Business Plan and IS Plan

The question was what should be the nature of the relationship between the business plan and the IS plan? To answer the question I will need information that would answer the question and thus ill be able to decide in my own understanding what should be the relationship between the business plan and the information systems plan. So first we should gather enough information in relation to the said topic so that we could answer it correctly. To start, I will define what a business plan and what is information systems plan or also called strategic planning.

According to wikipedia.org 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.

The business goals may be defined for for-profit or for non-profit organizations. For-profit business plans typically focus on financial goals, such as profit or creation of wealth. Non-profit and government agency business plans tend to focus on organizational mission which is the basis for their governmental status or their non-profit, tax-exempt status, respectively—although non-profits may also focus on optimizing revenue. In non-profit organizations, creative tensions may develop in the effort to balance mission with "margin" (or revenue). Business plans may also target changes in perception and branding by the customer, client, tax-payer, or larger community. A business plan having changes in perception and branding as its primary goals is called a marketing plan.

While strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ), PEST analysis (Political, Economic, Social, and Technological), STEER analysis (Socio-cultural, Technological, Economic, Ecological, and Regulatory factors), and EPISTEL (Environment, Political, Informatic, Social, Technological, Economic and Legal).

Strategic planning is the formal consideration of an organization's future course. All strategic planning deals with at least one of three key questions:

1. "What do we do?"
2. "For whom do we do it?"
3. "How do we excel?"

In business strategic planning, the third question is better phrased "How can we beat or avoid competition?". (Bradford and Duncan, page 1).

In many organizations, this is viewed as a process for determining where an organization is going over the next year or more typically 3 to 5 years, although some extend their vision to 20 years.

In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the "strategic plan."

It is also true that strategic planning may be a tool for effectively plotting the direction of a company; however, strategic planning itself cannot foretell exactly how the market will evolve and what issues will surface in the coming days in order to plan your organizational strategy. Therefore, strategic innovation and tinkering with the 'strategic plan' have to be a cornerstone strategy for an organization to survive the turbulent business climate.
So for me the relationship between business plan and strategic plan is this:

• Why plan?
– To obtain resources
• Financial
• Facilities – “Capacity planning”
• Staff
– To align IS with the business
– To identify needed applications
– To establish goals, schedules, and milestones in order to track progress
– To provide an opportunity for communication with top management and user management
• Outcomes vs. process?
• Reactive vs. proactive?
• Planning vs. forecasting?
– Forecasting is predicting the future
– Planning is being prepared for that future

Information Systems Strategic Planning
• Establish a mission statement
• Assess the environment
• Set goals and objectives
• Derive strategies and policies
• Develop long-, medium-, and short-range plans
• Implement plans and monitor results

Establish a mission statement
• These are the services that you are responsible for; it is your place in the organization
• It is not what you are supposed to achieve, it is who you are and what you do in the company

Assess the environment(s) . . .
1. The capabilities of the IT department
2. The readiness of the company to use IT
3. The status of our customers, our industry
4. The status of the economy, government regulations, environment, society, etc.
5. Technology

This is similar to a SWOT analysis – Strengths and Weakness – items no. 1 & 2; and Opportunities and Threats – items no. 3, 4, & 5

Goals and Objectives
• Set goals – what do you want to achieve?
• Set objectives – what are your specific, measurable targets?

Derive strategies and policies
• Strategies for
– Technology focus
– Personnel and career development
– Aligning with the company
– Others . . .
• Policies for
– Funding criteria; how much to spend on IT?
– Allocation criteria; priority setting
– Organizational arrangements
– Use of outside IT services, outsourcing
– Selling IT services to outside organizations
– Others . . .

Short-, medium-, and long-range plans
• Short-range – the next year, the next budget period; developing and operating current systems
• Medium-range – committing to development efforts for applications that will take more than one year to complete; meeting management’s current information needs, projected into the future for as many years as needed to complete them. This is what most organizations call “Long-Range Planning.”
• Long-range planning – preparing for management’s future information needs. These are not application specific; they are investments in infrastructure; it is creating an information architecture.

And finally, implement plans and monitor results.

Business planning and strategic planning are very closely interrelated. Business planning can be seen as an aspect of the overall strategic planning of a company, minutely following in written form all the sides of the business. Also, the strategic planning can be seen from the perspective of the business plan of a company as a delineator of main rough, undetailed aspects.

Strategic planning implies general directions of a business, main strategies, a long-term perspective, for about 2-4 years.

Business plans, on the other hand, state in detail the data of the business from the marketing point of view, from the management and personnel point of view and from the financial point of view. They also contain stipulations for contingencies. They offer a shorter term perspective, for about 1 year.

In a world of an ever increasing competition, less stable and predictable, planning has become more important for managers, conditioning business existence. Times are for thorough analysis of a business from all its perspectives, the difference between an evolving business and a failure depends on this.

Even if inclined to base their actions on immediate-gain grounds, successful business managers have learned to take their time for a prospective analysis. Even if initially starting off their business on a gut feeling, successful talented managers have learned that they have to go beyond the gut feeling, putting together a concrete plan of action, meant to enhance more stability and reduce the tendency of working at random.

Although there are voices saying that most successful businesses did not need a plan to begin with, I would not minimize the importance of a business plan, integrated within the strategic business planning, as every business, be it small or "oversized" will need a plan in a certain stage of its growing. The reason might be not necessarily its founding, but the need to communicate in the business environment — be it raising some money or hiring quality personnel.

Basically we can refer to the strategic business planning through the SWOT analysis used for marketing: analysis and identification of strengths, weaknesses, opportunities and threats. Strengths and weaknesses are internal factors of the business, while opportunities and threats are external factors.

The strength analysis requires a look at the advantages of a business, its strong points and all its resources and capabilities that can be used as a basis for developing a competitive advantage.
Weakness may be absence of certain strengths. Weaknesses' analysis must reveal where there is room for improvement, what is there to avoid.

Opportunities and threats are triggered by environmental occurrences such as unexplored marketing niche, new technologies, new loosened regulations, identifiable as opportunities or, on the contrary, threats such as consumers' change in tastes away from the firm's products, new regulations, debt or cash-flow problems, etc.

The business plan treats in detail the main directions that the strategic planning settles. If strategic planning provides general directions for the next 2 years, the business plan analysis what the business' characteristics are, how to implement the directions, what will the impact on the market and the potential customers be, the financial side of the action etc., generally all the ins and outs of the matter.
When starting a business online there are some things you certainly want to know and be able to put in place to offer yourself a much higher chance at success.

The first draft of a business plan for an online venture must include the means and targets you are going to use to drive customers to your business that are more inclined to buy.
It makes sense that just being able to send random people to your business is not going to lead to a high percentage of buyers. This is why we target and the internet gives us the easiest way to find our potential customers and put our products or services in front of them without spending a dime.

Advertising online has much more to do with knowing than it does with spending. There are certainly ways you can spend money online advertising and make a very good return. When starting a business and putting together that first draft of a business plan you want to consider these as well if you can afford them.

You key is going to be spending time looking at the searches people are making every day online as they relate to whatever it is your are trying to use as your online business.

If you are selling bird cages you would want to know what searches people are making and in what frequency in order to craft your website and content to attract those people. This is the key to making money online regardless of what type of product or services your new online business is offering.

So basically, the relationship between the business plan and IS plan is that the IS plan is inclined to what the organization or business is aiming at. They should be related to each other to meet a common goal. So basically that’s it.

References:
Wikipedia.org
http://www.businessplanning.ws/learn/business-strategic-planning.html
http://ezinearticles.com/?Starting-a-Business---First-Draft-of-a-Business-Plan&id=3868596