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Strategic IT Management - Essay Example

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The term 'Information Technology' defines the use of computer software and computer hardware to process, store and communicate information in different formats to people all over the world. Information Technology, now popularly known as 'IT', has raced into the new millennium creating an ever increasing need for more information…
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Strategic IT Management
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VALUE CHAIN ANALYSIS Introduction The term 'Information Technology' defines the use of computer software and computer hardware to process, store andcommunicate information in different formats to people all over the world. Information Technology, now popularly known as 'IT', has raced into the new millennium creating an ever increasing need for more information. This trend is apparent in all fields but its need is unparallel in the software developing industry which is considered the heart of all information and communication technology. The reason for this trend is identified as the need to gain more information about the customers to give them more value and more reason to stay loyal to the company and its products.
Porter's Value Chain
The Harvard Guru Michael Porter (1985) described in his book 'Competitive Advantage' that value for the customers can be created by efficiently linking and managing the series of primary and supporting activities in an organisation. Porter's Value Chain Model is represented in the diagram below. (NetMBA, 2002)
This model shows that inputs are taken in, processed and converted into outputs and finally sold to the customers to maximize profits. Lets take an in depth view of these activities to analyse the role of information technology.
Analysis of the Value Chain
By analysing the value chain of the company, we can identify that primary activities of the delivery team would be system architecture, system requirements, development of the system, test and implementation and finally deployment. After-sales service and technical support is the on-going facility that the company provides. In each and every activity, the company adds value to the previous stage to develop a differentiated product that satisfies the customer's needs. (Jenz, 2003)
Inbound Logistics - The inbound logistics for the software development company include the system architecture, the IT infrastructure and the system requirements. These are stored in gigabytes of memory on computers and servers and coordinated by the Systems Management and Human Resource Management departments. Customer information, their needs, past experiences and projects are stored in data warehouses and are analysed.
Operations - The operations are the actual development of the system where software engineers from the Research & Development department start building the software. The Human Resource department manages the 35 programmers and 4 testers to keep them motivated while the systems management department oversees the procurement needs of the development team. The Accounts & Admin Departments closely works with the procurement department to make sure that the developers have an adequate budget to complete the project on time. Various software including CASE tools are used to develop the system. Information technology is constantly employed to get the updated status of the development process using tools like Lotus Notes. Agile development using iterative approach is used to 'build the right thing and deploy it'. (Charlie 2006)
Outbound Logistics - As such there is no outbound logistics since the software developed is stored onto disks with documentation also in electronic format. However packaging suitable formats and gaining electronic copyrights are part of the information technology's role in outbound logistics.
Sales and Marketing - Sales and Marketing department takes care of the testing and implementation of the system on the customer side. Media such as audio and video is used to give presentations to train the customers. The systems management department remains in contact wit the sales and marketing team through online applications to support the implementation and deployment of the system. (NetMBA, 2002)
Service - After sales service is now considered as an embedded part of the system. The Customer Call Centre provides aftercare service and helpdesk support is available through the internet for the convenience of the customers. At the backend of the company the systems management department provides IT support to customer queries.

Conclusion
Porter said that the key to linking activities together in a way that gives a company an advantage over others is to understand the flow of information that occurs between the various activities. Each department in the organisation must coordinate and interact with other departments for a company to reach its goals and to provide customers with maximum value. According to Ranjiva (2006) the sales, development and systems management departments need to share information on new orders if they are to work together successfully. The business analysts need to share the use cases they built with the developers and testers. The architects need to share high level design information with the developers. The developers need to share detailed design information with the testers and all need to share information on progress with the project manager who uses PERT and GANTT charts to complete projects in time. Understanding the need for information and increasing the efficiency of information flow using IT is important in improving the productivity of the team hence providing the customers with value added and differentiated products.
Works Cited
1. Charlie (2006), "A value chain approach to IT", erp4it, Retrieved on November 18, 2007 from http://erp4it.typepad.com/erp4it/2006/02/a_value_chain_a.html
2. Jenz, Dieter E. (2003), "Simplifying the Software Development Value Chain", Retrieved on November 18, 2007 from www.bpiresearch.com/WP_BPMOntology.pdf
3. NetMBA (2002), "The Value Chain", Internet Center for Management and Business Administration, Inc., Retrieved on November 18, 2007 from www.netmba.com/strategy/value-chain
4. Porter, Michael E. (1985), "Competitive Advantage: Creating and Sustaining Superior Performance", Free Press
5. Ranjiva (2006), "The Value Chain Delivering IT Solutions", Retrieved on November 18, 2007 from http://blogs.ittoolbox.com/pm/school/archives/the-value-chain-9813 Read More
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