Management of

Information Systems
Lecture Week 10:
IT Strategy & Planning

Robin Keno Pur

School of Business & Public Policy
Robin.pur@upng.ac.pg
mois361203@gmail.com
University of Papua New Guinea University of Papua New Guinea
 Week Topic CLO Align Assessment
with Topic
1 Introduction 1
2 IT supports Organisational Performance in Turbulent 2
Business Environment
3 Information Technologies: Concepts, Types, & IT Support 2, 3 Assignment 1
Released
4 Managing Data to Improve Business Performance 3, 4
5 Network & Collaboration as Business Solutions 4, 5 Assessment - 15%
6 E-Business, E-Commerce & Mobile Commerce 5, 6 Assessment1 Due
7 Transection Processing, Functional Applications & 6, 9 Assignment 2
Integration Released
8 Enterprise Systems: Supply Chains, ERP, CRM 7, 9
9 Business Intelligence & Decision Support Systems 7,8
10 IT Strategy & Planning 8, 9 Assignment 2
Project 30% - Due
11 Study Week
12 Exam Week Exam – 50%
2
University of Papua New Guinea
 Assignments
▪ Assignment 2 – Group Project – Groups members of 3 – 30%
▪ Part A: Report – due 31st October 2022
▪ Part B: Report Presentation: 26th October 2022 (2:30pm – 5:00pm)
▪ Presentation Order released – 13 Groups
▪ Presentation Criteria

▪ Examination – 50%
▪ MCQ - ~20 x2 = 40marks
▪ SAQ – ~2-3 = 35 marks
▪ Case Study ~1 = 25 marks
▪ 100 marks??

3
University of Papua New Guinea
 Assignment Presentation

Planning & Understanding & Delivery & Oral Visual Aids

Analysis of the
Preparation
Project:
• clearly structures the
presentation • Identifies, explains and
analyses the key
• complies with the time
components of the project
limits
• Provides valid, balanced
and logical support for the
project findings or
outcomes
Communication Skills
• delivers a presentation of
professional quality
• uses effective voice
projection and clear
pronunciation
• effective use of pace, pitch,
pause and emphasis
• designs visual aids that are
appealing and of a
professional standard
• use visual aids to enhance
the oral presentation

4
University of Papua New Guinea
 IT Strategy & Planning
Learning Outcomes:
▪ IT Strategy and Strategic Planning Process
▪ Describe the steps in the IT strategic planning process, how to evaluate the IT strategy,
and the role of IT steering committees.
▪ Aligning IT with Business Strategy
▪ Explain the value of aligning the IT and business strategies and how this alignment can be
achieved.
▪ Balanced Scorecard
▪ Describe the balanced scorecard methodology, its four performance metrics, and its
function as a road map for strategy execution and making strategy a continual process.
▪ IT Sourcing and Cloud Strategy
▪ Describe how sourcing strategies can improve performance and the risk and challenges
of sourcing and offshore relationships.
▪ Explain the IT vendor selection and management processes and how to improve
successful relationships through the use of contracts and service level agreements. 5
University of Papua New Guinea
 IT Strategy & Planning
▪ Snapshot:
▪ What a company can do depend on its IT infrastructure and
Information Systems can do.
▪ IT strategy shapes direction of IT investments over the next one to five
years to maximise business value and shareholder wealth.
▪ IT strategy defines priorities, a road map, budget and investment plan,
and
▪ Must align with and support business strategy.
▪ Strategy making is uncomfortable because it is about taking risks and
facing the unknown.
▪ From 2010, IT Strategy process has taken in consideration social,
mobile, cloud, analytics, SaaS and methods to measure how well IT
plan is working 6
University of Papua New Guinea
 IT Strategy & Planning
▪ Snapshot:
▪ IT strategic plans include an operating plan for acquiring or providing new
technology and services.
▪ Operating plan defines how to execute the IT strategic plan;
▪ Balanced scorecard is a methodology for evaluating performance based
on financial and nonfinancial metrics.

7
University of Papua New Guinea
 IT Strategic Planning Process
▪ Strategic planning is the process of formulating the direction of a
business in terms of how it intends to achieve its mission, goals, and
objectives.
▪ IT–business alignment means how closely an organization’s IT
strategy is interwoven with and driving its overall business strategy.
▪ Balanced scorecard is a methodology—and a tool—for measuring
performance using financial and nonfinancial metrics.

