Summary of Chapter 14The IS Value IssueIs This Really an Issue?The ChallengeThe Evolution of Information Systems JustificationJustification of ISSlide 7IS JustificationSlide 9Information Systems Do Not Produce Value DirectlyConclusionsPossible Exam QuestionsChapter 15 SummaryChapter ObjectivesDrivers Influence PlanningSlide 16Slide 17Strategic Planning ModelSlide 19Business - IS PlanningSlide 21Slide 22Possible Exam QuestionsChapter 16 IntroductionChapter OverviewTotal Quality Management (TQM)Case Study: XeroxFundamentals of TQMConsiderations for a TQM ProgramTQM and ReengineeringRole of IS in a TQM ProgramChallenges in Implementing a TQM ProgramSlide 33Chapter 16Slide 35Slide 36A Case AnalysisXerox 914Slide 39Off the BenchmarkQuality Through Leadership Program at XeroxThe Plan for Leadership Through QualityXerox Policy StatementXerox’s OutcomeSlide 45Slide 46Information Systems SupportWhat Xerox Did RightSlide 49Slide 50Xerox PerspectiveSlide 52Slide 53Slide 54Slide 55Slide 56Slide 57Slide 58Course ScheduleSummary of Chapter 14Summary of Chapter 14Information System Value and Information System Value and Financial StrategyFinancial StrategyThe IS Value IssueThe IS Value IssueSome companies have a difficult time articulating the value of an increasingly large amount of money being spent on Information Systems.Is This Really an Issue?Is This Really an Issue?1. It is a big deal and the IS organization is being challenged to answer the value question while being denied additional funding.2. It is a medium issue but there are other business issues that are considered more important so the IS organization has not yet been impacted financially.3. It is not a current issue within the organization.The ChallengeThe ChallengeTo convince senior management that IT is contributing to the success of the business and needs to continue to be funded appropriately!Evolution of Financial StrategyApplication SupportMotivationFinancial JustificationDP PlanningOrganizationInitiation Expansion Control Maturity I II III IVSingle Area Proliferation ContainmentOrganizational StrategyPeople DisplacementCost AvoidanceDP EfficiencyCompetitive Advantage Little Reactive Directed ProactiveBudgetBusiness Case Installation AuditCharge-Out SystemManagement ProcessFinance Dept. Multiple Dept. CentralizedCentralized Decentralized DistributedBased on material from Gibson and Nolan, Harvard Business Review, January-February 1974, pp. 76-88.The Evolution of Information The Evolution of Information Systems JustificationSystems JustificationJustification of ISJustification of ISStage I: Most organization address funding for information systems as part of the budget.The challenge is to accomplish as much as possible with the existing IS resource without exceeding the budget. A possible problem with this approach is that a limited budget can curtail the possible and logical use of information systems within the organization.Justification of ISJustification of ISStage II: The rapid growth of IS and increasing use and cost of IS prompts establishing a business case proposal process followed by a post-installation audit.This attempts to establish appropriate priorities for new IS projects. The post install audit objective is to validate that what was proposed was actually accomplished.A problem with this approach is that the business case is a snap-shot in time.IS JustificationIS JustificationStage III: Objective: To put the burden of financial responsibility on the people (departments or business functions) who are using the IS.The logic of this approach is that if people are willing to pay for the use of information systems then it must be justified.The problem with this approach is that senior management can conclude that it is simply shifting money from the IS organization to user departments.IS JustificationIS JustificationStage IV: A management process is an attempt to provide a better way to articulate the value of information systems geared to factors that are important to the success of the business.This could be efficiency, effectiveness or competitive advantage.While viewed as a possible necessary step, this approach will entail time and money to create the process.Information Systems Do Not Information Systems Do Not Produce Value DirectlyProduce Value DirectlyInformation SystemsValue to the BusinessBusiness ChangeConclusionsConclusionsAn important consideration as to whether this will become an important issue is whether senior management is likely to hit a pain threshold regarding the amount spent on Information Systems..Meanwhile, should the IS organization try to anticipate the need to establish a process that does a better job of answering questions regarding the value of information systems to the organization.Possible Exam QuestionsPossible Exam Questions1.1.What is the IS value issue?What is the IS value issue?2.2.Name three ways a company derives value from Information Name three ways a company derives value from Information Systems?Systems?3.3.Is there a process that monitors the effectiveness of Information Is there a process that monitors the effectiveness of Information Systems?Systems?Chapter 15 SummaryChapter 15 SummaryIntegrating IS Integrating IS into the Business Plan into the Business Plan1. Understanding importance of integrating I/S planning into business planning process.2. Realizing that the success of a planning approach depends on making it a priority within a company while implementing a necessary process to make it happen.Chapter ObjectivesChapter ObjectivesDrivers Influence PlanningDrivers Influence PlanningOrganizationalResponse to Business DriversOrganization• Decentralization• Downsizing• Outsourcing• Business Partnering• Corp. AlliancesProcess• Reengineering• Redefining• TQMTime, FlexibilityandResponsivenessas CompetitiveFactorsProduct Customization• Value-added Services• Markets• Customers• Global StandardsNew Markets,Opportunitiesand CompetitorsEmployees• Skills• Empowerment• Quality Circles• TeamsFigure 15-1Major Planning Challenges Major Planning Challenges •What to do Important to know where the company is going.•Making it happenCan be difficult because it frequently involves changes.Strategic Planning ModelStrategic Planning ModelBusinessPlanTacticalPlanStrategicPlanEnvironment(External)OpportunitiesThreatsStrengthsWeaknessesEnterprise(Internal)GoalsObjectivesStrategic
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