I will discuss the following thoughts and steps with the university president in order to expedite the implementation of the IS Plan of the university.
While the making of strategic choices is often portrayed as the end of a planning process, it is well recognized that in modern organizations, the choices made in any planning process may not be enacted. There are many reasons for such strategy implementation failures, ranging from a lack of understanding as to who is responsible for implementation to reluctance on the part of lower level managers to truly accept the choices made in the SPIS process, perhaps because they disagree with or do not fully understand them.
To avoid these strategic implementation failures, clear implementation plans must be developed. These plans should indicate who is responsible for the implementation of each element of the plan; they should identify specific “milestones” and schedules for the reporting of results to those who are responsible and to top management, and they should specify clear performance goals for each milestone. Such implementation plans cannot be prepared until the desired changes in the major strategic
IS/IT elements have been approved by top management, but they should be developed immediately thereafter and their development should be considered an integral part of the SPIS process.
The steps in order to expedite the implementation of the IS Plan:
1. Strategy Implementation Step – Budgets are also the “real world” of implementing IT strategy, linking the long-term goals of the organization and their short-term execution through the allocationof resources to activities. Unfortunately, research shows that the majority of organizations do not link their strategies to their budgets, which is why so many have difficulty making strategic changes . This is particularly true in IT, according to the focus group. As one manager complained, “no one knows what we’re doing in the future. Therefore, our goals change regularly and at random.” Another noted, “The lines of business pay little attention to IT resources when they’re establishing their strategic plans. They just expect IT to make it happen.” Budgets can affect IT strategy implementation in a number of ways. First, where IT dollars are spent determines the impact IT can have on corporate performance. Clearly, if 80 percent of IT expenditures is going to operations and maintenance, IT can have less strategic impact than if this proportion is 20 percent lower. Second, how discretionary IT dollars are spent is important. For example, some companies decide to invest in infrastructure while others do not; some will choose to “bet the company” on a single large IT initiative while others will choose more focused projects. In short, the outcome of how a company chooses between investment opportunities is reflected in its budgets.
Third, the budgeting process itself reflects and reinforces the ability of strategic decision making to have an impact. IT expert states that because budget processes are inherently biased toward the short term, in many organizations operational needs will systematically preempt strategic ones. In IT, the common practice of routinely allocating a fixed percentage of the IT strategic budget to individual business units, makes it almost impossible to easily reallocate resources to higher priority projects at the enterprise level or in other business units. In addition, several focus group members noted that their siloed budgeting processes make it difficult to manage the cross-business costs of strategic IT decisions. Overall, budgets are a critical element of most managerial decisions and processes and are used to accomplish a number of different purposes in IT: compliance, fiscal accountability, cost reduction, business unit and enterprise strategy implementation, internal customer service, delivery of business value, and operational excellence, to name just a few. This, in a nutshell, is the reason why IT budgeting is such a complex and challenging process.
According to some IT experts one of the major causes of SISP failure is the lack of understanding and emphasis on implementation issues. Plans are likely to remain and gather dust on the shelf unless there is an effective implementation strategy. In order to address this problem IT experts have come up with a “comprehensive and parsimonious set of factors or practices that predict implementation” and suggest that they “may help planners and researchers better understand implementation.” It is highly desirable for the plan to be read by all key stakeholders. The skill set of employees should also come under scrutiny. Implementation can fail if the organization lacks employees with the appropriate expertise. Plans must proactively be put into practice under the supervision of a project champion and any problems at the implementation stage must be sorted out to derive maximum benefit from the plans. As IT experts point out: “too often organizations fail to implement the recommendations from a SISP study.” An implementation strategy should therefore form an integral part of any strategic planning process.
2. Exploration Strategy Step - While exploitation strategy takes a structured, analytical, evaluative, and methodical approach to IS development, the nature of the beast is quite different in exploration strategy, which is about identifying opportunities for the innovative use of IT. While structured approaches can give some signposting for the innovative use of IT, they alone are not sufficient to nurture the creative talents of individuals within the organization. Exploration strategy specifically seeks to encourage and promote innovation and creativity and thereby achieve competitive or strategic advantage for the business. This will involve the use of unconventional approaches such as tinkering and improvisation to unleash the creative potential of bright sparks and visionaries in the organization. Individuals and/or teams might come up with fresh ideas and the feasibility of these ideas has to be tested by creating a prototype. Such experimentation/exploration must be encouraged, despite the possibility of its becoming costly, and may, in the majority of cases, need to be abandoned after the initial feasibility study. This should not involve harsh criticism or loss of face of individuals/ teams. Impact methodologies are part and parcel of any exploration strategy.
