nature of the relationship between the business plan and the IS plan

What Is a Business Plan?
A business plan is any plan that works for a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities.
Unfortunately, many people think of business plans only for starting a new business or applying for business loans. But they are also vital for running a business, whether or not the business needs new loans or new investments. Businesses need plans to optimize growth and development according to priorities.
What’s a startup plan?
A simple startup plan includes a summary, mission statement, keys to success, market analysis, and break-even analysis. This kind of plan is good for deciding whether or not to proceed with a plan, to tell if there is a business worth pursuing, but it is not enough to run a business with.

Business planning is often conducted when:
• Starting a new venture (organization, product or service)
• Expanding a current organization, product or service
• Buying a current organization, product or service
• Working to improve the management of a current organization, product or service
There are a wide variety of formats for a business plan. The particular format and amount of content included in a plan depends on the complexity of the organization, product or service and on the demands of those who will use the business plan to make a decision, eg, an investor, funder, management, Board of Directors, etc.

Overall, the contents of a business plan typically aim to:
1. Describe the venture (new or current organization, product or service), often including its primary features, advantages and benefits
2. What the organization wants to do with it (buy it, expand it, etc.)
3. Justification that the plans are credible (eg, results of research that indicate the need for what the organization wants to do)
4. Marketing plans, including research results about how the venture will be marketed (eg, who the customers will be, any specific groups (or targets) of customers, why they need the venture (benefits they seek from the venture), how they will use the venture, what they will be willing to pay, how the venture will be advertised and promoted, etc.)
5. Staffing plans, including what expertise will be needed to build (sometimes included in business plans) and provide the venture on an ongoing basis
6. Management plans, including how the expertise will be organized, coordinated and led
7. Financial plans, including costs to build the venture (sometimes included in business plans), costs to operate the venture, expected revenue, budgets for each of the first several years into the future, when the venture might break-even (begin making more money overall than it has cost), etc.
8. Appendices (there are a wide variety of materials included in appendices, eg, description of the overall organization, its other products and/or services, its current staff, etc.)

Is there a standard business plan?

A normal business plan (one that follows the advice of business experts) includes a standard set of elements, as shown below. Plan formats and outlines vary, but generally a plan will include components such as descriptions of the company, product or service, market, forecasts, management team, and financial analysis.
Your plan will depend on your specific situation. For example, description of the management team is very important for investors while financial history is most important for banks. However, if you’re developing a plan for internal use only, you may not need to include all the background details that you already know. Make your plan match its purpose.

What is most important in a plan?
It depends on the case, but usually it’s the cash flow analysis and specific implementation details.
• Cash flow is both vital to a company and hard to follow. Cash is usually misunderstood as profits, and they are different. Profits don’t guarantee cash in the bank. Lots of profitable companies go under because of cash flow problems. It just isn’t intuitive.
• Implementation details are what make things happen. Your brilliant strategies and beautifully formatted planning documents are just theory unless you assign responsibilities, with dates and budgets, follow up with those responsible, and track results. Business plans are really about getting results and improving your company.

Business planning, also known as strategic planning or long-range planning, is a management-directed process that is intended to determine a desired future state for a business entity and to define overall strategies for accomplishing the desired state. Through planning, management decides what objectives to pursue during a future period, and what actions to undertake to achieve those objectives.
Successful business planning requires concentrated time and effort in a systematic approach that involves: assessing the present situation; anticipating future profitability and market conditions; determining objectives and goals; outlining a course of action; and analyzing the financial implications of these actions. From an array of alternatives, management distills a broad set of interrelated choices to form its long-term strategy. This strategy is implemented through the annual budgeting process, in which detailed, short-term plans are formulated to guide day-to-day activities in order to attain the company's long-term objectives and goals.
For entrepreneurs and small business owners, the first step in successful business planning involves creating a formal business plan, of the type commonly used to attract investors and secure bank loans. Careful preparation of this document forces a small business owner to examine his or her own goals as well as the market conditions in which the business operates. It also includes a detailed financial analysis, a look at current staffing levels and future needs, and information about management's expertise. "All the elements can be folded together to formulate a strategic plan that focuses on where you want your company to be in the long run, and how you plan to get there," Vince Maietta wrote in The Business Journal. "That also helps entrepreneurs focus on the strengths and weaknesses of the firm, as well as opportunities and threats."

The use of formal business planning has increased significantly over the past few decades. The increase in the use of formal long-range plans reflects a number of significant factors:
• Competitors engage in long-range planning.
• Global economic expansion is a long-range effort.
• Taxing authorities and investors require more detailed reports about future prospects and annual performance.
• Investors assess risk/reward according to long-range plans and expectations.
• Availability of computers and sophisticated mathematical models add to the potential and precision of long-range planning.
• Expenditures for research and development increased dramatically, resulting in the need for longer planning horizons and huge investments in capital equipment.
• Steady economic growth has made longer-term planning more realistic.

Why Prepare A Business Plan?

Your business plan is going to be useful in a number of ways
• First and foremost, it will define and focus your objective using appropriate information and analysis.
• You can use it as a selling tool in dealing with important relationships including your lenders, investors and banks.
• Your business plan can uncover omissions and/or weaknesses in your planning process.
• You can use the plan to solicit opinions and advice from people, including those in your intended field of business, who will freely give you invaluable advice.

