Phase 1: Alignment of IT with business

Define strategic business objectives

Objective of the exercise

The objective of this exercise is to enhance identification and understanding of the key business objectives and goals that should be achieved through the implementation of FIS, and understanding how FIS can support decision-making and value creation within the forest sector (or a part of the sector, depending on the analysis scope).

Introduction

What are business objectives of a FIS programme?

The business objectives of a FIS development programme/strategy are fundamentally different from the forest sector business objectives and one should take caution not to mix the two notions. While the forest sector business objectives are the motivation for activities of the forest sector stakeholders, the FIS programme business objectives describe how successful execution of the FIS development programme should influence the forest sector (or its part).

For example, assuming that a legally established duty of a forestry government agency is communication with citizens on forest-related issues, the agency’s business objective would be providing comprehensive information on the country’s forest resources to the public. This business objective would be realized through the activity of sharing data on forests over the Internet. While analysing possible points of intervention through a FIS, one of the business objectives of the FIS programme could be improving the quality and scope of the agency’s communication with the public.

What is the purpose of defining business objectives of the FIS programme? 

The goal of value chain analysis and value chain mapping is done to better understand the current system in order to identify strategies for improving. Business objectives of the FIS programme depend to a large degree on policy objectives, but it is vital to identify the most important business objectives of the FIS programme through a structured discussion informed by the VCA results and input from members of the analytical team (steering committee). Resources available for developing the FIS are usually limited and care should be taken to identify and choose the FIS programme business objective so that maximum cost/outcome value is achieved. 

How should points of intervention for a FIS programme be identified?

There are many types of value chain interventions that lead to defining concrete business objectives. Interventions can be classified for example as the following four types (Humphrey and Navas-Alemán 2010):

  1. Strengthening the weakest link. This type of intervention addresses the issue of weak links in the chain. The efficiency of the chain as a whole depends upon the performance of each of the linkages. A value chain intervention starts from a diagnosis of the impact of a particular link in the chain on the performance of the chain as a whole.
  2. Improving knowledge and resource flows. Poor flows of knowledge are commonly found in value chains. Knowledge is either poorly communicated, or not communicated at all. This leads to missed opportunities or to inefficiencies in the value chain operation. One implication of targeting these flows is that knowledge deficits at one point in the chain may be addressed by interventions involving actors at other points in the chain.
  3. Improving linkages. The efficiency of a value chain depends on the readiness of the actors to exchange information and collaborate. Poor linkages, e.g. lack of trust between parties involved, result in high transaction costs or transaction failures. Value chain interventions address these problems in a variety of ways, including trust-building initiatives, providing indicators of organization/company reputation and setting up institutions to manage risk. While in practice improving linkages is closely related to the second objective, improving knowledge and resource flows, they are analytically distinct.
  4. Developing new or alternative links in the chain. If the overall efficiency of the chain depends on the functioning of each of the links, value chain interventions can identify alternative linkages. Linkage A shows the development of new sources of supply to overcome problems such as shortage of raw materials, or low quality. Linkage B shows how one link in a chain is replaced by another. This might be the brokering of new intermediaries to substitute a link that was malfunctioning, or non-existent. Linkage C shows the case of new market outlets being developed. In each case, the new link might complement or replace the old one.

There is considerable underutilized potential in value chains that can be tapped into by improving flows of knowledge and resources, improving relationships and establishing linkages, as well as by improving capabilities at specific points in the chain. Outside interventions may be needed to unlock this potential. In other words, strategies to improve the forest sector functioning should focus as much on linkages as on its assets.

What are the steps in defining business objectives of an FIS development programme?

The steps in defining business objectives of an FIS development programme are:

Step 1. Participatory analysis

In this step, the task is to identify possible points of intervention using the intervention typology described in the introduction and attempt to quantify expected benefits that would result from each intervention. They should be marked on the value chain (context) map prepared in the previous exercise.

The question to be addressed is what activities carried out in the forest sector could be improved/changed using information technologies in order to have a positive impact on the sector.

Practical note: This step could be organized as separate discussion groups taking notes of their proposals for intervention, together with justifications, and marking them on the value chain map.

Step 2. Validation of the findings

After the brainstorming session on possible points of intervention, the findings should be summarized and discussed. Proposed items should be evaluated for their relevance, urgency, cost and expected benefits. Care must be taken to ensure coherence between all proposed business objectives of a FIS development programme. 

Step 3. Identifying solutions

The final step is choosing from the proposed points of intervention those items which are deemed to be most suitable to the current situation. They should be ranked with business objectives assigned to each of them. There is no single approach to identifying and ranking solutions. 

Different factors should be considered, including: political priorities, legal obligations, existing strategies and policies, cost-effectiveness, available resources (both financial and human), organizational circumstances etc. 

For a FIS development programme more limited in scope, there may be only one or a few points of intervention with a limited number of business objectives. 

All identified solutions should be listed and ranked with their respective business objectives to be achieved within the FIS development programme.