Information Technology as a Key to Strategic Management - Research Paper Example

Information Technology as a key to Strategic Management Introduction Strategic management is described as the “the collection of decisions and measures consequential in development as well as establishment of strategies designed to attain the aims and goals of a business”. The procedure of strategic Management systems differs extensively between businesses. Procedures direct to the level of that association, jobs, power as well as good judgment in decision making is placed. It is considered as a significant thought in the research as well as investigation of the strategic management paradigm. For the reason that level of requirement is frequently entirely associated by the cost, extensiveness, correctness as well as accomplishment of planning. A number of forces decide needs for formality in corporate strategic management. For example volume of the business, its major organization styles, the difficulty of its atmosphere, its manufacture procedures, the temperament against its difficulties, and the idea of its planning system, all these factors jointly decide suitable degree of strategy in particular. Corporate strategy is normally linked with two factors: stage and size of development of the business (pim, 2010; Laudon & Laudon, 1999). Information technology has been and carries on being functional in a broad variety of business, management as well as financial tasks. It is obvious that one of the newest plus competently most important progresses in Information technology in scenario of corporate performance is the deployment as well as establishment of the IT and IS based system and technology facilities in business management support and corporate performance management. These areas have significantly influenced the structure of strategic management systems in businesses. Presently the role of the information is very important to corporate performance in the modern knowledge-based world in addition to financial system. As a result, information systems and technology support have turned out to be most important in the organizational expedient. The handling plus management of IS and IT in modern organizations is in an era of revolution (lotsofessays, 2010; Turban et al., 2005; Turban et al., 2004; Shelly et al., 2005). This paper addresses the question how information technology is a key to strategic management. In this scenario this paper will analyze some of the main areas regarding the role and support of the Information technology in case of enhanced business and corporate strategic management as well as development. Strategic management and Information technology Strategic management includes the wide range of factors about strategy development as well as strategy accomplishment. In the earlier period, a great deal of strategic management's influence approaches as of an Industrial Age ''mindset'' comprises ideas as well as administration viewpoints. Despite the fact that, economic transform at the present comes into view to be an inevitable conclusion. Certainly, a lot of suggestion that the arrangement of worldwide business is in the middle of a theoretical ''new financial system” modification to the Information or else Acquaintance Era, one where the relationship among a new financial arrangement as well as information technology is frequently established. Unluckily, as strategic management has been extensively presented in the literature, diverse debates have apparently dropped short when taken in situation by means of information technology. The perspective is formulated that Information Systems as well as information technology are definitely indispensable to the effective procedures of strategic management and should take on additional substantive negotiations in the literature (Enz, 2006; Whipp, 1988; Ray, 2004). Information Systems and Information technology are revealing a superior influence on the corporate strategic management. At a huge level, future-oriented plan proposed for cooperating by the competitive atmosphere in order to optimize accomplishment of business aims plus its objectives” is the conventional description of strategy. Therefore, we can assume that the strategy signifies a corporate competition plan. It reveals a business’s knowledge of how to struggle beside when, whom, where, plus for what. In general, strategic matters have several particular extents: Strategic concern necessitates the decisions of tope administration. Strategic matters engage the allotment of huge amounts of business ingenuity (Enz, 2006; Laudon & Laudon, 1999; Hutchinson & Sawyer, 2000). Information Technology competently offers a major strategic function in the handling and management of businesses as well as corporate. Information Technology is the collection, allocation and processing of data by means of computer software and hardware. In case of IT support for a business the technologies of telecommunications, database administration and digital electronics provide huge support for the enhanced business strategic support as well as business compliance. Information Technology offers simple tactics for a corporate decision making for the reason that they have correct in-time and efficient information within reach. By means of the facility plus technology support of the information technology at business and corporate, the managers have additional information, within their reach than previously happened, existing Information Technology develops premium business as well as worth at every phase of the strategic decision-making processes (OPPapers, 2010; Crowston et al., 2001) & (Betz, 2001).. There exists a huge potential proposed for added worth arrangement in the realistic association of information systems development tasks to the strategic company planning in the administration section. Well-organized utilization of the information system utilities to assist in the procedure of evolving business broad implicit knowledge as well as dynamically integrating it into the subsisting organizational culture is revealed. Significance of information technology contribution in the planning of managerial and corporate strategies cannot be