ICT_ITM5_06_0811_Match_IT_Needs_With_the_Strategic_Direction_of.pptx

Hns5ICT_ITM5_06_0811_Match_IT_Needs_With_the_Strategic_Direction_of.pptx

1. Woliso Polytechnic College Information Technology Service Management Level V ICT ITM5 06 0811 Match IT Needs With the Strategic Direction of the Enterprise

2. UC Learning Outcome Contents The Unit of Competence “Match IT Needs With the Strategic Direction of the Enterprise” covers the following Learning Outcomes: LO1: Evaluate current Business strategy 1.1 Analyze Strategic plan of organization to understand the industry environment and current organizational goals 1.2 Information related to current operational practices and the strategic plan is compared to determine possible IT gaps and improvement opportunities. 1.3 Information regarding the impact of IT developments is reported to appropriate person(s) LO2: Evaluate impact of changes 2.1 Information on current IT systems supported by the organization is reviewed. 2.2 Advantages and disadvantages of current and proposed IT systems are compared and documented. 2.3 The objectives and implications of introducing changes are determined. 2.4 Findings are document and forward to appropriate person(s) for feedback. LO3: Develop action plans 3.1 Action plans are developed for the proposed changes that can be implemented according to organizational policies and procedures 3.2 Action plans that take account of appropriate operational, financial, legal, human relations, internal and external operating environments and other relevant considerations are ensured. 3.3 Document action plans, ensuring that standards, targets and implementation methods are detailed 3.4 Documentation is forwarded to appropriate person for feedback/approval.

3. LO1: Evaluate Current Business Strategy Overview Strategic planning is the method by which a business can set goals for its future.  Strategic planning  involves conducting environmental analysis in order to understand the internal and external forces that affect the business.  Goals  and  objectives  are set for the future of the organisation, and over time the organisation works towards these goals. These business goals may be simple (such as updating the database software to the latest version) or more complex (such as: restructuring the organisation to incorporate e-commerce practices).

4. Evaluate Current Business Strategy …. This learning outcome covers how to: Analyse the current business strategy Explore different strategic planning models Identify gaps in operational practice and strategic plans.

5. Analyze strategy The strategic plan of an organisation sets out the goals a business hopes to achieve within a specified period of time. It also helps the organisation understand the environment within which they operate, and the market forces that affect them. An analysis of the current strategic plan enables you to understand the goals of your organisation. However, in order to analyse the strategic plan, you first need to understand the structure and purpose of a strategic plan. This topic describes the elements that make up a strategic plan. What is strategy? A strategy is a plan for action that sets out to achieve a goal or several goals. In a business context, we define strategy as having some sort of goal for the future

6. What is strategic planning? Strategic planning, then, can be defined as follows: Strategic Planning – is determining long–term objectives by analysing the strengths and weaknesses of an organisation, studying opportunities and threats in the business environment, predicting future trends, and projecting the need for new products and services. ‘Strategic planning - is the process of identifying long term organisational goals, strategies, and resources. Strategic planning looks beyond day–to–day activities and focuses on a horizon that is three, five, ten, or twenty years into the future. ‘Strategic planning - is the use of strategies to develop a plan of action. Strategic planning - is a task that all organisations perform. For smaller businesses, this may be a very informal process. The manager or owner of the business may decide the goals and objectives of the business.

7. Examples The owner of a business may decide that the business needs to update its computer hardware over the next ten months. The manager may decide that their organisation needs to have a presence on the Internet, either in the form of a brochure site such as  http://www.bigw.com.au an e–commerce site such as  http://www.ebay.com/ The strategic plan will set out how these objectives will be achieved. Larger organisations approach strategic planning more formally. Strategic planning will usually be performed by management and/or the board of directors in an organisation.

8. Strategic planning .... Strategic planning is not something that the organisation completes once a year or once every three years. It is an ongoing and evolving process that does not finish once the strategic plan has been written. An organisation should constantly be scanning its environment to gather information about new trends, competitors and its industry surroundings. Strategic planning means being prepared to respond to the circumstances of the organisation’s operating environment. Here are two are examples: Non–profit organisations must often respond to dynamic and even hostile environments Often businesses must respond quickly to changes in their environment, i.e. broken down equipment, new legislation, competition (both new and old), interest rates, the value of the ETB, staffing problems, etc.