8
University of Papua New Guinea
 IT Strategic Planning Process – Intel Corporation

Intel’s IT Strategic
Planning Process ▪ Planning phase:
▪ Model of Intel’s six- ▪ steps 1 to 4.
step IT strategic ▪ Decision-making phase:
planning process. ▪ step 5.
▪ Measuring and
evaluation phase:
▪ step 6.

Turban, (2015) 9
University of Papua New Guinea
 Characteristics of Intel’s Corporate and IT Strategic
Planning Process

Turban, (2015) 10
University of Papua New Guinea
 Characteristics of Intel’s Business Planning Process
▪ Characteristics of the Business Planning Process
▪ Intel’s strategic planning approach has improved Intel’s agility.
▪ It provides a clear and credible direction for the enterprise and
supports consistent decision making at all levels of the business.
▪ An effective strategic planning process is critical to an enterprise’s
long-term success and health.
▪ The plan supports consistent decision making at all levels of the
business. Each enterprise must adapt its strategic planning process
and approach to fit is own culture and leadership style.

Turban, (2015) 11
University of Papua New Guinea
 Balance Scorecard
▪ A methodology—and a tool—for measuring performance using financial
and nonfinancial metrics.
▪ Translates mission and vision statements into a comprehensive set of
objectives and performance measures that can be quantified and
appraised.
▪ Objectives are the building blocks of strategy.
▪ Objectives set out what the business is trying to achieve.
▪ They are action-oriented statements,
▪ Characteristics of Objectives – “SMART” criteria:
▪ Specific: Define what is to be achieved,
▪ Measurable: Are stated in measurable terms,
▪ Achievable: Are realistic given available resources and conditions,
▪ Relevant: Are relevant to the People who are responsible for achieving them,
▪ Time frame: Include a time dimension.
12
University of Papua New Guinea
 Balance Scorecard
▪ Companies use Balance Scorecard to:
▪ Clarify or update a strategy,
▪ Link strategic objectives to long-term targets and annual budgets,
▪ Integrate strategic objectives into resource allocation processes
▪ Increase companywide understanding of the corporate vision and strategy,

13
University of Papua New Guinea
 IT Strategy and the Strategic Planning Process
▪ Long-term business planning starts with clear understanding of factors
that create significant value.
▪ Factors a value drivers,
▪ Value Drivers: enhance the value of a product or service to consumers,
creating value for the company. Examples:
▪ Advanced IT,
▪ reliability, and
▪ Brand reputation.
▪ Business Value: Identify and link Value drivers to daily activities to
create business value.
▪ Value drivers are considered in the strategic planning process and the
balanced scorecard methodology.

14
University of Papua New Guinea
 IT Strategy and the Strategic Planning Process
▪ Three types of Business Value Drivers:

Turban, (2015) 15
University of Papua New Guinea
 IT Strategy
▪ Directs investments in social, mobile, analytics, cloud and other digital
technology resources,
▪ Focuses on value drivers in core process areas in order to make targeted
improvements.
▪ IT Strategic Planning: systematic process for determining what a business
should become and how best it can achieve that goal.
▪ Evaluates full potential of a business using SWOT analysis, and
▪ Decide how to allocated resources to develop critical capabilities
▪ Competing agendas, tight budgets, poor interdepartmental communication
and politics can turn strategic planning discussion into conflicts – if not
managed well.
▪ IT investments on the basis of an immediate need or threat—rather than
according to IT strategy—might be necessary at times, but reactive
approaches result in incompatible, redundant, expensive to maintain, or
failed systems.
16
University of Papua New Guinea
 IT Strategy
Re a c ti ve A p proac h to I T I nvestments Wi l l Fa i l
▪ IT investments on the basis of an immediate need or
threat—rather than according to IT strategy—might be
necessary at times, but reactive approaches result in
incompatible, redundant, expensive to maintain, or failed
systems.
▪ Risks and Concerns of management:
▪ Failing to align IT to real business needs,
▪ Failing to deliver value to the business
▪ IT has dramatic effect in business performance and
competitiveness,
▪ Failure to manage IT effectively seriously impacts the business.
17
University of Papua New Guinea
 IT Strategies Support Business Strategy
▪ Four objectives of IT strategic plans:
▪ Improve Managements understanding of IT opportunities and limitations
▪ Assess current performance
▪ Identify capacity and human resource requirements
▪ Clarify the level of investment required

