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Business Systems Planning (BSP)

  • 1 What is Business Systems Planning (BSP)?
  • 2.1 See Also
  • 2.2 References

What is Business Systems Planning (BSP)?

Business systems planning (BSP) is a method of analyzing, defining, and designing the information architecture of organizations. It is a complex method dealing with interconnected data, processes, strategies, aims, and IT Business systems organizational departments.

Business systems planning goals are to:

  • Understand issues and opportunities with current applications
  • Develop future technology supporting the enterprise
  • Provide executives with direction and a decision-making framework for IT expenditures
  • Provide information systems (IS) with a developmental blueprint [1]

Business Systems Planning (BSP) Procedure [2]

BSP procedure contains 15 steps which are classified into 3 main sections according to their functions.

  • Obtain authorization for the study: The very first step of BSP is to obtain authorization for the study from management or a department interested in this study. There is no use to proceed in the study without this document. There are a number of roles which have to agree on the purpose and range of the study.
  • operates as a sponsor or a team leader
  • Verifies, approves final results of the study
  • provides with the financial support for the study
  • chooses and leads the team members (4-7 prsns)
  • coordinates activities
  • guarantees early documentation
  • has 8 weeks to carry out the study (usually more)
  • presents final results to the management
  • set time plan
  • get all the necessary documents
  • choose managers for interview
  • ensure meeting and interview space
  • fundamental functions of the organization
  • data processing level of the organization
  • all the necessary information mentioned above,
  • concrete study schedule, documents relating to IT, diagrams, etc.
  • the main purpose of the study
  • expected results of the study
  • results of previous part
  • plan of the study
  • the present state of IS
  • role of IS within the organization
  • Strategy = particular strategic targets mentioned above.
  • a cross [*]= primary responsibility.
  • a slash [/] = partial responsibility.
  • Adaptation to the customer’s desires
  • Centrally planned reservations, stock, customer’s payments
  • Check-in improvement
  • Material movement improvement
  • Noise reduction
  • Paperless processes
  • Product portfolio expansion
  • Presentation improvement
  • Advertising improvement
  • Reduction of commitment losses
  • Reduction of material costs
  • Relations with business partners improvement
  • Stock management improvement
  • Simplification of customer’s order cycle
  • Transport coordination
  • 1.Processes / OU
  • 2.Processes / Strategy.
  • Contacts creation
  • Plane coordination
  • Plane service
  • Registration of a new customer
  • Service reservation
  • Employee training
  • 1.Data classes / Processes,
  • 2.Data classes / Strategy and
  • 3.Data classes / OU.
  • Purchase order
  • Service Catalog
  • IT Strategy (Information Technology Strategy)
  • ↑ What is Business Systems Planning (BSP)? Musato Technologies
  • ↑ Business Systems Planning (BSP) Procedure mibambino

Book cover

Managing Information Systems pp 41–51 Cite as

Information Systems Planning and Evaluation

  • Jun Xu 3 &
  • Mohammed Quaddus 4  
  • First Online: 01 January 2013

2460 Accesses

1 Citations

In this topic we will discuss the importance of alignment between information systems strategy and business strategy, argue the importance of evaluating the performance of information systems initiatives/investments, describe metrics for measuring performance of information systems initiatives/investments, present methods for information systems investment justification, and discuss difficulties associated with justifying information systems investments.

  • Business Strategy
  • Enterprise Resource Planning System
  • System Investment
  • Customer Relationship Management System
  • Information System Project

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Bibliography

Alvarez, E. & Raghavan, S. 2010, ‘Road Map to Relevance: How a capabilities-driven information technology strategy can help differentiate your company’, Strategy  +  Business , Iss. 61, pp. 1–6.

Google Scholar  

Blick, G. & Quaddus, M. 2003, Benefit Realization with SAP: A Case Study , Graduate School of Business, Curtin University of Technology, Australia, pp. 1–16.

Boochever, J. O., Park, T. & Weinberg, J. C. 2002, ‘CEO vs CIO: Can this marriage be saved’, Strategy  +  Business , Iss.28, pp. 1–10.

Booth, A., Roberts, R. & Sikes, J. 2011, ‘How strong is your IT strategy?’, McKinsey on Business Technology , Number 23, Summer 2011, pp. 2–7.

Copper, B. & Nocket, K. 2009, ‘Toyota’s IT Transformation’, Strategy  +  Business , Iss. 55, pp. 1–3.

