Nature of Relationship between Business plan an IS plan
There is considerable debate in the academic literature on the issue of business/IS alignment. As yet, no one has come up with a universal methodology for achieving it. However, there is significant consensus that business planning should not be done in isolation. Indeed, it has to be done in conjunction with IT plans and both plans need to be developed collaboratively by a team consisting of business-focused managers and technology-focused IS professionals. Clearly, the implication is that, when writing an IT strategic plan, chief information officers (CIOs) should not wait until the business plan is formulated. CIOs should be active participants in the development of both strategies. The point that a sequential approach to alignment is not effective and that “a better approach is one in which strategies, processes, technologies and actions are defined and aligned concurrently.” Similarly, The development of IS strategy during the same process and at the same time as business strategies if organizations are to derive maximum advantage from IT systems.
The reality in many organizations, however, is that they have no formal business planning process, let alone an IS strategic planning process. Almost a third of respondents did not have a formal business plan—that is, a written plan. Perhaps a detailed written plan is not always essential as long as both parties—business-savvy managers and IT specialists—are well informed about the corporate aims and objectives and participate in the informal planning process to understand how technology can
help the organization in realizing them .
Over the past twenty years, information systems (IS) planning has consistently remained among the top ten issues facing senior executives. A key aspect of strategic IS planning is the need for alignment between business planning (BP) and information systems planning (ISP). In the context of BP and ISP, alignment means that business and IS plans (the outputs of the planning process) should be in harmony and consistent with one another. In other words, similar to aligning things to make them congruent, business and IS strategic alignment can be defined as the alignment of IS goals, strategies and processes with the goals, strategies and the processes of the business enterprise.
It appears that IS planninghas decreased in ranking (though it still remains among the top five issues) while business–information technology (IT) alignment has remained the top key issue since 2004. Although this issue has received significant attention in recent years, empirical research focusing specifically on BP–ISP alignment appears to have somewhat slowed down. Note that this chapter focuses on the alignment between IS strategy/plan and business strategy/plan, and between IS planning and business planning. When the concept of deriving IS strategy from business strategy was first, it dealt primarily with the content of plans—that is, deriving theIS mission, strategy and objectives from the mission, strategy and constraints of the strategicbusiness plan. Even when the “reverse” transformation of having IS influence business strategy was first discussed, the focus was on content.
Little attention was given to the alignment of the IS strategic planning process with the business planning process until IBM used the other approach as the basis for their business systems planning (BSP) process. IBM’s use of these ideas with their customers around the globe was significant in popularizing and extending their application to the consideration of both content and process. Subsequently, various researchers have emphasized the importance of enterprise architectureand strategic planning methodologies/ frameworks for creating alignment. Examples of IS planning methodologies/frameworks that suggest how IS can support or be aligned with business include: BSP and Business Information Control Study (BICS), and critical success factors (CSFs), value chain, customer resource life cycle, and strategic thrusts. In addition, authors have also examined the creation of business-aligned IS strategy in practice. However, a review of such literature, which would include details of different strategic IS planning processes and frameworks, is beyond the scope of this chapter.
Various terms are often used synonymously to describe alignment, namely, “bridge”, “congruence”, “consistency”, “coordination”, “fit”, “fusion”, “harmony”, “integration”, “linkage”, and “match”.
The need for BP–ISP alignment or more generally, business–IT alignment, has been emphasized in both prescriptive and empirical studies. The basic premise of the importance of alignment is that greater alignment between IS and business will lead to better performance. Alignment has been examined in various contexts, such as mergers and acquisitions, enterprise systems implementation, critical success factors of business and IS executives, software development processes, Internet usage, and interorganizational relationships. However, the focus of this chapter is mainly on the alignment of business planning/strategies with IS planning/strategies.
