Porters Generic Value Chain

Infrastructure
Human Resource Management

Support
Activities

Technology Development
Procurement
Primary
Activities

Inbound
Logistics

Operations

Outbound
Logistics

Elapsed Time - Value added time cost

Marketing
& Sales

Service

Potential IS Contributions
Support Infrastructure Activities Human Resource -

Primary
Activities

Planning Models
Skills & Experience Databases

Technology -

Computer-Aided Design

Procurement -

On-line parts ordering

Automated
Warehouse

Automated
Check
Clearing

Point of
Sale
Scanners

E-Commerce

Inbound
Logistics

Operations

Outbound
Logistics

Marketing
& Sales

Elapsed Time - Value added time cost

Remote
Equipment
Servicing
Service

Project Selection Factors

Tim
i
Co ng o
mm f P
itm roje
en ct
t

Available
Organizational
Resources

Support
From Top
Management

Development Project
Selection Decision

- Accept - Reject - Redefine - Postpone - Proof of Concept -

Degree of
Perceived Need
Within the
Firm

Established
Evaluation
Criteria

IS Planning Process

Assess the
current state of
affairs with
regard to IT
assets

Create a set of
blueprints
that represent
the desired state
of affairs

Create a prioritized
schedule of projects

Project Process Flow Model

Current System

New
System

5
2

How

Physical

Physical

What

Logical

Logical
3

Project Evaluation Criteria

Evaluation Criteria

Potential Organizational Benefits

Strategic Fit

Level of Resource Allocation

Value Chain Analysis

Description of Criteria
The degree to which the proposed project will
improve profits,customerservice, organizational
performance, etc. and the expected duration of
thesebenefits.

The degree to which the proposed project will

assist the organization in achieving its strategic
objectivesandotherlong-termgoals.

The various types of resources and their

expected levels associated with the proposed
project, including time, labor, capital, and
identifiableopportunitycosts.

The degree to which the proposed project

contributes value to the manufacture or delivery
ofgoodsandservicestothemarketplace.

Measurable vs. Unmeasurable

Measurable Benefits

Unmeasurable Benefits

Marketsharewillimprovetoasustainable
minimumof35%.

Wewillbeoneoftheleadingsuppliersin
themarket.

Linethroughputwillincreaseby7%within
the first quarter and by at least 3% each
quarterthereafter.

Line throughput will be dramatically

increasedandwillcontinuethistrendover
time.

Product quality will increase and rework

willdecrease.

Product quality will increase such that

rework will be reduced more than 12%
annually.

Production costs for the auxiliary power

unit will be reduced by at least $3.00 per
unit.

Production costs for the auxiliary power

unitwillgodownsignificantly.

Corporate IS Strategy Objectives

A corporate IS strategy is necessary to define:

whatISserviceswillbeprovidedandtowhom;

whoisresponsibleforprovidingspecificISservices;

howtheseserviceswillbeprovided;

prioritiesforprovisionofnewfacilitiesandimprovementofexistingfacilities;

whohasaccesstowhatinformation;

howaccesstoISserviceswillbedistributedandsupported;

whatcommonstandardsshouldbeapplied;

whatresourcesarerequiredandhowresourcesavailableshouldbeutilized;

mechanismsforunderstandingandmappingcurrentandfuturebusiness
processes;

amechanismformaintainingandrenewingthestrategy.

Typical Corporate IS Plan

Section of Plan

Section Contents

Organizational Mission
Statement

Describestheobjectivesandgoals
oftheorganizationincludingboth
currentandfutureperspectives.

Inventory of Information
Requirements

Describestheobjectivesandgoals
oftheISorganizationwithregardto
itsroleintheachievementofthe
statedorganizationalgoalsand
objectives.

IS Development Constraints

Itemizesanddescribesthe
constraintsimposedoncurrentand
futuredevelopmentincluding
technological,financial,human
resource,andoperationalassets
andresources.

Typical IS Plan (continued)

Section of Plan
Long-Term IS Needs and
Strategies

Section Contents
Presentsthesetoflong-range(25
year)needsandstrategiesoftheIS
departmentprioritizedinkeepingwith
theinformationrequirementspreviously
described.

Short-Term IS Needs and

Strategies

Providesaprioritizedlistofcurrent
projectsandascheduleofalladditional
projectsintendedtocommencewithin
thecurrentyear.

Implications of IS
Corporate Plan

Discussesthevariousexpected
impactsontheorganizationofboththe
short-termandlong-termISstrategies.
Additionally,thissectioncanbeusedto
discussanyexpectedchangesinthe
currentbusinessenvironment.

Project Feasibility Assessment

Feasibility Assessment
Category

Description

Technical

Determinestherelationshipbetweenthepresent
technologyresourcesoftheorganizationandthe
expectedtechnologyneedsoftheproposed
project.

Operational

Determinesthedegreetowhichtheproposed
developmentprojectfitswiththeexisting
businessenvironmentandobjectiveswithregard
todevelopmentschedule,deliverydate,
corporateculture,andexistingbusiness
processes.

Human Factors

Determinestherelationshipbetweenthepresent
humanresourcebaseoftheorganizationandthe
expectedhumanresourceneedsoftheproposed
project.

Project Feasibility Assessment

(continued)
Feasibility Assessment
Category
Legal and Political

Economic

Description

Identifiesanypotentiallegalramifications
resultingfromtheconstructionand
implementationofthenewsystemincluding
copyrightorpatentinfringements,violationof
existingantitrustlaws,foreigntraderestrictions,
oranyexistingcontractualobligationsofthe
organization.

Assessesthecost/benefitrelationshipofthe
proposedprojectanditsnetvaluecontributionto
theorganization.