About Digi

Topics: Strategic management, Management, Strategy Pages: 7 (1835 words) Published: November 22, 2010
1.0 Introduction

Instead of being relegated to the backrooms of the enterprise, IT is now being invited to the boardrooms and is being expected to play a leading role in delivering top line value and business transformation. Nowadays, IT leaders are assuming significant organizational roles including the role of a change leader and having the responsibility for strategic alignment of IT and business. The capabilities of emerging IT shape the strategic direction of a firm. It enables new competencies that make new business strategies possible. Moreover, it allows new business governance options for how a firm works with other firms. On the contrary, if IT is to deliver business value, IT strategy and business value must always be closed linked. Ideally, strategy development should be a two-way process between IT and business. In short, what business want to accomplish with their IT and how IT shapes its own delivery strategy is increasingly vital to the success of an organization.

2.0 IT Strategy: Past, Present and Future

At the highest level, a strategy is an approach to doing business. Traditionally, a competitive business strategy has involved performing different activities than competitors or performing similar activities in different ways.

In the past, the job of an IT function was to understand the business’ strategy and then figure out a plan to support it. Therefore, most formal IT plans were focused on more tactical and tangible line of business needs or opportunities for operational integration rather than in supporting enterprise strategy. As a result, companies’ improved information processing capabilities were used to drive down transaction costs to near zero, threatening traditional value propositions and shaving profit margins.

In the present, IT is leading to considerable disruption as business models in many industries are under attack by new technology-enabled approaches to delivering products and services. Accordingly, such new business strategies are inconceivable without the use of IT. Flexibility, speed and innovation are therefore becoming the watchwords of competition and must therefore be incorporated into any business through IT. Thus, business executive have to take a more prominent role in IT related decisions so that IT strategy shapes and/or complements business strategy. Business strategy is not only enabled by IT but that it can provide new business opportunities as well. Today, CIOs are valued for their insights into business opportunities, their perspective across the entire organization and their ability to take the long-term view.

However, this does not mean that organizations have become good in developing an effective IT strategy. “There are many inconsistencies and problems with strategy development.” Briefly, business strategy must become more and more evolutionary and interactive with IT. IT strategy development must therefore become more dynamic itself and focused on developing strategic capabilities that will support a variety of changing business objectives.

3.0 Critical Success Factors for Developing IT Strategy
4.1 Revisit Business Model

It is essential that all managers including IT and business managers completely understand how their business as a whole works. The worlds of IT and business have traditionally been isolated from each other, leading to misaligned and sometimes conflicting strategies. Therefore, IT must translate their ideas and concepts into business language. IT must absolutely understand and focus on the business.

4.2 Adopt Strategic Themes

Themes give both business and IT managers a broad yet focused topic of interest that challenges them to move beyond current operations. By grouping IT and business programs around a few key themes, managers find it easier to track and direct important strategic threads in an organization’s development and to visualize the synergies and interdependencies involved...
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