The term “strategic planning” is gaining currency among systems management as they become increasingly concerned with more formalized and disciplined approaches to identifying requirements beyond the immediate future

Strategic Planning(Part I)

The word "planning" in the context of this discussion connotes a process for exercising favorable influence over future events. It is an active rather than a passive exercise, as contrasted to forecasting which is concerned with estimating the future rather than influencing it through actions and decisions.

The word "strategy" has been borrowed from military parlance to convey the notion of an important and high-level form of activity, such as might be required to command a military theater of operations.

Strategic planning has, by its nature, a long-range rather than a short-range connotation. Though there can be decisions within the near term that have strategic implications, strategic planning tends to cover a time horizon of at least five years into the future, with eight to ten year planning cycles not uncommon.

Because information systems planning is concerned with long-range activities, it concentrates on the broad goals an organization is trying to achieve, leaving more specific objectives to be articulated through subordinate planning exercises. A distinction between goals and objectives is useful in delineating the realm of strategic planning.

Strategic planning for information systems seeks to assure that the organization will be in a position to take full advantage of emerging equipment and software technology to satisfy requirements throughout the planning period. At the tactical level, management must make certain that enough resources are available to support the near term data processing requirements of the organization as, for example, in assuring that as increase in reservations workload can be handled by an airline or that a growth in account activity can be accommodated by a bank’s computers.

Regardless of terminology, most organizations have come to recognize that planning is necessary on these two levels: the tactical, to assure that there is sufficient equipment capacity, the recurring work done; and the strategic, to anticipate what future workloads, and workload processing systems, are likely to be.

For a manager to lead successfully, he or she must have a plan that includes a vision of where to go and some ideas on how to get there. Thus, effective leaders work with the members of their organization to develop an organizational plan to guide the efforts of the group. A good organizational plan includes the elements such as: Vision what is the view that top management has for the future of the company. The vision is generally expressed in terms of what the company wants to become and wants to achieve. Mission is the bottom-line purpose of the organization, in other words why it exists. Organizational mission gives meaning and substance to the vision and provides legitimacy and purpose for the people who will have to complete the vision. Thus, an organization needs to set goals and objectives, establish a clear strategy , win consensus and commitment, and successfully implement projects that help achieve the vision. Goals are broad statements of the end results that the organization intends to achieve in fulfilling its mission. Objectives are specific and tangible measures of the results the organization wants to achieve. Strategy includes statements of how to track the vision and achieve the organizations' objectives.

The process of developing a good strategic plan are as follows. Set the organizational plan, which outlines the vision, mission, goals, objectives, and strategies of the firm, that becomes the primary input for the IT planning process. All elements of the IT plan flow from the organizational plan. A business process is the activity or group of activities that is executed repeatedly. Using a process, we take input, add value to it, and provide value to an internal or external customer of that process. Within a process, we use an organization's resource, e.g., people, data, computer systems, equipment. The next step is the business data what is the set of fundamental data needed to support the business processes. Data needs can be expressed in the form of high level logical data model that shows data entities and relationships among them. Next, we need to define the business applications that are IT applications that support the business. An application is often some kind of information system, such as a new production planning system, that helps to support and automate a portion of the production planning process. A project is next set up as a set of activities that is designed to meet a specific objective. Quite often the project is to implement a specific data base or an information system. And finally, each project requires time and resources to complete. Time is usually measured as elapsed time from project initiation—the number of weeks or months. Resources include people, time, and dollars to purchase necessary software and hardware.

Every organization faces hundreds of problems and opportunities for improvement. Because of scarce resources and finite organizational capacity to accommodate change, one of the major challenges facing managers is to decide which of the several projects that address possible problems or opportunity should be initiated.

It is critical to have a business manager involved into the process of strategic planning process for the IT. During the business needs identification portion of the study, the planning team needs to obtain a clear picture of how well current information technology is being applied to meet current business needs. It then needs to identify and assess potential areas of future applications of technology.

A key to the success of this part of the study is participation from the multiple organizations that have work processes under study or that may be affected by portions of the strategic plan. For example, if the plan is focused on the order-entry process, people involved in those functions that support or are affected by order processing ought to be included: order entry, shipping, inventory control, warehouse operations, billing, customer services, credit, and so on. Such participation will ensure that the processes are viewed with a cross-functional perspective, thus avoiding placing too much emphasis on meeting the needs of one group without sufficient consideration of the effect on others or without identification of their needs. The cross-functional approach also leads to defining stronger, better solutions by having several people familiar with the same problems, issues, and opportunities working together and building off one another's ideas.

Business area analysis is completely independent of the current information technology used to support a given area. The best person to be involved during this phase of the information systems planning is the business manager who knows the best the way the business functions in his organization, what the problems and opportunities are.

The term "strategic planning" is gaining currency among systems management as they become increasingly concerned with more formalized and disciplined approaches to identifying requirements beyond the immediate future. The complexity of today’s information systems, and the increasingly large share of company resources earmarked to support them, underscore the need for a more carefully prepared "road map" to the future. This is especially so because of the long lead times that typically many of toady’s’ large systems projects.

As adapted from the military vocabulary, strategic planning has to do with the overall conduct of large-scale operations. This is in contrast to tactical planning, which concentrates on the immediate problems of maneuvering military units in the field to achieve specific objectives. In a business organization, strategic planning reflects the concern of top management with the future directions, profitability, product line and position in t he community of the firm, while tactical planning addresses the conduct of day-to-day operations such as getting this week’s, or this month’s or this year’s workload processed in the form of payroll checks produced, customer accounts updated or airline reservations booked.

The classical Data Processing or MIS (Management Information System) Department part of most organizations, business or otherwise-oriented has been changed. These days, these departments are rather called IS (Information Systems or Information Services) or IC (Information Center), or still MIS, but spelled out as Management Information Services) or even better, IT (Information Technology). This shift in both name but especially in substance shows a change of the corporate culture toward computers and computing in general. If the classical meaning was rather a support, transaction-based computing, where all the other business departments had to make a service request to the DP or MIS and wait at least hours but usually days to be fulfilled, these days things changed considerable, especially in large, successful, or technologically advanced corporations. We hear more and more the term of office automation, and knowledge workers, or information society. Desktop computers, portable or laptop can be found more and more on each employee's desk. And together with that other equipment such as telephone with a corporate voice mail systems, fax, modem, e-mail, copier, laser printers, etc. All these make every employee, from a front desk clerk, to mail room , to top executives, not just conversant with the technology, but users of this information technology.

An employee in the Accounting or Finance department is not, for most of the daily tasks, dependent on the DP or MIS department. They have the tools and knowledge to extract and process corporate data and transform it into meaningful information for better and more timely business decision making. Same for the management from supervisors all the way up to the top. The decision making process is much more timely and ad hoc via the computer on their desk, rather then a formal request that may take some time to be fulfilled by the DP or MIS department.

This new paradigm of information technology became therefore of a strategic importance to each company. Of course that in a good part, the role of computers and technology is still to improve, to better the business and efficiency of a corporation. But, as highlighted above, the role of information technology became more strategic in nature. A business, to be successful these days, must be technologically advanced, and rely on information technology. And not just on information technology, but as mentioned above on information , knowledgeable workers that know how to use the technology. Planning strategically for technology, is planning for business competitiveness of the corporation, no matter what type of business they are in. Because being in business and especially close to the top, a corporation must use information technology.