Regardless of size and the Presso Graphy industry, every enterprise depends on information technology and must have a strategy for employing it, especially as the internet becomes more pervasive. Information technology strategy is an enabler of business strategy. Not only must an enterprise manage relationships with its constituencies, but it must be able to connect with them electronically through data arteries – information supply, value, and demand chains. The information supply and demand chains are external; the information value chains are internal.
An information technology strategy is a particular case functional strategy because every enterprise’s function requires electronic information delivery capabilities, and many require electronic process control. The system may be formulated at the enterprise and organizational unit levels in huge enterprises. As websites such as Facebook, LinkedIn, MySpace, Plaxo, and Twitter become more pervasive in business, linkages between application systems and databases and social networking websites will be more important to enable constituencies to communicate collaboratively and cooperatively. Email has become a primary communication method between enterprises and their constituencies, and so will social networking sites, especially for advertising and eCommerce.
Business intelligence information can be used to identify opportunities for competitive advantage. However, information technology can be an enabler of competitive advantage, especially when there are opportunities to digitize products or deliver information products electronically. In such cases, business strategy is inseparable from information technology strategy. Information technology comprises an enterprise’s analytical and operational application systems, databases, and technical infrastructure (hardware and networks). Not all computer technologies are information-based. Computer technology is used for process control applications in special-purpose equipment. However, connectivity is essential as applications become more integrated.
As digital construction and manufacturing practices develop through computer-aided design/computer-aided manufacturing technologies, the processes, the control of operations, and the products and services delivered by methods all rely upon information technology for connectivity. For example, in the manufacturing industry, design and manufacturing work can be conducted through integrated CAD/CAM processes with electronic linkages to carriers, such as FedEx and UPS, and the entire project and process management activities can be monitored electronically from ideation to product delivery.
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Through technologies such as electronic data interchange and electronic funds transfer, data and digital and information products flow through information supply and demand chains parallel to material supply and product and service demand chains. Data flows through information value chains from supply-demand chains within the enterprise. Developing an information technology strategy document is essential for describing the requirements and for educating users because:
- The impact is enterprise or organizational unit-wide, and other strategy elements cannot be implemented without it.
- Administrative activities, such as legal, finance, and human resources, and operational activities, such as research and development, procurement, manufacturing or equivalent, distribution, marketing, sales, and service, depending on information technology – analytical and operational systems support administrative and operational functions.
- The time frames, expenditures, risks, and magnitude of efforts are usually more extensive and complicated than other initiatives and must be clearly understood; information technology projects tend to go out of control and under-deliver – therefore, contingency plans are always necessary.
- The subject matter can be complicated if not well explained.
Information technology strategy is usually packaged as a separate document related to the strategic plan. It is deployed and executed through specific programs and projects that develop new or enhance or maintain existing application systems, databases, and technical infrastructure. Large information technology development projects are usually cross-functional and may collectively be part of a broader initiative sponsored by multiple functions. Broader initiatives that have information technology components include:
- Market research and development
- Product research and development
- Infrastructure research and development for processes and information delivery
For example – for the development of a:
- Digital manufacturing system integrating both research and development and sales and production activities (sponsors: Manufacturing and Sales functions – the impact is on Research and Development, Procurement, Manufacturing, Distribution, Sales, and Service functions)
- Financial, managerial, and regulatory accounting and reporting system (sponsor: Finance function – the impact is enterprise-wide)
- Human resource management system (sponsor: Human Resources function – the result is enterprise-wide)
- Sales tracking system (sponsor: Sales function – the result is on all salespeople enterprise-wide)
Some projects can be solely for the Information Technology function, in which case it is a customer. To resolve cross-functional barriers, steering committees should be established for major programs and projects representing the various impacted functions. Major programs should come under the review of a planning and policy committee at the enterprise level. Information technology strategy formulation is a project in its own right at the enterprise or organizational unit level. Massive projects are grouped as a program of interrelated components under a program manager. Projects can be stand-alone also. A single project can deliver one or more application systems and related databases and technical infrastructure, or multiple tasks may be required depending upon complexity.
