IT chapter 8

Topics: Information systems, Information system, Information systems discipline Pages: 3 (1392 words) Published: October 27, 2014

Strategic information systems planning involve identifying the long-term direction of information systems use and management within the organization. It provides a framework for decision-making and project selection. Within this framework the firm develops yearly operational plans and budgets in order to prioritize information systems spending. The yearly budgeting process is a tool organizations use to communicate plans and enforce control systems. As a planning tool, the budget provides an assessment of what the firm believes future financial flows will be. As a control mechanism, the budget helps encourage and enforce specific behaviors. More subtly, the budget can be used to allocate decision rights and power. As a general or functional manager, you need to understand how the budgeting and prioritization processes work so that you can make the most of them. All too often we see organizations funding information systems using simple metrics, like percentage of revenue or fixed increments over the previous year’s budget. While these metrics have a place in the budgeting process, the yearly budget is an opportunity to formally evaluate competing projects and make the (sometimes tough) comprehensive prioritization decisions necessary to align information systems with the firm’s strategy. The firm that fails to do so misses the opportunity to offer guidance and a clear mandate to the IS function. The consequence is that a lack of direction and cohesive effort will degrade service (in many cases leading to outright failure) and demoralize the firm’s IS professionals. The business case is a formal document, prepared and presented by the general or functional manager sponsoring the project. It provides the rationale for pursuing the opportunity. Its primary objective is to explain and provide evidence to convince the executive team, typically during the budgeting process, that the initiative will pay off and its funding is warranted. The steering committee is...
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