refuted. Technology-supported education and interactions as the foundations of the knowledge making developments are as well employed in the strategic part of Information Technology in administration (OPPapers, 2010; Norton, 2001; Ray, 2004; Shelly et al., 2005) & (Betz, 2001). The function of Information Technology in attaining the organization’s strategic progress intentions has been a very important field of firm research as well as development. Higher executive personnel were critical for the effective change to the modern technology. By means of the development of an intranet as well as database system supported technology based systems there is currently superior administration power, in the corporate departments and also have superior access to the corporate operational as well as working information, this facility helps them to work more successfully plus professionally, and as protrusions are further right or else obtainable in time for the management in case of long term business as well as corporate strategic tactics (OPPapers, 2010; Turban et al., 2004) & (Betz, 2001). Strategic exercise of IT Evolution Information technology function was resulting openly from the evaluation of informational source and it had no clear connection with strategic options at the level of business or company. This aspect was depiction of the real circumstance until the due times of 1960s as well as in the beginning of 1970s, when the requirement to shape the blueprint of management information systems to the necessities of the managerial strategic framework achieved money. In the year 1968, McKinsey & Co. presented a report with subject unlocking the Computer's Profit Potential that knows for a proper connection among the plan as well as accomplishment of management information systems and the firm’s goals as well as strategies. Researches of this type have advocated corporate strategic management and administration to think about the functionality of computers in company associations as somewhat further than a business data description as well as data processing resource at the business’s working level as well as more as systems that up-hold their policy (Bobbin, 2010). Basic Change There exists an undoubtedly transformation from a business financial system to an information technology up-hold service financial system that has considerably altered the global business as well as management practices. In this scenario the global business plus financial system has totally been transformed. The new business management and administration is having facility of in-time and accurate information that can be used for better policy formation in addition to enhanced business administration (Bobbin, 2010). Environmental activities similar to extensive worldwide contest and globalization are motivating the progress in the direction of increased information technology exploitation through businesses. The dire demands of global management of processes as well as need to act in reply swiftly to the worldwide competitive intimidations have highlighted the impact of information technology in the present business framework. Remarkable technical advancement in software, hardware, telecommunications and databases has concomitantly moved onward the employment of Information Technology to a further advanced position (Bobbin, 2010). Fundamental Practice As stated to the customary analysis, information systems provide a service task (i.e. for the human resources, bookkeeping, or else business dealings) which is supposed for the assignments of well-organized data processing and supervision of the management reporting and managing business operational systems. As of such observations, business IT and IS supported systems are planned to provide facility of working as well as operational support for the informational requirements of dissimilar executive plus strategic roles plus are known by means of typical informational necessities evaluation tactics. As a result, systems are assessed by means of principles like that design excellence, appropriateness and dependability, revealing the practical potential of the arrangement. The intimation is that the function of information technology was visualized mostly as the technical hub of the Management Information Systems tasks (Bobbin, 2010; Laudon & Laudon, 1999; Ray, 2004). Practice The possible influence of the IT and IS on the practice of business administration and strategic management is extremely higher. The basis planned for adopting such a observation reveals a basic conviction that information technologies are competent to possibly organize the basis of a corporate tasks: Alternatively pertaining to marketplaces, products as well as technologies (the business strategy stage), plus competitive processes within all of the product-market sections (the company strategy level). This practice of the IT and IS has influenced the decision power of the business management. Presently business management is more capable to take decision and implement new polices for the enhanced corporate support and performance (Bobbin, 2010; Hutchinson & Sawyer, 2000; Turban et al., 2005). Issues A number of issues are obstructing beside the fast deployment of Information Technology for strategic management. Along with there is still a slow growth of suitable business management software, concerns of database merging from different sources, hoary complexities in measuring Information Technology benefits (intended for explanatory IT deals), and the lack of proper business as well as corporate standards (for the reasons of inter-corporate connection) (Bobbin, 2010; Hutchinson & Sawyer, 2000; Turban et al., 2004). Attain competitive superiority The application of the new Information technology systems with advanced business management in addition to decision support incorporate functionality of the business and in time business decision support and handling. This framework leads to better business handling as well as management which indeed offer the business to gain a better competitive advantage plus dominance for the business. Information systems by means of an agreement to attain competitive superiority are known as the "strategic information