MIS 2 - Assignment #2

Assignment #2 (November 28, 2009)

What should be the nature of the relationship between the business plan and the IS plan?

Planning is one thing that is very essential in a person or an organization. It puts essential things, things that need to be done or accomplished, in perfect order so as to be achieved with repose. Encarta defines plan or planning as a system for achieving an objective. Planning is a method of doing something or lay-outing as in making a blueprint of what is needed to be done in order to achieve something. The topic that is being discussed in this post is to what should be the nature of the relationship between the BP or the business plan and the ISP or the information systems plan. The topic is discussed in the following paragraphs.

What is a business? A business, also called a company, enterprise or firm, is a legally recognized organization designed to provide goods and/or services to consumers. Businesses are predominant in capitalist economies, most beingprivately owned and formed to earn profit that will increase the wealth of its owners and grow the business itself. The owners and operators of a business have as one of their main objectives the receipt or generation of financial returns in exchange for work and acceptance of risk. Notable exceptions include cooperative enterprises and state-owned enterprises. Businesses can also be formed not-for-profit or be state-owned.

The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope, the singular usage (stated earlier) to mean a particular company or corporation, the generalized usage to refer to a particular market sector, such as "the music business" and compound forms such as agribusiness, or the broadest meaning to include all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate and complexity of meanings. There other forms of business ownership. Sole proprietorship is one of the most basic forms of business ownership. Sole proprietorship means or is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has personal liability of the debts incurred by the business. One other form of ownership is partnership. Partnership is a form of business in which two or more people operate for the common goal which is often making profit. In most forms of partnerships, each partner has personal liability of the debts incurred by the business. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships. Next form is called Corporation. A corporation is either a limited or unlimited liability entity that has a separate personality from its members. A corporation can be organized for-profit or not-for-profit. A corporation is owned by multiple shareholders and is overseen by a board of directors, which hires the business's managerial staff. In addition to privately-owned corporate models, there are state-owned corporate models. And the last basic form of business ownership is Cooperative. Cooperative is often referred to as a "co-op", a cooperative is a limited liability entity that can organize for-profit or not-for-profit. A cooperative differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.

Before pointing out the nature of the relationship between the business plan and the information system plan I’ll lay down or rather site the definitions of the terms included in the question. What is a business plan? A business plan is a formal statement where the business goals of a certain company or organization are set, the reason why they are said to be reachable and the plan for reaching these goals. In any organization planning is a basic tool for achieving its objectives and purposes and to be able to achieve this and to be able to achieve an organization’s objectives an organization must have an effective business plan to be carried out.

A business plan is essential to a company or an organization based on the following reasons: first to test the feasibility of the business. Writing a business plan is the best way to test whether or not an idea for starting a business is feasible, other than going out and doing it. The business plan is a business safety net. Writing a business plan can save a great deal of time and money, if working through the business plan reveals that your business idea is unsustainable. With this you can test if having your idea business is feasible, and if not this help freeing you to move on to a new and better idea.

To give your new business the best possible chance of success, it is vital to the success of the business. Writing a business plan will ensure that you pay attention to both the broad operational and financial objectives of your new business and the details, such as budgeting and market planning. Taking the time to work through the process of writing a business plan will make for a smoother startup period and fewer unforeseen problems as your business becomes established. The next reason is to secure funding. Why? To start a business, it needs to have both operating and startup capital. Some business has their capital from financial institutions such as banks in which they expect that business has a developed business plan. And established businesses usually need money for their business operations. With this, the role of having a business plan will at least gives you an assurance and chance to keep the business operating or maybe an expansion.

To make business planning manageable and effective. A business plan is essential if you're thinking of starting a business, but it's also an important tool for established businesses. The company's original business plan needs to be revised as new goals are set, to adopt the changes in business industry. Reviewing the business plan can also help a company or corporation see what goals have been accomplished, what changes need to be made, or what new directions to a company's growth should take. And the other reason is to attract investors. Having a solid business plan, this is a plus factor to the company in which investors pull towards the company to invest. A company business plan will be the basis of the investor to do some background checks to the company.