Gunasekaran, A., Love, P.E.D., Rahimi, F. & Miele, R. 2001, ‘A Model for Investment Justification in Information Technology Projects’, International Journal of Information Management, Vol. 21, pp. 349–364.

Haag, S., Baltzan, p. & Phillips, A. 2006, Business Driven Technology , 1st edition, McGraw-Hill Irwin, Boston, USA.

McNurlin, B.C. & Sprague, R.H. 2004, Information Systems Management in Practice , 6th edn, Pearson Education, New Jersey.

O’Brien, J. A. & Marakas, G. M. 2011, Management Information Systems , 10th Edition, McGraw-Hill, New York, USA.

Pearlson, K.E. & Saunders, C.S. 2004, Managing and Using Information Systems: A Strategic Approach , 2nd edn, Wiley, Danvers.

Pearlson, K. E. & Saunders, C. S. 2010, Managing and Using Information Systems: A Strategic Approach, Fourth Edition, John Wiley & Sons, USA.

Peppard, J., Ward, J. & Daniel, E. 2007, ‘Managing the realization of benefits from IT investment’, MIS Quarterly Executive , Vol. 6, No. 1, pp. 1–11.

Soh. C. & Markus, L.M. (1995). ‘How IT Creates Business Values: A Process Theory Synthesis’, Proceedings of the 16th International Conference on Information Systems , Amsterdam, Netherlands, pp. 29–41.

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Southern Cross Business School, Southern Cross University, Brett Street, Tweed Heads, NSW, 2485, Australia

Graduate School of Business, Curtin University, Perth, Australia

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Correspondence to Jun Xu .

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Xu, J., Quaddus, M. (2013). Information Systems Planning and Evaluation. In: Managing Information Systems. Atlantis Press, Paris. https://doi.org/10.2991/978-94-91216-89-3_3

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Business Systems Planning

  • Small Business
  • Business Planning & Strategy
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Typical IT Project Milestones for Controls

Importance of acquisition logistics, the advantages of the multiview framework model.

  • Theory of Constraints for Small Businesses
  • The Importance of Business Analysis for a Project Manager

Business systems planning looks at the whole organization to determine what information systems the business requires to fulfill its goals. For large businesses, this can be an expensive process involving consultants and specialists, but smaller businesses can often perform the analysis and planning in house. Prerequisites for effective business systems planning are the existence of a business plan that details the goals and strategies of the company and the communication of the plan to the people responsible for implementing the plan.

Goals and Strategies

The requirements for a company's information systems can only be integrated into a plan when it is clear where the company wants to go and how it plans to get there. A strategic plan lays out the company goals and the strategies it intends to implement to achieve them. In small businesses, such strategies often focus on financial goals and corresponding marketing plans. These business plans are the initial input for the information systems plan and influence the types of systems that the company will consider.

Corporate Processes

Once the overall orientation of the information system is clear from the strategic plan, the business systems planning process has to look at what the company does. If the company has manufacturing, the information system has to include production planning. If it is service oriented, the software has to have hourly billing and cost assignment features. The key corporate processes are a second step in defining the requirements for the proposed information systems. Sometimes the processes themselves require re-engineering to let them work with information systems.

Corporate Data

A key question for the planning of information systems is the nature of the company's data processing requirements. Large volumes of complex data need different systems than flat, simple databases or mailing lists. A company's data is a valuable asset and its nature can't easily be changed. As a result, the data has a major influence on the kind of information systems that are required.

Constraints

The strategies, company processes and data represent the major inputs to the planning of the information systems, but the systems themselves are subject to constraints. The most important limitation, especially for small businesses, is the cost. Other constraints may include technical, space, time and operational factors. The information system planning process has to consider that the ideal system may not be a realistic possibility, and alternatives must be situated within the constraints.

End-user Input

Once the planning process has established the overall concept and requirements for the information systems, it is important to involve the end users in the design for the interface. The people who carry out the work have the best knowledge of what is required to do their job. Not supplying what is required is a frequent planning failure, and getting end user input at this stage is vital to the success of the business systems plan.

Implementation

The final step for an information system is to plan for implementation. At this stage the plan becomes a project and the planners have to assign responsibilities and resources, ensure that the project plan matches the strategic and business plans and set completion, budget and performance targets. At this stage the business can expect to have functioning information systems at the project completion date, fulfilling the identified needs.