9. Strategic planning ..... Being strategic means being clear about the organisation's objectives being aware of the organisation's resources incorporating both into being responsive to a dynamic environment. In the strategic planning process, an organisation’s purpose, vision and values shape its mission statement, which leads to goals, objectives, business operations, and results that affect the stakeholders of the organisation.

10. Strategic Planning Processes Figure 1: Strategic planning process

11. Pitfalls in strategic planning Strategic planning is a very important process for every organisation, but there are many pitfalls that should be avoided. Problems with strategic planning The following problems are encountered in organisations where strategic planning is not regarded as an important activity, or not enough time has been put into the process: A. Inability to Activate New Strategy Implementing a new strategy usually requires the organisation to change its management systems, culture, skills, resources or structure. If all of these had to be changed at the same time, many managers might be unable to cope with the complexity of the situation. This might lead to them not implementing the strategy.

12. Problems with strategic planning ... B. Inability to develop a strategic response In some cases, even if the organisation is aware of the trend, it may not be able to respond appropriately. This may be due to an inability or an unwillingness to change the managerial approach of the organisation. It may also be the result of structural or organisational inflexibility. C. Allowing corporate politics to dictate priorities Individuals in the organisation may be aware of future trends, but the information may not be placed on the agenda because Managers may be too busy with operational issues to give time to significant trends. Managers may decide not to give the information to the organisation as a whole because they value the power of their knowledge over others. This type of internal politics can reduce the ability of the organisation to respond to environmental change.

13. Problems with strategic planning ... D. Failure to see a strategic challenge Many organisations do not look at their external environment carefully enough, and thus are unaware of significant trends that will have an impact on future operations. This can be caused by introverted thinking from top management or by focusing inwards too much to solve technical or organisational problems. Such managers neglect to examine external environmental factors such as the potential of new competitors. E. Failure to understand the challenge Although the organisation may identify the major trends in their environment, they may not understand the magnitude of the issue or how to respond to it effectively.

14. Which strategic planning model is best? Many books and articles describe how best to do strategic planning. In this resource, we will be following a model that has four basic steps: Figure 2: Strategic plan model 1. Identifying Identifying  involves looking at the organisation’s current mission and vision statements (if available) in order to understand their core business. Mission and vision A  mission statement  is like an introductory paragraph. It must communicate the essence of the organisation to the reader. An organisation's ability to articulate its mission indicates its focus and purpose.

15. Mission statement A mission statement typically describes an organisation in terms of the following: Purpose  – why the organisation exists, and what it seeks to accomplish. Business  – the main method or activity through which the organisation tries to fulfil this purpose. Values  – the principles or beliefs that guide an organisation's members as they pursue the organisation's purpose. The  mission statement  summarises the  what ,  how , and  why  of an organisation's work, while a  vision statement  presents an  image  of what success will look like, such as how the organisation will effectively carry out its operations.

16. Vision statement Vision  is a less specific type of aim which is usually defined as a desirable future state where details have not yet been determined. The  vision statement  presents a description of how the organisation will or should operate at some point in the future and how the customers or clients will benefit from the organisation’s products or services. 2. Diagnosing Assessing the situation Once an organisation has committed to why it exists and what it does, it must take a look at its current situation. Part of strategic planning is an awareness of the resources available to the organisation and an idea of future trends that may occur. This will enable the organisation to respond to changes in its environment.

17. Situation assessment means obtaining current information about the organisation's strengths, weaknesses, and performance (opportunities and threats). This information will highlight the  critical issues  that the organisation faces and that its strategic plan must address. These could include a variety of primary concerns such as funding issues, new program opportunities, changing regulations or changing needs in the client population, changes in technology, problems with information systems, changing needs of customers, and so on. The point is to choose the most important issues to address. The strategic plan should focus on no more than five to ten critical issues.