▪ IT Deployment Strategies: In-House and Sourcing

▪ IT strategy guides investment decisions and decisions on how ISs will
be developed, acquired, and/or implemented.
▪ IT strategies fall into two broad categories:
▪ In-house development
▪ Sourcing
18
University of Papua New Guinea
 IT Strategies Support Business Strategy
▪ In-house development
▪ Systems are developed, or other IT works done in-house
▪ With help from Consulting firms and vendors
▪ Benefits:
▪ Provides competitive advantage,
▪ Proprietary or confidential data developed and maintained in-house
▪ Sourcing - Outsourcing
▪ Systems or IT work is done by vendors or a third-party
▪ Onshore sourcing – consulting company or vendors sourced in-
country
▪ Offshoring – sourcing done offshore
▪ Other Options:
▪ Lease or purchase IT as a Service
▪ Cloud Computing and SaaS
University of Papua New Guinea
19
 IT Strategic Planning Process
▪ Focus of IT strategy is how IT creates Business Value

20
Turban, (2015)
University of Papua New Guinea
 IT Steering Committees
IT Steering Committees:
▪ Set directions;
▪ link corporate strategy with IT strategy, planning is the key activity.
▪ Allocate scares resources;
▪ Approves the allocation of resources for and within the information systems organization.
This includes outsourcing policy.
▪ Make staffing decisions;
▪ Key IT personnel decisions involve a consultation-and-approval process made by the
committee, including outsourcing decisions.
▪ Communicate & provide feedback;
▪ Information regarding IT activities should flow freely
▪ Set and evaluate performance metrics
▪ The committee should establish performance measures for the IT department and see
that they are met.
▪ This includes the initiation of SLAs.
▪ Success depends on IT Governance
21
University of Papua New Guinea
 Aligning IT Strategy with Business Strategy
IT-Business alignment can be improved:
1. Commitment to IT planning by senior management.
2. CIO is a member of senior management.
3. Understanding IT and corporate planning.
4. Shared culture and good communication.

22
University of Papua New Guinea
 Balance Score Cards
▪ A strategic measurement and management methodology—
and a tool.
▪ Introduced in 1992 by Robert Kaplan and David Norton in
their Harvard Business Review article “The Balanced Score
Card – Measures that Drive Performance”
▪ BSC method is ‘balanced’ – it balance financial measures
with three forward –looking nonfinancial measures.
▪ Customer,
▪ Business Process,
▪ Innovation, Learning and Growth

23
University of Papua New Guinea
 How is Balanced Scorecard Applied
▪ BSC is used to translate strategic plans and mission statements into a
set of objectives and performance metrics that can be quantified
and measured.
▪ Financial. To succeed financially, how should we appear to our
investors and shareholders?
▪ Customer. To achieve our vision, how should we provide value to our
customers?
▪ Business processes. To satisfy our shareholders and customers, what
business processes must we focus on and excel at?
▪ Innovation, learning, and growth. To achieve our vision, how will we
sustain our ability to innovate, learn, change, and improve?
24
University of Papua New Guinea
 Application of BSC
• BSC converts senior management’s priorities into visible, actionable objectives by
identifying ways to measure progress against agreed-upon targets.

Balanced Scorecard (BSC) uses four

metrics to measure performance—
one financial metric and three
nonfinancial metrics.

25
Turban, (2015)
University of Papua New Guinea
 Examples of Balanced Scorecard (BSC)
Measurement Criteria

26
Turban, (2015)
University of Papua New Guinea
 BSC Process
Process in BSC methodology starts with Business Vision, and Strategy.
The general steps:
1. Identify performance metrics that link vision and strategy to results—financial
performance, operations, innovation, employee performance.
2. Select meaningful objectives.
3. Select effective measures and targets.
4. Determine the actions needed to achieve the targets.
5. Implement necessary tracking, analytics, communication, and reporting systems,
including sensors, data visualization, mashups, and dashboards via social and mobile
channels.
6. Collect, analyze, and compare performance data with targets.
7. Revise actions to improve performance gaps and take advantage of new opportunities.

