include managers, operations personnel, accountants, and internal auditors. In some organizations, it is difficult
to find someone who is not a user. During systems development, systems professionals work with the
primary users to obtain an understanding of the users’ problems and a clear statement of their needs.
As defined in Chapter 1, stakeholders are individuals either within or outside the organization who
have an interest in the system but are not end users. These include accountants, internal auditors, external
auditors, and the internal steering committee that oversees systems development.1
Systems Strategy
The objective of systems strategy is to link individual system projects to the strategic objectives of the
firm. Firms that take systems strategy seriously establish a steering committee to provide guidance and
oversight for systems projects. The composition of the steering committee may include the chief executive
officer (CEO), the chief financial officer, the chief information officer, senior management from user
areas, the internal auditor, and senior management from computer services. External parties, such as management
consultants and the firm’s external auditors, may also supplement the committee. This committee
is involved not only in developing system strategy but in every major phase of the SDLC.
The strategy stage in the SDLC consists of three fundamental tasks: assessing the organization’s strategic
information needs, developing a strategic systems plan, and creating actions plans. The inputs to the
systems strategy phase are the business plan, the legacy system situation, and feedback from the user
community. In this section we see how these pieces come together to form a comprehensive strategic plan
that will generate action plans for selecting and developing individual systems projects.
Assess Strategic Information Needs
Strategic systems planning involves the allocation of systems resources at the macro level, which usually
deals with a time frame of 3 to 5 years. This process is very similar to budgeting resources for other strategic
activities, such as product development, plant expansions, market research, and manufacturing technology.
For most companies, key inputs in developing a sound systems strategy include the strategic
business needs of the organization, the legacy system situation, and user feedback.
STRATEGIC BUSINESS NEEDS
All functional areas should support the business strategy of the organization. Because this is most certainly
true for the information systems function, we begin with an overview of business strategy. We will briefly
review some common aspects of business strategy that bear directly on developing a sound systems strategy.
Vision and Mission
Developing a systems strategy requires an understanding of top management’s vision, which has shaped
the organization’s business strategy. Many CEOs communicate their strategic vision through a formal
mission statement. In some cases, however, top management’s strategic view for the company is not fully
articulated or formulated. Organizations without a well-considered mission statement might have individuals
who lack a clear vision for the future managing and directing them. Not surprisingly, companies in
this situation often lack a viable systems strategy. Consequently, their management is prone to making
knee-jerk responses to information systems needs that emerge out of crisis rather than planning.
Industry and Competency Analysis
In addition to needing a durable vision component, the strategic planning process has many dynamic
business factors that drive it, including consolidations, competition, rapidly evolving technology, changes
in the regulatory landscape, and increasing demands from stakeholders. Industry analysis and competency
analysis are two strategic planning methodologies used to capture information on these factors.
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