IS PLANNING

1. Introduction Information system management is becoming both more difficult and more important, especially in strategic system planning. Most organizations survival depends on IT, therefore planning its effective use is a matter of organizational life and death. Planning is usually defined in three form, they are strategic, tactical and operational. Figure 1 summarizes these thee planning types and some of their characteristics. Figure 1. Three Types of Planning Horizon Focus 3-5 years 1-2 years Strategic Tactical

6monts-1year

Operational

Primary Responsibility Vision, architecture, business goal Senior managemet CIO Resource allocation, project Middle managers selection IS lin Steering committee Project management, meeting time, IS profesioals and budget targets Line manager Partner

Issues

1.1 Strategic Planning Strategic plans are designed with the entire organization in mind and begin with an organization's mission. Top-level managers, such as CEOs or presidents, will design and execute strategic plans to paint a picture of the desired future and long-term goals of the organization. Essentially, strategic plans look ahead to where the organization wants to be in three, five, even ten years. Strategic plans, provided by top-level managers, serve as the framework for lower-level planning. For example, Tommy is a top-level manager for Nino's Pizzeria. As a top-level manager, Tommy must use strategic planning to ensure the long-term goals of the organization are reached. For Tommy, that means developing long-term strategies for achieving growth, improving productivity and profitability, boosting return on investments, improving customer service and finding ways to give back to the community in which it operates. For example, Tommy's strategic plans for achieving growth, improving productivity and profitability and boosting return on investments are all part of the desired future of the pizzeria. Strategic plans also tend to require multilevel involvement so that each level of the organization plays a significant role in achieving the goals being strategically planned for. Top-level managers, such as Tommy, develop the organizational objectives so that middleand lower-level managers can create compatible plans aligned with those objectives.

1.2 Tactical Planning Tactical plans support strategic plans by translating them into specific plans relevant to a distinct area of the organization. Tactical plans are concerned with the responsibility and functionality of lower-level departments to fulfill their parts of the strategic plan. For example, when Martha, the middle-level manager at Nino's, learns about Tommy's strategic plan for increasing productivity, Martha immediately begins to think about possible tactical plans to ensure that happens. Tactical planning for Martha might include things like testing a new process in making pizzas that has been proven to shorten the amount of time it takes for prepping the pizza to be cooked or perhaps looking into purchasing a better oven that can speed up the amount of time it takes to cook a pizza or even considering ways to better map out delivery routes and drivers. As a tactical planner, Martha needs to create a set of calculated actions that take a shorter amount of time and are narrower in scope than the strategic plan is but still help to bring the organization closer to the long-term goal. 1.3 Operational Planning All operational plans are focused on the specific procedures and processes that occur within the lowest levels of the organization. Managers must plan the routine tasks of the department using a high level of detail. For example, Frank is the frontline manager at Nino's Pizzeria, is responsible for operational planning. Operational planning activities for Frank would include things like scheduling employees each week; assessing, ordering and stocking inventory; creating a monthly budget; developing a promotional advertisement for the quarter to increase the sales of a certain product (such as the Hawaiian pizza) or outlining an employee's performance goals for the year. Operational plans can be either single-use or ongoing plans. Single-use plans are those plans that are intended to be used only once. They include activities that would not be repeated and often have an expiration. Creating a monthly budget and developing a promotional advertisement for the quarter to increase the sales of a certain product are examples of how Frank would utilize single-use planning. Ongoing plans are those plans that are built to withstand the test of time. They are created with the intent to be used several times and undergo changes when necessary. Outlining an employee's performance goals for the year would be considered an ongoing plan that Frank must develop, assess and update, if necessary. Ongoing plans are typically a policy, procedure or rule. Policies are general statements, or guidelines, that aid a manager in understanding routine responsibilities of his or her role as a manager. Examples of policies include things such as hiring, training, outlining and assessing performance appraisals and disciplining and terminating subordinates. A procedure details the step-by-step process of carrying out a certain task, such as assessing, ordering and stocking inventory. A rule provides managers and employees with specific and explicit guidelines of behavior that is what they should and should not do as a member of the organization.
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2. Porters Value Chain Porters value chain is illustrated in figure 2 and is developed mainly for item or product manufacturing businesses. Porter divides the activities into two groups: The primary activities, which are typically directly involved in the logistic product flow, and the support activities, which deals with more indirect activities. When used in strategic analysis, Porter focuses on the added value that each activity contributes with. Furthermore, Porter focuses on the contribution to the competitive advantage of the company that each part might make. (Hansen, 2007)

Figure 2. The value chain model

The five primary activities deal with creating a product or service, getting it to buyers, and servicing it afterward. These activities form the sequence of the value chain: 1. Inbound logistics These are all the processes related to receiving, storing, and distributing inputs internally. Your supplier relationships are a key factor in creating value here. 2. Operations These are the transformation activities that change inputs into outputs that are sold to customers. Here, your operational systems create value. 3. Outbound logistics These activities deliver product or service to customer. These are things like collection, storage, and distribution systems, and they may be internal or external to organization.

4. Marketing and sales These are the processes to persuade clients to purchase instead of competitors. Communicate are sources of value here. 5. Service These are the activities related to maintaining the value of product or service to your customers, once it's been purchased. The four supporting activities underline the entire value chain: 1. Procurement (purchasing) This is what the organization does to get the resources it needs to operate. This includes finding vendors and negotiating best prices. 2. Human resource management This is how well a company recruits, hires, trains, motivates, rewards, and retains its workers. People are a significant source of value, so businesses can create a clear advantage with good HR practices. 3. Technological development These activities relate to managing and processing information, as well as protecting a company's knowledge base. Minimizing information technology costs, staying current with technological advances, and maintaining technical excellence are sources of value creation. 4. Infrastructure These are a company's support systems, and the functions that allow it to maintain daily operations. Accounting, legal, administrative, and general management are examples of necessary infrastructure that businesses can use to their advantage.

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Summaries 1. There are three types of planning, strategic, tactical and operational. 2. Porter divides the activities into two groups: The primary activities, which are typically directly involved in the logistic product flow, and the support activities, which deals with more indirect activities.

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References 1. Hansen, H.J., The Value Chain and Life-long Learning. VIA University College Horsen Denmark, 2007. 2. http://education-portal.com/academy/lesson 3. http://www.mindtools.com