In summary, then, exploitation strategies, which take a methodical approach, are concerned with improving operational efficiency whereas exploration strategies, which make use of experimentation and prototyping, are meant to provide competitive/strategic advantage for the business. Both of these strategies are essential for a balanced SISP process. A great deal of work has also been done in the past couple of decades to understand the success factors of many of the strategic planning efforts. These include: organizational issues, resource issues, effectiveness of the planning methods used and the actual relevance of the plan, and, more importantly problems associated with implementing the plans themselves. Many researchers have also argued for an ongoing process of evaluation and review and the consideration of implementation as a critical issue. These calls are not always heeded and the reality is that, many IS planning decisions/documents, rather than being proactively implemented, are left to gather dust on the shelf or in many instances implemented only partially.
Another fundamental problem is that many still question the value of conducting strategic planning. For them, strategic planning is inappropriate/ineffective for responding to the modern fast-changing business world because, by the time plans are developed and implemented, business requirements will have changed (and/or technology moved on), rendering the plans obsolete. As IT expert has observed, many CIOs “have apparently responded to the forces of chaos by throwing in the towel on strategic planning.” His view resonates with that of IT experts, who point out that a lot of (Western) companies have abandoned the idea of a long-term IS planning process altogether. Also a more recent survey in the United States has shown that 39 percent of the respondents had no formal IT strategy at all. Some would go even further to suggest that the emergence of the Internet marks the death knell for strategies and strategic plans. Porter disagrees strongly: “In our quest to see how the Internet is different, we have failed to see how the Internet is the same. While a new means of conducting business has become available, the fundamentals of competition remain unchanged. The next stage of the Internet’s evolution will involve a shift in thinking from e-business to business, from e-strategy to strategy. Only by integrating the Internet into overall strategy will this powerful new technology become an equally powerful force for competitive advantage”.
IT expert sides with other and points out that the difficulty in sustaining a competitive position, because of the speed of imitation by rivals, actually strengthens rather than weakens the need for strategic planning. “As buyers become more powerful and business processes and systems more homogeneous, only the strategically astute companies will be able to rise above the competitive free-for-all.” He cites the success of Dell and Wal-Mart, which, despite the acquisition of sophisticated IT systems by competitors, are able to maintain their competitive position primarily through astute business and IT plans and strategies. IT expert believes that such chaotic times “make it more necessary than ever for the CIO to routinely take a strategic view.” IT expert agrees with another: “Strategic planning is more important today than ever before, and it is the very speed of change in today’s business climate which makes it so.” The case for conducting strategic planning is therefore well argued. The unanswered question, however, is: how should organizations go about conducting successful strategic planning? In this chapter we attempt to identify several dos and don’ts for success. More specifically, eight principles for successful strategic planning are identified from the prior literature, and case examples from organizations of contrasting size and structure that report effective IS planning efforts are described. This chapter also emphasizes the need for planning to be an ongoing activity and that IT systems that are planned and developed must be continuously repositioned and enhanced to enjoy long-term sustainable advantage. In the light of these principles is also carried out to determine whether they are valid in the real world of business.
Technical IT Skills/Application Development/Implementation Methodology Step - Technical IT skills are the skills needed to develop IT applications. Technical IT skills include analysis, design, and programming skills, understanding of operating systems, and experience with databases and networking protocols. While these skills can be very valuable, since they are widely available to firms—through hiring employees or consultants with these skills—they are usually not rare or costly to imitate, and thus, by themselves, they are not likely to be sources of distinctive advantages. However, if a firm’s programmers and analysts develop a specialized understanding of the firm’s processes and strategies and are able to conceive unique applications to improve customer service, then such an understanding of a firm’s processes and strategies can be a source of competitive advantage. In contrast to technical skills, application development methodology refers to the higher order (managerial) processes involved in collecting requirements and organizing the development and implementation of IT applications. Carnegie Mellon University’s capability maturity model (CMM) is an example of software development methodology. CMM refers to the structured approach to developing and implementing software applications. However, while it is clear that the requirements of each CMM level are well documented, few organizations have achieved the highest level (CMM level 5) of certification. As higher levels of CMM have been associated with more reliable/predictable, higher quality, and lower cost/cycle time of development firms at higher CMM levels have a competitive advantage in developing and implementing IT applications. Similarly, implementing large IT applications has proved to be a significant challenge. Since large IT applications are more about managing organizational change than about implementing software applications, this is not surprising. Thus, if a firm has figured out the social aspects of implementing IT projects, that firm can achieve a competitive advantage with application development/implementation methodology.
