CHAPTER DEVELOPING

STRATEGIC INFORMATION
SYSTEMS PLANNING
ITS4223
CHAPTER OUTLINE

• Strategic IS Planning Process

• Strategic IS Planning Input
• Formulate IS/IT Strategy
• Strategic IS Planning Output
• Strategic IS Planning Implementation
1.0 STRATEGIC IS PLANNING PROCESS
WHAT IS THE BASIC OF STRATEGIC ICT PLANNING PROCESS?
Engineering Approach
(Pita et. al)
STRATEGIC ICT PLANNING APPROACH

* *
*

* *

*
*

* *
REVIEW OF EXISTING STRATEGIC ICT PLANNING
METHODOLOGIES
• LUFTMAN
• WARD AND GRIFFITH
• MAMPU
• ISP-IPTA
Luftman IT Strategy Formulation
Framework
STRATEGIC ICT PLANNING FRAMEWORK

Business and Understand the

Initiate Other
Technical Current Situation
Planning Planning
Environments and interpret
Process Activities
Business Needs

Define/Update Determine
Info. And System Business IS
Architecture Strategy

Previous
Prepare Migration
IS/IT Formulate IT
Plans and
Strategy Strategy
Business Case

Business Strategy
IS/IT Strategy
and Proposed
and Proposed
Development (Ward dan Peppard)
plans
Programme
MAMPU STRATEGIC ICT PLANNING
FRAMEWORK
ISP-IPTA STRATEGIC ICT PLANNING FRAMEWORK

Initial Phase

Assess internal and and

external business and
IS/IT environment

Assess internal and and Assess internal and and

external business external IS/IT environment
environment

Formulate SISP Strategy

Formulate IS/IT Formulate IS/IT

strategy Management Strategy

SISP Implementation
2.0 STRATEGIC IS PLANNING INPUT
 WHAT ARE THE INPUT OF STRATEGIC IS
PLANNING INPUT?
• Strategic IS Planning Input:
• Organisation/business internal environment
• Organisation/business external environment
• ICT internal environment
• ICT external environment
 STRATEGIC IS PLANNING INITIATION
• Develop a proposal that state the purpose, objective scope and deliverables
of the SISP. Determined approach and resources acquired. Identify business
participant and assemble team members, and if necessary, trained. Plan for
works, tasks, roles and responsibilities and defined checkpoints.
• Enables the sponsor to develop an understanding of the business needs and
drivers that prompted the IS/IT strategy process. It must be shown that its
conduct and resulting strategy will assist all levels of management in achieving
their objectives and resolving key problems.
• It is also important that management accept that the costs involved are merited.
The cost should be repaid by focusing future investment in IS/IT more precisely
on the achievement of corporate objectives, by undertaking projects with
clearer, deliverable benefit.
• TOR must be clear and acceptable to the senior management and key
participants, that adequate resources are allocated, and that interdependencies
and consolidation plans with the rest of the business strategy and plans are
achievable.
 THINKING TIME

• Who should involved in Strategic IS

Planning Team?
STRATEGIC IS PLANNING TEAM STRUCTURE

• ICTSP Steering Committee

• CIO
• Head of ICT Department
• Head of other Department
• ICTSP Working Committee
• ICT Executives
 ASSESS BUSINESS IN ORGANISATION AND ICT
ENVIRONMENT

Assess business/organisation environment

• Studying existing documents, interviewing users, holding workshops and
brainstorming sessions with group of users
• Analyze the business strategy, not just the objectives but the intended
means of achieving them and critical success factors.
• The current business processes, activities and the main information entities
and how they relate to other entities, critical problems and processes.
• The organizational environment covering its structure, assets and skills,
and less tangible factors such as knowledge, competencies, value, style,
culture and relationships.
 ASSESS ICT ENVIRONMENT