systems" as well as distinguished as of the more operationally concentrated management information support. Certainly, modern and advanced management information systems technology has been usually concerned with the working control systems that are planned for relatively well thought-out decisions based on voluntarily obtainable, internal data. In difference, strategic information systems are intended to up-hold comparatively amorphous corporate decisions, particularly those that are elaborately attached to the actions of the market (Bobbin, 2010; Laudon & Laudon, 1999; Ramakrishna & Lin, 1999; Mooney et al., 1996). Corporate Strategic information systems attain their aims and goals in the course of numerous means; however two means require particular consideration. These are the rearrangement of the corporate information transfer within a business to offer competitive benefits comparative to struggling, and/or expansion of inter-corporate systems that expand further than the expected limitations of a distinct crucial business (Bobbin, 2010; Laudon & Laudon, 1999; Hutchinson & Sawyer, 2000). IT for Significance of Strategic Management It is really significant to assess and analyze the information technology systems significance in addition to their application and support for diverse areas of business. In this scenario the business industry has attained higher business functionality and performance for the enhanced customer experience plus support. It is accepted worldwide for the crucial significance of strategic management for the business. These technologies are designed on the advanced IT and information systems that are powerfully linked to the long-term business expansion, success, modernism development and competitive advantages. They are prepared upon the assistance as well as knowledge of organizations to conquer the struggle in the knowledge marketplaces. The hypothetical bases of these marketplaces are recognized here. Through its contribution in these marketplaces the business is competent to noticeably augment its competitive authority, their influence on worldwide marketplace and produce more profits through developing modernisms as well as creating knowledge. In the novel knowledge-based financial system simply knowledge-oriented corporate are able to obtain principal place in the global business. The information technologies that are competent to be engaged for knowledge management, accomplishment as well as business are as follows. These systems are capable to support business strategic support and corporate decision and policy management (Kovacheva, 2008): Corporate Knowledge administration frameworks New and advanced intelligent expert systems proposed for diverse knowledge domains Competitive intellectual systems Business Ontology creation systems Web services as well as Knowledge portals Corporate intellectual systems Knowledge sharing systems Enhanced Knowledge map systems Modernization support methodologies Knowledge based support systems for administration Knowledge communication systems IT for Corporate Strategic Management The application and support for the information technologies proposed for strategic management could be categorized according to the stages of strategic management procedure that includes 5 stages those are described below (Kovacheva, 2008): 1. Organizational objectives 2. Environmental Scanning 3. Strategy formulation 4. Strategy implementation 5. Strategic control Organizational objectives In case of organizational objectives which are taken as the firm objectives that a business desire to attain in future. These goals as well as intentions need to be quantifiable in order that the business is proficient to supervise its development as well as make improvements if required. Considering this stage of strategic management development the information technology based support and systems are used as given below (Kovacheva, 2008) & 1: Business objectives management IT tools and systems Policy building tools along with systems Discovery of inconsistent objectives as well as resolution systems Environmental scanning In case of corporate strategic management development environmental scanning is extremely significant activity of the strategic management procedure for the reason that its outcomes are the foundations for building corporate strategy as well as strategy re-engineering. When the corporate has established its aims plus goals, it starts by means of its present state as well as makes a strategic arrangement to competently attain these goals. An environmental scan is carried out to recognize alterations in the outside as well as inside environments plus the available prospects as well as concerned issues. This process is as well recognized as the situation analysis that entails a study of jointly the external as well as internal situation (Kovacheva, 2008). The outside environment has 2 features: the micro-environment as well as macro-environment. Macro-environment influences the entire corporate plus its analysis which is acknowledged in scientific research as the PEST Analysis. Micro-environment influences simply corporate as of single business. Its analysis consists of problems like that contest in the business, the actions of diverse contestants, suppliers, clients, modernisms in the business, products range and so on. The inner environment analysis is concerned with the entire aspects within the business. Consequently IT and IS technology based systems and software applications employed in environmental scanning have to support processing, collecting as well as studying the information regarding the outside plus inside status of the corporate. In this phase of strategic management process we are competent to utilize various sort of information technology which is capable to be used for minimizing ambiguity (Kovacheva, 2008): GIS (Geographic information systems) GIS (Geographic information systems) are extremely appropriate for geographic screening of business clients as well as consumers, contestants and suppliers and it is planned for marketplace geo-positioning. Information technology based Systems planned for discovery of prime environmental transforms plus prospects and