Managing Strategies for IT Segment - Essay Example

Running head: Strategic IT Management Course Name: Course Instructor: Date: Abstract In this paper, we identify strategic IT management issues in organizations. We critically analyze and evaluate the organizations practices in IT management. The paper also tries to discuss the wider organizational implications of the steps which are taken by any business in the use of the IT strategy and their consequences. Introduction In many organizations today, such as the Glo- bus company, a strategic role is being played by information technology (IT) and, as such, has signified indispensability than it used to be, in the making of business strategies. Furthermore, when information technology is aligned with the current business strategy, a major concern is raised by IT leaders today (Hill, & Hill, 2011). Strategic management has an element of multidimensional construct. This element characterizes an extension which provides a basis of business, implementation and also, utilization of information systems competitively. This particular construct has four dimensions which include: Scanning of IT related environment (e.g. this means establishing the type of IT which the competitors are using), IT planning, and also control (this means a strategic planning of information systems related to the business set goals and objectives). Others are; IT acquisition and also implementation; (this involves choosing an IT which is properly suited to the strategic orientation of your company), and finally but not the least, is the strategic use of IT (here it involves using the acquired IT in order to increase the performance of your business i.e. increase in profits) (Hill, & Hill, 2011). Now, based on the above arguments, we can conclude that IT’s strategic management is basically addressing the strategic planning in Information Technology. Let us now see some of the systems hierarchy in strategic IT management (Hill, & Hill, 2011). Systems hierarchy In any organization, management can be used to monitor the overall performance of your business; it also establishes requirements of a business as well as its strategy. So information in technology has to entail these needs. Management Information systems People- Technology- Process (Paton, et al 2011). A strategic management normally starts with development of a company’s mission (i.e. to provide it with direction), goals as well as objectives (to give the company both the channels and methods for mission accomplishment), a business portfolio as this allows the business to make use of the facets of the institute as well as plans that are deemed functional in order to perform day to day operations in the different functional units. The aggregate objective strategic IT management is two folded: To achieve a competitive advantage, whereby a business is in a position to outperform its competitors so that it can have dominance over the market; here, the strategy helps the company to differentiate itself from its competitors in the production of its services and goods. As a result, the company dominates the market in the production of that particular product hence increasing profits and growth (Crane, 2000, pp 87). Helps in guiding the company successfully in the context of all the changes in the environment. The market environment keeps on changing hence the company has also to change in order to satisfy the customers’ demands. With the changes in the environment, the company can well position itself with the IT strategy to meet the customers’ demands (Crane, 2000, pp 87). The relationship among organizations, IT and IS strategies The three concepts above are related in order for the business to operate properly. With business strategy, it sets the overall direction to be taken by the company. Here, the company adopts a business strategy for example total quality management then it works towards the set goals and objectives in order to realize its competitive advantage. The IT impact and potential helps the business in making decisions, setting goals, objectives and direction as well as change. It answers the question, where is the business going and why? (John, 1997). Information systems (IS) are used when defining the kind of information, information system as well as the IT architecture which are required in order to run and support your business. Any organization requires information and it is this particular information which is reviewed periodically which tries to give direction for the company. The IT impact and potential here is business based, application focused as well as demand oriented. It answers the question what is really required by our business? (John, 1997). Information technology strategy: It gives and indicates how services and infrastructure are to be delivered. Any organization need IT strategy since in involves the infrastructure which is used by the company in order to realize its set goals and objectives. IT infrastructure is composed of a set of hardware, software, networks, facilities among others, to facilitate development, delivery, monitor, test, control and even to support the services affiliated to IT services. The IT impact and potential is activity based, technology focused as well as supply oriented. It answers the business question, how it can be delivered? With the above information, this now leads us to the business triangle which is another aspect in IT strategy (John, 1997). The strategy triangle The strategy triangle is used to show