Assess ICT environment

• Evaluate current application portfolio and the applications under
development to determine their content, coverage and contribution
• Evaluate current/previous strategy and policies
• Evaluate IS organization and processes (IS function, IT provision, sourcing
strategy, IS/IT governance structure, budget for IS/IT investment.
• Gain perspective on technology trends and opportunities for using IS/IT in
new and innovative ways
• Looking at what competitors or other comparable organizations are
doing
STRATEGIC ALIGNMENT MODEL (SAM) HENDERSON
AND VENKATRAMAN

Henderson and
Venkatraman
3.0 FORMULATE IS/IT STRATEGY
 FORMULATE IS/IT STRATEGIES
Formulate IS/IT strategy
• Based on strategic analysis tools finding,
• Define applications to meet current business needs
• Identify innovative potential applications of IS/IT
• List according to it priorities

Formulate IS/IT management strategy

• Define how resources and technologies will be acquired, manage and develop to satisfy business
IS strategies within the management strategy framework.
• Review IT policies, methods and standards in place.
• Focus on the areas where change is necessary due to business requirement, or when new option
available due to changes in technology, experience, capability that have not been previously
recognized and pursued.
• Address the IT supply factor –application portfolio management, organization of IS/IT (resources
management and administrative matters), managing the information resources and provision of
information services, managing application development and managing technology.
• Address IS/IT management factor- scope and rationale, IS function, investment and prioritization
policies, vendor policies, human impact policies including education and IS accounting policies.
RELATIONSHIP BETWEEN BUSINESS, IS AND IT
STRATEGIES
Business Strategy WHERE is the
• Business Decision business
• Objective and direction
going and
WHY
• Change

Support Business Direction for business

IS Strategy
• Business Based WHAT is
• Demand Oriented
required
• Application Focused
Infrastructure and Needs and priorities
service
IT Strategy
• Activity Based
HOW it can
• Supply Orientated be delivered
• Technology Focused 21
 THINKING TIME

• What are the ICT strategic methods that you know?

 ICT STRATEGIC METHOD

A) Environment Analysis

• SWOT Analysis
• PEST Analysis
• Five Forces Competitive Analysis
• Stages of Growth Model
 ICT STRATEGIC METHOD

B)Strategy Identification

• Ansoff Product Market Analysis

• Value Chain Analysis
• Gap Analysis
• TOWS Analysis
• BCG Matrix
• Blue Ocean Strategy
• Balance Scorecard
 ICT STRATEGIC METHOD

C)Prioritization Method

• Critical Success Factor

• E-business value matrix
• IS Application Portfolio
• Scenario Planning Grid
 A) ENVIRONMENT ANALYSIS

A) Environment Analysis

i. SWOT Analysis
ii. PEST Analysis
iii. Five Forces Competitive Analysis
iv. Stages of Growth Model
 THINKING TIME

• What is SWOT analysis?

 I) ENVIRONMENT ANALYSIS:
SWOT ANALYSIS
• A SWOT analysis is an organized list of your business’s greatest
strengths, weaknesses, opportunities, and threats.

• Strengths and weaknesses are internal to the company such as

reputation, patents and location. You can change them over
time but not without some work.

• Opportunities and threats are external for example suppliers,

competitors and prices. They are out there in the market,
happening whether you like it or not. You can’t change them.
I) ENVIRONMENT ANALYSIS:
SWOT ANALYSIS
• Strengths - Internal attributes that
is helpful to the organization to
achieving its objective
• Weaknesses - Internal attributes
that are harmful to the organization
to achieving its objective
• Opportunities - External factors
that help the organization achieve
its objective
• Threats - External factors that are
harmful to the organization to
achieving its objective

Figure 1: SWOT Analysis Matrix

THE ELEMENT OF SWOT ANALYSIS
1.) Internal factors: Strengths and weaknesses
The resources and experience readily available to you.
Examples of areas typically considered include:

• Financial resources (funding, sources of income and investment

opportunities)
• Physical resources (your company’s location, facilities and
equipment)
• Human resources (employees, volunteers and target audiences)
• Current processes (employee programs, department hierarchies and
software systems)
2.) External factors: Opportunities and Threats
Every company, organization and individual is influenced and affected by
external forces. Whether connected directly or indirectly to an opportunity
or threat, each of these factors is important to take note of and document.
External factors typically reference things you or your company does not
control, such as:

