Establish the Plan

• Purpose
° Process
eo Scope

_________
LC===~~~==~~~~========~----------~
Document High Level Bu.siness Direction
I -.-

Document CU1'TentIS Situation - Internal

Business Plan (Mission., Vision. Values, • IS Environment
Goals, Objectives, Business Priorities) • Organizational Structure '
Business Information (History, Description, ° Expenditures
Financial Summary, Industry Summary, • BacJdog
Environmental FactOC'S, Intc:mal Strengths • Other Locations
and Weaknesses)
° Environmental Requirements
I ,
". External Requirements (Customers, . "'11. Document Current IS Situation - External
Suppliers) ° IS Industry Trends
• .Competitor Profiles
-:,,_~j!!ILViS~r----.------""-:
I
r--------- ------------,
I DocwnentDeWledLevel Buslaess Directicn I Determine IS Direction
I ° Information Needs ~ • Mission, Vision
I • Business Processes L, --I e Strategic Objectives'
~_0_P!!Sl!t~~ui"!91E1~ ~I • Stra~es
• [S and the Business Goals
• Computing Architecture
• Policies and Responsibilities
° Annual IS Objectives
• Service Architecture
T
r-----------~------------
tDetermine Gap from Current to Future
./ I· Business Operating Vision Assessment
rI , . Environmental R •••.••iirements A3sessment
...~u
I· Infonnation Needs Assessment
I· External Requirements Assessment
: ~. Business Applicatio¥\sseasment
I· Business Requirements Assessment I
I· Technical Computing Architecture Assessment I
~------------T-----------
Determine Recommendation
Options (~st. Time, Resources, Benchmark
Infonnati on. Advantages, Di sadvantages)
Recommendation
ROI Analysis
Exhibit 2.1 Table of Contents with Phases
Table of Contents
I. Management Overview Phase 1,2,3,4
II. The Plan Phase 1
A. Purpose Phase 1
B. Process Phase 1
C. Scope Phase 1
III. High-Level Business Direction Phase 1
A. Business PI(~m(Mission, Vision, Values, Goals, Phase 1,
Objectives, Business Priorities)
B. Business Information (History, Description, Financial Phase l
Summary, Industry Summary, Environmental Factors,
Internal Strengths and Weaknesses)
C. Environmental Requirements s:•·· Phase 1
D. External Requirements Phase 1
E. Operating Vision Phase 1
IV. Detailed Business Direction Phase 2
A. Information Needs Phase 2
B. Business Processes Phase 2
C. Business Requirements Phase 2
v. Current Information Systems Situation - Internal . Phase 3
A. Information Systems Environment Phase 3
B. Organizational Structure Phase 3
C. Expenditures Phase 3
D. Backlog Phase 3
E. Other Locations Phase 3
VI. Current Information Systems Situation - External Phase 3
A. Information Systems Industry Trends Phase 3
B. Competitor Profiles I Phase 3
VII. Information Systems Direction Phase-3
A. Mission Phase 3
,.
B. Vision Phasf 3
C. Strategic Objectives Phase 3
D. Strategies Phase 3
E. Information Systems and the Business Goals Phase 3
F. Computing Architecture Phase 3
G. Information Architecture Phase 3
H. Policies and Responsibilities Phase 3
I. Annual Objectives Phase 3
J. Service Architecture Phase 3
Exhibit 2.1 Table of Contents with Phases (continued)
Table of Contents
Vllt. Gap Analysis Phase 4
IX. Recomrnendation Phase 4
A. Options Phase 4
B. Recommendations- Phase 4
C. Return "n I~vestment An2tys·is Phase 4
X. Appendix
A. Planning Groups Phase 1
B. Planning Process Phase 1
C. Business Direction Phase 1
D. Detailed Business Requirements Phase 2
E. Roles and Responsibilities Phase 3
F. Information Systems Backlog Phase 3
G.lnformation Systems lndustry Technologies Phase 3
H. Competitor Profiles' Phase 3
I. Business Application Assessment "Phase-4

