Module 2 Managing Technology Topic 3: Align Information Technology and Business Strategy

What is IT strategy? The mission critical, long-term IT choices made by a firm. Commitment to build IT capability

Why acquiring IT capability? To create new businesses, to expand an existing market, and to discern new strategic directions To survive To improve performance To distinguish an organization in the marketplace

Successful IT Implementation Commitment to IT strategy Alignment between IT and business strategies Role of Chief Information officer Top management support

Types of IT Strategy IT leader strategy IT follower strategy Niche strategy When to use what IT strategy?

Strategic Alignment Process IT strategy Business strategy Organization infrastructure and process IS infrastructure and process

The Concept of ‘Fit’ Three perspectives (Alder 1989) Business and technology strategy Technology poster and functional decision making practice Synergy between decision making practices

Technology Strategy Field Consists of Particular dimensions of technology policy that is related to business strategy Integrative models that prescribe fit between technology policy and business strategy Empirical links between technology strategy and business strategy

Business Competitiveness & Technology Strategy Manager should (Clark, 1989) Understand their technological base Take an international perspective Discipline their business function around the production function Integrate all business functions Focus on time as the critical factor

Strategic Technology Management Process 3 Key areas (Betz 1993) Identification and development of a firm’s technological capabilities Products/processes that provide competitive advantages Integration of areas one and two

Technology and Business Outcomes Technology is critical to business outcomes Characteristics of best practices include Championship of technology issues Adequate levels of technological competence Selection of the structural for of the unit Coupling between a technology function and others Extent and timing of technology control Technology transfer mechanisms

Technology Strategy & Leadership Technology strategy plays an important role in enabling firms to achieve their leadership position

Summary Superior performance characteristic (textbook, p. 30) Technology is a means, not an end in itself. Capable people are valuable resources. Technology needs to be planned and exploited within and through the “big picture” context.

Strategic Alignment Framework Luftman, J.N., Lewis, P.R., and Oldach, S.H. "Transforming the Enterprise: The Alignment of Business and Information Technology Strategies." IBM Systems Journal ,Vol. 32, No. 1, 1993, p. 198- 221. Luftman, J. and Brier, T. "Achieving and Systaining Business-IT Alignment." California Management Review, 42(1), Fall 1999, p 109-122.