that the business strategy drives both the information strategies as well as organization strategies. In every successful business, they are always guided by a proper business strategy which drive the organizational and IS strategies. This business in order to endeavor seeks to balance the business, organizational and IS strategy. If any of them is missing, the business can fail for example, IS strategy is affected by usage of strategies existing in a firm. So a change in either strategy is also accompanied by dominant adjustments in other strategies (Hallam, & Seebohm, 2007, pp 12). IT planning success Planning in IT involves the organization of plans concerning resources, and this is done at different levels of the business. It involves coming up with a strategic business pan. This business plan then includes the overall direction to be taken by your business. It has the business goals, objectives, and the company’s strategic position. During the planning process, we have the IT long- range process, IT medium term plan and the IT tactical plan (Hicks, 2009, pp 49). In the IT strategic long- term plan, it gives the overall direction on resource requirements’ and resourcing, the company’s budget, activities as well as time frames. It tries to define what it should do in order to achieve the set goals of this company. In the IT medium term plan, it involves the general projects plans like the project portfolio and the resource determination. In the tactical planning of IT, it details the budget as well as scheduling for the current year projects and activities. Strategic IT management has tools and methodologies in the strategic planning (Hicks, 2009, pp 49). Tools and methodologies in IT strategic planning The tools as well as methodologies, which help in facilitating strategic planning in IT, include the balanced score card, IT dashboards, and critical factors for success. Under IT dashboards, management of a business service is one of the approaches in trying to link the key performance indicators (KPIs) in IT to the goals of a business in order to define the effect to the business. The biggest question here is; what is the business impact? What is the problems effect? And what is the problems cause? (Karlsson & Honig, 2009, pp 27). Balanced scorecards keep an attention and tend to focus on the business value drivers. Many companies utilize it in order to access the impact on the strategies associated with the company, their customers, workforce, and their performance in financial areas. Here, the business is in a position to answer the questions such as; what views about us do our customers hold? Must we succeed in? Can we have a continuous improvement and value creation? And how do we view the shareholders? As a result, you find that the company is in a position to work on its strategies hence increased performance (Karlsson & Honig, 2009, pp 27). The above tools and methodologies are used in the following ways: they help the business in aligning IT strategies with the business strategies, they do also establish opportunities in order to add value with IT or even utilize the available IT in order for the company to realize its competitive advantage. It helps the business to analyze its internal processes (Karlsson & Honig, 2009, pp 27). IT governance and leadership IT governance is an integral part of the business governance and it has the potentials of providing mechanisms for leadership as well as the organizational structures plus the processes that ensuring that the company’s IT extends and sustains the companies strategies and set goals and objectives. It leadership on the other hand sets the company’s direction, it also creates commitment, mobilize organizational, political and psychological resources, it also acts as a catalyst to actions according to the environmental changes so that it builds on value to the general performance of the company (Kobia & Sikalieh, 2010, pp 110). Critical success factors (CSFs) The critical success factors can be seen regarding the few number of areas where satisfying results will give rise to a successful competitive advantage for organization, individual and department. These are the areas in any organization, which should attract a continued attention from the company’s management. The critical success factors help the company in answering the following questions (Lechner & Leyronas, 2009, pp 645). What objectives are key to the business? What CSFs are required in order to meet these objectives? What information is required to achieve the above critical success factors? How is information technology helping in achieving the critical success factors? Key IT capabilities that facilitate reliable competitive advantage The following are some of the key IT capabilities that help a business in trying to realize its competitive advantage taking into account, the staff as well as the highly competent IT leaders. This helps the company in properly adopting and using the technology in its operations effectively. An IT infrastructure with an attribute of agility and, a strong partnership with the business. This helps the company to implement its decisions together and work towards those set decisions by the management and a strong governance system for managing IT. This is because it is one of the integral parts by any business as it provides the mechanisms for leadership, and organizational structures as well as the various processes that ensure the business IT extends and sustains its strategies and