IS-IT Strategy Module - Case Study Example

IS Strategy Student Name: Lecturer: Institution: Date: Table of Contents Table of Contents 2 IS Strategy 2 Introduction 2 Question 1 3 Question 2 7 Question 3: Report on IS/IT Policy Document 12 SWOT analysis of the IT infrastructure 13 Strengths 13 Weaknesses 14 Opportunity 14 Threats 15 Strategic Plan 15 Conclusion 16 Bibliography 17 Weill, P. & Ross, J. 2004, IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, USA, Harvard Business Press. 20 IS Strategy Introduction Different types of information systems have been proposed to be useful for management. Hemmatfar et al (2010) proposed that the advances of information have challenged organizations to develop information technology strategies that are related to their business strategies and those that when combined, will support the corporate missions of the organization. Avison et al (1994) added to this allegation by claiming that information systems strategy was an important part of business and had a linkage to the business framework. In their work, they presented strategic information system as an information system that was intended to enable the operator to gain and uphold a competitive advantage over their rivals in varying environmental conditions. Hemmatfar et al (2010) presented the types of information systems, presenting them as operational systems, financial systems and strategic systems. This paper shall discuss IS strategy with respect to the case study given and other sources of information in information system strategy. Question 1 An information system strategic plan, just like the a business strategic plan involves statement of a clear information system objective, carrying out an assessment of where the organization would like to be and assessing its capabilities and then implementing the methods that will get the organization to where it wants to be (Basahel and Irani, 2010). The elements of information system strategic plan include the business information strategy; which defines how knowledge and information will be used in supporting the objectives of the business, information system functionality strategy; which states the requirements that the business needs from the system and defines how the resources shall be used, and the information system strategy; which states the hardware and software standards together with the preferred suppliers. Planning Process It should be well known that there are no short-cuts to strategic planning process. The preparation procedures which ensure that the enterprises, firms as well as information strategies are efficiently aligned in a harmonized manner are extremely essential. Both internal and external evaluation need to be fully addressed and the general role of IT systems within the organization should be determined. The level of the expenses in IT initiatives has to be determined. The organizers need to be aware that the planning process for technology needs to be part and parcel of the overall business plan. Fergerson (2012) stated that information system strategic planning begins with clear specification of objectives. Stating of objectives in a strategic plan helps in providing the direction that will guide the team as it implements the strategy. It is the objectives that the group will keep referring to as they work the strategy out. It is also at this stage that the mission o the organization is linked to the strategic plan. This will enable the plan to work to the benefit of the organization. This is followed by generation of strategies that will be used in achieving the objectives. This stage requires involvement of all the concerned groups in the organization. Key stakeholders have to be engaged in setting the strategy so that they make their contribution on what they want to appear in the strategic plan. Any gaps to the setting of the strategy are identified so that they can be bridged. This involves identification of challenges that will be faced by the organization during the setting of a strategic plan. These strategies are then evaluated and rated against the specified objectives. Evaluation of the strategies is important so as to find out whether the strategy is working out as planned and to make any corrections or improvements on time. A means for monitoring the results is provided so that feedback is given. The feedback from this process is an important indicator of the progress and the viability of the whole process. Finally, an explicit procedure is created so as to ensure gain in commitment to the plan. It is vital for the team working on the strategic plan to be committed so that the work being done is carried out to meet the expectations. Commitment also ensures that there is a general goodwill from team members towards the success of the whole process (Johnson et al, 2008). An active strategy involves advocacy for the strategy to be done. This strategy pushes for the objectives set in the strategy so as to ensure the objectives are achieved. In this strategy, there is active participation in implementation of the strategic objectives. The strategy involves setting of a particular goal and working to outperform that goal. This goal can be set in terms of a performance index and then the team works towards achieving well beyond the set index. In essence, active strategy involves taking risks so as to go beyond the expectation of the objectives. The strategy involves active involvement of members with active consultation so as to rectify any errors and to get the