Assignment 2

Let us define first business plan and IS Plan

What is business plan?

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. 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 financingwill 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." A business plan is a written statement of your business; what you want to achieve and how you plan to go about it. It should outline the structure of your business, the product or service, the customer, the growth potential and the financials. But as well as giving information about your business it should also inspire you for the future. It’s a blueprint for what you want to achieve and should give you a clear understanding of how you intend to get there. That’s not to say it should act as a rigid prediction of every future occurrence. You can’t control the future, and the outside circumstances will have an affect on the shape and direction of your business. But a good business plan should at least give you a clear direction to aim for. Every business should have a plan whether it is to open a second shop or float on the stock exchange. It is why you are in business. It helps you to define strategy and, if properly used, will help you involve and motivate key members of staff. It allows you to work out how to make your business a success and can help you avoid failure by plotting the pitfalls along the way. It should outline a realistic target for how that can happen while remaining flexible enough to make changes along the way. By setting out a plan and some targets, you can also monitor your progress and get the business back on track fairly quickly if anything goes wrong. Hossain Rezaei, founder of, Pride Valley Foods, used a tree to plan the growth of his specialty breads business. Each stage of the business was mapped out and it is important to reach each one on budget and on time. When you borrow money explain to your backers how you will spend it and what the next stage for your business is. When you have reached that, you can go back and borrow more. “It is important to do it one step at a time,” he says. His careful planning was crucial in keeping the business on track when a fire destroyed the factory and insurers initially refused to meet the claim. Rezaei kept sight of his original plan but put it on hold while building up the business again. He handed over customers to his competitors, moved back to old premises and approached his backers with an emergency plan. Within six months he had won back his largest customers and the business was back on track. In Rezaei’s case, the business plan was used primarily to guide his own aspirations for the business. However, it’s often the case that a business plan is primarily written to persuade investors, whether it be the bank or private funders, to come on board with your venture. Regardless of whether you need outside funding or not, it’s always a good idea to set out your ideas on paper, even if it’s just a case of looking at your idea from the point of view of a potential investor. It can really highlight areas you haven’t yet considered and help you form a realistic estimate of how much it’s all going to cost, and in what kind of time frame you can expect to become fully open for business.

A business plan is a document used to detail plans for a start-up or existing business. This document is used to describe business goals and strategies, as well as provide a blueprint of financing and marketing plans. Essentially, it provides detailed information about where a company is going and how it will get there. Many experts consider such a plan critical to the success of a business.

Often, a business plan is required when seeking a business loan or investment capital. Investors and loan officials need to know what abusiness owner hopes to accomplish and the steps he or she plans to take to meet goals. Business plans help those in the position to loan money determine whether or not a business is likely to succeed, based on information provided by the owner or owners. A company backed by a well-thought-out business plan is a better loan or investment risk than one with a thrown together or incomplete plan. A business plan is not just useful for obtaining financing. A carefully considered plan can serve as a veritable road map to success for thebusiness owner and company employees. It can help all involved stay on task while striving to achieve goals. Furthermore, this type of planmay be reviewed and revised when necessary, allowing those operating a business to keep the strategies that work, eliminate those that don't, and change objectives as the business evolves.

When preparing a business plan, it is vital to put maximum effort into researching every aspect of your venture. You'll need to include detailed information about everything from the basics of your product or service to how you intend to manage daily operations. If you plan to seek outside financing, you'll need to make your business plan both informative and captivating. By doing so, you'll be able to keep loan officers or investors interested long enough to read the bulk of your plan and, hopefully, decide to provide the financing you need. Your business plan should provide a detailed description of your business, including the products or services you plan to offer, as well as expected expenditures and profits. If you have products to sell, you'll need to include information about the manufacture of those products. A detailed description of the market for your products or services, along with competition comparisons, should be provided as well. You'll also need to include your plans for development, distribution, staffing, funding, and more. Finding help with creating a business plan is not difficult. There are many resources on the Internet that provide step-by-step instructions for creating business plans. There are also many books, computer programs, and business plan kits available for purchase. Likewise, your local public library is likely to have an abundance of resources forbusiness plan creation. Business Planning encompasses all the goals, strategies and actions that you envision taking to ensure your business’s survival and growth. Huge, isn’t it? For convenience, think of business planning as being broken into two large topics; profit-making business planning and contingency business planning.

Profit-making business planning is all the general business planning that must be done to start and run a successful business. The best known example of this type of business planning is the business plan. The business plan isn’t a do-it-and-forget-it business planning exercise but a living document that needs to be updated throughout the lifecycle of your business. Once the business has officially started, profit-making business planning will center on setting and meeting goals and targets. While some businesses make business planning an annual event, business planning is most effective when it’s done frequently and consistently. The business planning process of reviewing progress on business goals and targets and setting new ones should take place at least monthly. Daily business planning is an incredibly effective way for individuals to focus on achieving both their own goals and the goals of the organization.

