1. IT Strategy
The effective management of IT organizations in the dynamic business environment of the 21st century demands that senior IT managers work with senior functional (e.g., marketing, R&D, finance) managers to develop IT strategies that are aligned with the firms strategy for sustainable competitive advantage.
IT management must be continuously aware of the opportunities to transform the firm.
The process for developing strategy must demonstrate the opportunity for IT to enable or drive business strategy and operational effectiveness and efficiency.
Alignment addresses both how IT is in harmony with the business, and how the business should, or could, be in harmony with IT.

2. IT Strategy are divided into further activities and focus areas
Issues
Hypotheses
Analytics
Conclusions
IT Strategic
Initiatives
Study Scope
and Objectives
Company's
Objectives
IT Plan
Business Strategy
Business Capabilities
Business
Scenarios
Business Capability
Descriptions
Structure
IT Capabilities
IT Vision
Application
Functionality
IT Current Assessment
IT Requirements
Technical
Infrastructure
IT Governance IT
Organization
IT Management
System
Processes
Positioning
Environment
Configuration

3. ICT GRAND DESIGN STEPS Planning
Vision, Mission, Strategy, Responsibility and Priority
Planning
(How reaching of)
Expected Condition
(where we are going to)
Existing Condition
(Where are we now)
Cost Estimate
4th STEP
2nd STEP
Determining expected Level .
Condition Assessment
1st STEP
Create Plan & Strategy
Implementation
3rd STEP
Gap Analysis

4. Vision Mission Goals & Targets
Methodology
Vision
Mission
Goals & Targets
Review
Existing
Direction &
Plans
Conduct SWOT
Analysis
Define
Organization
Value
Chain(s)
Phase 1
Environment
Define
“Should Be”
Competences
Capabilities
on the Value
Chain(s)
Strategic
Focus Model
Phase 2
To-Be Scope
& Competencies
Define
“As-Is”
Competences
Capabilities
on the Value
Chain(s)
Strategic
Focus Model
Phase 3
As-Is Scope
& Competencies
Refine
“Should Be”
to “To Be”
Determine
“As-Is /
Should Be”
Gap Analysis
Define
“To Be”
Governance
Phase 4
Gap Analysis/
Define
Realisation
Organization
Plans
Identify
Opportunities:
Early Wins &
Long-Term
Information Tech.
Planning
Define Organization
Value
Propositions &
Needs
Phase 5

5. Strategic Management DEFINITION
Science concerning formulation, execution and decision evaluation by comprehensive to reach the organization objective.
MANAGEMENT STRATEGIC PHASE
VISION & MISSION DETERMINING
ENVIRONMENT STUDY
STRATEGY FORMULATION
ACTION or IMPLEMENTATION
CONTROL & EVALUATION :
RE-STUDY, MEASURING PERFORMANCE & CORECTIF ACTION
KEY : ADAPTATION BY MANAGEMENT CHANGES
ACTIVITIES
VISI
MISI
OBJECTIVE
ANALYSIS
(SWOT : STRENGTH & WEAKNESS, THREAT & OPPORTUNITIES)
STRATEGY & POLICY
PROGRAM & ACTIVITIES
BUDGETING

6. Strategy Definition STRATEGY
Derived from Greek, means “the art of the general”
About making choices that include :
The selection of business goals.
The choice of products and services to offer.
The design and configuration of policies that determine how the firm positions itself to compete in its markets.
The appropriate level of scope and diversity.
The design of organization structure, administrative systems, and policies used to define and coordinate work.
VISION, MISSION AND STRATEGY
Mission (What?)
Strategy (How?)
Bridge between Vision & Mission
Big Hairy Audacious Goals
“BHAGs”
Implementation
Objectives
With plans
Time
Analysis
Measurements
Vision (Where?)