• Market trends (new products and technology or shifts in

audience needs)
• Economic trends (local, national and international financial
trends)
• Funding (donations, legislature and other foundations)
• Demographics (a target audience’s age, race, gender and
culture)
 Strength Weakness
Cost advantage Ignore store decoration
Low price & customer-oriented Since Wal-Mart sell products
Strong supply chain across many sectors (such as
People are key to success clothing, food, or stationary), it
may not have the flexibility of
some of its more focused
competitors.
Opportunity Threat
Build its own brand Other competitors
Put efforts on social welfare Intense price competition
→ better image
New locations and store types
Overseas markets

WALMART
Wal*Mart’s Discount Stores
and SWOT Analysis
 I) ENVIRONMENT ANALYSIS:
SWOT ANALYSIS

• SWOT Analysis Template

II) PEST ANALYSIS

PEST ANALYSIS, IS A CONCEPT IN

MARKETING PRINCIPLES.
MOREOVER, THIS CONCEPT IS USED
AS A TOOL BY COMPANIES TO
TRACK THE ENVIRONMENT THEY’RE
OPERATING IN OR ARE PLANNING
TO LAUNCH A NEW
PROJECT/PRODUCT/SERVICE ETC.
 II) ENVIRONMENT ANALYSIS: PEST
ANALYSIS

PEST analysis ('Political, Economic, Social and Technological

analysis''') describes a framework of macro-environmental
factors used in the environmental scanning component
of strategic management.
• The growing importance of environmental or ecological factors in
the first decade of the 21st century have given rise to green
business and encouraged widespread use of an updated version of
the PEST framework. STEER analysis systematically considers Socio-
cultural, Technological, Economic, Ecological, and Regulatory factors.
II) PEST ANALYSIS EXAMPLE
II)PEST
PESTANALYSIS
ANALYSISCRITERIA
EXAMPLE
 II) ENVIRONMENT ANALYSIS:
PEST ANALYSIS
o PEST Analysis Example - Restaurant

The various Political, Economic, Social and Technical factors that a firm needs to consider and research in order to enter the restaurant business
in a new environment may be depicted as follows:-
o Political Factors:
Government regulations regarding hygiene, health and food regulations, food standards, etc.
Economic policies of government regarding the restaurant industry and running eating joints; these may include licenses, inspections by Health and Food
Ministry departments, etc.
o Economic Factors:
Interest rate would impact the cost of capital, the rate of interest being directly proportionate to the cost of capital.
Rate of inflation determines the rate of remuneration of employees and directly affects the price of the restaurant's products. Again, the proportion between
the inflation rate and wages/prices is direct.
Economic trends act as an indicator of the sustenance and profitability of your business in the chosen region and help you in deciding your marketing strategy.
o Social Factors:
Certain cultures abhor certain foods. For instance, Hindus will not eat beef and Muslims would not even touch pork. Therefore knowledge of these cultural
facts about your business environment will help you decide whether or not you'll be able to do any business there.
Eating habits of the people in your chosen business environment may, and certainly will, affect your marketing decisions.
Ratio of people preferring to eat out regularly.
o Technological Factors:
A good technical infrastructure would lead to better production, procurement and distribution logistics, resulting in reduced wastage and lower costs.
Sound technology may be a decisive factor for food technology innovation, better presentation, more effective business marketing, etc.
://www.buzzle.com/articles/pest-analysis-example.html
ii) PEST Analysis Template
 III) ENVIRONMENT ANALYSIS:
PORTER FIVE FORCES COMPETITIVE ANALYSIS

Porter Five Forces Competitive Analysis

• Organizations usually have competitive forces. The usual competitive
forces organization faces are:
 III) ENVIRONMENT ANALYSIS:
PORTER FIVE FORCES COMPETITIVE ANALYSIS CRITERIA
 III) ENVIRONMENT ANALYSIS:
PORTER FIVE FORCES COMPETITIVE ANALYSIS

