The foundations of IT strategy Jonny Holmström Web: jonnyholmstrom.com Email: jonny.holmstrom@informatik.umu.se Twitter: jonnyholmstrom

Outline Mintzberg again Galliers & Leidner Early assumptions about IT strategy Assumptions change… Peppard et al (2014) Ad hoc IS planning SISP Building an IS capability IS Strategizing

Remember Mintzberg’s view of Strategy? Source:H. Mintzberg and J. A. Waters, “Of Strategies, Deliberate and Emergent,” Strategic Management Journal 6 (1985), pp. 257-72.

Galliers & Leidner: Strategic Information Management IT management must not only be sensitive to the phase of a technology, but also its impact on the organization As technology, environment and organization change, so too must the priorities which organizations give to their IS portfolios. The strategic impact of IS/IT on an organization will vary over time

The early assumptions on IT strategy The strategic alignment model (Henderson & Venkatraman, 1993) Assumes that linkages/alignments between key components must be in place

Assumptions change over time…

Practice and technology becomes increasingly complex

IT strategies in organizations (Peppard et al., 2014)

Ad hoc bottom-up approach to determining IS Praxis: Ad hoc approach to determining EDP and computing requirements Practitioners: IT staffs Practices: Most emphasis on building systems rather than determining strategy. Illustrative tools: Systems development methodologies Description: Ad hoc, bottom up, primarily driven by technology requirements. IS plan operational in focus, for the most part identifying individual applications (cf Galliers and Sutherland, 1991)

IS planning Praxis: Top down approach to determining IS needs to meet business goals. Shared group understanding of a few key individuals (Ciborra, 1994) Practitioners: IT staffs Practices: Planning based on an informal network of a few key individuals (Pyburn, 1983; Earl, 1993) Illustrative tools: IBM Business Systems Planning Andersen Consulting Method 1 Critical success factors (Rockart, 1979) Description: Formal top down planning for IS. IS plans reactive to business plans. Aligning to business goals (Kriebel, 1968; Zani, 1970; McFarlan, 1971; King and Cleland, 1975; Zachman, 1978; King, 1978)

Strategic planning for information systems Praxis: Team approach (Mentzas, 1997). Involving multiple stakeholders (Earl, 1993). Importance of feedback in assessing IS planning effectiveness (Baker, 1995) Practitioners: IS strategy promoted as a business management issue (Earl, 1989). Senior management and IT staffs Practices: Focus on themes (Earl, 1993). IS plans periodically reviewed to adapt to changing circumstances (Earl, 1993). Illustrative tools: Customer resource lifecycle, Strategic thrust analysis, Five forces analysis, etc Description: Proactively seeking opportunities for competitive advantage from IT (McFarlan, 1984; Porter and Millar, 1985; Earl, 1989)

Building an IS capability Praxis: IS capability embedded in fabric of the organization Practitioners: All employees Practices: Influenced by organizational culture; and information orientation of organization (Marchand et al., 2000) Description: Acknowledging that having a strategy is only part of what is required. Ability to continually identify opportunities, deploy technology, implement change and use information and IT (Peppard and Ward, 2004)

IS strategizing Praxis: Cognitive and intellectual dimensions. ‘‘The most important direct predictor of alignment in this study was a high level of communication between IT and business executives’’ (Reich and Benbasat, 2000) Practitioners: All employees Practices: Co-evolution of business and IT strategies (Benbya and McKelvey, 2006; Breu and Peppard, 2003) Description: IS strategy something that organizations do rather than have. Integrating IS considerations into the discourse on business and knowledge strategy (Galliers, 2011). Functional strategies having a digital component; fusion of IS and business strategies – the digital strategy (Bharadwaj et al., 2013)

Summary IT strategy has become a key concern for today’s organizations The role and meaning of IT strategy depends heavily on the role and meaning of the character of IT There are several distinct approaches to IT strategy – a firm must make informed decisions regarding what approach to pick