The nature of the business plan is to look ahead, allocate resources, focus on key points, and prepare for certain risks, problems and opportunities. I reckon almost all business establishments have their own business plan. Business plans are determined or as I might say it is categorized for a profit or non-profit organization or company. A profit organization or company’s business plan focuses typically on financial goals such as profit creation while a non-profit organization or company’s business plan tend to focus on the mission of the organization which is the main reason for their status which is non-profit. A business plan is essential to an organization whether profit driven or not because it gives them a backbone or a guide. It makes an organization move into a systemic and orderly way. No business will be able to have a clear perspective of what is needed to be done if there is no plan or else they would be lingering towards nowhere and would unlikely achieve their goals.

There are ways of plotting or preparing a business plan for a company. This I know I found in the web and I honestly forgot who the author was. I just happened to save the web page. Steps in preparing the Business Plan. The process of preparing and developing a business plan is an interactive one that involves every functional area of a company. Successful business plans are usually the result of team effort, in which all employees provide input based on their special areas of expertise and technical skill. Business owners and managers provide overall support for the planning process as well as general guidelines and feedback on the plan as it is being developed. Once the planning process has been fully organized, participants can begin the process of assessment. Internal evaluations include identification of strengths and weaknesses of all areas of the business. In addition, it is generally useful to assess and evaluate such external factors as the general economy, competition, relevant technologies, trends, and other circumstances outside the control of the company that can affect its performance or fundamental health. Setting goals and defining strategies are the next key steps in the planning process. Using the assessment and evaluation of internal and external factors, fundamental goals for the business are developed. Pertinent areas to be studied include the company's competitive philosophy, its market focus, and its customer service philosophy. Specific performance and operational strategies are then established, based on these goals. After strategies and goals have been defined, they are translated into specific plans and programs. These plans and programs determine how a company's resources will be managed in order to implement its strategies and achieve its goals. Specific areas that require their own plans and programs include the overall organization of the company, sales and marketing, products and production, and finance. Finally, these specific plans are assembled into the completed business plan.

Also related in this account are the factors or the elements that can be found in a business plan of company or an organization. This I also found in the web. Business plans must include authoritative, factual data, usually obtained from a wide range of sources. The plans must be written in a consistent and realistic manner. Contradictions or inconsistencies within a business plan create doubts in the minds of its readers. Problems and risks associated with the business should be described rather than avoided, then used as the basis for presenting thoughtful solutions and contingency plans. Business plans can be tailored to the needs and interests of specific audiences by emphasizing or presenting differently certain categories of information in different versions of the plan. Business plans contain a number of specific elements as well as certain general characteristics. These include a general description of the company and its products or services, an executive summary, management and organizational charts, sales and marketing plans, financial plans, and production plans. They describe the general direction of a company in terms of its underlying philosophy, goals, and objectives. Business plans explain specific steps and actions that will be taken as well as their rationale. That is, they not only tell how a company will achieve its strategic objectives, they also tell why specific decisions have been made. Anticipated problems and the company's response to them are usually included. In effect, business plans are a set of management decisions about how the company will proceed along a specified course of action, with justifications for those decisions. Listed below are brief descriptions of the major elements found in business plans.

Include the same information on the title page. If you have a logo, you can use it, too. A table of contents follows the executive summary or statement of purpose, so that readers can quickly find the information or financial data they need.

The first is the EXECUTIVE SUMMARY. This is usually a two-to five-page summary of the entire business plan. It is an important part of the plan, in that it is designed to capture the reader's attention and create an interest in the company. It usually includes the company's mission statement and summarizes its competitive advantages, sales and profit projections, financial requirements, plans to repay lenders or investors, and the amount of financing requested. Next is the DESCRIPTION OF BUSINESS. The business description includes not only a profile of the company, but also a picture of the industry in which the company operates. Every business operates within a specific context that affects its growth potential. The description of a company's operating environment may cover new products and developments in the industry, trends and outlook for the industry, and overall economic trends. The intent of the company profile, meanwhile, is to provide readers with a description of unique features that give the company an edge in the environment in which it competes. A brief company history reveals how specific products and services were developed, while descriptions of pertinent contracts and agreements should also be mentioned (information on contracts and legal agreements may also be included in an appendix to the business plan). Other topics covered include operational procedures and research and development.