7. Formulation of Strategy
Having three keys elements
VISION
MISSION
STRATEGIC OBJECTIVE
Vision (Where?)
Mission (What?)
Strategy (How?)
Bridge between Vision & Mission
Implementation
Objectives
With plans
Time
Analysis

8. Vision Statement “Where Do We Want To Go?” An Effective Vision, is :
Imaginable, conveys a picture of what the future will look like.
Desirable, appeals to the long-term interests of employees, customers, stockholders, and other who have a stake in the enterprise.
Feasible, comprises realistic, attainable goals.
Focused, is clear enough to provide guidance in decision making.
Flexible, is general enough to allow individual initiative and alternative responses in light of changing conditions.
Communicable, is easy to communicate, can be successfully explained within five minutes.
Measurable, stakeholders will clearly see that they have attained the goal.
State the vision and long term direction

9. Mission
“What are we?”
Begins with the mission of the IT function, the reasons the IT function exists.
A mission statement for IT is a concise statement of what business the group is in.
The company mission should be reviewed to identify ideas or themes for the IT mission.
IT strategies that are formulated that are inconsistent with the mission or the core values of their company run a very high risk of failure.
Example :
“To develop, implement, and maintain high-quality efficient and effective business systems that provide the information needed to support the daily operation and strategic business direction of the business at a level superior to the competition with customer satisfaction as the end goal”

10. Mission Statement
To be architects of alignment linking Business and IT.
The metaphor of architecture is chosen because the IT strategy is not just about technology.
IT strategy is about the purposeful creation of integrated environments that leverage human skills, business processes, organizational structures, and technologies to transform the competitive position of the business.

11. Strategic Objectives
“How will we achieve this vision?”
How the vision will be accomplished over the time period identified in the vision?
An effective strategy is aligned with the mission and core values of the company and provides the “architectural bridge” between the mission of the company and the vision.

12. Goal and Objective State the desired goal State the desired objective
Use multiple points if necessary
multiple points
Goal
Today’s Situation
Objective

13. Today’s Situation Summary of the current situation
Use brief bullets, discuss details verbally
Hyper Competition.
Global Markets.
The other influence of the 21st century business environment on IT strategy.
Mutually Supporting, Company’s Ability to respond to increasingly uncertain and evolving markets.

14. Scanning the External Environment
Environmental Scanning.
The process of studying the environment of the organization to pinpoint opportunities and threats.
Environment Changes Impacting IT
Governmental regulations
Economic conditions
Geographic and competitive concerns
Workforce composition

15. ENVIRONMENT APPROACH ICT GRAND DESIGN TOP-DOWN APPROACH
Goal & Objective
Analysis
Method
Revision
EXTERN-INTERN
APPROACH
Developing System
ICT GRAND DESIGN
Survey
Creation
Evaluation
BOTTOM-UP APPROACH
Existing System

16. How Did We Get Here? Any relevant historical information
Original assumptions that are no longer valid
In this role IT Managers need to :
Be knowledgeable about how the new IT technologies can be integrated into the business as well as among the different technologies and architecture.
Be privy to senior management’s tactical and strategic plans.
Be present when corporate strategies are discussed.
Understand the strengths and weaknesses of the technologies in question and the corporate wide implications.

17. IT Strategy
A set of decisions made by IT and functional senior management that either enable or drive the business strategy.
The development of an aligned IT strategy is critical in today's business environment for several reasons :
Regardless of whether the business is in the manufacturing or service sector, most business is information based.
The ubiquity of IT in manufacturing and services throughout the world has made the market value of physical products and processes less important than the knowledge and information embedded.
A turbulent business environment demands organizations that have adaptive processes, that are not merely flexible, but also aligned with the changing information requirements of the organization and the external environment.
Business processes are coordinated activities that involve people, procedures, and technology.

18. IT and Business Transformation
In formulation of an IT strategy, technology can drive business transformation as well as enable transformation.
The evidence that IT can transform business has been amply documented.
In the role of transformation driver the IT strategy becomes the Business strategy, offering novel and competitively differentiating ways of doing business.
In its role as transformation driver IT can create and exploit new markets, link customers more tightly to the firm, and define new standards of operational excellence for the industry.
For Example : E-Business

19. DEVELOPMENT STRATEGY Where is the business going and Why
IS/IT
Impact &
Potential
Business Strategy
Business Direction
Objective and Direction
Change
Support
Business
Direction
for Business
IS Strategy
What is require
Business Based
Demand Oriented
Application Focused
Infrastructure
& Services
Needs &
Priorities
IT Strategy
How it can be delivered
Activity Decision
Supply Oriented
Technically Focused

20. Unfortunately, IT can also an inhibitor to Business Transformation
This situation occurs through several mechanisms :
When the IT Strategy is not aligned with the Business Strategy.
Over-emphasis by IT Management and Business Management. Due to communications issues between the different “culture” of management, are :
* The “executive” culture, focused on maintaining an organization’s financial health and deals with boards of directors, investors, and markets.
* The “engineering” culture, represents the people who work with the various technologies of the organization and how those technologies are to be used.
* The “operator” culture, evolves locally in an organization or business unit and is based on human interaction.
Failure of IT and Business Management to recognize that effective use of IT requires business process change.