3. IT Platform Step - The IT platform is the set of shared capital resources that provides the foundation on which specific IT applications are built. The primary components of the IT platform are: (1) the computing platform (hardware and operating systems), and (2) the communications network. The characteristic of the IT platform makes the speed of implementation, cost, and value of new IT applications different for different firms. This characteristic is described as “flexibility.” A flexible IT platform allows for more rapid response to emerging business needs, whereas an inflexible IT platform gets in the way of some important initiatives, limiting the freedom of the company to respond to market forces and innovate. On the other hand, less flexible platforms may allow the efficient execution of a narrow and unchanging set of IT applications in a firm. The flexibility of the IT platform is manifested in the degree to which a firm’s data and applications can be shared and accessed throughout the organization. Such flexibility enables an organization to rapidly build and implement IT applications to respond to emerging market needs. A firm’s IT platform is also flexible to the extent that the firm adopts and enforces standards for the components of its IT platform to ensure connectivity and compatibility of its technology platform and share ability of its data and applications.
A flexible IT platform is a complex set of technological resources carefully planned for and developed over time. Because of its path-dependent nature, there can be significant differences across firms in how infrastructure is constituted. Moreover, these differences can be long lasting, since disassembling one platform and erecting a new one can be both costly and time consuming. To the extent that the flexibility of the IT platform varies across firms in an industry, and to the extent that a flexible IT platform enables firms to implement IT applications to support specific processes more efficiently and effectively, the variance in platform flexibility can explain differences in customer service across firms. To the extent that one firm can implement an IT-based strategy that its competitors cannot imitate because of an inflexible IT platform, a flexible IT platform is a strategic resource that can be a source of competitive advantage. A flexible IT platform is an investment for the future that enables the organization to respond quickly to the market. Therefore, though a flexible IT platform may improve the responsiveness of the IT organization, a flexible IT platform may not have any impact on the current level of performance. By investing in a standard platform that ensures compatibility/connectivity and facilitates the shareability of data across systems and units, an organization sets itself to respond quickly to market demands. Thus, though a flexible IT platform may not improve current performance, it may be necessary for the long-term competitiveness of the organization. Also, the more dynamic a firm’s environment, the more valuable a flexible IT platform can be to its long-term survival and growth. The IT platform is thus an enabler (of IT applications), just as highways are enablers of commerce. The IT platform by itself may not provide a competitive advantage, just as highways on their own do not lead to economic growth, but they provide the backbone for commerce that allows economic growth to take place.
A flexible IT platform is more valuable when the firm’s environment is dynamic, that is, when the firm actually requires flexibility to respond to changing customer requirements and different and unpredictable competitive moves. In very stable and mature industries where customer needs and competitors’ strategies are quite predictable, flexibility may not be very valuable. Investing in a flexible IT platform in such environments may actually hurt economic performance as it will increase the firm’s cost of IT operations without any commensurate benefits from the flexibility of its IT platform.
The degree of the relevant stakeholders’ support for higher payoffs from an IT investment is an issue of IS implementation plan. Different stakeholders create different kinds of uncertainties and risks. For example, in procurement-related settings, the success of an IT implementation is often based on what IT experts have called the “missing link”: the degree of actual usage by stakeholders involved with the deployed systems. Similar arguments apply regarding usage of systems that support trade services in international banking, where systems integration capabilities make it possible to achieve highly productive transactional support for trade services and the related banking business partners. The stakeholders can be of numerous kinds, including external stakeholders such as buyers and suppliers, and other industry and technology partners. They also can include internal business partners such as financial and accounting managers, or product design and development, and manufacturing operations staff members. In all of these cases, IT implementations are subject to a variety of relational risks that come up in principal–agent relationships.
Reference:
Information System Planning
Copyright 2005
by: William R. King
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