18. Environmental analysis Environmental analysis is the method used to perform situation assessment. The purpose of environmental analysis is to identify significant characteristics that exist within the industry environment. By identifying these characteristics, the organisation can make decisions regarding which of these areas will be critical to their future success. Here is an example: Environmental analysis  consists of two major components: The  external environment:  An examination of the external environment will determine outside forces that have an influence on the organisation. The  internal environment:  An investigation of the internal environment will establish internal factors that influence organisation strategy and sources of competitive advantage.

19. SWOT Analysis One of the major tools of environmental analysis is the  SWOT analysis . Role of SWOT analysis A  SWOT analysis  helps to answer key questions and create a better organisational strategy by answering the following types of questions: Does the organisation have internal strengths which an organisational strategy can be built on? Which weaknesses does the organisational strategy need to correct? Do the organisation’s weaknesses disqualify it from pursuing certain opportunities? Which opportunities does the organisation have resources to pursue with a chance of success? What threats should the organisation worry most about?

20. The internal environment What is happening within the organisation and what are the effects? Through an analysis of the  internal environment , an organisation can determine what it can do, or the actions that it can undertake based on the resources, core competencies and capabilities available. Resources Resources are inputs from the organisation’s production process. Examples of resources include the following: capital equipment skills of individual employees patents finances talented managers.

21. Generally, an organisation has both tangible and intangible resources.  Tangible  resources are assets that can be seen and quantified, including assets like production equipment, manufacturing plants and formal reporting structures.  Intangible  resources include assets that are rooted deeply in the history of the organisation and that have accumulated over time, including knowledge, trust between managers and employees, ideas, the capacity for innovation, managerial capabilities, and reputation. Intangible resources are difficult for competitors to understand and copy. Capabilities Capabilities  are the knowledge and skills of employees. This is seen as one of the most relevant sources of competitive advantage for any organisation. They must find ways to share this knowledge and skills with the rest of the organisation. Only when a capability is valuable, rare, costly to imitate, and unable to be substituted is it a  core competency  and a source of competitive advantage.

22. Core competencies An effective internal environment analysis includes identifying both what are and what are not the organisations core competencies.  Core competencies  refer to activities of the organisation which create unique value. These activities are not necessarily those on which the organisation spends the most time, but which have the potential to create sustained competitive advantage. Competitive Advantage Competitive advantage  is the ability of the organisation to outperform its competitors in key performance areas. Competitive advantages may arise through the external environment, such as changes in customer demand, fluctuations in prices, and the impact of advances in technology. Competitive advantages may also arise as a result of internal activities, such as the restructuring of the organisation.

23. Analysis of the  internal environment  helps to understand the  strengths  and  weaknesses  that face the organisation. The following table lists some of the questions to ask to determine the strengths and weaknesses of the organisation.

24. Strengths Weaknesses What are our advantages? What could be improved? What do we do well? What is done badly? What are our major strengths, and how can we utilise them in the future? What are our main weaknesses, and how can we overcome them? What must we do to strengthen our IT function, including our people and technology infrastructure? How should we address weaknesses in IT resources and capability? A distinctive competence? No clear strategic direction? Adequate financial resources? A deteriorating competitive position? Good contacts/relations with clients? Low profitability because...? Good competitive skills? Lack of managerial depth and talent? Special expertise? Proven management? Missing any key skills or competencies?

25. Strengths Weaknesses An acknowledged market leader? Poor track record in implementing strategy? Well–conceived functional area strategies? Plagued with internal operating problems? Innovative programs/services? Vulnerable to competitive pressures? Good overall reputation? What should be avoided? Access to economies of scale? Weak market image? Insulated from competitive pressures? Competitive disadvantages? Cost advantages? Below–average marketing skills? Competitive advantages? Unable to finance changes in strategy? Table 1: Strengths and Weaknesses

26. The external environment How do external factors like customers/ competitors affect the organisation? An understanding of the  external environment  helps organisations to understand their current situation and predict future trends. Industry environment An  industry  is a group of companies producing products that are close substitutes. An example of this is the Web design industry which is made up of individual web design and development companies, including ISPs. The  industry environment  has a more direct affect on strategic competitiveness. Competitor environment Competitor analysis  enables an organisation to focus on each rival company and gather information about them.