21. Strategy Alignment
The concept of strategic alignment stresses the harmonization of the goals and implementation plans of IT with the goals and organizational structure of the business.
One of the major concerns of key business leaders has been the alignment of business goals and IT goals.
IT executive must understand the strategic goals of the business in dynamic and uncertain environment, choices of technology support that will enhance competitive advantage.
Refer specially to the coordination of an organization’s external business and IT goals and its internal business and IT organizational infrastructures.

22. Strategy Alignment BUSINESS Strategic Fit
The concept of strategic alignment is based on two fundamental assumptions
External domains concerned :
The Scope of the Firm’s Business, (customer, products, markets, and competitors).
The Distinctive Competencies, (core competencies and critical success factor that provide competitive advantage).
The Governance of the Firm, (impact of regulatory agencies on strategic choice).
Internal domains concerned :
Administrative (organizational) Structure, (functional, matrix, decentralized, process-based, geographic and organizational structure).
Critical Business Processes. (critical processes).
Human Resources Skills. (acquisition and development of the skills of the people required to manage and operate the firm’s key business activities.
The Dynamic Nature of Strategic Fit
A firm’s competitors will eventually imitate any strategic choice, thereby rendering temporary any competitive advantage obtained from a specific technology or suite of applications.
From an IT management perspective, strategic fit also implies the need for the organization to develop and sustain capabilities that leverage IT to generate sustainable competitive advantage.

23. Strategy Alignment INFORMATION TECHNOLOGY External domains concerned :
The concept of strategic alignment is based on two fundamental assumptions
External domains concerned :
The Scope of the Firm’s Technology, the critical technologies and suite of applications that impact and support business strategy decisions and initiatives. (data mining, neural networking, data visualizations, internet, sales force automation, collaborative software, imaging system RDBMS)
Systemic Competencies, analogous to a firm’s distinctive business com, these are technology capabilities (connectivity, customer information).
IT Governance, analogous to the choices of business strategic alliances or external relationships (vendors and consultant).
Internal domains concerned :
IT Architecture, the principles that guide choices and decisions about the selection of technology infrastructure as well as the structures and models used to define data and information, network, applications and systems.
IT Organizational Processes. The activities and task that are critical to the operation of the IT organization such as system development or IT operations (data center) management. (critical processes)
IT Skills, the acquisition and development of the people needed to manage, operate, and design the IT infrastructure of the firm. Analogous to the firm’s key business skills, Human Resources considerations specific to IT (hiring, firing, retention, training, assessing) are also considered.

24. Strategy Alignment Strategic Alignment Model (SAM) Components
I. Business Strategy
Business Scope
Distinctive Competencies
Business Governance
II. Organization Infrastructure and Processes
Administrative Structure
Processes
Skills
III. IT Strategy
Technology Scope
Systemic Competencies
IT Governance
IV. Infrastructure and Processes
Architecture
Processes
Skills

25. The Strategy Alignment ModelIT
Functional Integration
BUSINESS
Business Strategy
business
scope
governance
distinctive
competencies
IT Strategy
technology
Systemic
Organizational Infrastructure
administrative
structure
skills
processes
IT Infrastructure
architecture
Strategic Fit
How to make Fit Business & IT Strategy?
How to integrated infrastructure IT with Organizational infrastructure?

26. Strategy Alignment Functional Integration
Ideally, the choices made in the IT strategic domain will shape and support the business’s strategic choices.
Given the potential of IT to offer competitive business advantage, the linkage among the externally focused choices made by IT management and the strategic choice made by senior business management needs to be explicitly accounted for.
Strategic Integration
the linkage between the IT strategy domain and the business strategy domain In the strategic Alignment Model.
Operational Integration
the internal domains of business and IT need to be integrated such that the capabilities of the IT infrastructure support the requirements and expectations of the business’ organizational structure and process.

