Strategic planning in Information Technology: Background and Significance of Study

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Information System Strategic Planning In XYZ Foundation

at Learning and Development Division Rainer Hannesto, Mahenda Metta Surya

Information Systems Department School of Information Systems

Bina Nusantara University Jakarta, Indonesia 11480

, mmetta@binus.edu

Abstract — IS Strategic Planning was conducted based on the framework by Ward & Peppard. Researchers interviewed the management and doing direct observation to determine the current business processes. Background of this study is to achieve the vision and mission of the organization through alignment between IT and business strategy that can brings benefit for organization. The data obtained by distributing questionnaires to the employees of the organization as well as literature. The result of this study is the composition of an application portfolio that contains information system strategic planning needs, management and infrastructure also performance measurement targets indication based on the results of the analysis of the Balanced Scorecard.

Keywords — Strategy; Planning; Information Technology; Information; Business Strategy

I. INTRODUCTION IT has entered into organization and covers all business

process, with main purpose is to increase the company’s business performance. IS is a tool for people and organizations using technology (hardware, software, communication networks and data resources) to collect, process, store, use and disseminate information that automate manual processes into an integrated operational system ([1]; [6], p7-11; [7], p3). The development of education industry is growing rapidly nowadays and competition among similar companies become more competitive.

Business strategy is about positioning business by analyzing business internal and external environment and IS/IT, determine objectives, how to achieve the goals, and review them periodically ([4]; [2]; [3], p127). For XYZ Foundation, have business strategy is not enough to achieve the opportunities and face the competition today. To be able to compete better, organization need to develop a business strategy which supported by IS Strategic planning so that investment issued by XYZ Foundation can be more effective and optimal. Information system strategy is the use of information, information processing and or communication to reach new business strategy or competitive advantage [5]. According to Ward & Peppard [7], information system strategy describes the requirements and needs of information and system to support all organization business strategy.

Targets to be achieved from the implementation of IS/IT in an organization such as maximizing the efficiency of business processes, improving the effectiveness of information processing in decision making, and improving competitive advantage by optimizing the process [7]. All of these goals can be achieved when there is alignment between the IS/IT strategy with the organization's business strategy [7]. However, the most common condition is that the implementation of IT has small effect on performance improvement, competitive advantage and organizational success. This can be seen from the company's assumption about the investment procurement of IS/IT that has not produced results up to a certain value. Although IS/IT has been applied to the management of company business processes such as finance, procurement, human resource management, marketing operations that can reduce processing time or provide cost efficiency but it is not clear whether the use of such IS/IT has actually produced an appropriate output.

The management wants IT not only as a support, but it can better analyze the needs of the organization and provide strategic IT innovations to support the achievement of the company's overall performance. For that we need a strategic planning IS/IT to improve competitive advantage tailored to the needs, resources and the goals of the company. The strategic planning of information systems is a process of identifying the portfolio of computer-based applications to be implemented, both of which are aligned with the company's strategy and have the ability to create an advantage over competitors [7].

II. METHODOLOGY This study used a methodology based on the conceptual

framework of Ward & Peppard. The process started from identifying the current condition of an organization. Environmental analysis that includes the internal and external aspects of business and IS / IT as well as the analysis of the current application portfolio. The next stage will result in the IS business strategy, IS/IT management strategy and IT strategy that will result in future applications portfolio ([7], p. 154).

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Fig. 1. IS/IT Strategic Planning Framework[7]

This research was conducted in period January 2015 to

March 2015, interviews conducted on the management concerned. This interview conducted face to face with Learning & Development Division Managers. A questionnaire was distributed to the management and the result obtained by the application of a suitable strategy is SO strategy. Researcher also got data from the observation and study of documents.

The method of data Analysis using references based on the premise by Ward & Peppard consisting of internal business environment analysis using the SWOT & Value Chain analysis. Analysis of the internal environment of the IS/IT using Balanced Scorecard, and application portfolio. Environmental analysis of external IS/IT used were analyzing competitors and growing trend at this time. After that, researcher propose future portfolios and IS/IT strategies to meet future business requirements.

III. RESULTS To construct IS strategic planning, analyzing business

environment and IS/IT both internal and external need to be done first.

A. SWOT Analysis SWOT analysis is used to analyze internal and external

business environments to identify strengths, weaknesses, opportunities and threats to the organization. The results of the SWOT analysis will then determine the position of the organization and be used to determine the strategic direction that the organization can take to achieve its objectives. After analyzing both internal and external factor using Pairwise Method, researcher concludes that the institution currently in aggresive position.

TABLE I. SWOT MATRIX

Strengths Weakness Opport SO Strategy WO Strategy

Strengths Weakness unity • Focus on local market

control. • Focus on Content Quality

Control. • Cost Leadership &

Efficiency. • Provide regular training &

assessment to employees. • Strengthen & ease the e-

learning portal. • Inculcate an independent

learning culture in the application of work to every employee.

• Proactively find out the difficulties & ways of learning the employees.

• Increase productivity & welfare level of employees of the Learning & Development Division.

• Implementing IT Governance based on CoBIT 4.