  • Journal of Information Technology Management: From Strategic Business Planning to Strategic Information Systems Planning: The Missing Link
  • State of Tennessee: Information Systems Planning Process

Bert Markgraf is a freelance writer with a strong science and engineering background. He started writing technical papers while working as an engineer in the 1980s. More recently, after starting his own business in IT, he helped organize an online community for which he wrote and edited articles as managing editor, business and economics. He holds a Bachelor of Science degree from McGill University.

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An investigation of IBM's Business Systems Planning (BSP)--as a suitable methodology for strategic information systems planning for the Naval Reserve.

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BUSINESS SYSTEMS PLANNING

Business systems planning (BSP) is an IBM proprietary technique devised initially for IBM internal use; later it was sold as a service to its customers in the mid-1970s.

BSP was perhaps the earliest formal IS planning method and is now the most widely known. In fact, a number of firms use methods which are similar to BSP. For

X CHAPTER 5 INFORMATION SYSTEM STRATEGIC PLANNING

example, Arthur AndersonÊs METHOD/1 and MartinÊs Information Engineering are predominant methods which are similar to BSP.

BSP offers a structured approach to IS planning via a number of fairly rigorously defined stages that lead from the identification of business processes to a definition of required data structures. Data are tracked as they flow throughout the organization by the business activity support or from which they result.

The objectives of BSP are:

• To translate business strategy into IS strategy (as shown in Figure 5.3).

• Impartially determining IS priorities.

• Planning long-life information systems based on enduring business processes.

• Managing IT resources to support business goals.

• Assigning IT resources to high-return projects.

• Improving relationships between the IS department and users by providing systems that meet their requirements.

• Improving understanding of the need for IS planning.

Figure 5.3: Translating business strategy into IS strategy

Top-down planning and bottom-up implementation. The major premise of BSP is that organization-wide information systems should be planned from the top-down and implemented piece-by-piece from the bottom-up. Top-down planning employs a study team consisting of managers, professionals, and IT experts with the broad strategic objectives of an organization, as well as other important information. The study team systematically decomposes them into an IS architecture that will support the organizationÊs strategy. Once this architecture has been defined, the bottom-up implementation of specific IS applications is carried out by the IS

CHAPTER 5 INFORMATION SYSTEM STRATEGIC PLANNING W 149

department and the organizationÊs users. Bottom-up implementation involves the users in operational decisions about new systems. Top-down planning establishes a sequence of implementation consistent with both long- and short-term issues. The combination of top-down planning and bottom-up implementation enables the organization to select IS projects with the highest payoffs and implement them with the full support of their future users, thus ensuring the best use of the organizationÊs limited IS resources.

Figure 5.4 shows how the business mission determines business objectives, which in turn establishes functions and processes. The processes determine the required data, which forms the basis for an architecture of information systems and sub-systems. The architecture determines computer databases containing the required data to be processed by the appropriate IS applications (such as accounting, marketing, etc.). The IS applications serve the functions that support the objectives and the organizationÊs mission.

Figure 5.4: Top-down planning with bottom-up implementation

5.3.1 Major Activities in BSP

The BSP methodology consists of four major activities:

• documenting the business activities

• defining the business processes

• defining the data necessary to support the business processes

• defining the information architecture.

Documenting the business objectives. This activity entails determining business direction so that the IS strategy can support it. Figure 4.3 illustrates the way in which the IS strategy is derived from the business strategy.

Defining the business processes. This activity is undertaken to identify business processes, which are defined as groups of logically related decisions and activities required to manage the resources of the business (IBM 1984, 29). This is important because it establishes the prime long-term basis for IS support in the organization.

Defining the data necessary to support the business processes. This activity involves identifying the information elements that are basic to the organization and that will not change unless the organization changes. These information elements are called business process support data because business processes identified during the previous activity use them.

Defining the information architecture. This final activity refers to relating the business processes to the appropriate business process support data. This activity reveals the relationships between business areas and the associated data to be managed. Thus, the relationships define an information architecture of individual IS application modules, which can be assigned priorities and built as scheduled in the IS plan.