Establish the Piau

• Purpose
• Process
• Sco e

Document High Level Business

Direction
Exhibit 3.1 Summary of Business Drivers

The business plan identifies better operating effectiveness through the following
key success factors:

• Creation of high performance customer-oriented organization

• Increased manufacturing efficiencies, 'consolidations, and outsourcing
• .Enhanced sales and customer-support processes
• Redefined financial and administrative processes tha! reduce cost·
The key success factors that apply to information systems are:

• Improved operating efficiency

• Improved operating effectiveness
The following key strategic issues..may have a significant impact>on business . '-.
syste~s and support architectures:
• Divestitures, .acquisitions, partnerships
• Investments in emerging markets
• Third-party distribution
• Automation of activities that connect the company with customers and
'suppliers
• Company initiatives
Following are the boundary conditions for information systems:
• Implement the plan in segments; define each segment as a project
• Balance costs with benefits for each project
• Mtflimiie external customer disruption
• Adhere to' predominant information technology industry standards
• Reiy on proven information technology.,(>roducts and processes
Table 3.1 Environmental Requirements
• Make-to.:.order
• Make-to-stock
• Configure-to-order
• . Process manufacturing
• Discrete manufactudng
• Repetitive manufacturing
• Job shoj.
• Discrete work orders
• Sell software
• Sell hardware
• Sell services
• Distributed processing
• Support of multiple divisions and locations
• Multipfe plants, integrated~ ....
• Multiple locations in a warehouse
• Distribution
• Distribution network, multi-level
°
.. .
• Multiplecurrenty: sell, invoice, buy, pay, report
• Purchase non-stock products for re-sale
• Configure products for sale.
• Repair, recondition, or' service our product
• Input to worldwide financial and sales reporting
• Blanket purchase orders
• Just-In-Time manufacturing capabilities
• Decimal inventory/Bill of Material quantities
• Back-flush inventory.and resources
• Finite capacity loading
• Computer Aided Design and Computer Aided Manufacturing interface
• Electronic Data Interchange interface .
• Interface to automated plant equipment
• Shelf life sensitive materials
• Use potency and grade-materials
• FDA and government reporting requirements (EPA, NRC, etc.)
• Free-stock capabilities
• Forecast demand
• Standard and actual costing
• Subcontract production
• Hazardous useand toxic materials
• Lot control
• Serial number control
• Engineering change control
 Table 3.2 Customer Requirements
• Electronic Data Interchange
• Electronic sales ;md cornpli~nc.e information
• Improved communication through the Internet (for example: home page)
• Worldwide corporate combined information for buying agreements
• Ability to interface with distributors and affil iates
• Bar coding
• Enhanced switchboard and telecommunications to more quickly get to the right
person
• Credit card capabilities
• Improved lead times
• Easier order entry
• Improved order information, availability, advise on late orders
" • Ability to handle special orders and requests'
• Services subscriptions
• Better price and value
• High quality
• Easier to do business with
• Ability to provide electronic media and documentation (e.g., CD-ROM)
• Capabilities for providing data from bundling sales
• Warranty information

Table 3.3 Supplier Requirements

• Electronic Data Interchange
• Supplier certification, preferred vend'Or information
• Ability to link and integrate with outside services for materials and dependent
services
• Supplier corrective action tnformation
• Ability to interchange drawings and specifications electronically
• Conformance history
• Product development information

Table 3.2 includes examples of possible customer requirements.

Table 3.3 identifies examples of possible requirements from suppliers
which the company utilizes. .
Table 3.4 Information Needs
Financial:

• Sales (domestic, export, inter-com~ny)

• Gross margin or profit (cost of sales), %
• Operating margin or profit
• Capital commitments and expenditures
• Days Sales Outstanding
• Cost reductions
• Incurred expenses
• Selling expenses, General & Administration
• Other income and expenses
• Interest expense
• Net income
• Balance sheet
• Cash flow
• Budget
• Forecast
• Ooerati r12 exoenses
Tab!e-3.4 :••fv; .r.ation Needs (continued)
• Profits by customer industry
III

• Backl(")~(units ?n~ ~01f3rs).