Benefits of Planning
Planning provides a means for actively involving personnel from all areas of the business enterprise in the management of the organization. Company-wide participation improves the quality of the plans. Employee involvement enhances their overall understanding of the organization's objectives and goals. The employees' knowledge of the broad plan and awareness of the expected outcomes for their responsibility centers minimizes friction between departments, sections, and individuals. Involvement in planning fosters a greater personal commitment to the plan and to the organization. These positive attitudes improve overall organizational morale and loyalty.
Managerial performance also benefits from planning. Planning focuses the energies and activities of managers in the utilization of scarce resources in a competitive and demanding marketplace. Able to clearly identify goals and objectives, managers perform better, are more productive, and their operations are more profitable. In addition, planning is a mental exercise from which managers attain experience and knowledge. It prepares them for the rigors of the marketplace by forcing them to think in a future- and contingency-oriented manner.

Steps in the Planning Process
The planning process is directly related to organizational considerations, management style, maturity of the organization, and employee professionalism. These factors vary among industries and even among similar companies. Yet all management, when applying a scientific method to planning, perform similar steps. The time spent on each step will vary by company. Completion of each step, however, is prerequisite to successful planning. The main steps in the planning process are:
• Conducting a self-audit to determine capabilities and unique qualities
• Evaluating the business environment for possible risks and rewards
• Setting objectives that give direction
• Establishing goals that quantify objectives and time-frames
• Forecasting market conditions that affect goals and objectives
• Stating actions and resources needed to accomplish goals
• Evaluating proposed actions and selecting the most appropriate ones
• Instituting procedures to control the implementation and execution of the plan.

WHAT is ISP?
• ISP is the planning of information systems for an organization.
• Information system planning is assessing the information needs of an organization and defining the systems, databases and technologies that best satisfy those needs.

Why Planning is Important?
• Systematic approach in dealing with future uncertainties.
• It focuses efforts and resources on long-term, general objectives and yet provides a foundation for short-term activities
• Provides a framework for action.

ISP Key Activities
1. Describing current situation: it includes a listing of the manual and automated processes, listing of manual and automated data, technology inventory and human resources inventory.
2. Describing future situation: includes blueprints of manual and automated processes, blueprints of manual and automated data, technology blueprints and human resources blueprints.
3. Describing scheduling of the project: includes scheduling of manual and automated processes, scheduling of manual and automated data, technology of scheduling and human resources scheduling.

ISP Planning Types
• Top-Down Planning: A generic information systems planning methodology that attempts to gain a broad understanding of the information system needs of the entire organization.
• Bottom-up Planning: generic information systems planning methodology that identifies and defines IS development projects based upon solving operational business problems or taking advantages of some business opportunities.

Components of ISP
• The Process of Information Systems Planning
• Strategic Alignment of Business and IT
• Selecting Systems to Invest In
• Project Management Issues

ISP Process
• What is an Information System Plan?
• Challenges in IS Planning
• Principles for IS Planning
• Planning Role of the IS and User Departments
• Allocating Resources between New and Old Information Systems
• Project Roles of IS Professionals

Why do we need to plan for IS?
• To ensure that IS both complements and assists in the achievement of our business goals.
• To ensure that the use of scarce resources are maximized within a business.
• To maximize the benefits of changing technology.
• To take account of the different viewpoints of business professionals and IT professionals.

Who Perform ISP?
• IS Planners / System Analyst
• Variety of stakeholders (i.e. sponsor, users)
• Top management commitment à successful ISP.

Where & When ISP?
• Any organization that has interest in getting the best out of its IT investments.
• Facing problems
• Grabbing opportunities.
• Information Systems (IS) fail to satisfy huge, diverse and complicated information requirements of their users.

HOW?
• Look at business structure, function, processes, culture
• Look at existing IT
• Look at available technology.
• Carry out interviews.
• Develop policies.
• Develop application portfolio.
• Plan schedules for migration, implementation etc.

Characteristics of a Quality ISP
A quality ISP must exhibit five distinct characteristics before it is useful. These five are presented in the table that follows.

Characteristics of a Quality ISP
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

Relationship between the Business Plan and the Information System Plan
Information systems planning is a major change for organizations, from planning for information systems based on users’ demands to those based on business strategy. And it changes the planning characteristics in major ways. For example, the time horizon for planning changes from 1 year to 3 years or more and development plans are driven by current and future business needs rather than incremental user needs. Increase in the time horizon is a factor which results in poor response from the top management to the strategic information systems planning process as it is difficult to hold their attention for such a long period. Other questions associated with strategic information systems planning are related to the scope of the planning study, the focus of the planning exercise – corporate organization vs. strategic business unit, number of studies and their sequence, choosing a strategic information systems planning methodology or developing one if none is suitable, targets of planning process and deliverables. On the other hand, business plan (Business Systems Planning) serves as a blueprint to guide the firm's policies and strategies, and is continually modified as conditions change and new opportunities and/or threats emerge. Its methodology combines top down planning with bottom up implementation. The methodology focuses on business processes which in turn are derived from an organization’s business mission, objectives and goals. Business processes are analyzed to determine data needs and, then, data classes. Similar data classes are combined to develop databases. The final BSP plan describes an overall information systems architecture as well as installation schedule of individual systems. Because BSP combines a top down business analysis approach with a bottom up implementation strategy, it represents an integrated methodology. It requires a firm commitment from the top management and their substantial involvement and also requires a high degree of IT experience within the BSP planning team. Because of this there is a possibility of having a problem of bridging the gap between top down planning and bottom up implementation, especially when it does not incorporate a software design methodology. Thus, business plans and IS plans written primarily for the use of the company that generally stress the benefits that will result from implementation of the plan. Business plan and IS plan generally involves planning of thinking ahead and designing future action.




Reference:
http://www.tdan.com/view-articles/5262
http://articles.bplans.com/writing-a-business-plan/what-is-a-business-plan/33
http://www.cse.dmu.ac.uk/~nkm/sisp/CONTENTS.html
http://managementhelp.org/plan_dec/bus_plan/bus_plan.htm