Three strategies for dealing with these competitive

forces:
• Differentiate product and services - make them
“better” in the eyes of the consumer
• Probably the most popular of the 3 strategies
• Be the lowest-cost producer - not just a low-cost
producer
• Find a niche - e.g.: geographical market
III) FIVE FORCES ANALYSIS EXAMPLES
III) PORTER FIVE FORCES COMPETITIVE ANALYSIS TEMPLATE
 IV) ENVIRONMENT ANALYSIS:
STAGES OF GROWTH MODEL

• The “Stages of Growth” technique is useful to identify where a technology or organization

resides on the organizational learning curve.
• It start from four stages. The stages are initiation/early successes, contagion, control, and
integration. Then two new stages are added Data Administration Stage and Maturity Stage.
• Stage One: Initiation/Early Successes: Increased interest and experimentation
• Stage Two: Contagion: Interest grows rapidly; learning period for the field
• Stage Three: Control: Efforts begun toward standardization
• Stage Four: Integration: Pattern is repeated
• Stage Five: Data Administration
• Stage Six: Maturity
B) STRATEGY IDENTIFICATION
i. Ansoff Product Market Analysis
ii. Value Chain Analysis
iii. Gap Analysis
iv. TOWS Analysis
v. BCG Matrix
vi. Blue Ocean Strategy
vii. Balance Scorecard
 I) Strategy Identification:
Ansoff Product Market Analysis

• Igor Ansoff created the Product / Market diagram as a method to classify

options for business expansion. This model consist four strategic options
defined can be generically applied to any industry.
• It is used by marketers who have objectives for growth and strategic
choices to achieve the objectives.
• Four main categories for selection.
• Market Penetration
• Market Development
• Product Development
• Business Diversification
 I) Strategy Identification:
Ansoff Product Market Analysis
STRATEGY IDENTIFICATION
 II) STRATEGY IDENTIFICATION:
VALUE CHAIN ANALYSIS
Value Chain Analysis
Porter describes the value chain as the internal processes or activities a
company performs “to design, produce, market, deliver and support its
product.” Porter describes two major categories of business activities:
primary activities and support activities.

Primary activities are directly involved in transforming inputs into outputs

and in delivery and after-sales support. It include:
• Inbound logistics — material handling and warehousing;
• Operations — transforming inputs into the final product;
• Outbound logistics — order processing and distribution;
• Marketing and sales — communication, pricing and channel management.
• Service — installation, repair and parts.
 II) STRATEGY IDENTIFICATION

Value Chain Analysis

Other Activity is support activities. They are handled by the
organization’s staff functions and include:
• Procurement—purchasing of raw materials, supplies and other consumable
items as well as assets.
• Technology development — know-how, procedures and technological inputs
needed in every value chain activity.
• Human resource management—selection, promotion and placement;
appraisal; rewards; management development; and labour/employee
relations.
• Firm infrastructure—general management, planning, finance, accounting,
legal, government affairs and quality management
 II) STRATEGY IDENTIFICATION
Value Chain Analysis
• The value chain identifies, and shows the links, or chain, of the distinct activities and processes
that you perform to create, manufacture, market, sell, and distribute your product or service.
The focus is on recognizing the activities and processes that create value for your customers.

• The importance of value chain analysis is that it can help you assess costs in your chain that
might be reduced or impacted by a change in one of the chain's processes. By comparing your
value chain to your competitors, you can often find the areas or links of the chain where they
might be more efficient than you; that points the direction for you to improve.