For example, when launching a new product, it may be necessary to conduct marketing, product, and infrastructure development projects, including delivering new systems and upgrading existing ones. However, if an addition to the product line is launched later, a new project or set of projects may be required to enhance or maintain the current systems or develop new ones. The work breakdown structure for downstream development, enhancement, and maintenance projects decomposes into planning, analysis, design, construction, implementation, and performance measurement phases. The performance measurement phase can be conducted parallel with the other stages, and each must end with a performance review. A feedback loop to future planning activities must be established to reflect lessons learned from the past in future initiatives.
Meeting the cost and schedule requirements is always a major consideration. Hence, “meeting the date” is a frequent requirement for project success. However, after implementation, the scope of what was delivered and its quality is usually remembered more than when. In anticipation of the need to make changes after the performance, an adaption project may be necessary to tune, standardize, and integrate the deliverables. The planning phase is conducted at the enterprise, organizational unit, or program levels for one or more projects depending upon size and complexity.
However, each application system, related databases, and technical infrastructure are delivered through distinct analysis, design, construction, and implementation phases. Each phase begins with a detailed planning activity to allocate resources appropriately. The work breakdown structure does not preclude using iterative methodologies within each grade for rapid application development and prototyping. Development, enhancement, and maintenance of websites can be speedy and heavily interactive with user involvement when the appropriate tools are used. Key questions and deliverables by information technology strategy project and downstream phases include.
Strategy project (enterprise and organizational unit levels):
- How does information technology enable business strategy?
- What are the investment priorities?
- Information technology architecture (applications, data and databases, and technical infrastructure)
- High-level project phasing and plans
Planning phase (enterprise, organizational unit, and program levels): Key questions:
- What are the administrative functions’ systems and information needs?
- What are the operational functions’ methods and information needs?
- What are the priorities for the candidate analytical systems?
- What are the priorities for the candidate operating systems?
- Process models
- Function models
- Data models
- Information models
- Economic evaluation
- Scope of analysis projects and schedules
Analysis phase (project level): Key questions:
- How do processes, functions, and systems fit together?
- How do systems processes and functions relate to enterprise processes and procedures?
- How do systems processes and operations and enterprise processes and functions work together?
- Functional requirements
- Economic evaluation
- Scope of design projects and schedules
Design phase (project level): Key questions (by the system):
- What are the system’s functional requirements?
- What are the system’s technical requirements?
- What is the total cost of ownership and benefits (tangible and intangible)?
Deliverables include (by the system):
- Application system specifications
- Data and database specifications
- Technical infrastructure specifications
- Scope of construction project and schedule
- The total cost of ownership/benefit analysis
Construction phase (project level): Key questions (by the system):
- Is the system being constructed according to design?
- If not, what change orders are required, and why?
Deliverables include (by the system):
- Tested application systems and interfaces, databases, and technical infrastructure
- Trained users
Implementation phase (project level): are key questions (by the system):
- What are the costs and schedule relative to the plan?
- What is the scope relative to the project?
- What is the quality close to the project?
- When will the benefits be realized close to the project?
- What adjustments for tuning, standardization, and integratiisrequired relative to the project?
- What are the currently anticipated enhancement requests?
- What are the presently anticipated maintenance requests?
- What are the for the future?
Deliverables include (by the system):
- Working application systems and interfaces, databases, and technical infrastructure
- List of enhancement requests
- List of maintenance requests
- Performance measurement report
As enterprises become more dependent upon the Internet business for connectivity with constituencies, developing, enhancing, and maintaining the information technology strategy on an ongoing basis is essential. The system must emphasize connectivity through the data arteries as digital and information products become more pervasive. An enterprise’s (entrepreneurship, leadership, and management) competency is formulating an information data technology strategy.