IS/IT Strategic Analysis: Assessing and Understanding

the Current Situation (Internal Business Analysis)

Faculty of Industry and Informatics TechnologyTelkom Institute of Technology Purwokerto, October

2018

Review From Previous Session

The development of IS/IT Strategies should be aligned with business strategies

The processes of developing IS/IT Strategic Plan consist of:

◦ Current situation analysis

Internal business analysis

Current IS/IT analysis

◦ Future situation analysis

External business analysis

IS/IT trend analysis

◦ Gap analysis

The output of IS/IT Strategic Plan: (1) IS/IT

management strategy, (2) Business IS/IT strategy, (3) IT strategy

Context of This SessionExternal Business Environment

Internal Business Environment

Internal IS/IT environment

Current Applications Portfolio

External IS/IT Environment

Planning Approaches, Tools and Techniques

Strategic IS/IT

Planning Process

IS/IT Management Strategy Business IS Strategies IT Strategy

Applications Portfolio Model & Matrices

We are here

Session Objectives

To understand the current situation in the business as the baseline of the SPIS analysis.

To identify business activities and business processes (existing condition).

To obtain Information System logical requirements based on fact finding, analysis and interpretation.

To understand the use of various modeling and analysis tools (techniques).

To develop IS/IT Strategy based on the analysis.

I. Analysis of Internal Business Environment

Business Process Re-engineering (BPR) and IS Strategy

Most business strategy development needs re-engineering to improve performance

Developing IS strategy needs understanding of business strategy

The success of BPR usually supported by IS strategy. BPR depends on IS/IT?

Which one comes first: Business drives IS/IT or IS/IT drives Business? BPR drives IS/IT or IS/IT drives BPR?

Con

toh

BP

R.

Dil

angkah

man

asa

jaIS

str

ateg

y

bis

am

end

ukung

BP

R?

Proses Bisnis - Value ChainCase Study: Perusanaan Pertambangan

Eksplorasi

Produksi

Pengolahan

Transportasi

Pemasaran

Pelayanan

Proses bisnis mana yang akan di re-engineered?

Apa tujuan BPR?

Dimana letaknya peran IS/IT?

The Role Of IS/IT in BPR? How can business processes be transformed using

IT?

◦ Based on IT capabilities (What are IT capabilities?)

◦ IT as enabler (explain what do you mean “enabler”)

How can IT support business processes?

◦ Provide value added (how do you measure value added?)

Ultimately, how can IT deliver optimal benefits to organization?

◦ Interface to IT Governance

◦ Improve performance

How an organization can gain competitive advantages, through BPR that supported by

IS/IT?

Competitive Advantage Indicators

Adopted from Porter and Resource BasedTheory (RBT), we used 11 indicators tomeasure the organization’s competitiveadvantage that caused by ERPimplementation (Molla and Loukis, 2005):

(1) value added, (2) rare product, (3) productleading, (4) non-substitute, (5) support corebusiness, (6) reduce product cost, (7) productdifferentiation, (8) operational efficiency, (9)increase entry barrier, (10) bargaining poweragain supplier/customer, and (11) supportcompetitiveness.

What IS/IT strategies that can realized these indicators?

Techniques and Analysis to Determine The IS Demand

SWOT, CSFs,

Value Chain,

Business Model

Current & Expected,

Business & Technical

Environment

Current Status of IS/IT

Potential Status of IS/IT

Proposed

IS/IT

Initiatives

Business

Strategy

Proposed

Business

Initiatives

Determine

IS Demand

Impact and Role of IS/IT

Opportunities

For IS/IT

Innovation

Gathering the Relevant Data in Order to Determine the Demand of Information Systems

Tasks Deliverables

Analysis of the

business strategy

Identified its components and its information

needs

Analysis of current and

future portfolio of the

business

Determine how IS/IT can strengthening business

competitive position

Analysis of the internal

business environment

Understand the relevant organizational

characteristics, SWOT, SLOT, and other factors

Identification of CSF

of the business

Crystallize the meaning of success in meeting the

objectives stated in the strategy

Information Analysis Model the logical activities and inherent

information elements in the business

Evaluation of the

Effectiveness

Identify where changes need to occur, how IS/IT

can improve performance

Where can you find all these data/information?

How do you collect the data/information?Use scientific method to collect

data/information: survey, interview, observation: need scientific instrument

Make sure you go through all the TASKS and

DELIVER the results using scientific methods in

order to gather the data and information

Where to Find Data and Information?

In all strategic business units (SBU) of the organizational hierarchical structure.

Documentations related to business plan, business report, decree (surat keputusan) policy and regulation, etc.

Observation: work flows, information flow, chain of command, etc.

Survey and Interview key persons.◦ Develop survey instrument

◦ Develop interview instrument

Make sure you collect all these sources of data, scientifically

Scientific Method to Collect Data and Information

Develop questioner for survey

Develop list of questions for interview◦ Record the interview

Develop check list for observation◦ Business process

◦ Human resources

◦ ICT facilities, etc.

Note taking for reading the documents of business report, strategic plan, etc.

