Planning
Fundamentals
Introduction
Information technology has created a seismic shift in
the way companies do business. Just knowing the importance and structure of
e-business is not enough. We need to create and implement an action plan that
allows us ti make the transition from an old business design to a new
e-business design.
Organizational Planning
The components of an organizational planning
process
Strategic planning
1. Strategic
visioning
Examples of strategic visioning questions in planning
for e-business initiatives
2. Tactical planning involves the setting of objectives and the
development of procedures, rules, schedules, and budgets.
3. Operational planning is done on a short-term basis to implement and
control day-to-day operations.
The scenario approach
1. Scenario approach to
planning has gained in popularity as a less formal, but more realistic,
strategic planning methodology for use by business professionals.
2. In the scenario approach,
teams of managers and other planners participate in what management author
Peter Senge calls microworld, or virtual world, exercises. A microworld is a
simulation exercise that is a microcosm of the real world.
Business operation risk – an assessment determines the risks involved in
addressing or ignoring a particular competitive threat.
Program risk – for approved or existing programs, management
concerns focus on whether the program or project will be delivered on time,
within budget, and with high quality.
Business interruption risk – this type of risk affects the company’s ability to
continue operating under difficult circumstances.
Market risk – this category is divided into geopolitical and
industry-specific risks.
Planning for Competitive
Advance
- Important in today’s competitive business arena
and complex information technology environment.
- Strategic business/IT planning involves an evaluation of the potential benefits and risks a company faces when using IT-based strategies and technologies for competitive advantage.
SWOT Analysis
SWOT (Strengths, weaknesses, opportunities, and
threats) is used to evaluate the impact that each possible strategic
opportunity can have on a company and its use of information technology.
- A company’s strengths are its core competencies
and resources in which it is one of the market or industry leaders.
- Weaknesses are areas of substandard business
performance compared to others in the industry or market segment.
- Opportunities are the potential for new business
markets or innovative breakthrough that might greatly expand present
markets.
- Threats are the potential for business and market losses posed by the actions of the competitor and other competitive forces, changes in government policies, disruptive new technologies and so on.
TABLE 11.1
: Example of a SWOT Analysis by
a Human Resources Consulting Firm
Business Models and Planning
- A Business model is a conceptual framework that
expresses the underlying economic logic and system that prove how a
business can deliver value to customer at an appropriate cost and make
money.
- A business model is a valuable planning tool
because it focuses attention on how all the essential components of a
business fit into a complete system.
FIGURE 11.6
: Questions that illustrate
the components of all business models. A good business model effectively
answers these questions.
FIGURE 11.7
: Questions that illustrate the
components of e-business
Business/ IT Architecture
Planning
-
This planning process leads to development of
strategies and business models for new e-business and e-commerce platform,
processes, products, and services.
The business/ IT planning process has three
major components:
Stategic Development
v Developing business strategies that support a
company’s business vision, for example, using information technology to create
innovative e-business systems that focus on customer and business value. We
will discuss this process in more detail shortly.
v Developing strategic plans for managing or
outsourcing a company’s IT resources, including IS personnel, hardware,
software, data, and network resources.
Technology Architecture
v Making strategic IT choices that reflect an
information technology architecture desiged to support a company’s e-business
and other business/ IT initiatives.
Information Technology Architecture
The
information technology architecture that is created by the strategic business/
IT planning process is a conceptual design, or blueprint, that include the
following major components:
Technology Platform
Þ The internet, intranets, extranets, and other
networks, computer systems, system software, and integrated enterprise
application software provide a computing and communications infrastructure, or
platform, that supports the strategic use of information technology for
e-business, e-commerce, and other business/IT applications.
Data Resources
Þ Many type of operational and specialized
databases, including data warehouse and Internet/intranet databases store and
provide data and information for business process and decision support.
Application Architecture
Þ Business applications of information technology
are designed as an integrated architecture of enterprise systems that support
strategic business initiatives, as well as cross-functional business processes.
For example, an applications architecture should include support for developing
and maintaining inter-enterprise supply chain applications, as well as
integrated enterprise resource planning and customer relationship management
applications.
It Organization
Þ The organizational structure of the IS function
within a company and the distribution of IS specialists are designed to meet
the changing strategies of a business. The form of the IT organization depends
on the managerial philosophy and business/IT strategies formulated during the
strategic planning process.
-
Introduced by Robert S.Kaplan and David Norton in 1992.
-
BSC is a strategic management system that forces managers to focus on the
important performance metrics that drive success.
-
The system consists of four processes:
Ø Translating the vision into operational goals.
Ø Communicating the vision and linking it to
individual performance.
Ø Business planning.
Ø Feedback and learning, and then adjusting the
strategy accordingly.
The scorecard
seeks to measure a business from the following perspectives:
Financial Perspective.
F This measures reflecting financial performance;
for example, number of debtors, cash flow, or investment.
Customer Perspective.
F This measure having a direct impact on
customers: for example, time taken to process a phone call, results of
customers surveys, number of complaints, or competitive rankings.
Business process perspective.
F This measure reflecting the performance of key
business processes; for example, time spent prospecting, number of units that
required rework, or process cost.
Learning and Growth Perspective
F This measure describing the company’s learning
curve; for example, number of employee suggestions or total hours spent on
staff training.
- The process is entirely subjective and makes no provision to assess
quantities like risk and economic value in a way that is actuarially or
economically well-founded.
-The BCS does not provide a bottom-line score or a unified view with clear
recommendations; rather, it is only of metrics.
Comparing Planning Approaches
E-Business Architecture Planning