expected goals. Since active performance focuses on adding value to the organization, an example is when the organization tries to select the objective, take advantage of the trend in the market environment, manage the risks involved and in return,. Get the returns that will outperform the benchmark index. On the other hand, passive strategies involve steps that support the implementation of the strategy. This strategy is a supporting strategy to the implementation and achievement of objectives. In this strategy, the team works in line with a certain preset and known goal. Therefore, the team only works to fulfill this goal and not to do anything beyond achieving the goal. Essentially, the team works to meet the benchmark. The idea in this strategy is to limit costs. Therefore the organization could find out an existing strategy in the market and since hey consider the strategy to be working equally well in other places, they could take notes from that strategy and even use the same strategy in their organization (Forefield Inc., 2009). According to Polack (2010), need for IT governance has been propelled by the rapidly evolving advances in technology. The emergence of competition has also become unpredictable and this requires the organizations to ensure appropriate plans are taken in governing their information systems. In addition, the need for strong IT alignment in organizations has also called for IT governance. There is also the growing need for effective resource allocation as well as accountability of the resources. This means that the decisions made have to be based on proper information and therefore the need for IT governance and well formulated procedures for the implementation (Kkavik, 2004). Teubner (2007) stated that the governance of IT in organizations is carried out by the heads of IT strategy and the directors of strategic information technology management. These positions are management positions that have been created purposely for strategic information system planning. The management of these organizations is behind all the plans to ensure there is proper IT governance in the organization. The management, in this case, was described by Weill and Ross (2004) to be the key decision makers in the organization. Therefore, the senior management in organizations plays a key role in IT governance. Kkavik (2004) added that the top administration of an organization should be on the front line in IT governance. The chief information officer plays the role of strategy alignment by selecting the most suitable balance between the organization and the drivers for information and communication technology so as to optimize delivery of services. The officer executes strategic alignment by implementing portfolios, projects and programs (Sabherwal and Chan, 2001). Question 2 The ownership of an IT strategy in my organization is taken by the person who is in charge of ensuring that the strategy is working in line with the objectives, initiatives and measures that will ensure the strategy succeeds. This person is accountable with respect to ensuring that the strategy is established. There is no title for the owner but it is about the responsibility of championing for achievement of the parts of the organization’s strategy. The person in charge of the strategy oversees communication between the teams that work towards implementation of the strategy as well as ensuring that training is done to the people responsible. The duty of the owner of this strategy is to ensure that the right people are selected to work on the strategy. He is also the person who coordinates communication between the strategy team and the organization so as to ensure that everything needed by the team is provided. The owner of this strategy makes sure that the strategy works in tandem with the requirements of the organization. The person also ensures that the strategy is engraved in the culture of the organization. Essentially, the owner manages and is accountable for the achievement of objectives of the strategy. He generally acts as a bridge between the implementers of the strategy and the strategy itself. Such a personality will required all the support from the management in terms of resouces to ensure that the set objectives are realized. Outsourcing of IT by organizations has been on the upward trend in recent years. DiRomualdo and Gurbaxani (1998) stated that one of the starters in IT outsourcing was Kodak. Kodak used a number of companies to outsource its operations. It turned to IBM for management of its entire data. In addition, it turned to Computerland for its microcomputer operations and to IBM and Digital Equipment Corporation for telecommunications network management (Taipala, 2008). Other companies like Lufthansa, British Petroleum Exploration, Dupont and Swiss Bank corporation have IS departments that are innovative and large enough to accumulate the same scale and benefits such as those they can obtain from vendors. Even so, they still prefer to outsource I.S. services from outside companies so as to ensure their operations are carried out at a close control (DiRomualdo and Gurbaxani, 1998). According to Sheng et al (2005), IT is central to the success of the business because it has initiatives like knowledge management, reengineering, creating electronic distribution channels and developing business strategies that are digital. This implies that organizations will work to ensure that they make good use of their IT services and attain maximum business benefits. To