27. When doing competitor analysis, companies seek to understand the following: what drives the competitor, as shown by future objectives what the competitor is doing and can do, as shown by its current strategy what the competitor believes about itself and the industry what the capabilities of the competitor are. Analysis of the external environment helps to understand the opportunities and threats that face the organisation.

28. The following table lists some of the questions to ask to determine the opportunities and threats of the organisation. Opportunities Threats What are our major opportunities, and how can we take full advantage of them? What major threats do we face, and what can we do about them? What IT plans do we have to support business opportunities? What can we do to deal with potential threats to IT success? What are the interesting trends? What obstacles do we face? Changes in technology and markets? What is our competition doing? Expand service line to meet broader range of client needs? Are the required specifications for our job, products or services changing? Are there changes in social patterns, population profiles, lifestyle? Is changing technology threatening our position? Will local events provide opportunities? Do we have bad debt or cash–flow problems?

29. Opportunities Threats Serve additional customer groups? Likely entry of new competitors? Enter new markets or segments? Slow market growth? Changes in government policy? Adverse government policies? Diversify into related services? Growing competitive pressures? Complacency among rival organisations ? Vulnerability to recession and business cycle? Fast market growth? Growing bargaining power of clients? Weak competitors? Changing client needs and tastes? Lack of dominant competitor? Adverse demographic changes? Table 2: Opportunities and Threats

30. 3. Conceiving Strategic analysis It is important to first review the environmental analysis you conducted on the organisation. In particular, you will need to review the  opportunities  and  threats  (from the  external environment ) and the  strengths  and  weaknesses  (from the  internal environment ). You are trying to find relationships between the elements of the SWOT analysis (i.e., strengths, weaknesses, opportunities, threats) so that they can be grouped together. Finding relationships Relationships between SWOT elements may have two forms: You can group together several strengths (or weaknesses, or opportunities, or threats) that are about the same issue to form a single organisational strength. When the elements relate to the same issue you can match: Strength to Opportunity Weakness to Opportunity Strength to Threat Weakness to Threat

31. Linking one of these elements may reduce the affect of the other. For example, by enhancing weaknesses in the organisation we may be able to reduce threats. Each of these groupings forms a critical issue that the organisation faces. The strategic plan will have up to ten critical issues that are being addressed. The  strategic objectives  are created for each of these critical issues. Strategic objectives “Strategic objectives are those objectives that refer to, and affect the entire organisation and deal with the relationship between the organisation and its environment.”

32. Strategic objectives  - like all objectives - should be  SMART  objectives. That is, the objectives should be: S pecific M easurable A ttainable R elevant T imely In creating each strategic objective, you must come to a conclusion or response about what the organisation will do as a result of the major issues facing them. This will be written in the form of a goal, or what the business is hoping to achieve.

33. Performance targets When setting performance targets, you take each strategic objective in turn and specify the requirements which enable the strategic objective to be achieved. The performance targets are written in the form of tasks that need to be achieved.

34. 4. Realizing Action plans An  action plan  carefully lays out how the strategic goals will be accomplished. You will be specifying activities and listing the expected results which enable the strategy to be implemented. Action planning also includes  stipulating responsibilities  (who needs to do what) and  timelines  (when). You should also include how you will  monitor  and  evaluate  the objective using performance indicators.  Strategic planning is an ongoing process which allows an organisation to plan for future development and the direction in which the organisation wishes to proceed. By analysing the strategic plan of an organisation, we can understand the goals a business hopes to achieve within a specified period of time. It also helps us to understand the environment within which the organisation operates and the market forces that affect them.

35. Compare information An examination and comparison of the current strategic plan of the organisation and their operational practices will enable an organisation to highlight information technology gaps and improvement opportunities. Current operational practices The current operational practices of an organisation may include the policies they have in place, the procedures they follow to complete tasks, or the system they use to perform day–to–day processing. The system used by the organisation may be a manual or paper–based system; a computerised system that incorporates hardware, software and networking capabilities; or a hybrid of the two: partially computerised with some manual processes.