27. IT Strategy Methodology
Source: Bernard Boar, Strategic Planning for IT
CONCLUSIONS
Directives &
Assumptions
BUSINESS SCOPE
Position
Situational
Analysis
Assessment
FUTURE BUSINESS
Strategy
Strategic
Moves
Objectives
Strategy
Statement
EXECUTION
Commitment
Plan
Change
Management
Plan
Goal

28. IT Strategy Planning IT Strategy
The Objective, will be describe a process that can be used by IT management to envision and plan an aligned IT strategy.
The process is heavily grounded in the concepts underlying the strategic alignment model and has the objective of providing the tools and techniques to assist IT management in formulating an IT strategy that can enable or drive the transformation of the business.
At a high level, the IT strategy formulation process can be described as a sequence of activities that transforms the current alignment state to the envisioned future alignment state.
The future alignment state has the required condition that it enables sustainable competitive advantage.

29. IT Strategy Planning Activities
Obtaining an Executive Champion/Sponsor.
Forming the Team.
Describing the “As-Is” State.
SWOT Analysis.
The “Strength”.
The “Threat”.
Strategy Alternative Analysis.
IT Strategy Implementation Planning.

30. IT Strategy Formulation Process
Obtain
Sponsor/
Champion
Form
The
Team
“As-Is”
State of the
organization
Gap
Analysis
Strategy
Alternatives
analysis
SWOT
Porter
Industry
Profitability
Ansoff
Product
Market
“To-Be”
alternatives
Strategic
Alignment
Maturity
Implementation
plan
Measurement
Criteria
Environment
turbulence
Periodic
Review 1 2 3 3a 4 5 6 7 8

31. Obtaining an Executive Champion/Sponsor
IT Strategy 1
Obtaining an Executive Champion/Sponsor
Establishing harmony among IT and Business strategies is a key objective of the firm, having the right senior executive sponsor essential for successful IT strategy formulation.
Power
Pain
Vision
Resources
The Long View
Sensitivity
Scope
A Public Role
A Private Role
Consequence Management Techniques
Monitoring Plans
Willingness to Sacrifice
Persistence 1
Obtain
Sponsor/
Champion 2
Form
The
Team

32. Obtaining an Executive Champion/Sponsor
IT Strategy
Obtaining an Executive Champion/Sponsor
The difference in roles between a Champion and Sponsor
Champion
A senior business executive
Who has the compelling vision of the “to be” state affairs.
Willing to lend his/her organizational credibility and reputation to the idea being advocated and communicates this vision of a future state to all levels of the organization.
Ideally, has the “power” and “vision” attributes described above.
Tend to be more focused on communicating the vision and driving the organization to embrace his/her vision.
Sponsor
A senior business executive
Who uses his/her organizational influence to obtain the resources needed to implement the champion’s vision.
Tend to be more focused on the aspects and details of strategy execution, including monitoring of progress against objectives.
They typically are the source of funding and play an important role in ensuring cross organizational change.

33. Forming the Team 2
IT management should from a team of senior decision makers from the corporate IT and (if applicable) business unit IT organizations as well as senior business management from the business units.
Minimally, the corporate CIO and respective divisional or business unit CIO’s should be part of this team.
It is also strongly recommended that the team include the corporate systems architect if the organizational structure accommodates this role.
It is strongly recommended that the team be constraint in size to about the dozen members for effectiveness.
Once formed, the team and the sponsor/champion must quickly establish a joint understanding and commitment to the goals and objectives of IT strategy formulation and its outcomes.

34. Describing the “As-Is” State
IT Strategy
“As-Is”
State of the
organization 3 3
Describing the “As-Is” State
This activity describes the current state of the firm in terms of the component of the strategic alignment model.
Needs to specify both the business strategy and organization infrastructure and process domains as well as the domains that pertain to the IT organization.
The “As-Is” becomes a baseline for senior business and IT management for articulating the firm’s strategic positioning in the marketplace for the business as well as understanding the firm’s strategic positioning in the IT marketplace.
The “As-Is” also reveals relationships among the components of the firm’s business and IT strategies that are usually not well understood or taken for granted.
Example : Often a source of misalignment through the effects of culture on governance mechanisms.

