Management Information Systems - Generating Busines Information Systems Planning

IS Planning Team 3 Tolu Adeleye Tahsin Alam Fabio deSouza Mazen Manasseh Agenda • Introduction • Overview of IS Planning • Boston Consulting Group (BCG) and its IS Planning approach • Microsoft Consulting and its IS Planning approach • Conclusion • Q&A Overview of IS Planning IS Planning and Rationale for it „ IS Planning means: • • • „ „ defining where to go with IT, assessing where the company is related to its objective determining what ought to be done in order to achieve its objective. IS planning aligns decisions about IT elements (infra-structure, governance, portfolio, etc.) with business objectives. IS planning is motivated by several factors: • • • • High costs of some IT investments Long-time frame for important initiatives Need to get buy in from top managers Fast-time for obsolescence Types of IS Consulting 2 • Alignment of IT strategy with business objectives – performed by IT arm of management consulting firms, for example IT Strategy BCG 1 • Definition of specification for IT portfolio elements, such as transactional applications, infra-structure, etc. – performed by consulting arms of product Specifications for IT portfolio companies, for example Microsoft • Integration of different systems in a company – typically performed by consulting arms of Big Five accounting companies 3 Systems Integration BCG vs. Microsoft The Boston Consulting Group 1 2 IT Strategy Specifications for IT portfolio Microsoft Choice of consulting firm depends on level of IS planning needed BCG & IS Planning BCG - mgmt consulting firm with an IS planning group „ BCG is organized around functional and industry practices • • • „ Functional: IT, Organization, Strategy, Corp Dev IT practice in existence since 1987 Most are general BCG consultants, very few specialized BCG does 5 different types of IS planning projects • • • • • IT issues in a mgmt consulting project E-commerce Processes inside of IT Organization and governance Post merger integration IT Strategy is a Key service offering „ Pure IT strategy • CIO: “We don’t know what the business does – you do, so figure it out and tell us what the IT strategy should be” • Often – no clear business strategy! • Steps in engagement: „ „ „ Check the business strategy Check the IT strategy Check the alignment • Key disconnect „ „ Business focus is earnings this quarter IT can’t build a system in a quarter – need a vision • BCG often acts as the IT champion in top management BCG has no strict IS planning methodology „ No “methodology” per se • Best practices • Specific analysis techniques • Highly customized „ Same tools as in rest of BCG • Customer segmentation • Microeconomic analysis • Preferences for quantifying and scoring BCG’s criteria for success „ A successful engagement was with an electronic component distributor • Issue: How to cut costs in IT? Outsource or insource? „ Analysis • Step 1: Ideally, what is the lowest possible cost? What is the cost of a “mainframe second”? • Step 2: Where are we today? • Step 3: What would it take to get us to the “best” place? „ „ „ Realized it would be too expensive to get there Help select an outsourcing vendor Criteria for success: • Is the client happy? • Does BCG get references? Strengths & Weaknesses Strengths „ Strength of management consulting firm to IT Weakness „ No methodology for IS Planning „ Success •Tools and techniques measurement is •Credibility with upper amorphous management: IT champion An unbiased point of view with regards to IT product choice „ Microsoft Consulting & IS Planning Microsoft Consulting Consulting arm of a product company „ Not a profit center „ Loss leader to support sale of products „ Primarily provides consulting services for Microsoft’s products „ MCS’s Client and How They are Served Who is the client? „ „ CIO CIO’s direct reports The Five Business Contexts „ „ „ „ „ Architecture Infrastructure Applications Operations & Processes Performance management MCS has a structured framework – REJ „ Rapid Economic Justification (REJ) is used to come up with: • Quantifiable benefits to the business from IT investments • Bridge of common language between IT and business executives • Characteristics: „ Business Centric: align business priorities and IT investments REJ Process Model – Five Steps Financial Metrics Computation Business Assessment Risk Identification Solution Definition Estimation of Benefits & Cost MCS’s criteria for success is breakeven and product sales „ „ „ „ „ Breakeven on consulting services (sometimes even loss) Client buys next version of product Client satisfaction surveys, realizing value added Explicit goals on engagement letter are met Deliverable depicts current state of client Flextronics - A Sample Case Study „ Overview • • • „ $13B electronics manufacturing service provider >70,000 employees 150 locations in 28 countries Situation • Lack of single customer support system • Non-integration among suppliers and customers „ Solution & Benefits • • • • Standardized business documents Simplified business process Reduced IT costs Accelerated integration of new suppliers and customers MCS- Strengths & Weaknesses Strengths „ In-depth know-how of Microsoft’s products „Ability to integrate multiple products for the same solution „ Shorter engagement cycles let solution provided depict clients’ current state Weakness „ Biased toward Microsoft’s product when consulting with clients „ Lack of profit incentive may lead engagement mismanagement „ Emphasis on product rather than on the underlying strategy Conclusion BCG vs. MCS – Different Approaches BCG MCS Undifferentiated for its main strategy business „Profit-driven „ Emphasis on IT strategy rather than IT infrastructure „ No specific IS planning framework Consulting arm of product company „ Non-profit „ Technically-driven approach „More structured framework „ „