5.3.2 BSP Study Steps

There are 13 major steps to perform in carrying out a BSP study (IBM 1984, 10):

1. Gaining executive commitment 2. Preparing for the study

3. Starting the study

4. Defining business processes

5. Defining business entities and data classes 6. Analysing current IS support

7. Determining the executive perspective 8. Defining findings and conclusions 9. Defining the information architecture 10. Determining architectural priorities

11. Reviewing information resource management 12. Developing recommendations and an action plan 13. Reporting results

CHAPTER 5 INFORMATION SYSTEM STRATEGIC PLANNING W 151

Steps 1 and 2 precede the study itself. All the steps are important, and although some can be carried out to varying degrees, none can be completely eliminated.

1. Gaining executive commitment. A BSP study must not begin without a commitment from a top executive sponsor. In addition, other executives must be willing to become involved in it. Success depends on the degree to which these executives can supply the study team with their views of the organization and its data needs. A key part of this first step is the concurrence of all parties regarding the studyÊs purpose and scope. Differing expectations are common and can lead to disappointing results and unmet expectations.

Furthermore, the purpose of the study is to commit the organization to a course of action based on recommendations made at the studyÊs end;

therefore, early expectations are critical.

2. Preparing for the study. All executives on the study team should be provided with proper orientation. Everyone should know the BSP plans and procedures before the study is conducted so that the executive can provide optimal input and the study team can make optimal use of the input. Study team interviewees should be identified as soon as possible so that their interviews can be scheduled. Information on the organizationÊs basic business functions and its current IT configuration should be compiled during this phase to facilitate the team training and orientation. The team should be given exclusive use of a conveniently located control room, where study activities can be conducted. By the end of this phase, the team should produce a study control book containing (IBM 1984, 19–28):

• a study work plan

• an interview schedule

• a schedule for reviews with the executive sponsor at certain checkpoints

• an outline of the final study report

• business and IS data analysed, charted, and ready for use in the study.

The executive sponsor should review the accomplishments made during this phase before actually beginning the study.

3. Starting the study. The BSP study begins with three presentations to the study team:

• The executive sponsor repeats the purpose of the study and its anticipated output.

• The team leader reviews business facts already collected so that each team member is thoroughly up-to-date.

• The senior IS executive discusses the departmentÊs recent activities and problems so that study team members understand its current role in the organization.

4. Defining business processes. This is the most important phase of the BSP study. In this phase, the study team identifies the business processes which form the basis for the executive interviews, the definition of the future information architecture, and various other subsequent study activities. A business process relates to a specific act that has a definable start and stop. A process has identifiable inputs and outputs (Martin and Leben 1989, 146). A process is not based on organizational structures, and it identifies what is done, not how. Often the name of a process begins with an action verb such as: ÂCreate purchase requisitionÊ, ÂSelect supplierÊ, ÂFollow up orderÊ, ÂAnalyse supplier performanceÊ (see Table 5.4).

This step is important because failure to define the process properly will be reflected in all that follows. During this step, team members record a list of the business processes, highlighting the most significant ones. In view of the importance of this step, you must have a thorough understanding of business process definition. You should, therefore, read the relevant portion of the BSP manual now to understand this step in detail.

CHAPTER 5 INFORMATION SYSTEM STRATEGIC PLANNING W 153

Table 5.4: Examples of Processes Groups and Processes by Industry (Based on Information in IBM 1984, 87–103)

Processes common to many businesses Policy and Goals

Establish Corporate Policy Develop Goals

Determine Product Cost Control Operations

Facilities Management Acquire Capital Equipment Maintain Facilities and inventory Production Planning

Plan Production Capacity Allocate Production Capacity Schedule Production

Plan Material Requireents Marketing Planning

Conduct Marketing Research Analyse Market Place Forecast Product

Establish Sales Objectives Price Product

Advertise and Promote Product

Processes in the Health Care(Hospital) Industry Health Care Delivery

Admit Patient

Determine PatientÊs Health Status

Determine Required Tests and Treatments Order and Schedule Diagnostic Studies, Treatments

and Reevaluations

Perform and Report Diagnostic Studies Administer and Record Treatments Provide Necessities and Amenities Evaluate Care

Interface with Referring Physician Discharge Patient

Personnel Planning

Establish Personnel Policies Develop Personnel Programmes Determine Personnel Requirements Determine Training Requirements Determine Personnel Development Needs

Product Planning, Development, Manufacture and Distribution

Develop Technology Develop Product

Track Product Performance Manage Plant Operations Manufacture Product Distribute Product Financial Planning and Control

Forecast Cash Requirements Forecast Capital Requirements Forecast Profitability Analysis Create Budget