the contrary of this allegation, DiRomualdo and Gurbaxani (1998) stated that IT is not critical to the success of a business. Therefore, it is questionable as to why organizations have turned to the outsourcing strategy in IT. There have to be reasons for this in terms of the benefits attained. One of the benefits of outsourcing IT services is cost savings. The tough and ever changing economic times have called for measures that will facilitate reduction in costs so as to propel organizations to sustainability. By outsourcing, organizations get the best possible services in IT at the least cost possible. This is because the outsourced companies understand what to do and their operation goes straight to the required action. The charges imposed by them have an overall reduced cost when compared to the cost incurred by the company itself. This is because the company will save on the number of human resource to be hired in IT when they outsource their services. The company will only need to hire a few individuals who will assist in maintenance of the systems, those with the relevant expertise. This will help in ensuring that the system is fully maintained and that it serves the purpose it is meant to serve. Another important benefit that is obtained from outsourcing of IT is business transformation. This favours organizations that are in the process of transformation; an essential process in every business. When organizations outsource their IT services, they share the experience from external bodies and this helps in the transformation of the business. More intentions by organizations to outsource are driven by the need to have a business impact by the contribution of IT to the performance of the business. As revealed, IT has a positive contribution to the business. Therefore, organizations that need to make use of this contribution will seek the expertise of companies with the expertise and experience in IT for their services. Another important intention shown by organizations is to get commercial exploitation. This focuses on leveraging assets that are related to technology, infrastructure and operations by developing and marketing products that are related to technology. Information technology will help the organizations in operations together with facilitating the efficiency of these operations. However, the strategy has its demerits on the firm. Taipala (2008) pointed out that IT supports the main business processes of many organizations. The technical core of these organizations depends on the technology and when this technology is outsourced, the activity is transferred outside the organization’ boundaries. Since the technical core components are externalized, the organization’s structure and operation are evolved to a new form. This evolution of the structure has to be done for the organization to accommodate the operations of an external body. More so, implementing this IT relationship takes the form of a partnership between the outsourcing partner and the organization. This relationship is based on interdependent activities and mutual goals. A careful analysis of such a partnership indicates the development of a virtual organization which may mitigate the undesirable effects of the outsourcing model of pay-for-service, a service that is less collaborative. Having an external partner within the organization has its own challenges to the organization since the organization has to factor in this organization when it is necessary. This calls for more sophisticated arrangements for the operation to be done successful and for the organizations to operate smoothly. Therefore, this implies that the organization has to dig into its own ways to find the most appropriate way to incorporate the new partnership. Additionally, consideration of the long term effect of the strategy reveals some perplexing findings. In a study by Gorg and Hanley (2003) on manufacturing companies that outsourced their IT, it was revealed that the profits attained by these companies were less than that achieved by the companies that did not outsource their strategies. Another concern that was raised was the loss of knowledge from the organization to the outsourced companies. This is because the organization’s information is shared with the outsourced company. Furthermore, the organization loses out in terms of the experience of its own IT staff. The IT department in the organization cannot gain meaningful experience since they are never directly at the service of their employers when IT services are required. They are therefore forced to work with the outsourced companies, a move that will not accord them full freedom to implement their findings. Rather, it restricts their operation to the outsourced company. Investigation of the ability of this strategy to reinforce competitive strategy reveals some negative and undesirable findings. Croteau and Raymond (2004) suggested that an organization’s ability to develop competitive advantage using IT investments depends on its ability to use technology in supporting the organization’s strategy. This means that maintaining the alignment between the business strategy and IT investment requires business knowledge and IT knowledge. By outsourcing, this knowledge is potentially lost since the resources that acquire and maintain the information is outsourced. Therefore, the strategy of outsourcing IT services does not provide the competitive advantage that institutions should have in the market today. This strategy can also be undermined