Business Plan and IS plan

In any kind of activity or process, planning has been a crucial part that should be addressed carefully in order to make the end result a success. This is also true for business processes. A business plan and an information system plan are some of the concepts that are usually encountered (and usually used interchangeably) when dealing with business processes. But what is the difference between the two concepts and what is there relationship with each other?

In establishing any kind of relationship between two concepts, it is important that there must be a thorough definition and comparison of each concept first and then find a common ground which the two ideas can relate to each other. That's why in order to describe the relationship between the business plan and the IS plan, I will define first each concept, differentiate them from each other and then iterate the relationship between them.

If you would ask me what a business plan is, I would define it as a set of goals and future strategic plans that a business entity must achieve in order to reach a certain vision. In a layman’s point of view, a business plan is basically a plan that will clearly define where your company will be in a certain period of time [usually 3 to 5 years] and how do you plan on getting there. A business plan will put a direction to where your company will go and define standards of success for the business as a whole.

According to Michael Russell, a business plan is a detailed description of a new or existing business, including the company's product or service, marketing plan, financial statements and projections and management principles, require a plan to be implemented. It is a document that spells out a company's expected course of action for a specified period usually includes a detailed listing and analysis of risks and uncertainties. For the small business, it should examine the proposed products, the market, the industry, the management policies, the marketing policies, production needs and financial needs. Frequently, it is used as a prospectus for potential investors and lenders.

According to wikipedia.com, a business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Business plans may be internally or externally focused. Externally focused plans target goals that are important to external stakeholders, particularly financial stakeholders. They typically have detailed information about the organization or team attempting to reach the goals. With for-profit entities, external stakeholders include investors and customers. External stake-holders of non-profits include donors and the clients of the non-profit's services. For government agencies, external stakeholders include tax-payers, higher-level government agencies, and international lending bodies such as the IMF, the World Bank, various economic agencies of the UN, and development banks. Internally focused business plans target intermediate goals required to reach the external goals. They may cover the development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a factory or a restructuring of the organization. An internal business plan is often developed in conjunction with a balanced scorecard or a list of critical success factors. This allows success of the plan to be measured using non-financial measures. Business plans that identify and target internal goals, but provide only general guidance on how they will be met are called strategic plans. Operational plans describe the goals of an internal organization, working group or department. Project plans, sometimes known as project frameworks, describe the goals of a particular project. They may also address the project's place within the organization's larger strategic goals. Business plans are decision-making tools. There is no fixed content for a business plan. Rather the content and format of the business plan is determined by the goals and audience. A business plan should contain whatever information is needed to decide whether or not to pursue a goal. For example, a business plan for a non-profit might discuss the fit between the business plan and the organization’s mission. Banks are quite concerned about defaults, so a business plan for a bank loan will build a convincing case for the organization’s ability to repay the loan. Venture capitalists are primarily concerned about initial investment, feasibility, and exit valuation. A business plan for a project requiring equity financing will need to explain why current resources, upcoming growth opportunities, and sustainable competitive advantage will lead to a high exit valuation.

Preparing a business plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing, among others. It can be helpful to view the business plan as a collection of sub-plans, one for each of the main business disciplines.

"... a good business plan can help to make a good business credible, understandable, and attractive to someone who is unfamiliar with the business. Writing a good business plan can’t guarantee success, but it can go a long way toward reducing the odds of failure."

As you can notice, my definition and the website wikipedia’s definition are somewhat the same. The main keywords there are goals and plan. The business entity should have one major game plan that should be embraced by all its constituents in order to attain a certain vision. To put it simply, the business plan of a company is just as important as the blueprint of a house. Without a clear and well defined business plan, it would be impossible if not difficult to sustain the business in the next few years of its operations. Because every organization or company has different goals and objectives, the purpose of a business plan may also vary. One company might be looking for funding from investors. Another company might be looking for a loan from a bank. But whatever the case, basically every business needs a business plan.

An Information System Plan or ISP, on the other hand, is basically a plan concentrated on aligning the information systems of an organization to its business plan as a whole. An information system is comprised of the hardware, software and peopleware of an organization. Usually, the term information system is related to using technology as a crucial part of an organization. The term is also used to identify the computer-based system that an organization is using.