35. Performing the SWOT Analysis
IT Strategy 4
Performing the SWOT Analysis
SWOT
Analysis
Porter
Industry
Profitability
analysis
Ansoff
Product
Market 4 5 6
Strengths
Weaknesses
Opportunities
Threats
Confronting the firm.
Identify factors that may affect desire future outcomes for the company.
The SWOT’s objective is to recommended strategies that ensure the best alignment between the external environment and internal situation.
The SWOT analysis is informed by several important analysis methods that will influence the analysis and selection of strategy alternatives.

36. 5 The “Strength” IT Strategy 4
SWOT
Analysis
Porter
Industry
Profitability
analysis
Ansoff
Product
Market 4 5 6
Strategy
alternatives
Component of the SWOT Analysis is informed by two important components from the “As-Is” description of the firms
Distinctive Competences. The critical success factors and core competences that provide a firm with a potential competitive edge. (include : brand, research, manufacturing and product development, cost and pricing structure, sales and distribution channels).
Systemic Competencies. Those capability (access to information about costumer) and critical success factor that are important to the creation/achievement of a company’s strategies and that distinguish the IT services of the firms.

37. The “Strength” IT Strategy Brand and Reputation
Agreement by the strategic planning team on the strengths of the firm is essential to creating an effective strategy, because these differentiating possibilities of strengths can be leveraged to generate sustainable competitive advantage. A firm’s strengths can include :
Brand and Reputation
Ability to control distribution of products
Ability to drive or influence industry standards
Enabling of new strategies
First to market or proprietary products
Its ability to innovate (and continuously innovate)
Price and cost leadership
Customer intimacy and customer knowledge
Proprietary Technology
Skilled employees

38. The “Weaknesses”
Component of the SWOT analysis comes from observation of the existing business and IT problems of the firm.
Weaknesses (gaps) will also emerge from observation of the gaps that exist between the desired state of IT-business alignment (the “To-Be” state) and the current state of IT-business alignment (the “As-Is” or current state).
Need to be recognized are concerned with those that affect a firm’s strategic positioning and its ability to compete effectively.
Some examples of the weaknesses, include :
Ability to withstand risk
Adequately trained staff
Change management
Inadequate finances
Decreasing demand for products or services
Narrow product line (or a product line that’s too broad)
Obsolete products, facilities or processes
Price and cost laggards
Poor brand image or quality
Poor skills
Vulnerability to price changes or suppliers
Weak market share or distribution system
Weak management team

39. The “Opportunities”
Component of the SWOT analysis is completed by using the Ansoff Matrix. A model that examines the competitive positioning of a firm based or the relationship between new and current products (or services) and current market.
The Ansoff Matrix is especially useful, in examining growth strategies and becomes the starting point in the IT strategy planning process for examining strategic alternatives and the enabling impact of IT on these strategies.
Present Product
New Product
Present
Market
Market
Penetration
(current products,
current markets) 1
Product
Development
(new products,
current market) 2
New
Market
Market
Development
(current product,
new markets) 3
Diversification
(new products,
new markets) 4

40. The “Opportunities”
When examining each of that market positioning strategies, senior IT management and counterparts should consider the following questions regarding growth strategies :
Where should we look for the next wave of profitable growth opportunities, and where might they lead?
How should we select from the several different opportunities before us today?
What defines our business boundaries, and what is the measure of leadership that we strive to attain?
Is it time to consider redefining fundamentally some of the elements of our core business, and how should we go about doing that?

41. The “Opportunities” Market Positioning Strategy
Strategy Objectives/Implications
Market Penetration
(current products, current markets)
Use where there is still potential for an existing
product/service in the current marketplace.
Deepen and broaden relationships with existing
Customers to sell more of what the organization
currently sells to them
Product Development
(new products, current market)
Useful for selling new products/services to a
strong existing customer base.
Anticipating the needs of the existing customer
base by building greater customer intimacy.
Market Development
(current product, new markets)
Taking existing products/services into a new
geographical or market sector.
Developing understanding of where existing
products or services may meet the needs of
new customers
Diversification
(new products, new markets)
High risk, “new business” approach where the
organization does not have the strength of a
known customer base or track record in the new
product/service.
Defining new markets or market niches with
innovative new product.