36. Examine current strategic plan The strategic plan of an organisation sets out the goals a business hopes to achieve within a specified period of time. It also helps the organisation understand the environment within which they operate and the market forces that affect them. Examination of the current strategic plan enables you to understand the goals of your organisation and how those goals will be achieved. The model followed in this resource presents each critical issue with the following four elements: Four elements of critical issues Strategic Analysis: lists SWOT elements to highlight a critical issue Strategic Objective: the goal the organisation wants to achieve Performance Target: ‘To do’ list of what the organisation wants to achieve Action Plan: Specific activities that enable the strategy to be implemented

37. IT gaps between current practices and future goals By examining the current strategic plan and current practices of the organisation, it may be possible to see some gaps. The gaps may be in what the organisation currently does and what they hope to do in the future. By identifying gaps, the organisation may be able to determine improvement opportunities. Here is an example: An organisation currently has a database that has a table for customers, customer orders and customer invoices. This database has been used successfully for the last two years. The following may represent the results of a gap analysis performed for this organisation. Example: Gap analysis Objectives:  To evaluate the current database functionality, to determine processing gaps. Findings:  An environmental analysis produced the following weaknesses and opportunities:

38. Weaknesses The database does not capture information about our suppliers or our purchasing patterns from different suppliers. We are unable to adequately compare suppliers to see if we are getting the ‘best deal’ from each of them. Opportunities A new supplier has approached us with cheaper prices and loyalty discounts.

39. LO2: Evaluate impact of changes 2.1 Information on current IT systems supported by the organization is reviewed. 2.2 Advantages and disadvantages of current and proposed IT systems are compared and documented. 2.3 The objectives and implications of introducing changes are determined. 2.4 Findings are document and forward to appropriate person(s) for feedback.

40. Review information Most organisations have some sort of information technology system in place. In order for a gap analysis to be performed successfully, detailed knowledge of the current information technology system must be understood. Current information technology (IT) systems The current IT system may include an entire information system, or it may be made up of components within an information system. These components may include the following: hardware software web page network telecommunications information documents files.

41. Changes may occur within one or more of these components of the information system such as upgrades of hardware, modification of documents, etc. The change may also be for the information system as a whole. For example, modifications may need to be made to the information system due to new legislative requirements – such as the Cash Register - which ensured that some businesses in Ethiopia had to modify their financial systems to be compliant. Most organisations will have some sort of IT system already in place. This system is often referred to as the ‘ legacy system’  of the organisation. When performing a review of the legacy IT system, a list of system components may be generated. This list will detail all of the  current hardware ,  software  and  other network infrastructure  in place in the organisation.

42. Compare advantages All information technology systems will have both advantages and disadvantages. A new system will usually seem better to some users because it is different from the system currently in place. This new system may purport to have better functionality than the legacy system. Other users may like the familiarity of the legacy system and may fear possible changes being introduced.  Gap analysis  is one method used to compare legacy and proposed information technology systems. Gap analysis allows an organisation to recognise the features and functionality of the legacy system when compared with the requirements of the new system.

43. Gap analysis Gap analysis  is all about evaluating and improving business performance. In information technology,  gap analysis  is the study of the differences between two different information systems or applications, often for the purpose of determining how to get from one state to a new state. A gap is sometimes spoken of as the space between where we are and where we want to be. Gap analysis is undertaken as a means of bridging that space.

44. Gap analysis steps A gap analysis may include the following steps: 1. Review system An initial  review  of the current information system or application is carried out in order to understand the processing, features or system currently in place. 2. Develop requirements This may be in the form of a  strategic objective  that the organisation wishes to implement. This strategic objective may allow the organisation to increase their competitive advantages or improve the technology and efficiency of their practices and procedures. The proposed system may include the following: Restructuring the current information system in order to become compliant with a new industry standard or organisation requirement Updating the hardware of the system. For example, the current hardware may be outdated, inefficient and unable to handle the capacity needs of the organisation.