According to Michael M. Gorman, the information systems plan project determines the sequence for implementing specific information systems. The goal of the strategy is to deliver the most valuable business information at the earliest time possible in the most cost-effective manner. The end product of the information systems project is an information systems plan (ISP). Once deployed, the information systems department can implement the plan with confidence that they are doing the correct information systems project at the right time and in the right sequence. The focus of the ISP is not one information system but the entire suite of information systems for the enterprise. Once developed, each identified information system is seen in context with all other information systems within the enterprise. Gorman has also identified some of the characteristics that an ISP should have and these are the following:

An ISP should be timely. An ISP that is created long after it is needed is useless. In almost all cases, it makes no sense to take longer to plan work than to perform the work planned.

The ISP must be useable. It must be so for all the projects as well as for each project. The ISP should exist in sections that once adopted can be parceled out to project managers and immediately started.

The ISP must be maintainable. New business opportunities, new computers, business mergers, etc. all affect the ISP. The ISP must support quick changes to the estimates, technologies employed, and possibly even to the fundamental project sequences. Once these changes are accomplished, the new ISP should be just a few computer program executions away.

While the ISP must be a quality product, no ISP is ever perfect on the first try. As the ISP is executed, the metrics employed to derive the individual project estimates become refined as a consequence of new hardware technologies, code generators, techniques, or faster working staff. As these changes occur, their effects should be installable into the data that supports ISP computation. In short, the ISP is a living document. It should be updated with every technology event, and certainly no less often than quarterly.

The ISP must be reproducible. That is, when its development activities are performed by any other staff, the ISP produced should essentially be the same. The ISP should not significantly vary by staff assigned.

As I understand the definition of Gorman, an information system plan is basically is a systematic approach on planning the information system implementation of an organization as a whole. He emphasized on doing it at the right time and sequence and finishing it at a certain period.

Last semester on our MIS I subject, we were tasked to provide an Information system needs assessment of a certain company and provide recommendations for the needs that we identified. The task concentrated on the information system and the potential changes that we could recommend for improvement. From that experience, my colleagues and I got a glimpse of the process being gone through in proposing and making implementation plans. Our adopted company for that project had already established information system even from the beginning. But it’s not the case for all. There were times in the past where information system was just a vague concept on the business sector. Most have none and if they had one, they were not explicitly defined as a department or a sector in the company. There were just mere objects that exist in the company. However, with the advent and rapid shift of technology, information system slowly became recognized and identified as a crucial and high potential investment for most businesses. From that point on, information system became a crucial part in the planning process in companies.

Since I have clearly defined what a business plan and an information system plan is, it is now time to iterate their difference and relationship with each other.

The main difference of information system plan with business plan is that an ISP is just a part of the business plan. One of the best strategies in making a business plan is developing a plan on how to effectively and efficiently use IS to its highest potential for the benefit of the organization as a whole. This is where information system planning comes in. An information system plan is developed in order to effectively manage the IS resources without compromising the business plan of an organization.

As the definitions I mention above suggest, a business plan is the overall plan of an organization. As a general plan, it can include subdivisions to clearly define the different parts of the overall plan. These subdivisions can be different for every company or organization depending on its type and applications. Some of these subdivisions can include a financial management plan, a marketing strategy plan or an information system plan. Although, each subdivision can be defined independently, they are strongly connected to each other because they are all part of the overall plan. As an example, you cannot define an information system plan without affecting the financial management plan and vice versa. They strongly relate to its other that any change in a certain plan can affect all the other subdivision plans for the organization as well.

In conclusion, although a business plan and information system plan of an organization may have different level of scope in an organization, they both exist in an organization for the same thing. They exist so that an organization can effectively and efficiently use all of its resources for success without compromising the established vision of the said organization.

References:

Gorman, Michael M. (September 1999). “Information System Plan”. Date Retrieved: February 17, 2010. Retrieved from: http://www.tdan.com/view-articles/5262

Russell, M. (2007, February 6). Business Plan - Purpose and Objectives. Retrieved February 17, 2010, from http://ezinearticles.com/?Business-­Plan-­-­-­Purpose-­and-­Objectives&id=445062

http://en.wikipedia.org/wiki/Business_plan

This is my MIS 2 Assignment # 2

What should be the nature of the relationship between the business plan and the IS plan? (at least 2000 words)