meets their needs.
The implementation process for newly designed information systems involves a variety of
acquisition, testing, documentation, installation, and conversion activities. It also involves the
training of end users in the operation and use of the new information system. Thus,
implementation is a vital step in ensuring the success of new systems. Implementation involves a
variety of activities which include:
1. Acquisition of hardware, software and services
2. Software development or modification
3. End User training
4. Testing of programs, procedures, and hardware
5. System documentation
6. Conversation (parallel, pilot, phased, plunge)
Acquiring hardware, software, and external IS services are a major implementation activity.
These resources can be acquired from many sources in the computer industry.
Corporate Buying Plans: - Corporate buying plans allow employees to purchase hardware
and software at substantial discounts directly from hardware manufacturers and software
companies.
Suppliers of IS Services:
When evaluating computer hardware, you should investigate specific physical and performance
characteristics for each hardware component to be acquired. This is true whether you are
evaluating mainframes, microcomputers, or peripheral devices. Hardware evaluation factors
include:
1. Performance 7. Technology (Obsolescence)
2. Cost 8. Ergonomics (user-friendly, safe, comfortable etc.)
3. Reliability 9. Connectivity (interconnectibility)
4. Availability 10. Scalability (wide range of processing demands)
5. Compatibility 11. Software
6. Modularity 12. Support
You should evaluate software according to many factors that are similar to those used for
hardware evaluation. Thus, the factors of performance, cost, reliability, availability, compatibility,
modularity, technology, ergonomics, and support should be used to evaluate proposed software
acquisition. In addition, however, software evaluation factors should also include evaluating:
1. Efficiency 2. Flexibility
3. Security 4. Connectivity
5. Language 6. Documentation
7. Hardware 8. Other factors (performance, cost, reliability etc.)
Evaluating IS Services:
Suppliers of hardware and software products and many other firms offer a variety of IS services
to end users and organizations. Evaluating IS services include factors such as:
1. Performance 6. Backup
2. Systems Development 7. Accessibility
3. Maintenance 8. Business Position
4. Conversion 9. Hardware
5. Training 10. Software
Testing, documentation, and training are keys to successful implementation of a new system. The
testing of a newly developed system is an important implementation activity.
Testing:
Documentation:
Training:
Training is a vital implementation activity. IS personnel must be sure that end users are trained to
operate a system or its implementation will fail. Training may include:
1. Only data entry
2. Or all aspects of the proper use of a new system
3. Managers and end users must be educated in how the new technology impacts the company’s
business operations and management.
4. Training programs for specific hardware devices, software packages, and end user applications.
The initial operation of a new computer-based system can be a difficult task. Such an operation is
usually a conversion process in which the personnel, procedures, equipment, input/output media,
and databases of an old information system must be converted to the requirements of a new
system. Four major forms of system conversion include:
Parallel Conversion:- Both the old and the new system are operated until the project
development team and end user managements agree to switch completely over to the new
system. It is during this time that the operations and results of both systems are compared and
evaluated. Errors can be identified and corrected, and the operating problems can be solved
before the old system is abandoned.
Phased Conversion: - Only parts of a new application or only a few departments, branch
offices, or plant locations at a time are converted. A phased conversion allows a gradual
implementation process to take place within an organization.
Pilot Conversion: - Where one department or other work site serves as a test site. A new
system can be tried out at this site until developers feel it can be implemented throughout the
organization.
Plunge/Direct Cutover: - Use the system immediately, and totally abandon the old system.
IS Maintenance:
Once a system is fully implemented and being operated by end users, the maintenance function
begins. System maintenance is the monitoring, evaluating, and modifying of operational
information systems to make desirable or necessary improvements. The maintenance function
includes:
1. A postimplementation review process to ensure that newly implemented systems meet the
systems development objectives established for them.
2. Correcting errors in the development or use of the system. This includes a periodic review or
audit of a system to ensure that it is operating properly and meeting its objectives.
3. Making modifications to a system due to changes in the business organization or the business
environment.