▪ BSC is used to clarify and update the strategy, align the IT strategy with the business
strategy, and link strategic objectives to long-term goals and annual budgets.

27
University of Papua New Guinea
 IT Sourcing & Cloud Strategy
▪ Cloud Computing as examples of IT outsourcing Technologies
▪ Cloud computing – a way to procure technology as a service
(XaaS)
▪ Infrastructure as a Service (IaaS), Application as a Service (AaaS),
Platform as a Service (PaaS), and business process
▪ IT capabilities are sourced, scaled on, and delivered on
demand, without physical location, labor or capital
restrictions.
▪ Results in enterprise’s cloud strategy plays an important role
in its strategy and business growth.
▪ Cloud Strategy: short for cloud computing IT strategy
28
University of Papua New Guinea
 IT Sourcing & Cloud Strategy
Integrating Cloud with On-premises Systems
▪ On-premise systems: IT infrastructure and systems on-site.
▪ Cloud strategy is complex
▪ Cloud adoption is not full, but in addition with on-premises
systems by enterprises – hybrid cloud computing solutions
▪ This creates integration challenges
▪ Cloud services also referred to as edge service – integrate
back to core internal systems.
▪ Edge systems connect and share data with enterprise
systems
▪ E.g. order and inventory management, ERP, CRM, SCM, legacy
financial, and HR systems and on mobile and social platforms.
29
University of Papua New Guinea
 IT Sourcing & Cloud Strategy
Tactical Adoption Versus Coordinated Cloud Strategy
▪ Tactical Adoption approach – Deployment of cloud services
incrementally that results in apps and services that a patched
together to create end-to-end business process
▪ Challenge: Cause difficult integration problems – as occurred in
adoption of ERP, mobile, social, and big data systems.
▪ cloud adoption needs to occur in a coordinated strategy
▪ Challenge: Tough to know how to design sustainable cloud strategy
given the ever-changing cloud services.
▪ Determining cloud strategies and lease agreements that best support
business needs may require hiring cloud consultants, such as
Accenture, Booz Allen, Deloitte, Gartner, HP, IBM, or others.
30
University of Papua New Guinea
 Cloud Strategy Challenges
▪ Top challenges about migrating to the cloud:
▪ cybersecurity,
▪ privacy,
▪ data availability, and
▪ accessibility.
▪ New challenges about cloud strategy:
▪ Integrating cloud with on-premises resources
▪ Reliability of cloud service
▪ Extensibility: Ability to get data into and out of cloud services
▪ These cloud challenges MUST be addressed before deciding on
sourcing solutions
31
University of Papua New Guinea
 Cloud Strategy Challenges
Cloud Case Examples
Social network LinkedIn has three enterprise lines of business: talent,
marketing, and sales solutions. When LinkedIn migrated to cloud
services to support sales and CRM, it began by using non-customized,
out-of-the-box capabilities (Main & Peto, 2013).
As the company grew rapidly, the standard cloud services could no
longer support the lines of business. Business processes increasingly
needed to be integrated with ERP and proprietary systems to generate
sales leads. LinkedIn switched to a cloud-based integration platform
that is able to connect its lead generation, financial, and CRM systems
and its proprietary apps and data warehouse. Integrating cloud and on-
premises systems gives salespeople a single view of the data they need
to do their jobs.

32
University of Papua New Guinea
 Cloud Strategy Challenges
Cloud Case Examples – Cont..

Nestlé Nespresso S. A. transitioned from a traditional coffee shop to an

online distributor in the single-serving coffee machine category. Faced
with growing global demand, Nespresso needed to replace its complex
ERP. By deploying a cloud integration platform, Nespresso has
integrated its ERP, warehouse management systems, and ordering tool.
Nespresso now leverages its cloud and traditional IT solutions.