45. Gap analysis step ... updating the software of the system: the applications used by the organisation may not have the functionality required. There may be a newer version of the software that incorporates added features and is a ‘better fit’ for the organisation’s requirements. restructuring of documents, files or information so that they are more accessible an e-commerce website that enables customers to purchase products online new technology may become available, i.e., a new invention or reduction in the price of a product, making it more affordable for the organisation. This ‘new technology’ may enable the organisation to improve efficiency or productivity. creating new applications for use by the organisation. For example, a new database may need to be created to contain all of the organisation’s data.

46. Gap analysis step ... 3. Comparison A  comparison  of the current system elements and the new system requirements or objectives will give an idea of whether a gap exists. If there is a gap, there will be mismatches between what the organisation wants and what they already have in place. The  gap analysis  allows us to discover how to get from one state to a new state. This comparison may take the form of a ‘Gap - Yes/No’ column (see example gap analysis table below) to identify where the gaps exist for each element.

47. Gap analysis step .... 4. Implications What are the  implications  of introducing the item being evaluated? What are the risks and impacts of introducing / implementing the item? 5. Recommendations The last step in the gap analysis is to make  recommendations  to identify the items or solutions needed to fill the gap, if a gap exists. The gap analysis table shown below is an example of a template that can be used to conduct a gap analysis.

48. Gap analysis example Currently in place Requirements Gap Y/N Items needed manual 'paper based' information system Computerized system Y computers (hardware) applications (software) user training Table 2: Gap analysis

49. Summary Gap analysis allows the organisation to compare an  as is  scenario with a desired  future state . Gap analysis generally follows four steps: reviewing  a current [as is] system determining  requirements of the proposed [future state] system comparing  these two states determining  the  implications  and  requirements  involved in getting from one state [as is], to the other [future state].

50. Determine objectives Changes to any part of the information technology system will have implications. These implications may be positive or negative.  Positive implications  may include increases in efficiency and reductions in costs of using the system.  Negative implications  will be the risks of implementing the changes.  Risks  may include end users not using the system effectively and the new system not performing as expected. In the Compare advantages section of this reading, we discussed the five different  steps  of  gap analysis  which are review  of the current system determination  of requirements for the proposed system comparison  of the two systems to determine gaps implications  of the gap recommendations .

51. The fourth and fifth steps of the gap analysis will be explored further later in this reading. Implications The  implications  of the  impact  /  risk  involved with the item being evaluated must be determined. The item may have both positive and negative implications associated with it. The implications of each item may be presented in the form of a list of dot points which outline the impact or risks of the item. A new piece of software is going to be introduced in the organisation. Risks/ implications: The current hardware must have the capacity to allow the new software to run effectively. If the software has not been used in the organisation before, then user training must take place to ensure the end users are able to operate the software. A help desk may need to be put in place to support the end users of the software. There may be licensing issues that need to be explored by the organisation.

52. Recommendations The last step in the gap analysis is to make  recommendations  to identify the items or solutions needed to fill the gap, if a gap exists. The recommendation may be a description of what is required in order for the organisation to put the new system in place. For example, if the current system uses a manual paper-based information system, and the requirement is to computerise this system, a gap exists between the legacy system’s performance and the strategic objectives of the organisation. We may recommend that the organisation needs to purchase new hardware and software and have user training for all end users involved in performing tasks in the proposed system.

53. Summary When implementing changes to information technology systems, the impact of the changes must be fully explored before the solution is implemented. While the gap analysis allows the organisation to determine if gaps exist between their current system and their proposed system, the risks and impacts of those changes will determine whether or not the organisation proceeds with making those changes. Recommendations will be made based on the determination of the risks involved.

54. Document findings Document findings Documentation  of findings and  reporting  information to management is an important process. It allows management to evaluate all relevant information and make informed decisions about the most appropriate course of action for the organisation. Gap analysis template Many different formats are used to display gap analysis information. The example gap analysis table and the gap analysis template (below) show two possible alternatives for presenting this information.