Prepare Financial Alternatives Acquire and Manage Funds Control Finances

Sales Sell Product

Develop New Business Service Policyholders

Cyclical Planning

Establish five-year Business Plan Develop Annual Operating Plan Develop Quarterly Operating Plan

Customer Order Control

Entry and Control Customer Order Service Customer Order

Invoice Customer

Financial Operations

Analyse and Report Financial Performance Manage Risk

Manage General Accounts

Purchase Supplies/Equipment/Raw Materials Facilities Planning

Determine Facility Requirements Establish Facility Acquisition Policies Management Support

Provide Legal Support

Maintain Stockholder Relations Comply with Government Regulations Maintain Public Relations

Processes in the Insurance Industry(Group Life) Product Development

Monitor Regulatory / Legislative Activity Develop Product

Price Product

Establish Dividend Formula Marketing Support

Prepare Prospect Proposal Underwrite Policy Issue and Maintain Policy Product Administration Maintain Employee Life File Pay Claim

Manage Claims Accounting Bill and Collect Premium

Analyse and Report on Premiums / Claims Produce Dividend

Genaral Administration Calculate Compensation

Calculate and Pay Incentive Compensation Managed Personal

Resrarch( General) Develop Proposal Approve Research Study Assign Resources Budget Research Project

CHAPTER 5 INFORMATION SYSTEM STRATEGIC PLANNING W 155

5. Defining business entities and data classes. During this phase, business entities and data classes and their relationships are identified. A business entity is something of lasting interest to an organization · something which can be uniquely identified and about which the organization wishes to keep data. Entities may be internal or external to an organization, and can be categorized as one of the following: person, place, thing, concept, or event. For example, ÂjobÊ is an entity because it is a concept of interest to an organization.

A data class is a logical grouping of data related to entities that are significant to the organization. Data classes are identified in order to:

(a) determine data sharing requirements across processes;

(b) determine data that are necessary but either unavailable or insufficient for business use; and

(c) establish the groundwork for data policy formulation (including data integrity responsibility).

To enable assignment of responsibility for data integrity, data classes must be defined so that there is one and only one process that creates each data class.

In this step data are grouped into related data classes. The future IS architecture will include databases that would contain these data. The organization of these databases should minimize the need for future revisions of the architecture. Criteria for data categorization are the relationships of the data to the business processes identified in the fourth study phase. Charts (matrices) are used to reflect these relationships clearly. A detailed description of this step is given in the BSP manual, which you should read now.

6. Analysing current IS support. In this phase, the study team identifies how information systems currently support the organization. Final recommendations will be based partly on the environment. The team develops charts (matrices) showing organizational processes during this phase to facilitate and document its analysis. These activities help the team prepare for its executive interviews and aid in defining requirements for information support for the various organizational areas. A detailed description of this phase and the charts to be drawn is given in the BSP manual, which you should read now.

7. Determining the executive perspective. The major purpose of this phase of the study is to validate the understanding that the team has developed thus far.

Another major purpose is to achieve the commitment and support of executives not yet deeply involved in the study. Executive perspective is gained by conducting interviews with executives from the top levels of management. The executive interviews conducted during this phase are used to validate processes and data classes and provide the study team with the basic understanding of the business problems that the future IS architecture should solve. This phase is described in detail in the BSP manual, and it would be useful for you to read it now.

8. Defining findings and conclusions. The major objective of this phase is to confirm that the BSP study team understands the information provided by the executives. In this step, the study team develops categories of findings and conclusions, and then assigns previously identified problems to the categories.

This classification becomes the basis for future recommendations. The details of this step are described in the BSP manual, which you should look at now.

9. Defining the information architecture. In this phase the BSP study team uses the business processes identified above in the fourth phase and the data classes identified in the fifth phase to design the databases of the future information architecture. Various charts (matrices) are prepared which show the relationship between business processes and data classes. The team also identifies major systems and subsystems and determines if some subsystems

CHAPTER 5 INFORMATION SYSTEM STRATEGIC PLANNING W 157

must be completed before others. An information architecture flow diagram is drawn which reflects the relationship of systems and subsystems. This is a very important step in BSP, and you should now look at the details given in the BSP manual.