systems planned for inner as well as outer environmental analysis. Knowledge management and Knowledge-based system that connect the newest accomplishments in the area of information technologies as well as encompass strategic influence over the company development as well as getting competitive benefit Information systems intended for taking out as well as processing information as of a variety of outer and inner business plus corporate information basis copyrights plus knowledge determining as well as observing technologies and tools Data mining as well as other company intellectual technologies plus tools Business tendencies as well as modernisms forecast systems and technologies Strategy formulation As I have already stated that corporate strategy is a large-period project and plan of accomplishments projected to attain some of the basic corporate objectives as well as is powerfully associated to the environment transforms. When the transform in the environment comes into view, the enterprises have to react by means of adjusting its policy according to the location transformations. Consequently we require information technologies by means of predicting characteristics plus planned for minimizing ambiguity (Kovacheva, 2008; Mooney et al., 1996; Summers et al., 2003): Information technologies that facilitates in support the strategy development process Situation development as well as assessment systems Strategy designing technology and tools State space examining tools as well as systems Strategic predicting Tools Strategy mapping Systems Strategy visualization Systems Systems intended for strategic business modeling Strategy implementation: Expanding the corporate strategy is not adequate to attain effective business and organizational outcomes. We should apply it through explaining it into more comprehensive policies that are competent to be recognized at the working level of the corporate. On this stage of the strategic management process we use the main aspects and areas of the information technology systems given below (Kovacheva, 2008; Summers et al., 2003): Strategic plan building systems Team association upholding systems Corporate Resources sharing supporting technologies Strategy accomplishment monitoring instrument Technologies intended for supporting managerial structure development as well as re-engineering Alterations management systems Strategy evaluation and control The corporate strategic management is an active as well as constant process. We continually require becoming accustomed of the developed strategy from the environmental alterations. Hence we should observe the environment as well as record plus evaluate its alterations. We as well should assess and appraise the efficiency of the developed strategy as well as apply strategy re-engineering algorithms if required (Kovacheva, 2008; Summers et al., 2003): To effectively meet these requirements the following systems can be employed: Business execution quantity systems Strategic control systems Strategy assessment as well as re-engineering systems Conclusion Corporate Strategic management is an excellent type of corporate decision-making action dealing by enduring development and development of the business. As a result it has precise information requirements as well as employs a variety of information technologies dissimilar than employed in the operational as well as middle-level management procedures. Strategic management is a on-going procedure that evaluates the company as well as the industries in which the corporation is engaged: competently study its competitors and establishes objectives and strategies to convene the entire obtainable as well as potential competitors; plus after that reassesses every corporate strategy yearly or else review [frequently] to verify how it has been purposeful plus whether it has accomplished somewhat or wants alternate through a modern type of strategy to convene altered state of affairs, fresh contestants, innovative technology, a fresh financial environment, otherwise a latest social, monetary, or political background. For the reason that strategic management employs the information from the entire levels of the business (in dissimilar levels of aggregation and abstraction) as well as from its background. We are competent to sate that each type of information technology that exists nowadays can be employed to up- hold the strategic management tasks. However according to its long-term tendency (long-term strategy development, accomplishment and evaluation) strategic managers have dissimilar business information requirements than middle-level as well as operational managers. To up- hold these precise business information requirements we are proficient to unite as well as take out a variety of information technologies appropriate particularly for strategic management as well as categorize them according to the phases of strategic management developments. The information which is offered for processing as well as examining is continually and rapidly mounting. It is employed at the entire levels in the modern corporate. In order to employ processing diverse information technologies are built up. In this paper I have analyzed and assessed the Information technology as a key to strategic management. In this scenario I have presented the main areas where the new technology based structures are proficient to facilitate the business sector and the management decision making and operational support. This report has tried to highlight some of the strategic management as well as strategy development phases where information technology along with information technology based systems are facilitating the business management. I hope this report will offer a better and broad insight into the Information technology and its key contribution to the strategic management. Bibliography Betz, F., 2001. Executive Strategy: Strategic Management and Information Technology. of John Wiley and Sons. Bobbin, N., 2010. The Strategic Use of Information Technology. [Online] Available at: http://ezinearticles.com/?The-Strategic-Use-of-Information-Technology&id=2040022 [Accessed 03 December 2010]. 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