Contingency business planning (also known as business continuity planning) is the type of business planning that focuses on dealing with crises. A business contingency plan is a proposed implementation plan to deal with some new emergency, event or new information. Defining a business plan can be difficult, as the definition might be different for every organization. A business plan, in its simplest form, will usually define where you want your business to be within a certain period of time (usually five years) and how you plan on getting there. A business plan is as important for starting a business as blueprints are for building your house. When starting a new business, writing a business plan is an important first step to getting started. A business plan will lay out the direction for the future of your company and begin to establish standards for success. A complete business plan should include five-year financial projections. These projections will assist investors with making decisions about your business and help you to know how much funding you will need to get things rolling. A business plan should define how you would like to operate your business. This includes describing the management team, the marketing strategy, and the methods in which you will interact with customers. A business plan might project a strategy that reflects the management style of the founders of the business. The definition should be clear but flexible. Business plans are developed for many purposes. One company might be looking for funding from investors. Another company might be looking for a loan from a bank. Your company might just need to plan out the company’s strategy to make sure it is successful. Whatever the case, every business needs a business plan.

What is a Formal Business Plan?

A formal business plan is a detailed document that usually follows a standard format. Formal business plans are a necessity for securing outside funding for a business, includingSBA loans and private capital. Formal business plans include an appendix area that contains important supporting documents.

What is an Informal Business Plan?

An informal business plan can consist of almost anything. In this case, the definition of a business plan is purely in the eyes of the business owner. Informal business plans may be nothing more than ideas scribbled down on paper. However, the more detailed and accurate the business plan the more useful it is as a guide to conducting business. Informal business plans are not presented to others, they are merely a planning tool for the business owner.

Why are Business Plans Important?

The general notion and old saying of "Those who fail to plan, plan to fail" can hold great meaning for someone who wants to start or operate a business. Even if outside funding is not necessary, it might become necessary as the business grows and if it does not, the business plan is a a valuable tool that can help a business owner understand the market and competition, keys to avoiding business failure. That's why understanding the definition of a business plan is so important.

When properly developed and maintained, a business plan can help to keep focused. In that sense, the answer to the question, "What is a Business Plan?" or "What is the definition of a business plan?" is simply that a business plan is a road map for a business: What it does, who's involved, who is included in its market and why the business should be successful against the competition.

A business plan defines a business and its goals. A good business plan is an essential tool for starting and successfully managing a business. The typical business plan has detailed descriptive information and financial data. Non-financial data in a business plan usually includes a statement of purpose and executive summary, a discussion of marketing methods, a analysis of the competition, details of operating procedures, and bios of key personnel. Financial data for a business plan usually includes current financial statements, pro forma financial projections (typically for three years, by month and by quarter), and a breakeven analysis. The core of the business plan may be supported by legal documents, resumes of the principals, or other information that makes the business plan more informative for potential suppliers, lenders, and other interested parties.

A company's business plan is one of its most important documents. It can be used by managers and executives for internal planning. It can be used as the basis for loan applications from banks and other lenders. It can be used to persuade investors that a company is a good investment. For start-up ventures, the process of preparing a business plan serves as a road map to the future by making entrepreneurs and business owners think through their strategies, evaluate their basic business concepts, recognize their business's limitations, and avoid a variety of mistakes.

What is an Information Systems Plan?

Strategic information systems planning is a disciplined, systematic approach to determining the most effective and efficient means of satisfying organizational information needs. It is a top-down, structured approach which, to be successful, must employ technical and managerial processes in a systems engineering context. Under this approach, the characteristics of the system’s hardware, software, facilities, data, and personnel are identified and defined through detailed design and analysis to achieve the most cost-effective system for satisfying the organization’s needs. The process must consider system life cycle management and the organization’s policy and budget as important integral factors, and include all organizational participants (e.g., managers, users, maintainers, operators, and designers) throughout the process. It is an iterative process in that changes identified during the process must be evaluated to determine their effect on completed analyses. Strategic information systems planning is not a one-time event-it should be revisited periodically to ensure a system’s continued viability in meeting information needs and achieving long-term missions.

Information systems are important tools for effectively meeting organizational objectives. Readily available, complete, and accurate information is essential for making informed and timely decisions. Being unable to obtain needed data, wading through unneeded data, or inefficiently processing needed data wastes resources. The organization must identify its information needs on the basis of a systematic identification and analysis of its mission and functions to be performed, who is to perform them, the information and supporting data needed to perform the functions, and the processes needed to most usefully structure the information. Successful information system development and acquisition must include a rigorous and disciplined process of data gathering, evaluation, and analysis prior to committing significant financial and human resources to any information system development. While implementing such an approach may not preclude all information system acquisition problems, it should produce detailed knowledge of organizational missions and operations, user information needs and alternatives to address those needs, and an open and flexible architecture that is expandable or that can be upgraded to meet future needs. The purpose and use of information system in the beginning was targeted towards reducing manual labor and increasing efficiency and thus reducing cost of doing business. Cost has thus been the ‘primal instinct’ justification for the usage of Information system in companies. Management seems to still use this justification even in today’s day and age because the IT salesman still thinks it’s the best and only way to get management buy-in. Moreover, as most other rationales used for IS have proved hard to sell, both the IT sales teams and their customers find a comfort zone in cost savings. This could also be because both sides (from all their previous experiences) are convinced of their failure before they even start out on a different track. The past experiences, in most cases were times they tried, half heartedly probably, without enough experience and failed. These failures have resulted in the baby being thrown out along with the dirty water.