55. Gap analysis template Objectives: Test / check / evaluate/ confirm a specified condition or situation Findings: The results of performing the test / check/ evaluation/ confirmation Implications: The impact / risk involved with the item being evaluated Recommendations (if required):Actions or solutions to be implemented

56. Reporting The results of a gap analysis are important to management of an organisation for a number of reasons: management needs to have all the information about a number of possible changes to the information technology system management can then evaluate all relevant information implications of each change are presented along with a recommended course of action the gap analysis allows management to make more informed decisions. As a result of feedback from management, the organisation will generally choose a course of action that best suits their situation. There may be financial or other resource constraints that management takes into account when choosing a course of action.

57. Summary The  gap analysis report  allows findings to be documented and presented to management in a meaningful way. Management will use this information to make informed decisions about appropriate courses of action for the organisation. This topic has explored the features of gap analysis in detail. Gap analysis follows five steps: A  review  of the current information technology system is performed in order to understand the features of the current system. A  list of requirements  for the proposed system is developed. This forms the future state that the organisation would like to reach. A  comparison  of these two systems is conducted to determine the ‘gaps’ that exist between the two systems. The positive and negative  implications  of these gaps are explored, and, finally, recommendations are made as to courses of action to be taken by the organisation. The  findings  of the gap analysis are then presented to management for a decision about how the organisation will proceed.

58. LO3: Develop action plans 3.1 Action plans are developed for the proposed changes that can be implemented according to organizational policies and procedures 3.2 Action plans that take account of appropriate operational, financial, legal, human relations, internal and external operating environments and other relevant considerations are ensured. 3.3 Document action plans, ensuring that standards, targets and implementation methods are detailed 3.4 Documentation is forwarded to appropriate person for feedback/approval.

59. Contents Developing action plans Ensure action plans Document action plans Feedback / approval

60. Developing action plans The action plan is where the recommendations made in the gap analysis are explored further. More detail is developed so that for each recommendation a list of activities, responsibilities, resources and a timeline is developed. What goes in an action plan? The  gap analysis  develops a range of options or recommendations for the organisation to consider. Each of these recommendations made in the gap analysis may become an action plan. These action plans will detail the activities that need to be carried out in order to implement each recommendation. Action plans take a number of forms, but generally may include the following elements:

61. Goal What will be achieved by implementing the action? See the table below for an example. Activities What are the activities, and in what order will the activities be completed? See the table below for an example. Responsibilities Which staff members are responsible for the completion of each activity? See the table below for an example. Resources What resources will be allocated to each activity? Resources may include funding, time, people and materials. See the table below for an example. Timeline When will each activity commence and finish? See the table below for an example. Evidence of success How will you know if you are making progress? How will progress be measured? See the table below for an example. Evaluation process How will you determine that the goal has been reached? See the table below for an example. Below is an example of an  action plan  which utilises these  elements .

62. Activity Responsibilities Resources Timeline Review customer requests, complaints, feedback to determine service provision possibilities Marketing staff 35 hours staff time x 3 marketing staff ($700) Begin 22/3/04 9am, End 26/3/04 5 pm Create alternative courses of action that could be implemented to improve service to customers: drop prices to match competitors’ offer discounts on calls during off peak times for: STD and international calls offer customer loyalty rewards for staying with Telstra. Pricing department 15 hours x 1 staff ($300) Begin 29/3/04 9am, End 31/3/04 10am

63. Activity Responsibilities Resources Timeline Implement new pricing strategy Inform customers (existing and potential) of new pricing strategy through: mail out brochures television and radio advertising. Review status of pricing strategy periodically to determine success or failure.

64. Evidence of success Increase in customer numbers by x% Evaluation process Review of customer feedback or survey to determine satisfaction of customers Action plans detail the activities that need to be completed the order of the activities the person responsible for each activity the resources available the timeline for the activity.

65. Ensure action plans When developing action plans, it is important to consider both internal and external factors and constraints. Failure to take these factors into account may lead to poor implementation or problems with the action when it is implemented. Constraints and considerations In order to implement action plans appropriately, it is important to consider all constraints and other relevant factors that may impact on them. These considerations may be both  internal  and external  to the action.