Third element of the business plan is the DESCRIPTION OF PRODUCTS AND/OR SERVICES. The goal of this section is to differentiate a company's products or services from those of the competition. It describes specific customer needs that are uniquely met by the firm's products or services. Product features are translated into customer benefits. Product life cycles and their effects on sales and marketing can be described. The company's plans for a new generation of products or services may also be included in this section. Next is the DESCRIPTION OF MANAGEMENT AND ORGANIZATIONAL STRUCTURE. The quality of a company's management team can be the most important aspect of a business plan. This section presents the strengths of the company's management team by highlighting relevant experience, achievements, and past performance. Key areas include management's ability to provide planning, organizational skills, and leadership. This section also contains information about the company's ownership and work force. It may present an existing or planned organizational structure that will accomplish the goals set forth in the business plan. Specific management and control systems are often described as well.

The fifth element is the MARKET ANALYSIS. A thorough market analysis serves as the basis for a company's sales and marketing plans. The analysis generally covers the company's competition, customers, products, and market acceptance. The competitive analysis details the competition's strengths and weaknesses, providing a basis for discovering market opportunities. A customer analysis provides a picture of who buys and uses the company's products or services. This section of the business plan highlights how the company's products or services satisfy previously unfulfilled market needs. It also includes evidence of market acceptance of the company's unique products or services. Next is SALES AND MARKETING PLAN. The marketing plan delineates the methods and activities that will be employed to reach the company's revenue goals. This section describes the company's customer base, products or services, and marketing and sales programs. The latter is supported by conclusions drawn from the market analysis. Different revenue outcomes may be presented to allow for contingency planning in the areas of finance and production.

The seventh element is the PRODUCTION PLAN. A production plan is usually included if the business is involved in manufacturing a product. Based on the sales and marketing plan, the production plan covers production options that are available to produce a desired mix of products. The production plan contains information that allows for budgeting for such costs as labor and materials. In non-manufacturing companies, this section would cover new service development. Next is the FINANCIAL PLAN. This section covers the financing and cash flow requirements implicit in other areas of the business plan. It contains projections of income, expenses, and cash flow, as well as descriptions of budgeting and financial controls. Financial projections must be supported by verifiable facts, such as sales figures or market research. Monthly figures are generally given for the first two years, followed by annual figures for the next three to eight years. If the business plan is written for investors or lenders, the amount of financing required may be included here or in a separate section.

the ninth element of the business plan is the IMPLEMENTATION SCHEDULE. This section provides key dates pertaining to finance, marketing, and production. It indicates when specific financing is needed, when specific aspects of a particular marketing campaign will take place, and delivery dates based on production schedules. And the last element is the CONTINGENCYPLANS. This section defines problems and challenges that the company may face and outlines contingency plans for overcoming obstacles that might arise. Specific topics that may be explored are competitive responses, areas of weakness or vulnerability, legal constraints, staffing, and continuity of leadership. Most business plans include a table of contents and a cover sheet containing basic information about the company. An appendix may include a variety of documentation that supports different sections of the business plan. Among the items that may be found in an appendix are footnotes from the main plan, biographies, graphs and charts, copies of contracts and agreements, and references.

In addition to publishing submitted articles, the Editors-in-Chief will invite retrospective articles that describe significant projects by the principal architects of those projects. Authors of such articles should write in the first person, tracing the social as well as technical history of their projects, describing the evolution of ideas, mistakes made, and reality tests. Technical results should be explained in a uniform notation with the emphasis on clarity and on ideas that may have applications outside of the environment of that research. Particularly complex details may be summarized with references to previously published papers. We will make every effort to allow authors the right to republish papers appearing in Information Systems in their own books and monographs.

We have already portrayed what a business plan is. Information Systems plan on the other hand is the searching of strategies for information systems in order for the company to gain competitive advantages. What really are Information systems? Information systems are the software and hardware systems that support data-intensive applications. The journal Information Systems publishes articles concerning the design and implementation of languages, data models, process models, algorithms, software and hardware for information systems. Subject areas include data management issues as presented in the principal international database conferences (e.g. ACM SIGMOD, ACM PODS, VLDB, ICDE and ICDT/EDBT) as well as data-related issues from the fields of data mining, information retrieval, internet and cloud data management, web semantics, visual and audio information systems, scientific computing, and organizational behavior. Implementation papers having to do with massively parallel data management, fault tolerance in practice, and special purpose hardware for data-intensive systems are also welcome. All papers should motivate the problems they address with compelling examples from real or potential applications. Systems papers must be serious about experimentation either on real systems or simulations based on traces from real systems. Papers from industrial organizations are welcome. Theoretical papers should have a clear motivation from applications. They should either break significant new ground or unify and extend existing algorithms. Such papers should clearly state which ideas have potentially wide applicability.