Alignment is important because it helps to: ensure that information systems are targeted on areas that are critical to successful business performance, ensure that the IS function supports organizational goals and activities at every level, enhance top management’s understanding of the significance of IS, and increases IS management’s understanding of business objectives, ensure that ISP activities are coordinated with BP activities so that the IS function can better support business strategies and contribute to the achievement of business value, facilitate acquisition and deployment of information technology that is congruent with the organization’s competitive needs rather than existing patterns of usage within the organization, heighten the stature of IS within the organization, thus facilitating the financial and managerial support necessary to effectively implement innovative, maximize returns on IT investment, help achieve competitive advantage through IS, provide direction and flexibility to react to new opportunities.
The reality in many organizations, however, is that they have no formal business planning process, let alone an IS strategic planning process. Almost a third of respondents did not have a formal business plan—that is, a written plan. Perhaps a detailed written plan is not always essential as long as both parties—business-savvy managers and IT specialists—are well informed about the corporate aims and objectives and participate in the informal planning process to understand how technology can
help the organization in realizing them .
Over the past twenty years, information systems (IS) planning has consistently remained among the top ten issues facing senior executives. A key aspect of strategic IS planning is the need for alignment between business planning (BP) and information systems planning (ISP). In the context of BP and ISP, alignment means that business and IS plans (the outputs of the planning process) should be in harmony and consistent with one another. In other words, similar to aligning things to make them congruent, business and IS strategic alignment can be defined as the alignment of IS goals, strategies and processes with the goals, strategies and the processes of the business enterprise.
It appears that IS planninghas decreased in ranking (though it still remains among the top five issues) while business–information technology (IT) alignment has remained the top key issue since 2004. Although this issue has received significant attention in recent years, empirical research focusing specifically on BP–ISP alignment appears to have somewhat slowed down. Note that this chapter focuses on the alignment between IS strategy/plan and business strategy/plan, and between IS planning and business planning. When the concept of deriving IS strategy from business strategy was first, it dealt primarily with the content of plans—that is, deriving theIS mission, strategy and objectives from the mission, strategy and constraints of the strategicbusiness plan. Even when the “reverse” transformation of having IS influence business strategy was first discussed, the focus was on content.
Little attention was given to the alignment of the IS strategic planning process with the business planning process until IBM used the other approach as the basis for their business systems planning (BSP) process. IBM’s use of these ideas with their customers around the globe was significant in popularizing and extending their application to the consideration of both content and process. Subsequently, various researchers have emphasized the importance of enterprise architectureand strategic planning methodologies/ frameworks for creating alignment. Examples of IS planning methodologies/frameworks that suggest how IS can support or be aligned with business include: BSP and Business Information Control Study (BICS), and critical success factors (CSFs), value chain, customer resource life cycle, and strategic thrusts. In addition, authors have also examined the creation of business-aligned IS strategy in practice. However, a review of such literature, which would include details of different strategic IS planning processes and frameworks, is beyond the scope of this chapter.
Various terms are often used synonymously to describe alignment, namely, “bridge”, “congruence”, “consistency”, “coordination”, “fit”, “fusion”, “harmony”, “integration”, “linkage”, and “match”.
The need for BP–ISP alignment or more generally, business–IT alignment, has been emphasized in both prescriptive and empirical studies. The basic premise of the importance of alignment is that greater alignment between IS and business will lead to better performance. Alignment has been examined in various contexts, such as mergers and acquisitions, enterprise systems implementation, critical success factors of business and IS executives, software development processes, Internet usage, and interorganizational relationships. However, the focus of this chapter is mainly on the alignment of business planning/strategies with IS planning/strategies.
Alignment is important because it helps to: ensure that information systems are targeted on areas that are critical to successful business performance, ensure that the IS function supports organizational goals and activities at every level, enhance top management’s understanding of the significance of IS, and increases IS management’s understanding of business objectives, ensure that ISP activities are coordinated with BP activities so that the IS function can better support business strategies and contribute to the achievement of business value, facilitate acquisition and deployment of information technology that is congruent with the organization’s competitive needs rather than existing patterns of usage within the organization, heighten the stature of IS within the organization, thus facilitating the financial and managerial support necessary to effectively implement innovative, maximize returns on IT investment, help achieve competitive advantage through IS, provide direction and flexibility to react to new opportunities.
Reference:
WIKIPEDIA.org
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