10. Determining architectural priorities. It would be impossible in most organizations to implement the entire information architecture all at the same time. Therefore, the BSP team must set priorities developing information systems and databases that will make up the final architecture. In determining selection criteria, the team considers potential financial and non-financial benefits, the likelihood of success, and the extent of the organizationÊs demand for each subsystem. The team sets priorities by listing the subsystems of the information architecture and using the criteria to rank each one. For details of this step, you should now refer to the BSP manual.

11. Reviewing information resource management. The objective of this phase is to ensure that the management of IT is under the direction and control of top management. A steering committee is established to set policy and control the function. The study team examines the current IS organization to find its strengths and weaknesses.

12. Developing recommendations. The BSP study recommendations centre on information architecture and information resource management. They are made not only for information systems, subsystems, hardware, and software but also for adjustments to systems under development and to systems currently in production. Another major area of recommendation includes strengthening IS management with improved planning and control mechanisms identified in the previous step. An action plan reflects priorities and identifies the means of delivering the future information architecture.

13. Reporting results. The BSP study team completes its mission by preparing the BSP study report and preparing and delivering an executive presentation. A brief executive summary covers the purpose of the study, its methodology, its conclusions, and its recommendations. A more detailed and comprehensive report expands these topics. In addition, an oral presentation to executives should include the result reporting process. Potential topics to be included in the BSP study report are given in Table 5.5 (based on information in IBM 1984, 130–31).

Table 5.5: Potential Topics for BSP Study Report Executive Summary Report Reasons for conduction study Level of organisation selected Objectives of the study team

Financial Budgets

Justification and funding processes

Method of Study BSP concepts

Overview of study approach Study team members

Findings and Conclusions Definition of data classes

Relationship of data class to current systems (matrix)

Relationship of data class to business processes (matrix)

Analysis of current system support Process relationships (diagram)

Process / organisation / system relationships (matrix)

Application support of organisation (matrix) Application support of processes (matrix) Business Perspective

External environment Economic, government, competition

Technology, customers, suppliers Internal environment

Policies, practices, constraints Business planning

Statement of Findings and Conclusion Objectives

Organisation Planning

Measurement and Control Operations

Current IS support Recommendations

Changes to current IS development projects Acceptance of information architecture Satisfying architecture priorities Sub-system packages

End-user tools (information centre) Sub-system development

CHAPTER 5 INFORMATION SYSTEM STRATEGIC PLANNING W 159

Major charges to existing systems Management systems changes

Changes in information resource management Action Plan for Follow-On Projects

(For the above recommendations) Description(s)

External environment

Technology, customers (users), vendors

Internal environment

Policies, practices, strategies Resources, project schedules

Narrative descriptions – processes Narrative descriptions – data classes Narrative descriptions – current ISs Problem analysis

Supporting statistics

5.3.3 Evaluation of BSP

The major strength of BSP is its ability to involve top management in the study, providing improved communication among top management, users, and IS departments and an increased awareness of the long- and short-term capabilities and cost of information systems. The methodology is highly structured and well documented. Another major strength is the continued evolution and adaptation to the changing IT environment. The latest subset of BSP, called the Information Quality Analysis (IQA), is similar to BSP but takes considerably less time and is supported by an integrated set of computer programs.

Compared with the stages-of-growth approach, BSP is business-oriented, and not theory-driven. BSP recommendations derive from the construction of an empirical model of a particular business enterprise and its information sources.

The most common criticism of BSP may be that the results of the BSP study are not easy to implement, because the study is not quickly translatable into the technical specifications that the IS department may require. Furthermore, the study depends

  • NATURE OF BUSINESS ORGANISATION
  • FUNCTIONAL AREAS AND BUSINESS FUNCTIONS
  • MANAGEMENT PROCESSES AND BUSINESS PROCESS RE- RE-ENGINEERING
  • BUSINESS MISSION AND VISION
  • BUSINESS OBJECTIVES AND GOALS
  • CHAPTER LEARNING OUTCOMES
  • STRATEGIC PLANNING
  • X Strategic Use of Information
  • EVOLUTION OF INFORMATION SYSTEMS
  • RISKS OF USING IT STRATEGICALLY
  • STRATEGIC OPTIONS GENERATOR
  • FEEDBACK ON ACTIVITIES
  • STAGES OF GROWTH MODEL
  • AN EXTENDED ENTERPRISE
  • Fifth Generation: Integrated Methodologies
  • BENEFITS OF IS PLANNING
  • WHAT MAKES A GOOD IS PLANNER?
  • CRITICAL SUCCESS FACTORS ANALYSIS
  • BUSINESS SYSTEMS PLANNING (You are here)
  • EARL’S MULTIPLE METHODOLOGY
  • CHOOSING METHODOLOGIES FOR IS PLANNING
  • RECOMMENDATIONS ON IS STRATEGIC PLANNING METHODOLOGIES

KAPCSOLÓDÓ DOKUMENTUMOK

EU AI Act: first regulation on artificial intelligence

The use of artificial intelligence in the EU will be regulated by the AI Act, the world’s first comprehensive AI law. Find out how it will protect you.