33
University of Papua New Guinea
 Factors Driving Sourcing As An It Strategy

Enterprises choose outsourcing for several reasons:

▪ To generate revenue
▪ To increase efficiency
▪ To be agile enough to respond to changes in the marketplace
▪ To focus on core competency
▪ To cut operational costs
▪ Because offshoring has become a more accepted IT strategy
▪ Because cloud computing and SaaS have proven to be effective IT strategies
▪ To move IT investment from a capital expenditure to a recurring operational
expenditure
▪ To differentiate from competitors—while reducing the burden on the IT
organization

34
University of Papua New Guinea
 IT Sourcing & Cloud Strategy
Risks Concern and Hidden Costs
Risks associated with outsourcing are:
▪ Shirking: The vendor deliberately underperforms while claiming full
payment,
▪ Poaching: The vendor develops a strategic application for a client and
then uses it for other clients.
• Opportunistic repricing: When a client enters into a long-term contract
with a vendor, the vendor changes financial terms at some point or
overcharges for unanticipated enhancements and contract extensions.ly
tied to IT solutions, the concerns about outsourcing risks increase.
• Other risks:
• Breach of contract by vendor
• Inability to deliver by vendor,
• Vendor lock-in,
• Loss of control over data,
• Loss of employee moral.
35
University of Papua New Guinea
 IT Sourcing & Cloud Strategy
Offshoring
▪ Offshoring of software development has become a common
practice due to global markets, lower costs, and increased
access to skilled labor.
▪ Other factors to consider are:
▪ Business and political climates in the selected country,
▪ Quality of the infrastructure, and risks such as IT competency,
▪ human capital,
▪ economy,
▪ Legal environment, and
▪ Cultural differences.
36
University of Papua New Guinea
 IT Sourcing & Cloud Strategy
Outsourcing Life cycle
Nine critical stages in Outsourcing life cycle that managers need to understand prior
to outsourcing (IAOP, 2009):
1. Strategy: Outsourcing is a strategic decision that is typically developed at senior
levels within a business.
▪ sets the overall direction by defining what the business desires to be, within a
specified timeframe, and the path to get there.
2. Reassessment: Organizations should look again at their business processes, IT
capabilities, internal supply, or other problems to see if they could be
reengineered to meet the requirements so that outsourcing is not needed.
3. Selection: involves identifying and defining the work to be outsourced as well as
the selection of the vendors using RFI (request for information) or RFP (request
for proposal) processes. The best value outsourcer is selected.
4. Negotiation: In this phase, contracts, schedules, and agreements are negotiated
by someone
37
University of Papua New Guinea
 IT Sourcing & Cloud Strategy
Outsourcing Life cycle Cont..
5. Implementation: involves the start-up activities of planning the transition
and the implementation of the outsourced agreement as well as establishing
the detailed budget and administrative functions needed for its management
and formal launching of the program.
6. Oversight management: This phase encompasses all ongoing activities
required to manage the program and achieve the contracted results.
7. Build completion: This phase covers all completion activities of the build
phase, including any development program and then acceptance, and the
introduction of new services.
8. Change. All complex outsourcing contracts will be subject to change and
alteration.
9. Exit: All outsourcing relationships end because the contract has expired, by
mutual agreement, or because the outsourcing relationship has failed.
38
University of Papua New Guinea
 IT Sourcing & Cloud Strategy
IT Vendor Relationships
Vendor Research and Selection:
▪ Vendor selection – build strong and positive relationship
▪ Vendor Research: To avoid interpersonal or technical
conflicts with IT vendors
▪ Criteria to assess:
▪ Experience: Experience with very similar systems of similar size,
scope, and requirements. Experience with the ITs that are needed,
integrating those ITs into the existing infrastructure and the
customer’s industry.
▪ Stability: Financial and qualified personnel stability. A vendor’s
reputation impacts its stability. 39
University of Papua New Guinea
 Contracts: Get Everything in Writing
▪ SLAs are designed to protect the service provider, not the customer, unless
the customer takes an informed and active role in the provisions and
parameters.
▪ a strong SLA can help prevent disruptions and dangers that can come with
sourcing or migrating to the cloud.
▪ No contract should be signed without a thorough legal review.
▪ no template SLA and each cloud solution vendor is unique
▪ SLA light on detail - light on accountability
▪ Sourcing or Cloud vendor refuses to improve SLA – do not consider that
vendor.
40
University of Papua New Guinea
 Activity – Case Study
IT/Business Alignment

41
University of Papua New Guinea
 Questions

1. How can IT–business alignment be improved?

2. How does strong collaboration among the CIO and other chief-level
officers influence performance?
3. What skills are important to a CIO’s success?
4. How did the CIO of CBA contribute to the bank’s competitiveness?

42
University of Papua New Guinea
 Thank you

43
University of Papua New Guinea