Most likely companies do this by assessing the current environment and the organization’s objectives and strategies. Improving the processes, performance and operations has been the top priorities of companies or organizations and also, improving the planning process of information systems has long been one of the top concerns of information systems department management. To achieve this, the information system plan must be aligned with the business plan or the business strategy of an organization or a company. We, together with my group mates happen to have interviewed one the system analyst in the Davao Light and Power Company. I remember him saying that the IT department serves as the support group or should I say the prop that supports the organization in attaining organizational goals. He also said that their department supports the company by enhancing organizational processes and by making them easier and more accurate. That is why information systems plan must be aligned with the business plan of an organization so that the IT (information technology) unit and other organizational personnel are working on the same goals, using their respective competencies. Thus, the relationship of the business plan and the information systems plan should be parallel or analogous to each other.

I have also seen in the web some qualities of a good information systems plan. Characteristics of a good information systems plan include being timely. Timely as such that the information systems plan must be created when it is needed. An information system plan created long after it is needed is considered to be useless. In almost all cases, it makes no sense to take longer to plan work than to perform the work planned. Next would be useable. An information systems plan should be useable for all projects. Meaning it can be utilized anywhere it is needed. Maintainable, new business opportunities, new computers, new business mergers, and etc. all affect the information systems plan so it must be able to adopt and change quickly to the estimates technology employed and possibly to the fundamental project sequences. Quality and reproducible, the information systems plan should be as is and should not vary to staff that is using the system.

Integration of the business plan and the information systems plan is undoubtedly very essential because of the reason that one benefits the other. An information system helps an organization with its processes and optimization of work flows and also eases their work and at the same time a business plan helps an organization manage their tasks in order to achieve their goals. The two should be well made and integrated to the point of having harmonious relations with each other in order for a company or an organization to grow and prosper. Unwell made business plan affects the information systems plan and the same goes to the business plan is the information systems plan is not well plotted.

There is however other kinds of planning that used in some companies and I just want to put it here in my post. Tactical Planning is the process of taking the strategic plan and breaking it down into specific, short term actions and plans. The relative length of the planning horizon will vary from one market to another but typically the strategic plan will cover a period greater than three years while the tactical plan covers the period from today through to the end of year three. The content of any business plan will depend on why the plan is being produced. Some plans are for internal use only and act as a common reference during the preparation of budgets and appraisals. Some plans are basically sales documents aimed at persuading banks to provide loans and investors to provide equity. The process of producing a useable tactical plan is not easy as some flexibility is required to allow response to unplanned events. There are a large variety of strategic planning models and organizations that provide strategic planning consulting. Some of these are useful and can be used a check lists to ensure completeness and as facilitators to ask the awkward questions that people would prefer to leave unanswered. It is important that the tactical plan should be checked to ensure it is aligned with the strategic plan and that all activities are aimed at moving closer to the goals defined in the strategic plan. It is very easy for the tactical plan to diverge at a tangent because of someone's interests or disagreement with the strategic plan.

In all the things we do, planning is a part of activities for it guides every step that can give satisfaction to our work. And we can't deny the fact that planning is so difficult. Here comes now the relationship between business plans and IS plan. It's because business goals and systems plans need to align. Strategic systems plans need to align with business goals and support those objectives. It will be difficult if CIO is not part of senior management. Technologies are rapidly changing. And continuous planning based on monitoring and experimenting new technologies. Certain companies need portfolios rather than projects. It is for the evaluation on more than their individual merit. On how they fit into other projects and how they balance the portfolio of projects. In planning, infrastructure is included in which the infrastructure development is difficult to fund. It is often done under the auspices of a large application project. One of the challenges for this is to develop improved applications and improve infrastructure over time. Systems planning has become business planning, not just a technology issue. Responsibility needs to be joint. It is better done by a full partnership of C-level officers. Other planning issue is planning culture in which the systems planning must fit.

This relationship, I think, is observed by companies and organizations. However, despite the importance of the alignment of the business plan and the information systems plan, some companies still come up or demonstrate limited or awry on the alignment of the plans. This happens because of some factors, factors like resistance, lack of knowledge, negative or neutral view of the ability of IT. However there are many companies especially the IT companies who are knowledgeable of the current trends and are currently employing information systems plan into their systems. These companies have properly integrated their business plan with their information systems plan and these companies have achieved their goals so far (at least that is what I think)