Module 2 Managing Technology

Topic 3: Align Information Technology and Business

Strategy

What is IT strategy?The mission critical, long-term IT choices made by a firm.Commitment to build IT capability

Why acquiring IT capability?

To create new businesses, to expand an existing market, and to discern new strategic directionsTo surviveTo improve performanceTo distinguish an organization in the marketplace

Successful IT Implementation

Commitment to IT strategyAlignment between IT and business strategiesRole of Chief Information officerTop management support

Types of IT Strategy IT leader strategyIT follower strategyNiche strategy

When to use what IT strategy?

Strategic Alignment Process

IT strategyBusiness strategyOrganization infrastructure and processIS infrastructure and process

The Concept of ‘Fit’Three perspectives (Alder 1989)

Business and technology strategyTechnology poster and functional decision making practiceSynergy between decision making practices

Technology Strategy FieldConsists of

Particular dimensions of technology policy that is related to business strategyIntegrative models that prescribe fit between technology policy and business strategyEmpirical links between technology strategy and business strategy

Business Competitiveness & Technology Strategy

Manager should (Clark, 1989)Understand their technological baseTake an international perspectiveDiscipline their business function around the production functionIntegrate all business functionsFocus on time as the critical factor

Strategic Technology Management Process

3 Key areas (Betz 1993)Identification and development of a firm’s technological capabilitiesProducts/processes that provide competitive advantagesIntegration of areas one and two

Technology and Business Outcomes

Technology is critical to business outcomesCharacteristics of best practices include

Championship of technology issuesAdequate levels of technological competenceSelection of the structural for of the unitCoupling between a technology function and othersExtent and timing of technology controlTechnology transfer mechanisms

Technology Strategy & Leadership

Technology strategy plays an important role in enabling firms to achieve their leadership position

SummarySuperior performance characteristic (textbook, p. 30)Technology is a means, not an end in itself.Capable people are valuable resources.Technology needs to be planned and exploited within and through the “big picture” context.

Strategic Alignment Framework

Luftman, J.N., Lewis, P.R., and Oldach, S.H. "Transforming the Enterprise: The Alignment of Business and Information Technology Strategies." IBM Systems Journal ,Vol. 32, No. 1, 1993, p. 198- 221.Luftman, J. and Brier, T. "Achieving and Systaining Business-IT Alignment." California Management Review, 42(1), Fall 1999, p 109-122.