• Maximize current existing resources

Threats

ST Strategy WT Strategy • Focus on local market

control • Differentiation of learning

materials & delivery. • Creation of content

appropriate to the Division's competencies.

• Maintaining ISO 9001 / management quality.

• Establish a proactive strategy.

• Looking for a more efficient way of learning.

• Time & resource efficiency. • Actively looking for new

potential materials. • Maximize IT usage.

B. Value Chain Analysis This analysis is to look at internal conditions of companies

that need improvement in achieving efficient organization.

Fig. 2. Value Chain Diagram

From the value chain analysis, which needs to be done by

Division XYZ, namely:

• Low rate of uptake of knowledge sharing employees.

• Low quantity of training for employees.

• IT governance that has not been systematic.

C. Balanced Scorecard Before analyzing the IS/IT environment, it is necessary to

align the company's vision, mission and strategy with the vision, mission and strategy of IT Division. The results will be formulated into perspective in the Balanced Scorecard.

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Fig. 3. KPI Component in Balanced Scorecard

Measurements are then made by identifying the results of strategic measures. Weights are categorized into very bad (0% - 54%), poor (55% -64%), enough (65% -74%), good (75% - 84%), excellent (85% -100%).

TABLE II. PERFORMANCE EVALUATION RESULTS OF IT DIVISION

Perspective Strategic Goal Results Description

Financial Absorption Efficiency Budget 70% Enough Average 70% Enough

Customer % Active Participant 75% Good Consumer Satisfaction 93.75% Excellent Average 84.38% Good

Internal Business Process

Effectiveness of Learning Program 85% Excellent Learning Applied Assurance 65% Enough Average 75% Good

Learning & Growth

Number of Sharing Knowledge 100% Excellent Number of Professional Services 100% Excellent Digitize & Systematize 75% Good KM Implementation 80% Good Average 88.75% Excellent

Average 79.53% Good

D. Current Infrastructure Infrastructure available at XYZ Foundation's Learning &

Development Division today, namely:

• 23 units of PC.

• 13 units of Laptop.

• 1 unit of printer.

• Server: integrate with IT Division

• Network: Wi-Fi, LAN, Internet.

E. Current Application Portfolios

TABLE III. CURRENT APPLICATION PORTFOLIOS AT XYZ FOUNDATION'S LEARNING & DEVELOPMENT DIVISION

Strategic High Potential • Learning Delivery System • Learning Measurement

System • Blended Learning System

• KM Portal • Dynamic Reporting System

• Training Information System

• Corporate Website

• Ms Office • Attendance System • Communication System

(V-Con, Phone line, dll) Key Operational Support

F. Proposed Future Application Portfolios

TABLE IV. FUTURE PROPOSED APPLICATION PORTFOLIOS

Strategic High Potential • Learning Delivery System • Learning Measurement

System • Blended Learning System • Learning Delivery Mobile

System

• KM Portal • Dynamic Reporting System

• Training Information System

• Corporate Website

• Ms Office • Attendance System • Communication System

(V-Con, Phone line, dll) Key Operational Support

G. Technology Needs 1) Upgrade Learning Delivery System

System requirements: Windows 7 or equivalent. Software requirements: .Net Visual Studio 2010, MS

SQL. Network requirements: internet connection. Hardware requirements:

• RAM 3GB or more. • Database MS SQL Server • DB Size: 200GB or more • Hard disk 500GB or more • Motherboard: Intel 915 • Processor: Intel i5

Currently hardware requirements are met for upgrading. 2) Integration between Training Information System and

Learning Delivery System System requirements: Windows 7 or equivalent. Network requirements: internet connection. Hardware requirements: could follow hardware requirements from Learning Delivery System

3) Upgrade Blended Learning System System requirements: Windows 7 or equivalent. Software requirements: VS .Net 2005 or above. Network requirements: internet connection. Hardware requirements:

• RAM 3GB or more. • Database MS SQL Server 2005 • DB Size: 200GB or more • Hard disk 500GB or more • Processor: Intel i5

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4) Learning Delivery Mobile System implementation System requirements: Windows 7 or equivalent. Software requirements: Java & Objective C. Network requirements: internet connection. Hardware requirements:

• RAM 2GB or more. • Database MS SQL Server 2008 or above • DB Size: 200GB or more • Hard disk 500GB or more • Processor: Intel i5

5) Upgrade of KM Portal System requirements: Windows server 2005. Software requirements: SharePoint 2013 Network requirements: intranet connection. Hardware requirements:

• RAM 16GB or more. • Database MS SQL Server 2008 • DB Size: 200GB or more • Hard disk 500GB or more • Processor: Intel i5 or equivalent

6) Dynamic Reporting System development System requirements: Windows server 2005 or equivalent. Software requirements: .Net Visual Studio 2010. Network requirements: internet connection. Hardware requirements:

• RAM 1GB or more. • Database MS SQL Server 2008 • DB Size: 200GB or more • Hard disk 500GB or more • Processor: Intel i5

H. Management Strategies IS/IT

TABLE V. PROPOSED MANAGEMENT STRATEGIES

Software Priority Related Division Notes

Implementation Needs

Learning Delivery System

IT, HC, & Learning

Development Division

Upgrade