and complicated by the ability of non-IT personnel and employees to procure IT without passing through the IT department. This is a flaw that is brought about by the new complicated structure of virtually incorporating the outsourced firm into the structure of the company. Additionally, there is bound to be confusion on the analysis of the cost-benefit analysis of outsourcing when the service is billed using a pay-per-use fluid basis (SearchCIO, 2013). While outsourcing has been proposed to be lowering the costs incurred by an organization in IT, the strategy means that the organization shares control of the use of IT with the partner organization. Vintar and Stanimirovic (2011) stated that some organizations have totally lost control over the development, preparation and realization of projects that have bee planned and this has resulted in weak control of the rising costs and it has also reduced the accountability of services by the concerned personnel. Furthermore, the organization is not able to directly push for attainment of certain objectives of the strategy since it is reliant on the trust that the services offered by the outsourced organization will meet the objectives. Attempting to push the objectives directly will require following of a different protocol and this is time consuming. Question 3: Report on IS/IT Policy Document DuPont ranks as one of the leading and most innovative corporations in science around the world. The company operates in 70 countries and has more than 60, 000 employees. This company recognized the need to transform in its business and to venture into a new type of business. The business model of the company started changing in 1997 where the company was originally an energy and chemical company. The company decided to change to a science company and this was because of fierce competition in the market. This therefore called for the strategy of joint ventures, divestitures and acquisitions. The company therefore required an IT partner who would provide the flexibility that was required for proper implementation and achievement of these changes. The IT provider would deliver reduction in costs in applications maintenance and in operations. Additionally, the partner would also ensure that there is improved productivity and improved delivery speed and value on the investments in IT. Essentially, the partner would support all the new and existing critical functions in IT and hence enable the company to focus more on the core business activities and on its strategy so as to achieve significant change. Consideration of the IS/IT infrastructure indicates that the company has the equipment, software, systems and services necessary to serve its information systems requirements. The company has software development services, software maintenance services, purchased software like the enterprise resource planning, IT hardware infrastructure and the IT services. The computer systems and internet in the company are available to facilitate efficient system operations in the company. The data centers, computer networks and devices for database management are all in place and in use by the company. Governing of infrastructure at DuPont is done by use of monarchies that help in making of decisions and in various inputs in the company. This infrastructure exists at numerous levels. Every business unit has its own infrastructure and the governance of these infrastructures is done under the arrangements of the business unit (Weill and Ross, 2004). All these facilities enable the company to properly utilize the digital network and run efficiently in terms of systems performance. SWOT analysis of the IT infrastructure Strengths Since there is global diversity, DuPont has a heavy reliance than any other company on studying IT professionals who are used to represent the needs of the business. In addition, DuPont greatly values the alignment that exists between business strategy and IT. Therefore, the main strength of the IT infrastructure in the company lies in the training that the workforce has received in information technology. The human resource is highly skilled because they are taken for trainings on the recent developments in technology. When hiring, knowledge on IT is chosen as a selection criteria that would provide added advantage to those who have it. Further, they are given periodic trainings on new developments in IT. Additionally, the telecommunications infrastructure in the company is of high quality and provides quality services to the company. This makes communication within the company fast and reliable. Additionally, IT professionals in the company are used in defining solutions to problems that are faced by the company. Weaknesses The main weakness faced by the company is insufficient practical knowledge on information systems. The workforce has a lot of theoretical knowledge from the trainings they get. However, they do not have enough practical knowledge. Additionally, the market share of the company is stagnant due to stiff competition. This has made the company to perform poorly in the market economy and therefore called for reduction in payment of the salaries paid to workers. Opportunity One of the main opportunities that the company has is the rising number of high quality education in IT. This can be used in developing the skill of IT staff further for better performance. Additionally, there is the increasing number of working age people and this can be used by the organization in tapping more talent from