SAD/U2 Topic 3 Dimensions of Planning
Dimensions of Planning
The following conditions dictate today’s business strategies:
- High interest rates make it more important that business realizes a good return on investment
- Inflation puts pressure on profit when it occurs.
- The growing trend toward guaranteed employment suggests that costs are becoming fixed and the commitment to business expansion may not be easily changed.
- Resource shortages impede expansion.
- Regulatory constraints slow entry into the market.
- Increased productivity paves the way for expansion.
Information systems embedded in an organization provide users with the opportunity to add value to products and business operations at lower costs as shown in figure. Therefore they must be carefully planned.
STRATEGIC MIS PLANNING
Planning for information system development must be done within the framework of the organization’s overall MIS plan. It may be viewed from two dimensions:
The time horizon dimension specifies whether it is short range, medium range or long range plan.
The focus dimension tells whether the primary concern is strategic, managerial or operational
Strategic (MIS) planning is an orderly approach that determines the basic objectives, the strategies and policies needed to achieve the objectives, and the plans to implement the strategies. The first task in strategic planning is to set the MIS objectives and the results expected. The objectives must be set in such a way that they meet the organization’s needs. Once the objectives are set, MIS policies are defined as a guideline to carry out the plan. These MIS policies are in turn translated into long-range, medium-range and short-range plans for implementation.
In determining the MIS strategic plan, the following are to be taken into consideration
- The MIS objectives and strategies that can be derived from the corporate strategic plan.
- The person who will review and approve the plan.
- The time taken to complete the plan and the contents of the plan.
- The highlights or focus of the plan (computer security, new application development, new technology)
In most cases, the answers depend on the structure and complexity of the MIS organization, the level of computerization in the firm, the hit rate of the MIS division and the influence of MIS in getting projects approved by top management.
MANAGERIAL AND OPERATIONAL MIS PLANNING
Managerial MIS planning combines strategic with operational plans. It is a process in which specific functional plans are related to a specific number of years. These plans show how strategies are to be carried out to achieve long-range plans. The next step is to find short-range plans that are used for carrying out the day-to-day activities of the system. They are programmed plans requiring a year’s commitment.
The MIS operating plan requires more user involvement to define the system requirements. System development must support organizational MIS objectives as laid out in the corporate plan. System development must also identify and select applications that are the organization’s priorities. Bowman, Davis and Wetherbe have described this link as a three-stage model consisting of the following
- Strategic system planning: Establishing relationships between the organization plan and the plan for a candidate system.
- Information requirements analysis: Identifying organization requirements to direct the specific application of system development projects.
- Resource allocation: Determining hardware, software, telecommunications, facilities, personnel and financial resources to execute the development of the system.
Thus planning for system development activities is a major aspect. Broad corporate strategic objectives should be the basis for system development objectives, which specify the goals in the form of specific action plans. Formalizing the planning process makes it easier to reorient and gain the support of upper, middle and operating management for candidate systems. The following figure shows a top-down approach to planning, the relationship between the corporate strategic plan and the goals and activities of the system development function.