66. Internal considerations Internal considerations  will relate to factors within the organisation which will affect the action plan. These include the following: Operational The structure of the organisation can either help to facilitate the action plan or prohibit the plan from proceeding. If the organisation is highly structured or complex and the action plan calls for creative thinking and development, the culture within the organisation may doom the plan to failure before it begins. Conversely, an action plan that fits in with this highly structured type of organisation has a greater chance of success.

67. Financial The organisation may not have the capital to invest in a new system or a system upgrade at the present time. This may mean that the organisation must delay the implementation of the action plan until they can afford it. Legal There may be legal reasons why the organisation may not implement a course of action. For example, installing proprietary software on a number of computers is illegal without the appropriate multiple licenses. Likewise, there may be legislation that the organisation must follow when implementing particular actions. For example, if the organisation is going to create and implement an e-commerce website, then elements of the Privacy Act must be considered and followed. The organisation has a duty of care to protect all customer information.

68. Human relations The implementation of an action plan may require extensive changes to the way people communicate within the organisation. For example, if an email system is made available to employees in an organisation for the first time, those employees will need to know about email etiquette and acceptable use policies for the organisation.

69. Internal operating environment The internal operating environment of the organisation will include the platform, hardware and software that the organisation uses to perform operations. If a new piece of software is being installed, then it must be compatible with the operating environment of the organisation. The internal operating environment may also include the following: the operating climate/culture, existing merchandise or service range of the organisation, possible future merchandise or service range, staff, management, and management information systems.

70. External considerations External considerations  will relate to factors outside the organisation which will affect the action plan. The  external environment  may include the following: 1. External operating environment The external operating environment may include the following: markets such as advertising/marketing target customers local culture/environment new or existing products and services, suppliers and technology.

71. Competitors Competitor considerations may include the competitor’s product or service range, their pricing policies and their marketing policies. If we decide to offer a similar product to that of our competitor, then a similar pricing structure must also be employed. Government bodies Government and legislative bodies may affect employment conditions, staff, trade practices, consumer law, and occupational health and safety.

72. Summary Internal constraints  include operational, legal, human relations, financial and internal operating environment factors. External constraints  include the external operating environment, competitors and factors relating to government bodies. When developing action plans, all of these factors must be considered.

73. Document action plans Many organisations have documentation standards and use templates for all organisation documents. The  template for the action plan  details the goal, activities, responsibilities, resources, timeline, success factors and an evaluation process for each recommendation or goal. Action plan template A  template  allows the organisation to develop documentation consistently across different departments, levels and workgroups. Each of the headings in the template shown in the example below was explained in detail at the beginning of these reading notes.

74. Feedback / approval Management review of documentation and the provision of feedback or approval is a standard procedure for all organisations. This process allows management to consider the information being presented when making decisions about the organisation’s future. Documentation The completed action plans will inform management about how they may implement each option. The action plan gives management all the information about a number of possible changes to the system or organisation.

75. Management will choose to implement the options that best suit their situation. There may be further information that management will consider when approving the action plan(s). For example, there may be financial or other resource constraints that management must take into account or that might influence the order of implementation and the commencement dates for each option. This feedback from management will give the organisation the ability to create a timeline and a list of activities for each option and perhaps allocate resources and personnel to each activity. Management must review all documentation in order to make informed decisions. The action plans may be compared to the business situation, ensuring that only appropriate courses of action are pursued. Management constraints will also need to be considered before the action plans can be implemented.

76. Summary Action plans detail step by step how the goals or recommendations of an organisation will be accomplished. Each action plan specifies the goal of the activities, the activities and the expected results for the activities, expected responsibilities of employees, resources, and timelines for each activity. The performance monitoring and evaluation of each action plan must also be detailed. When developing action plans, it is important to consider both internal and external factors and constraints. Consideration of these factors increases the likelihood of success in implementing the action. Action plans usually take the form of a written document which summarises the activities an organisation needs to undertake to implement a course of action. Templates are used by an organisation to ensure consistency of documentation. The action plans produced must be reviewed by management, who will then decide if the action will be implemented and the order of implementation.