objectives (Morris, Schindehutte & Allen, 2005, pp 726). In a market place with high competition, creation and delivery of superior value enable companies operate successfully. As such, the superior value is essential in targeting customers and also learns an aspect of adaptability concerning a business environment subjected to continuous change. Competitive advantage can only be achieved when the companies are farsighted and visionary with a system of managing strategically. The table below represents the major findings based on a survey which was done on 290 businesses. It was done by the information management society. It was done to give leaders around the world, an assistance to understand the important issues and trends in IT management (Ranyan, Droge & Swinney, 2008, pp 567). IT management concerns 2008 2007 2006 2005 2004 2003 IT & business alignment 1 2 1 1 1 1 IT strategic planning 2 3 Attracting new IT professionals 3 8 4 4 4 2 Making better use of information 4 1 2 2 2 4 Manage change 5 9 Reduce the cost of doing business 6 7 3 2 3 3 Improve IT quality 7 4 Retaining IT professionals 8 5 Security and privacy 8 1 2 2 2 4 Benefits of strategic IT management Strategic IT management enables companies to be more proactive rather than being reactive, in curving the business future. You find that the companies can do analysis as well as take actions, while avoiding being mere spectators. With a strategic IT, they can control their own destiny better. It assists them to work within the environmental parameters, while shaping it, rather than letting the turbulence or uncertainties carry them away (Rodriguez, 2008, pp 640). IT strategy also helps companies through provision of major business decision frameworks of an enterprise. These major decisions include the company’s products, services, markets for their products, the manufacturing facilities, investments and organizational culture. The company then has a proper guidance since the strategy gives the company the proper direction to take-what course of action the business is contemplating. It is also concerned with providing a basis towards a good future for the company. It aims at establishment and preparation of the company to exist in the future and also acts as a pathfinder to a number of businesses opportunities. The company can establish available opportunities’. Still it can identify the available ways as well as means as to reaching these opportunities (Rodriguez, 2008, pp 640). It also acts as a company’s defense mechanism against mistakes and pitfalls. It helps in avoiding mistakes with significant rectifying cost in products, various investments, market, or even choices. Over a time period, IT strategy management has helped companies in evolving certain key competencies and competitive advantage hence this has helped these companies in fighting for their survival as well as growth in the competing markets (Rodriguez, 2008, pp 640). Summary The form of IT existing today has a higher degree of importance with respect to the form that existed before in the making of a for the business strategy In order for IT to be strategic and provide a competitive advantage, therefore it should be tied to the whole processes of the business and also align with the set business strategy Strategic alignment pose as a concern to the top management concern though challenges about the IT strategy exists, of which need to be researched In order to attain a strategic alignment, IT governance as well as leadership is playing a vital role. These two concepts work together under IT strategy in order for the company to compete effectively in the market The profile of a leader in IT should be one leader with a role that is strategic and should be included in the top management team. Adopting a proper approach to strategy in measuring IT performance with support of tools and methodologies for strategic planning, enables the business to see how it is performing hence it can access its growth and success. Conclusion Within the past decades, organizations have grown within the benefits of utilizing information technology in order to improve the timeliness, cost, and quality of a product or even delivery of service. Furthermore, companies are seeking in solving a problem using a telephone call, obtaining customer service on a day and night basis, cash withdraw from an automated teller machine all over the country and also getting products and services been delivered almost anywhere in a single night. Strategic IT management has transformed so many companies hence the economies have grown tremendously and a good example is the Glo-bus company which has employed this technology. Most of this technology has been applied in the developed country that is why they tend to give a stiff market competition to the developing economies which tend to lag behind. References Crane, O. 2000. High performance teams. Team performance management. British journal, Pp 87-102 Hallam, S., & Seebohm, P. 2007. What makes an entrepreneur? A life in the day, 11 (1), 12-1 Hicks, S. 2009. What business ethics can learn from entrepreneur? Journal of private enterprise, 24 (2), 49-57 Hill, A., & Hill, T. 2011. Essential IT management. Chicago: Palgrave. ISBN 9780230232594 John, K. 1997. Achieving competitive advantage. London, Littman publishing free press. Karlsson, T., & Honig, B. 2009. Judging a business by its cover: An institutional Perspective on new ventures and the business plan. 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