• However, you need to understand that the value chain will be influenced by the type
of small business strategy you and your competitors follow: if you are the high value, high
quality market leader, your chain will be quite different than the low cost, high volume
competitor. Understand how those differences influence your analysis and make sure that your
business strategy is in-tune with your market and with your strategic objectives.
 II) VALUE CHAIN ANALYSIS

• Value Chain Analysis is a useful tool for working out to create the greatest
possible value for customers.
• Take raw inputs, and "add value" to them by turning them into something of
worth to other people.
• For example, wood pulp; converting it into something that people are
prepared to pay money for (e.g. paper).
 II) HOW TO USE THE TOOL

Value Chain Analysis is a three-step process:

• Activity Analysis - First, identify the activities undertake to deliver
product or service.
• Value Analysis - Second, for each activity, think through what would do
to add the greatest value for customer.
• Evaluation and Planning - Thirdly, evaluate whether it is worth making
changes, and then plan for action.
II) VALUE CHAIN ANALYSIS
 WALMART
Wal*Mart’s Discount Stores
 WAL*MART’s Value Chain

Wal-Mart Wal-Mart Wal-Mart

Suppliers
Suppliers Distribution Store Shopper
Center

Vendors are Wal-Mart's Once the products are After products are Customers can
suppliers. They deliver delivered to the delivered to the purchase products at
products to Wal-Mart's distribution center, they stores, they are very low prices and
distribution center or are sorted and placed placed on the have the ability to
directly to one of the on trucks to be appropriate shelf return any item.
stores. Wal-Mart is able to delivered to stores. This location for
bargain for the lowest allows for less than 48 customers to view.
possible price because of hour deliveries to Store locations are
the high volume of sales. stores and increased located throughout
Therefore, Wal-Mart passes efficiency on trucks the U.S. in rural and
this savings to its with backhauls. urban towns.
customers.
 III) STRATEGY IDENTIFICATION:
GAP ANALYSIS
• A technique that businesses use to determine what
steps need to be taken in order to move from
its current state to its desired, future state.
Also called need-gap analysis, needs analysis,
and needs assessment.
 III) STEP TO ANALYZE GAP
1. Analyze Your Current Situation (Business and ICT)
• For each of your objectives, analyze your current situation. To do this, consider the following
questions:
• Who has the knowledge that you need? Who will you need to speak with to get a good picture of
your current situation?
• Is the information in people's heads, or is it documented somewhere?
• What's the best way to get this information? By using brainstorming workshops? Through one-to-
one interviews? By reviewing documents? By observing project activities such as design workshops?
Or in some other way?
2. Identify Your Future State ( Business and ICT)
• First, identify the objectives that you need to achieve. This gives you your future state – the "place"
where you want to be once you've completed your project.
 III) STEP TO ANALYZE GAP

3. Compare current business/organization environment with future desired

business/organization environment
Compare current ICT in organization with future desired ICT in organization

4.Identify How You'll Bridge the Gap

Once you know your future state and your current situation, you can think about
what you need to do to bridge the gap and reach your project's objectives.
 Current ICT Future ICT environment Gap/Improvement
environment desired Method/Innovation needed

ICT Strategy

a. Technology Scope Gap:

•
Improvement Method:

•
a. Systemic Competencies Gap:
•
Improvement Method:

a. ICT Administration Gap:

•
Improvement Method:

ICT Infrastructure
Gap:
a. ICT Architecture •
Improvement Method:
•
a. ICT Key Processes Gap:
•
Improvement Method:

•
a. ICT Skills Gap:
•
Improvement Method:
IV) Strategy Identification:
TOWS Matrix
 V) BOSTON CONSULTING GROUP
BUSINESS MATRIX (BCG MATRIX)
• The BCG Growth-Share Matrix is a portfolio planning model developed by Bruce
Henderson of the Boston Consulting Group.
• Based on the observation that a company's business units can be classified into four
categories based on combinations of market gro

• wth and market share relative to the largest competitor.

• Market growth serves as a proxy for industry attractiveness, and relative market share
serves as a proxy for competitive advantage. The growth-share matrix thus maps the
business unit positions within these two important determinants of profitability.