42. 6 The “Threats” IT Strategy
Portion of the SWOT analysis employs an expanded model of “Porter’s Five Forces Model of Industry Profitability” to identify the threats facing a firm from external sources.
“Porter” argues through the model that industry profitability is a function of five distinct external forces that shape competition, and not just a function of the traditional rivalry between firms.
Identifying and understanding the five forces that influence competition within a firm’s industry provides powerful insight regarding the strategic positioning a firm should consider in countering external threats, are :
Rivalry Between Existing Firms
The Risk of New Entrants
The Power of Buyers
The Power of Suppliers
The threat of Substitutes

43. The “Threats” IT Strategy Political and Legal Environment
Also important for an organization to consider the impact of its environment on any strategy it is considering, include :
Political and Legal Environment
Macroeconomic Environment
Social Environment
Technical Environment
Demographic Environment

44. The “Threats” IT Strategy
Adopted from Porter’s “Five Competitive Forces” Model of Industry Profitability
Complementors
Political & Legal
Environment
Technical
Environment
Potential
Entrants
Bargaining Power
Of Suppliers
Threat of
New Entrants
Industry
Competitors
Rivalry among
Existing Firms
Suppliers
Buyers
Bargaining Power
Of Buyers
Threat of Substitute Product of Services
Substitutes
Demographic
Environment
Macroeconomic
Environment
Social
Environment

45. Strategy Alternative Analysis
Activities of IT Strategy Formulation Process 7
The threat post by each one of these force should be ranked on a scale of 1 (weak) to 5 (strong) to determine the role each competitive threat plays in the IT strategies identified in the Ansoff Matrix. A company whose strategy and market position provide a good defense against the forces can earn above average profits even when some or all of the five forces are strong.
The most promising 3-4 IT strategies identified in the Ansoff Matrix should be identified as those having :
“As-Is”
State of the
organization
Gap
Analysis
Strategy
Alternatives
analysis
SWOT
Porter
Industry
Profitability
Ansoff
Product
Market 3 4 5 6
The lowest potential vulnerabilities to the threats identified in the Competitive Focuses analysis.
The highest potential ability to leverage the strengths identified in the SWOT analysis.
The highest potential to close the gaps identified between the “As-Is”.
The highest potential to mitigate the weaknesses identified in the SWOT analysis.
Articulating the potential costs and benefits of each of the alternative IT strategies. This should not be an exhaustive time consuming exercise, but should attempt to quantify broad dimensions of cost and benefit (and dependencies) for each IT strategy such that reasonable conclusions can be reached about the attractiveness of a particular approach.
Another technique that can be used to evaluate alternative IT strategies is scenario planning.

46. IT Strategy Implementation Planning8
“To-Be”
State of the
organization
Strategy
alternatives
Strategic
Alignment
Maturity
Implementation
plan
Measurement
Criteria 3a 7
Much to the distress of strategy theorists, who focus on the formulation of the strategies, surveys of strategy practioners have revealed that less than 10 percent of effectively formulated strategies are actually implemented.
Further analysis on the failure of CEO’s concluded that the lack of ability of their firms to execute the strategy.
Considerations on planning for the implementation of an IT Strategy, include :
Commitment and Engagement of Senior Business Management.
Strategic Alignment Maturity.
Adoption of Measurement Criteria.

47. Periodic Review 9
Implementation
plan
Measurement
Criteria
Environment
turbulence
Periodic
Review 7 8
All strategies need to be periodically review to ensure that :
The initial assumptions made about markets and external forces are still correct, especially if the company exists in an environment of significant uncertainty.
Implementation plans are on schedule and meeting established milestones.
Measurement are being captured and reported and that these measurement support ongoing alignment of IT strategy with the business.

48. Recommending a Strategy
Ideas for Today and Tomorrow
Available Options
State the alternative strategies
List advantages & disadvantages of each
State cost of each option

49. Recommendation Recommend one or more of the strategies
Summarize the results if things go as proposed
What to do next ?
Identify action items