• Royalty income and expense
Human Resources:

JIll Employee information, including background, experience, demographic,

personal
.• Number of employees: Man-ufacturing, Product Support, Sales, Marketing,
General & Administrative, R&D, by location
• Salary, increase, and.pension data
• Training courses taken
ill Employee survey data'
• Turnover rate
• E£O measurements and government reporting
• Organizational reporting relationships
• Workers comp incidents, costs
• Healthcare costs
• Benefit information
• Salary market data by geography, type
Manufacturing Operations:
• Variances (overhead spending, volume, manufacturing, purchases, work
order, purchase price, other)
• Scrap (product changes, expiration)
• Overdue
• Throughput time
• Rework (percentage, hours)
• Scrap (dollars,units)
• Reserve for potentially 'obsolete material
• Shrinkage and inventory adjustments
• Scrap arid obsolescence % to standard r;,¢ceipts
• Labor hours by system and operations (tracking run average of actual versus
standard, labor tracking by part number)
• Variances (rework, work order, scrap, obsolescence) by product
• Inventory (turns, dollars, Days Inventory On Hand)
• Allocation and backlog, average throughput time versus stated lead time by
part number -
• Direct material, direct labor cO~J percent
• System cost roll-up
• Cost of revisions (Design Change Orders: scrap, rework, standard increase)'
• DCa throughput and volume by distinction code
• Fixed costs
• Batch size costs
• .S~C and work order activity
 Table 3.4 Information Needs (continued)
• Corrective action status (internal and external)
• Simulation capability (what in '
• % on time, on quality of work orders
• Capacity levels (shop floor, facilities)
• Inventory accuracy
• Excess and slow moving inventory
• Facility and equipment utilization ratio
• Forecast versus actual units produced
,. Pending changes -' 80M, standard cost, routings
• Customer service level
• Standard receipts to inventory
• Summary of shipments (dollars, units by zone)
• First-pass yield by assembly
• Supplier cost, quality and delivery performance
• Reporting 0[\ vendor activity' -.
• Conformance and acceptance (Incoming, In-process, Final te*1g)
• Volume produced by commodity
Field Service and Support:
• Total service costs per product (labor, travel, other field, in--n.se,. parts)
• Number of installations completed (net, cumulative, average)
• Number of preventive maintenance calls
• Product support costs
• Number of repair service calls
• Service contracts
• Warranty obligations
• Cost and time to repair
• Reliability measurements
Quality:

• First-pass access yield I

• Warranty cost
Ii Installation success
• Number of complaints
• Unscheduled service calls pee product
, Calls per instrument for key accounts
• Mean time to repair .
• Mean time between service calls
• Average number of calls per service rep
• Total scrap and obsolescence
• Volume produced
• Service level
• Corrective actions, and recalls
• Total cost of recalls
• Customer survey resuIts
 Table3.4 Information Needs (continued)
• Number of returns
• Mean time between failure
• Num,ber of Design Change Orders
Regulatory:

• Shipment control
• ISO requirements and dC~:Jn:tentation
• Export cornrnoditr reporting
• EPA, NRC, hazardous waste info
• FDA information
Marketing:

• Customer placements
'" • Sales by zone, region, territory, representative, customer, product group and
class; account, product
• Market share data: gains, .losses by product and location
• Gross profit by account and product
• Competitive activity
• Customer membership data, including sales and administrative fees
• Placements by location
• Data won and lost
• Pricing, discount
• Commissions
• Forecast (units)
• Revenue by business segment, product class, etc.
• Integration of buying group data
Engineering and R&D:

• R&D expenses
• New product sales ;'
• Time to market
• Number of releases
• Patents, awards
• Infringements costs
It):

• IS costs as % of sales.
• Backlog and completed hours (project, support maintenance)
• Average time for request completion
• Process elapsed time for completion
• Sales-per employee
• System availability
• System response ti me
• Cost of processing a transaction
• Value-added ration per. process