68
V) BOSTON CONSULTING GROUP
BUSINESS MATRIX (BCG MATRIX)

HIGH

Market
Growth
WILD CAT
? STAR

DEAD
DOG CASH COW
LOW
LOW HIGH

Market Share

Focus in cash flow, market share and industry

growth 69
V) PRODUCT PORTFOLIO BASED ON BCG MATRIX

• Wild cats products –

• low market share in a high growth market. Require significant
investment but generate little cash in return
• Star products and business –
• strong market position in attractive or high growth
market/demand. Generate significant revenue
• Cash cow products and business –
• strong market position in mature, lower growth
market/demand. Product well-established,fewer new
customer buy it, generate repeat sales, generate significant
cash flow
• Dead Dog products and business –
• weak position in a low growth or declining market

70
V) PRODUCT LIFE CYCLE
Mature
Demand Growth

Decline

Emerging

[DEMAND UNKNOWN] [DEMAND  SUPPLY] [DEMAND  SUPPLY] [DEMAND  SUPPLY]

• Product Specification • Product enhancement Time
• Product variations • Reduce inventory levels
• Customer requirement • Customer service • Customer segmentation and optimise service
• Process design • Capacity development • Product cost reduction costs
• Market research and utilisation • Costing/sourcing of • Sales forecasting
• Logistic planning • Extend distribution component • Subcontracting - control
• Identify costs channels • Finished goods inventory of suppliers
• Set price/monitor margins control • Release capacity for
• Service from supplier • Pricing flexibility other users
• Promotion to expand • Value analysis/cost • Rationalize distribution
customer based reduction channel
• Selling support • Analysis of contribution • Reduce administrative
• Identify competitors’ 71
• Target specific costs
position competitors
IMPLICATIONS FOR IS/IT STRATEGY
• Wild cats products –
• System need to focus on product/process development or identify potential
customer and ensure effective information exchange on requirements of
product or services and choosen segment of the customer.
• Star products and business –
• System and information will be focus toward customer, identify customer
and their requirements to achieve better understanding of demand and
actual or potential competitors, to allow growth in business, handling
greater order volumes or variety of product mixtures, or types of customer
service that can help to add value and cope with growth.
• Cash cow products and business –
• System tend to focus on control of business relationship and activities rather
than innovation.
• Dead Dog products and business –
• System strategy should be selective, strongly financially–justified investment
to improve profit performance by reducing cost or securing customers 72
 VI) STRATEGY IDENTIFICATION:
BLUE OCEAN STRATEGY
• Blue Ocean Strategy (BOS) is a framework which
inspires to innovate and develop new demand and
new markets to sell your products instead of
fighting with competition over the same market
share and satisfying the same demand which is
typically done in a red ocean strategy (ROS).
 VI) BLUE OCEAN VS. RED OCEAN

RED OCEAN STRATEGY BLUE OCEAN STRATEGY

Compete in existing market space Create uncontested market space

Beat the competition Make the competition irrelevant

Exploit existing demand Create and capture new demand

Make the value-cost trade-off Break the value-cost trade-off

Align the whole system of a strategic Align the whole system of a firm's
firm's activities with its choice of activities in pursuit of differentiation and
differentiation or low cost low cost
Table 1: Blue Ocean vs.VALUE
Red OceanINNOVATION!!
VI) COMPARISON BETWEEN CONVENTIONAL
THINKING AND BLUE OCEAN THINKING

Table 2: Conventional Thinking vs. Blue Ocean Thinking

 VI) THE SIX CONVENTIONAL BOUNDARIES OF
COMPETITION
Boundaries of Head-to-Head Competition Creating New Market Space
Competition
Industry Focuses on rivals within its industry Looks across alternative industries

Strategic Group Focuses on competitive position within Looks across strategic groups within its industry
strategic group
Buyer Group Focuses on better serving the buyer group Redefines the buyer group of the industry

Scope of Product and Focuses on maximizing the value of Looks across to complementary product and
Service Offerings product and service offerings within the service offerings that go beyond the bounds of
bounds of its industry its industry

Functional-emotional Focuses on improving price-performance Rethinks the functional-emotional orientation of