the market. The rising developments in IT also provide opportunities for the company to use more sophisticated technology that will ensure efficiency in operations. The development of cloud technology facilitates use of services as and when required and paying for them as they are used. This makes it les costly for the company in use of IT. The global diversity in IT and other talents can and has been used by DuPont in ensuring that the IT professionals are the best that the company can have so as to propel the company to great heights in booth business and IT. Threats The economic meltdown in Europe provides a major threat to the company. This comes with dire economic consequences that the company has to deal with. It therefore calls for cost cutting by the company. Competition from other companies like PPG Industries, Akzonobel and Autocoat Engineering Private Ltd also provides a threat to the company. In addition, the company faces the threat of competition in talent which calls for the company to intensify its efforts of retaining the workforce that it has. The company faces the risk of losing valuable individuals and the investment that it has made on the people should they decide to leave. Strategic Plan Ward and Peppard (2007) stated that the most effective process of strategy happens at the business unit level followed by consolidation across the organization. This most effective plan would involve using the best individuals available from the IS function. These people will provide invaluable knowledge to the business and will bring in the creativity that is required to ensure efficient operation of the IT department. Top management should also be enthusiastic and committed towards the implementation of the strategy. The organization should gain a thorough understanding of the external and internal IT and business environments. It should also understand the business imperatives together with the culture and stimuli that drives the strategy. The objectives set should also be consistent with the maturity and experience and the approach used should be tailored so as to meet the objectives. Once these factors have been considered, the strategy should be formulated. This involves development of the strategy through alignment and competitive impact. The strategy should be in line with the objectives, the mission and vision of the organization right from the onset. This is then followed by IS planning. This is the implementation plan with which the strategy is effected. Through this plan, aspects of the strategy that need to be reviewed will be addressed and it is also using the plan that the strategy can be monitored. Evaluation of the plan has to be done time and again and the feedback received from this evaluation used in improving the strategy so that the right strategy for the organization is developed. Having set out the strategy, governance of IT should be done effectively so as to deliver the vision of the company. The right personnel need to be identified to help in the realization of the set goals and objectives. Keen adherence to the stipulated procedure ensures that issues are talked accordingly and to the required standards. Conclusion Information science planning was reported by Basahel and Irani (2010) as having crucial benefits to the organization. However, this requires the commitment of the executive and their skills so as to ensure the IS strategic plan is successful. There is also need for collective responsibility to ensure that all the stakeholders are significantly contributing towards the growth and development. The benefits take some time before they are felt after delivery of the IS plan. The importance of effective planning is stressed in ensuring the strategy goes through as intended. Further, innovation is required in the planning process so as to develop a plan that will work out successfully. From the study, it can be stated that the strategy of outsourcing IT works out in most organizations. But the long term competitive advantage of the organization does not benefit from such a strategy. Bibliography Avison, D., Eardley, A. & Powell, P. 1994, How Strategic are Strategic Information Systems? Australasian Journal of Information Systems, Vol. 4, No. 1, pp. 11-20. Basahel, A. & Irani, Z., 2010, Examining the Strategic Benefits of Information Systems: A Global Case Study, European, Mediterranean & Middle Eastern Conference on Information Systems, UAE. Croteau, A, & Raymond, L., 2004. Performance Outcomes of Strategic and IT Competencies Alignment, Journal of Information Technology, Vol. 19, 178 – 190. DiRomualdo, A. & Gurbaxani, V. 1998, Strategic Intent for IT Outsourcing, Working Paper ITR-140, Irvine, University of California. Fergerson, B. 2012, Key Stages of Strategic Information System Planning (SISP) Methods and Alignment to Strategic Management Planning Concepts, Applied Information Management, University of Oregon. Forefield Inc., 2009, Active vs. Passive Portfolio Management, Malborough, USA. Gorg, H. & Hanley, A., 2003, International Outsourcing and Productivity: Evidence from Plant Level Data, Research Paper Series: Globalisation, Productivity and Technology, Vol. 20. Hemmatfar, M., Salehi, M. & Bayat, M. 2010, Competitive Advantages and Strategic Information Systems, International Journal of Business and Management, Vol. 5, No. 7, 158-169. Johnson, G., Scholes, K. & Whittington, R., 2008, Exploring Corporate Strategy, UK, Financial Times Prentice Hall. Kkavik, R. 2004, IT Governace, IT Alignment in Higher