MANAGING
INFORMATION
TECHNOLOGY
02
IT Strategy and
Directions
IT Strategy
Shapes the direction of the IT investments to
maximize the business value and shareholder
wealth.
Value Drivers
Operational Financial Sustainability
Cost of raw materials Debt level Government
Cost of service Working Capital regulations
Cost per mile Capital expenditures Industry standards
Sales volume Days receivables Federal and state
Sales revenue Bad debt expense Environmental laws
Privacy and security
regulations
IT Strategic Planning
A systematic process that evaluates the full
potential of a business which outcome is used
to decide how to allocate resources to develop
business-critical IT capabilities.
Objectives
1. Improve management’s understanding of IT
opportunities and limitations.
2. Assess current performance.
3. Identify capacity and human resource requirements.
4. Clarify the level of investment required.
SWOT Analysis
STRENGTHS OPPORTUNITIES
WEAKNESSES THREATS
Strategy and Technology
• Operational effectiveness (same tasks, better)
• Strategic positioning (different activities; same
activities but different way)
Resource-based view of
competitive advantage
• Valuable
• Rare
• Imperfectly imitable
• Nonsubstitutable
Powerful Resources
• Imitation-resistant value chain
• Brand
• Scale
• Switching costs
• Differentiation
• Network effect
• Distribution channels
• Patents
Nothing lasts forever, and shifting
technologies and market conditions can
render once strong assets as obsolete.
IT-business
Alignment
IT strategy needs to keep pace with business
strategy.
Alignment
• Senior management support and are involved in IT
planning.
• CIO is a member of the senior management.
• Understand IT and corporate planning.
• Corporate culture buy-in and good communication.
• Multilevel links
Balanced
Scorecard
A tool used for strategic planning and for
evaluating how well objectives are being
achieved.
• Lagging indicators
• Leading indicators
BSC Methodology
1. Identify performance metrics that link vision and strategy to results—
financial performance, operations, innovation, and employee
performance.
2. Select meaningful objectives.
3. Select effective measures and targets.
4. Determine the actions needed to achieve the targets.
5. Implement necessary tracking, analytics, communication, and reporting
systems, including sensors, data visualization, mashups, and dashboards
via social and mobile channels.
6. Collect, analyze, and compare performance data with targets.
7. Revise actions to improve performance gaps and take advantage of new
opportunities.
A strategist must constantly refer to
models that describe events impacting
their industry, particularly as new
technologies emerge.
Thank you.