Orientation of an Industry with the functional-emotional orientation of its industry
this industry

Time/Trends Focuses on adapting to external trends as Participation in shaping external trends over
they occur time
Table 3: Blue Ocean Strategy (Reconstruct Market Boundaries)
 VI) BLUE OCEAN STRATEGY
The strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean
strategy. It captures the current state of play in the known market space. This allows you to understand
where the competition is currently investing, the factors the industry currently competes on in products,
service, and delivery, and what customers receive from the existing competitive offerings on the market. The
horizontal axis captures the range of factors the industry competes on an invests in. The vertical axis captures
the offering level that buyers receive across all these key competing factors. The value curve then provides a
graphic depiction of a company’s relative performance across its industry’s factors of competition.
 VI) BLUE OCEAN STRATEGY
Buyer utility
Is there exceptional buyer
utility in your business idea?
No → Rethink
YES

Price
Is your price easily accessible to the mass
of buyers?
No → Rethink
YES
Cost
Can you attain your cost target to profit at
your strategic price?
No → Rethink
YES

Adoption
What are the adoption hurdles in actualizing
your business idea?
Are you addressing them up front?
No → Rethink

YES

A Commercially Viable Blue Ocean Strategy!!

 VI) FOUR ACTIONS FRAMEWORK +
ELIMINATE/REDUCE/RAISE/CREATE GRID
Reduce
Which factors should be reduced
well below industry standards?

Eliminate Create
Which of the factors that the Four Action Which factors should be
industry takes for granted Framework created that the industry
should be eliminated? has never offered?

Raise
Which factors should be
raised well above the
industry’s standard?
 VI) FOUR ACTIONS FRAMEWORK +
ELIMINATE/REDUCE/RAISE/CREATE GRID
VI) BLUE OCEAN STRATEGY
 VII) STRATEGY IDENTIFICATION:
BALANCED SCORECARD
• The Balanced Score Card is a framework for integrating measures derived from strategy. While
retaining financial measures of past performance, the Balanced Score Card introduces the drivers of
future financial performance. (Figure 1) The drivers (customer, internal business process, learning &
growth perspectives) are derived from the organization's strategy translated into objectives and
measures.
• It used a "4 perspective“ approach:
 VII) STRATEGY IDENTIFICATION:
BALANCED SCORECARD
• Financial: encourages the identification of a few relevant high-level financial
measures. In particular, designers were encouraged to choose measures that
helped inform the answer to the question "How do we look to shareholders?"
Examples: cash flow, sales growth, operating income, return on equity.[20]
• Customer: encourages the identification of measures that answer the question
"How do customers see us?" Examples: percent of sales from new products, on
time delivery, share of important customers’ purchases, ranking by important
customers.
 VII) STRATEGY IDENTIFICATION:
BALANCED SCORECARD
• Internal business processes: encourages the identification of measures that
answer the question "What must we excel at?" Examples: cycle time, unit cost,
yield, new product introductions.
• Learning and growth: encourages the identification of measures that answer
the question "How can we continue to improve, create value and innovate?".
Examples: time to develop new generation of products, life cycle to product
maturity, time to market versus competition.
 VII) STRATEGY IDENTIFICATION:
BALANCED SCORECARD
• A completed organizational score card needs to have the following
components:
• Strategic Themes Identified
• Strategic Objectives Identified
• Measures for the execution of the strategic objectives
• Competitive Bench Marks for the measures selected
• Short Term and Long term targets for identified measures
• Initiatives aligned to the Strategic objectives for execution and review.
 ICT STRATEGIC METHOD

