Information Technology strategy
In today’s fast-paced and rapidly
changing business environment, companies has deeply modified their strategies to
integrate technology into the business planning process. Technologies are now
everywhere in the firm’s value chain.Thus, it is necessary for firms to adapt
their strategic process as technology is pervasively important as part of
business function. This implies the need to develop a technology strategy that
link technology with business objective. In this paper,the researchers will
review a structured approach to business and technology strategy.
Definition of information technology strategy
Technology strategy (Information Technology strategy or IT strategy)
is the overall plan which consist of objective(s), principles and
tactics relating to use of the technologies within a particular
organization. Such strategies primarily focus on the technologies
themselves and in some cases the people who directly manage those
technologies. The strategy can be implied from the organization's
behaviors towards technology decisions, and may be written down in a
document.
Other generations of technology-related strategies primarily focus
on: the efficiency of the company's spending on technology; how people,
for example the organization's customers and employees, exploit
technologies in ways that create value for the organization; on the full
integration of technology-related decisions with the company's
strategies and operating plans, such that no separate technology
strategy exists other than the de facto strategic principle that the
organization does not need or have a discreet 'technology strategy'.
Primary objective of designing Technology Strategy is to make sure
that the Business Strategy can be realized through Technology and
Technology Investments are aligned to Business. Technology Strategy facilitates the
attainment of a company's vision through alignment of its information
technology strategy with its business strategy.
The important components of information tech-strategy is information technology and strategic planning working together.
IT and Strategic Alignment
IT Strategy &
Analysis of the industry Impacts of e-Business
Information Systems Strategy Triangle
Every organization has three main strategies which are Business Strategy, information strategy, and organizational strategy.
The Information system strategy triangle is a model that can show the linkage of Information Systems (IS) on organizations. For doing business, Business strategy has a priority because it drives organizational and information strategy and those bottom line strategies are then dependent upon the business strategy. If any strategy is changed, other strategies must be changed in order to maintain a balance. As we saw from the following diagram, IS strategy is affected by the other strategies a firm uses and are always involved with consequences.
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IT and Strategic Alignment
Businesses must develop a written Business
Plan to succeed in today's competitive business environment. A Business Plan
defines the strategies and tactics for the business and provides a road map to
success.The same concept also applies to your Information Technology (IT). If
your business does not have a documented IT plan - or strategy, your technology
investments are likely considered a necessary cost of doing business instead of
an investment that provides optimum business value. Developing an IT strategy
is a vital requirement for any size business. An effective IT Strategy defines
the technology, people and processes necessary to meet business requirements.
More
importantly, an IT strategy directly connects IT services with business
processes, providing a framework that enables effective metric-based technology
decisions in support of business goals and objectives.
There are key elements IT must provide to
recognize value from your business investment:
- Align IT with business goals
- Provide critical business functions at high quality
- Deliver specified and measurable service levels
- Provide recommended risk mitigation tactics
- Maintain cost effectiveness.
The alignment of business strategy and IT strategy have emerged as a critical issue for organizations. From the survey, 87% of the people believed IT was critical to their companies’ strategy success. However, the good IT strategy does not always help the business to succeed when gaps exist between the business strategy and IT strategy.
Failure to aligning IT with business strategy is believed to result in the failure of IS initiatives. CIOs need to ensure that the IT department is focused on building systems that help the organization achieves major objectives and helps business units.
New IT systems are rapidly coming to firms, but lack of integration with existing systems limits usefulness. In order to be successful, IT systems must fit to companies’ strategy and other departments are able to adapt themselves.
76% of employees abandoned at least one IT project, and 29% abandoned more than 10% of all projects. The main reason is firms cannot fit IT to their businesses.
The Relationship among Business, IS and IT Strategies
Align IT with business goals. This is the
most important element and becomes an impetus for an IT strategy that directly supports
the business strategy. An effective IT strategy clearly defines how all IT
services, and processes to deliver the services, align with business goals. It
also outlines a future state where your IT services directly contribute to the
business sustainability and growth.
The strategy sets the foundation for
aligning IT with the business, addresses the delivery of technology services
and describes the costs associated with the delivery of those services. In
summary, it provides a road map or blueprint for direct contribution to the
success of the business.
Impact of IT strategy
Information Systems Strategy Triangle
Every organization has three main strategies which are Business Strategy, information strategy, and organizational strategy.
The Information system strategy triangle is a model that can show the linkage of Information Systems (IS) on organizations. For doing business, Business strategy has a priority because it drives organizational and information strategy and those bottom line strategies are then dependent upon the business strategy. If any strategy is changed, other strategies must be changed in order to maintain a balance. As we saw from the following diagram, IS strategy is affected by the other strategies a firm uses and are always involved with consequences.
Example: E-commerce: If an
off-line based firm changes a business model to be online- based, the company
needs to change its server and database for support the new model.
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