Characteristics of a Quality ISP

A quality ISP must exhibit five distinct characteristics before it is useful.

Timely- The ISP must 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.

Useable- 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.

Maintainable- 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.

Quality- 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.

Reproducible- 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.

The ISP Steps

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.

1. Create the mission model- The mission model, generally shorter than 30 pages presents end-result characterizations of the essential raison d=etre of the enterprise. Missions are strategic, long range, and a-political because they are stripped of the Awho and the Ahow.

2. Develop a high-level data model- The high-level data model is an Entity Relationship diagram created to meet the data needs of the mission descriptions. No attributes or keys are created.

3. Create the resource life cycles (RLC) and their nodes- Resources are drawn from both the mission descriptions and the high level data model. Resources and their life cycles are the names, descriptions and life cycles of the critical assets of the enterprise, which, when exercised achieve one or more aspect of the missions. Each enterprise resource Alives through its resource life cycle.

4. Allocate precedence vectors among RLC nodes- Tied together into a enablement network, the resulting resource life cycle network forms a framework of enterprise=s assets that represent an order and set of inter-resource relationships. The enterprise Alives through its resource life cycle network.

5. Allocate existing information systems and databases to the RLC nodes- The resource life cycle network presents a Alattice-work onto which the Aas is business information systems and databases can be Aattached. The Ato-be databases and information systems are similarly attached. ADifference projects@ between the Aas-is and the Ato-be are then formulated. Achievement of all the difference projects is the achievement of the Information Systems Plan.

6. Allocate standard work break down structures (WBS) to each RLC node- Detailed planning of the Adifference projects entails allocating the appropriate canned work breakdown structures and metrics. Employing WBS and metrics from a comprehensive methodology supports project management standardization, repeatability, and self-learning.

7. Load resources into each WBS node- Once the resources are determined, these are loaded into the project management meta entities of the meta data repository, that is, metrics, project, work plan and deliverables.

8. Schedule the RLC nodes through a project management package facilities- The entire suite of projects is then scheduled on an enterprise-wide basis. The PERT chart used by project management is the APERT@ chart represented by the Resource Life Cycle enablement network.

9. Produce and review of the ISP- The scheduled result is predicable: Too long, too costly, and too ambitious. At that point, the real work starts: paring down the suite of projects to a realistic set within time and budget. Because of the meta data environment, the integrated project management meta data, and because all projects are configured against fundamental business-rationale based designs, the results of the inevitable trade-offs can be set against business basics. Although the process is painful, the results can be justified and rationalized.

10. Execute and adjust the ISP through time- As the ISP is set into execution, technology changes occur that affect resource loadings. In this case, only steps 6-9 need to be repeated. As work progresses, the underlying meta data built or used in steps 1-5 will also change. Because a quality ISP is Aautomated at the recasting of the ISP should only take a week or less.

IT projects are accomplished within distinct development environments. The two most common are: discrete project and release. The discrete project environment is typified by completely encapsulated projects accomplished through a water-fall methodology.

In release environments, there are a number of different projects underway by different organizations and staff of varying skill levels. Once a large number of projects are underway, the ability of the enterprise to know about and manage all the different projects degrades rapidly. That is because the project management environment has been transformed from discrete encapsulated projects into a continuous flow process of product or functionality improvements that are released on a set time schedule. Figure 3 illustrates the continuous flow process environment that supports releases. The continuous flow process environment is characterized by:

• Multiple, concurrent, but differently scheduled projects against the same enterprise resource

• Single projects that affect multiple enterprise resources

• Projects that develop completely new capabilities, or changes to existing capabilities within enterprise resources

It is precisely because enterprises have transformed themselves from a project to a release environment that information systems plans that can be created, evolved, and maintained on an enterprise-wide basis are essential.

There are four major sets of activities within the continuous flow process environment. The user/client is represented at the top in the small rectangular box. Each of the ellipses represents an activity targeted to a specific need. The four basic needs are:

• Need Identification
• Need Assessment
• Design
• Deployment

The nature of relationship of business plan and IS Plan is that the basis of the IS Plan is the Business Plan. The hardware and the software components will be based on what type of business are you planning to build because the IS components will help the operations of the business.

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