C) Prioritization Method

i. Critical Success Factor

ii. E-business value matrix
iii. IS Application Portfolio
iv. Scenario Planning Grid
 I) Prioritization Method:
Critical Success Factor
• CSF is a popular planning approach that can be used to help companies identify
information systems they need to develop / improve.
• CSFs are the few key areas of the job where things must go right for the organization
to flourish.
• Used to determine factors critical to accomplish corporate objectives and
corresponding measures.
• Can be used to identify IS plans that need to be developed.
• It is suggested that an organization have less than 10 CSF.
• CSF is time dependent (must be re-examined).
• Four sources of CSF:
• industry the business is in,
• company itself and situation within industry,
• environment (consumer trends), and
• temporal organizational factors (inventory)
 I) Prioritization Method
• Critical Success Factor (CSF)
No. Critical Success Factor (CSF) CSF Timeframe to
Achievement achieve the CSF
Indicator

3
 II)Prioritization Method:
E-business Value Matrix
E-business Value Matrix Guidelines
• A‘portfolio’ management approach is valuable for executives to prioritise projects.
• This tool used by Cisco to ensure they are developing a well-rounded portfolio of IT
projects.
 II) Prioritization Method:
E-business Value Matrix

E-business Value Matrix Guidelines

• Every IT project is meant to be placed into one of four categories to assess its value to
the company (Figure 4-8):
• New fundamentals: Low-Low=provide a fundamentally new way of working in
overhead areas, not business-critical areas
• Operational excellence: High in criticality to business-Low in newness of
idea=medium risk because they may involve reengineering work processes
• Rational experimentation: Low in criticality to business-High in newness of idea=test
new technologies and ideas
• Breakthrough strategy: High-High=potentially have a huge impact on the company
 Prioritization Method:
E-business Value Matrix
No. Project Names E-business Value Impact Risks
Matrix Category
(High/ (High/
(new fundamental/ operational
Medium/ Medium/
excellence/ rational
Low) Low)
experimentation/ breakthrough
strategy)
III)AN APPLICATION PORTFOLIO FOR
THE “COMBINED ERA”
STRATEGIC HIGH POTENTIAL
applications which applications which
are critical to are critical to
sustaining future sustaining future
business strategy business strategy

Application on Application which

which the are valuable but not
organisation critical to success
currently depends
for success
KEY SUPPORT
OPERATIONAL
Information Systems and their business contribution: application portfolio 95
III) AN APPLICATION PORTFOLIO FOR
THE “COMBINED ERA”
STRATEGIC HIGH POTENTIAL
• Order management • EDI with wholesalers
• Link to supplier • Man power planning
• MRP II; Sale forecast & • Decision support
Market analysis;
• Expert fault diagnosis
• Product profitability analysis
• Document processing

• Bill of material • Time recording

• Inventory management • Budgetary control
• Shop floor control • Expense reporting
• Maintenance scheduling • General accounting
• Employee DB • etc
KEY OPERATIONAL SUPPORT

Example portfolio for a manufacturing company

96
IV) PRIORITIZATION METHOD:
SCENARIO PLANNING GRID
 IV) PRIORITIZATION METHOD:
PRIORITIZE STRATEGY

Prioritize strategies based on:

1. Highest impact on firm
2. Highest likelihood of occurrence
3. Lowest combined attributes of risk
4. Least amount of resources demanded
5. Highest anticipated return
4.0 STRATEGIC IS PLANNING OUTPUT
 STRATEGIC ICT PLANNING OUTPUT/
DELIVERABLES
• Strategic ICT Planning Output:
• Strategic ICT Plan Blueprint consist of
• ICT strategies that support /drive organization
• ICT management strategies
5.0 STRATEGIC IS PLANNING
IMPLEMENTATION
 STRATEGIC IS PLAN IMPLEMENTATION

• Present draft of SISP blueprint to top management to get the

budget for SISP implementation
• Make sure that the SISP blueprint aligns with business
strategy in term of communication, competency and value
measurement, governance, partnership, scope and
architecture and skills.
• Make detail project proposal to implement the SISP project
based on the priority.
 STRATEGIC IS PLANNING EVALUATION
AND MONITORING

• Adoption of measurement criteria

• Periodic review
BUSINESS ISSUES IN STRATEGIC IS PLANNING

• Alignment
• Budget
• Implementable
• Top Management Support
• ICTSP expert
• ICT expert