Internal Business Environment (Interpreting The Business Strategy)

Business strategy◦ Purpose: to ensure that IS strategy supports rather contradicts

business strategy◦ Identify and analyze the current strategy◦ Compile and confirm the IS requirements, and document in the IS

demand◦ Tools: critical success factors analysis and business drivers analysis

Business processes, activities, and key entities◦ Purpose: to understand important business tasks and processes, and

the flow of information. Make up the business model with supporting IS model

◦ Tools: processes effectiveness analysis, process flow diagrams, DFD, ER, and activity entity matrices (tabular representation of the business…)

Organizational environment◦ Purpose: to understand organizational arrangements, value system,

and key people and their relationships. Understand the environment, its skills, resources, values, culture, social interactions, its management style…

◦ Tool: organizational modeling

Constituents of Business Strategy(Usually included in “Renstra”)

Mission: Statement of overall purpose for the organization

Vision: Brief description of the future that is consistent with the mission

Business drivers: A set of critical forces for change that the business must respond to

Goals: Major achievements necessary to accomplish the vision

Objectives:Measurable targets that take the organization towards the goals

Strategies: Concrete ways to achieve the objectives (inputs from IS planning process)

Critical success factors: Areas where things must go right for the organization to flourish

Business area plans: the plans of various areas of the business

Notify the components of Business Strategy

Components of Business Model

Business processes: the sets of interlinked activities or roles that deliver specific outputs to identified customers inside or outside the organization

Activities: the elements of the business processes that organization undertakes to produce, promote and distribute its products or services, to develop, support and administer its infrastructure and to measure performance against objectives.

Key entities: within an activity that are of fundamental importance to business processes.

Components of Information Systems (IS) Model

Rich picture

Process flow models

Functional decomposition model

ERD

DFD

Activity/Entity Matrices

Other Diagramming Techniques using UML – OO

Other diagrams

IIA. Analysis of Internal IS/IT Environment

Current IS management strategy (applications portfolio)◦ Content and coverage of applications◦ Contribution of applications

Current IS/IT regulation and policies Value of IS organization

◦ IS profile in organization: structure, function, etc.

◦ IS perception in organization Current IT management strategy (IT

infrastructure)◦ IS/IT organization and processes◦ IS/IT assets, resources, and skills◦ IS methodologies and training provisions

IIB. Analysis of External IS/IT Environment

Identify drivers of IS/IT trend

To gain perspective on IT trend and opportunities

Looking at what competitors are doing with IS/IT

Identify elements of IS/IT that need further investigation

Gartner’s Top 10 Strategic Technologies for 2011

1. Cloud Computing

2. Mobile Applications and Media Tablets

3. Social Communications and Collaboration

4. Video

5. Next Generation Analytics

6. Social Analytics

7. Context-Aware Computing

8. Storage Class Memory

9. Ubiquitous Computing

10.Fabric-Based Infrastructure and Computers

Sumber: Gartner, Inc. (www.gartner.com)

1. MOBILE DEVICES BATTLES

2. MOBILE APPS AND HTML5

3. PERSONAL CLOUD

4. THE INTERNET OF THINGS

5. HYBRID IT AND CLOUD COMPUTING

6. STRATEGIC BIG DATA

7. ACTIONABLE ANALYTICS

8. MAINSTREAM IN-MEMORY COMPUTING

(IMC)

9. INTEGRATED ECOSYSTEMS

10.ENTERPRISE APP STORES

Gartner’s Top 10 Strategic Technologies for 2013

How your IT strategies keep up with the technology trends?

III. Measurements, Techniques, Methods, etc to

Determine Information System Needs

Critical Success Factors (CSF) Analysis

“The limited number of areas, in which results, if they are satisfactory, will ensure competitive performance of the organization

Hierarchy of CSF (industry, organizational, business unit, and manager)

Identified from objectives and strategies For prioritizing and determining

Information System applications

Strategy CSF Measure to be

developed

Improve sales in all

sites at rates higher

than industry average

Competitive pricing

Salary of site manager

Distribution of sites

Company price versus

industry average

Manager salary versus

industry average

Proportion of high turnover

sites

Improve sales of

underperfoming sites

Level of advertising Amount spent versus

industry average

Example: Business objective is to achieve 1% growth in market

share. In order to achieve that objective, Strategy, CSF

and Measurement needed are as follow:

Other examples of CSFs: access to raw material, timely delivery, etc

CSF helps Define and set objectives.Give Examples

Objectives must be well defined and measurable

CSF Analysis

Executive IS IS applications

Define

Critical Success

Factors Prioritize Define

Identify

Objectives and Business tasks

Strategies and processes

CSFs help manager to control the business performance

CSFs help define and prioritize the IS needs

Technique to analyze degree of Information System:

IS Profile in Organizations

Support routine, Strategic to entire

Distributed organization

Computing

Support routine, Crucial to some

Centralized business areas

computing

Infusion (impact on business)

Diffusion

(deployment

in business)

High

High

Low

Evaluating the Gap Between Current and Required IS/IT

Identify business processes in need of recognition, simplification, streamlining, or redesign

Identify new or upgraded information provisions◦ New uses of existing sources of information

◦ New sources of information

Identify changes in the IT management strategy (supply provisions) to support the new role of IS in the organization

Tips and Bits for this Session

Fact finding processes to obtained relevant information to develop IS/IT strategy

There are techniques to analyze and interpret the development of IS/IT Strategy

No trivial attempt to develop IS/IT strategy

More techniques to come….