A man faces a computer generated figure with programming language in the background

As part of its digital strategy , the EU wants to regulate artificial intelligence (AI) to ensure better conditions for the development and use of this innovative technology. AI can create many benefits , such as better healthcare; safer and cleaner transport; more efficient manufacturing; and cheaper and more sustainable energy.

In April 2021, the European Commission proposed the first EU regulatory framework for AI. It says that AI systems that can be used in different applications are analysed and classified according to the risk they pose to users. The different risk levels will mean more or less regulation. Once approved, these will be the world’s first rules on AI.

Learn more about what artificial intelligence is and how it is used

What Parliament wants in AI legislation

Parliament’s priority is to make sure that AI systems used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly. AI systems should be overseen by people, rather than by automation, to prevent harmful outcomes.

Parliament also wants to establish a technology-neutral, uniform definition for AI that could be applied to future AI systems.

Learn more about Parliament’s work on AI and its vision for AI’s future

AI Act: different rules for different risk levels

The new rules establish obligations for providers and users depending on the level of risk from artificial intelligence. While many AI systems pose minimal risk, they need to be assessed.

Unacceptable risk

Unacceptable risk AI systems are systems considered a threat to people and will be banned. They include:

  • Cognitive behavioural manipulation of people or specific vulnerable groups: for example voice-activated toys that encourage dangerous behaviour in children
  • Social scoring: classifying people based on behaviour, socio-economic status or personal characteristics
  • Biometric identification and categorisation of people
  • Real-time and remote biometric identification systems, such as facial recognition

Some exceptions may be allowed for law enforcement purposes. “Real-time” remote biometric identification systems will be allowed in a limited number of serious cases, while “post” remote biometric identification systems, where identification occurs after a significant delay, will be allowed to prosecute serious crimes and only after court approval.

AI systems that negatively affect safety or fundamental rights will be considered high risk and will be divided into two categories:

1) AI systems that are used in products falling under the EU’s product safety legislation . This includes toys, aviation, cars, medical devices and lifts.

2) AI systems falling into specific areas that will have to be registered in an EU database:

  • Management and operation of critical infrastructure
  • Education and vocational training
  • Employment, worker management and access to self-employment
  • Access to and enjoyment of essential private services and public services and benefits
  • Law enforcement
  • Migration, asylum and border control management
  • Assistance in legal interpretation and application of the law.

All high-risk AI systems will be assessed before being put on the market and also throughout their lifecycle.

General purpose and generative AI

Generative AI, like ChatGPT, would have to comply with transparency requirements:

  • Disclosing that the content was generated by AI
  • Designing the model to prevent it from generating illegal content
  • Publishing summaries of copyrighted data used for training

High-impact general-purpose AI models that might pose systemic risk, such as the more advanced AI model GPT-4, would have to undergo thorough evaluations and any serious incidents would have to be reported to the European Commission.

Limited risk

Limited risk AI systems should comply with minimal transparency requirements that would allow users to make informed decisions. After interacting with the applications, the user can then decide whether they want to continue using it. Users should be made aware when they are interacting with AI. This includes AI systems that generate or manipulate image, audio or video content, for example deepfakes.

On December 9 2023, Parliament reached a provisional agreement with the Council on the AI act . The agreed text will now have to be formally adopted by both Parliament and Council to become EU law. Before all MEPs have their say on the agreement, Parliament’s internal market and civil liberties committees will vote on it.

More on the EU’s digital measures

  • Cryptocurrency dangers and the benefits of EU legislation
  • Fighting cybercrime: new EU cybersecurity laws explained
  • Boosting data sharing in the EU: what are the benefits?
  • EU Digital Markets Act and Digital Services Act
  • Five ways the European Parliament wants to protect online gamers
  • Artificial Intelligence Act

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