Unit 1: Strategic management and IT planning
Strategic Management of IT notes · PTU syllabus (MBA 946-18)
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Unit summary
IT has moved from back-office support to the heart of strategy. This unit covers the role of IT and executive support systems in decision making, types of strategic IT planning approaches — ad hoc, data collection, organisation chart, top-down and bottom-up — and planning for strategic IT applications.
After this unit you can
- Explain the role of IT and executive support systems in decision making
- Compare approaches to strategic IT planning
- Plan strategic IT applications
- Link IT planning with business strategy
PTU syllabus topics
- Role of IT and Executive Support Systems in decision making
- types of strategic management planning approaches (ad hoc, data collection, organization chart, top-down, bottom-up)
- planning for strategic IT applications
Top-down
From business strategy to IT
May miss operational needs
Bottom-up
From user needs upward
May lack strategic focus
Ad hoc
Respond as needs arise
No coherence
Topic 1
Role of IT in decision making
- Executive support systems (ESS)
Strategic decisions — top management
- Decision support systems (DSS)
Semi-structured decisions — middle management
- Management information systems (MIS)
Routine reports — middle management
- Transaction processing systems (TPS)
Day-to-day operations
- IT supports decisions through timely data, analytics, simulation, collaboration and automation; Simon's decision process — intelligence, design, choice, implementation.
Topic 2
Executive support systems
- ESS (executive information systems): easy-to-use systems giving senior executives summarised internal and external information — KPIs, trends, drill-down, alerts, news feeds.
- Features: dashboards, exception reporting, drill-down, external data (markets, competitors), mobile access.
- Modern form: BI dashboards (Power BI, Tableau), balanced scorecard systems, AI-generated insights.
Topic 3
Strategic IT planning approaches
Ad hoc
Projects approved as needs arise
No overall direction; fragmented systems
Data collection (inventory)
Inventory existing data and systems, then plan
Backward-looking; may miss strategic needs
Organisation chart
Plan systems for each department
Reinforces silos; ignores cross-functional processes
Top-down
Start from business strategy and goals; derive IT needs (e.g., critical success factors, BSP)
Needs strong executive involvement
Bottom-up
Start from operational needs and existing systems
May not support strategy
- Combined approach: top-down for direction, bottom-up for feasibility and user needs.
- Methods: business systems planning (IBM BSP), critical success factors (Rockart), enterprise architecture (TOGAF).
Topic 4
Planning for strategic IT applications
- 1
Understand business strategy and environment
- 2
Assess current IT portfolio and capabilities
- 3
Identify strategic opportunities
Value chain, CSFs, competitive forces
- 4
Prioritise applications
Value, risk, alignment
- 5
Define architecture, sourcing and governance
- 6
Roadmap and investment plan
- 7
Implement and review
- Portfolio view (McFarlan): classify applications as strategic, high potential, key operational or support — manage each differently.
Key terms
- ESS
- Systems giving executives summarised strategic information
- DSS
- Interactive systems supporting semi-structured decisions
- Top-down planning
- Deriving IT needs from business strategy
- Critical success factors
- Few areas that must go right for success
- Enterprise architecture
- Blueprint aligning business and IT
Quick revision
- TPS, MIS, DSS, ESS; Simon's decision phases.
- ESS features; BI dashboards.
- Ad hoc, data collection, organisation chart, top-down, bottom-up approaches.
- BSP, CSF, TOGAF.
- Strategic IT planning process; McFarlan's portfolio.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.What is an executive support system?
- Q2.Distinguish MIS and DSS.
- Q3.What is the ad hoc approach to IT planning?
- Q4.Distinguish top-down and bottom-up planning.
- Q5.What are critical success factors?
- Q6.Name McFarlan's four application categories.
Long-answer questions
- Q1.Explain the role of IT and executive support systems in decision making.
- Q2.Compare approaches to strategic IT planning.
- Q3.Explain the process of planning strategic IT applications.
- Q4.Discuss the importance of aligning IT planning with business strategy.
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