Internal IS environment

Analysis of the internal IS involves the sophistication of IS usage within an organization including the current portfolio of applications and the IT infrastructure. The gap analysis approach is an effective approach to assessing the internal IS environment. Analysis of business processes will also identify areas where information systems can increase 4/14/12 process efficiency and effectiveness.

Gap analysis

Identification of the requirements from information systems by comparing the current systems and information availability to what is required by users

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IS analytical tool 2: Stages of growth models

IS stages of growth model A six-stage evolutionary model of how IS can be applied within a business Enable companies to compare the sophistication of their IS strategy to other organizations. They can also be used to identify future IS requirements. a six-stage model The best-known model is4/14/12

The characteristics of the six stages are as follows:

1 Initiation. The first use of applications within an organization. Characterized by lack of senior management interest, operational or simple office systems and transactional systems to reduce costs. 2 Contagion. Widespread use of applications as benefits are sought from automation and information management. Characterized by rapid growth in use of application with enthusiasm from departmental managers, overall 4/14/12 control is limited.

3 Control. This stage is a reaction against excessive and uncontrolled expenditures of time and money on computer systems from the contagion stage. It is characterized introduction of plans, methodologies and expenditure controls, often resulting in an applications backlog.
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4 Integration. This is a reaction against the use of departmental applications arising from earlier poor control. Traditionally characterized by use of databases, today by the use of middleware and enterprise resource planning systems. Control continues to improve at this stage.

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5 Data administration.
A change of emphasis to information management rather than focus on technology and applications. Databases and document or content management systems are introduced to help achieve this.

6 Maturity.
Information systems are put in place that reflect the real information needs of the organization. Characterized by planning and development of IS closely linked to business strategy. 4/14/12

Stages in adoption of different models

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E-business adoption stages model

Quelch and Klein (1996) developed a five-stage model referring to the development of sell-side ecommerce.

1. Image and product information. A basic brochureware Website with no interactivity. 2. Information collection. Interactivity is introduced. 3. Customer support and service. 4. Internal support and service.
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IS analytical tool 3: IS applications portfolio

IS applications portfolio The range of information systems deployed within an organization A widely applied framework for assessing the IS applications portfolio is that of McFarlan and McKenney (1993).
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Categories of Applications portfolio

Strategic IS the business depends on these IS to achieve or sustain competitive advantage. Turnaround IS the application does not currently deliver significant competitive benefits, but it has the potential to positively affect the businesss competitive position. 4/14/12

Categories of Applications portfolio

Factory IS. Currently of competitive
importance, but less relevant in the future.

Support IS. No significant

competitive advantages are derived from these IS, although they may be important for operational purposes.
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IS analytical tool 4: Internal value chain analysis

A model that considers how supply chain activities can add value to products and services delivered to the customer

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 Michael Porters value chain is a wellestablished concept for considering key activities that an organization can perform or manage with the intention of adding value for the customer as products and services move from conception to delivery to the customer (Porter, 1980). The value chain is a model that describes different value-adding activities that connect 4/14/12 a companys supply side with its demand

 The value chain is a model that describes different value-adding activities that connect a companys supply side with its demand side. Through analysing the different parts of the value chain managers can redesign internal and external processes to improve their efficiency and effectiveness.
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Value Chain

Information naturally has a role both in linking the elements of the value chain and, in some cases, itself adding value or reducing costs. Examples of information flows through the value chain include demand levels from customers, inventory and stock levels and the availability and pricing of raw materials.
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2 Value chain Model

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External microenvironment

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IS analytical tool 5: Porters five competitive forces model

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The stages of IS strategy development

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Strategic Objectives
Objective setting for information systems strategy does not only involve setting specific IS objectives, rather it involves reviewing how organizational objectives will be achieved through the information systems strategies. So the objectives for IS strategy are derived from the business objectives. 4/14/12

Critical success factors (CSFs)

A performance measure which must be achieved in order for business objectives to be met

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Key performance indicators (KPIs)

are then used to set targets for CSFs and assess whether these have been achieved. An example of this approach is provided by Dell Computer. Specific business objectives were identified that were aimed at increasing customer loyalty by the Dell Customer Experience Council which had researched key loyalty drivers, identified measures to track these and put in place an action plan to 4/14/12 improve loyalty .

Example

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Balanced scorecard

A framework for setting and monitoring business performance. Metrics are structured according to customer issues, internal efficiency measures, financial measures and innovation
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 The balanced scorecard is increasingly used for objective setting for IS strategy, both in the sense of the balanced business scorecard for the whole organization which may contain some IS-specific metrics, such as information quality or availability and staff IT skills, but also a balanced IS/IT scorecard which is dedicated to specific IS performance objectives and measures. 4/14/12

Strategy definition

Setting relative investment priorities for applications, support services and infrastructure

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 The strategy definition part of the IS strategy specifies which resources will be deployed to achieve the organizations objectives. It also specifies how those resources will be delivered through different organizational structures, responsibilities and control mechanisms. The strategy will be based on 4/14/12 analysis of the internal and external

IS portfolio management

A structured approach to the selection and management of IS projects specifying the best combination or portfolio of IS applications to support and impact organizational objectives is a key part of IS strategy 4/14/12

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Macfarlan modified grid

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 This model recognizes that the information systems used by a single company will not fit into a single quadrant on such a matrix, but rather there will be a portfolio of IS, some of which may lie in different quadrants.

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 Strategic. Applications that are critical to sustaining future business strategy. Test: Results in a clear competitive advantage for the business? Enables the achievement of specific business objectives and/or critical success factors? Key operational. The organization currently depends on these applications for success 4/14/12 (mission-critical).

 Support. These applications are valuable to the organization but not critical to its success. Test: Does it improve the productivity of the business and so reduce long-term business costs? High potential. These applications may be important to the future success of the organization. benefits, not yet Test: Likely to provide future 4/14/12

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