education, Vol. 3: pp. 57-66. Pollack, T. 2010, Strategic Information Systems Planning, ASCUE Proceedings. Sabherwal, R. & Chan, Y., 2001, Alignment between Business and IS Strategies: A Study of Prospectors, Analyzers, and Defenders, Information Systems Research, Vol. 12, No. 1, pp. 11–33. SearchCIO, 2013, IT Outsourcing Strategy, Retrieved on March 23, 2013 from . Sheng, H., Nah, F. & Siau, K. 2005, Strategic implications of mobile technology: A case study using Value-Focused Thinking, Journal of Strategic Information Systems, 14: 269–290. Taipala, D. 2008, Information Technology Outsourcing: A Study of Its Role in Strategic Alignment and the Mitigating Effect of Virtual Organization, USA, Proquest. Teubner, R. 2007, Strategic information systems planning: A case study from the financial services industry, Journal of Strategic Information Systems 16: 105–125. Vintar, M. & Stanimirovic, D., 2011, Evaluation of Impact of Outsourcing on Efficiency of Public Sector Organizations, International Journal Of Business And Management Studies, Vol. 3, No. 2, pp. 211-225. Ward, J. & Peppard, J. 2007, Strategic Planning for Information Systems, 3rd Edition, UK, John Wiley & Sons. Weill, P. & Ross, J., 2004, IT Governance on One Page, MIT Sloan Working Paper No. 4517-04; CIS Research Working Paper No. 349. Weill, P. & Ross, J. 2004, IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, USA, Harvard Business Press. Read More

It is also at this stage that the mission o the organization is linked to the strategic plan. This will enable the plan to work to the benefit of the organization. This is followed by generation of strategies that will be used in achieving the objectives. This stage requires involvement of all the concerned groups in the organization. Key stakeholders have to be engaged in setting the strategy so that they make their contribution on what they want to appear in the strategic plan. Any gaps to the setting of the strategy are identified so that they can be bridged.

This involves identification of challenges that will be faced by the organization during the setting of a strategic plan. These strategies are then evaluated and rated against the specified objectives. Evaluation of the strategies is important so as to find out whether the strategy is working out as planned and to make any corrections or improvements on time. A means for monitoring the results is provided so that feedback is given. The feedback from this process is an important indicator of the progress and the viability of the whole process.

Finally, an explicit procedure is created so as to ensure gain in commitment to the plan. It is vital for the team working on the strategic plan to be committed so that the work being done is carried out to meet the expectations. Commitment also ensures that there is a general goodwill from team members towards the success of the whole process (Johnson et al, 2008). An active strategy involves advocacy for the strategy to be done. This strategy pushes for the objectives set in the strategy so as to ensure the objectives are achieved.

In this strategy, there is active participation in implementation of the strategic objectives. The strategy involves setting of a particular goal and working to outperform that goal. This goal can be set in terms of a performance index and then the team works towards achieving well beyond the set index. In essence, active strategy involves taking risks so as to go beyond the expectation of the objectives. The strategy involves active involvement of members with active consultation so as to rectify any errors and to get the expected goals.

Since active performance focuses on adding value to the organization, an example is when the organization tries to select the objective, take advantage of the trend in the market environment, manage the risks involved and in return,. Get the returns that will outperform the benchmark index. On the other hand, passive strategies involve steps that support the implementation of the strategy. This strategy is a supporting strategy to the implementation and achievement of objectives. In this strategy, the team works in line with a certain preset and known goal.

Therefore, the team only works to fulfill this goal and not to do anything beyond achieving the goal. Essentially, the team works to meet the benchmark. The idea in this strategy is to limit costs. Therefore the organization could find out an existing strategy in the market and since hey consider the strategy to be working equally well in other places, they could take notes from that strategy and even use the same strategy in their organization (Forefield Inc., 2009). According to Polack (2010), need for IT governance has been propelled by the rapidly evolving advances in technology.

The emergence of competition has also become unpredictable and this requires the organizations to ensure appropriate plans are taken in governing their information systems. In addition, the need for strong IT alignment in organizations has also called for IT governance. There is also the growing need for effective resource allocation as well as accountability of the resources. This means that the decisions made have to be based on proper information and therefore the need for IT governance and well formulated procedures for the implementation (Kkavik, 2004).

Teubner (2007) stated that the governance of IT in organizations is carried out by the heads of IT strategy and the directors of strategic information technology management.

Read More