Test Bank for Information Systems, IT Strategy, IT 506-IT STRATEGY AND INNOVATION, Strategy & Innovation - Ch 1, 1. Innovation Strategy, Strategy & Innovation - Ch 2, Chapter 3 ~ Production, Innovation & Strategy, Chapter 3 Productivity, Innovation, Stra
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IT Strategy & Innovation
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IT Strategy & Innovation
Test Bank for Information Systems, IT Strategy, IT 506-IT STRATEGY AND INNOVATION, Strategy & Innovation - Ch 1, 1. Innovation Strategy, Strategy & Innovation - Ch 2, Chapter 3 ~ Production, Innovation & Strategy, Chapter 3 Productivity, Innovation, Strategy, Stra.. 5th Edition by James D. McKeen
Test Bank for Information Systems, IT
Strategy, IT 506-IT STRATEGY AND
INNOVATION, Strategy & Innovation - Ch 1,
1. Innovation Strategy, Strategy &
Innovation - Ch 2, Chapter 3 ~ Production,
Innovation & Strategy, Chapter 3
Productivity, Innovation, Strategy, Stra..
5th Edition by James D. McKeen
Strategic role of IT in frims
1. 90's and early 2000's: "strategy mobilization"
- IT for business strategy support
2. Late 2000's/2010's: "strategy collaboration"
- Business mobilization through IT
3. Now: "strategy fusion" [in very innovative/digital firms]
- Digital Business Strategy
Inhibitors of effective change in IT
- Gap between business and IT strategy
- No business strategy available (with sufficient details)
- No IT strategy
- No dialogue between business and IT executives („IT is servicing unit")
Definition of IT Strategy
The primary objective of developing an IS Strategy is to identify a value-added portfolio of
applications that will have a strategic impact on the organization and increase its performance.
IT Strategy is:
,- an organizational perspective on the investment in, deployment, use, and management of
information systems.
- a document containing plans, intentions and policies for the organization's current and future
use of IT.
Ideally, the IT Strategy monitors and implements appropriate measures aimed at IT to align with
business strategy.
IT Strategy Content Components
1. To-be status: What do we want to achieve? Where do we want to go?
2. Need for action: What are our weaknesses?
3. Definition of measures: What needs to be done?
4. Definition of responsibilities: Who does what? Who is responsible?
5. KPIs for monitoring: When are the goals reached? Based on which measures?
Steps of IT Strategy Development
1. Analyze the relevant environment
2. Analyze existing IT resource
3. Determine aspired IT value contribution and IS objectives (in sync with development of
business strategy)
4. Determine IS strategy
In Strategy Development, analyzing existing (internal) IT resources consist of...
- Human Assets (High-performing IT unit)
- Relationship Assets (Shared Risk and Responsibility)
- Technology Asset (Shareable platforms and databases)
(IT Assets model by Ross et al. (MIT))
Dimensions of the Human Asset
- Technical skills of IT personnel
- Business understanding of IT personnel
- Capabilities for solving business problems
,Dimensions of the Relationship Asset
- Business/IT partnership and shared responsibility for effective application of IT
- Top management involvement in establishment of IT priorities
Dimensions of the Technological Asset
- A well-defined technology architecture
- Data and platform standards
Determining IS goals
Derivation and Visualization of Goals:
- Alignment: Performance of IS regarding firm goal fulfillment
- Strategic orientation of IS (Strategic Impact Grid)
- (To-be) information intensity (Information Intensity Matrix)
- Prioritization of future development
- Other aspects: flexibility, technical availability, cost efficiency
The IT Architecture Roadmap answers the following question...
1. Which systems will be deployed? Which releases?
2. When will which system be decommissioned/replaced?
3. Which system is the leading one, e.g. for customer data?
4. Which interfaces do exist among the different systems? Which data are transferred?
To-be IT architecture represents the IT strategy put into concrete terms.
Problems with „traditional" strategy development processes...
1. Sequential: Business plan --> IS strategy (how will the business plan be supported) --> To-be
IS architecture --> IS implementation plan
2. Problematic assumptions:
- Future is predictable
- There is sufficient time for walking through the process
- IT supports and 'follows' the business.
- Top management "knows best".
- Firm can be governed monolithically (like an 'army')
Consequence: flexible, adaptive, and iterative planning strategy development approaches are
needed
The two kinds of dynamic strategy development approaches are...
, 1. Develop a "strategic envelope", and define a series of smaller strategies and then grow each
one and see which develop and fail. Such stages are:
- Early Successes: Interest and experimentation
- Contagion: Interest grows rapidly; learning period for the organization
- Control: Efforts begun toward standardization
- Integration: Pattern is repeated
2. Create an IT-Business Value Matrix. Rather than develop a series of strategies and allow
them to grow, first determine the criticality of the strategies to the organization (early portfolio
analysis).
The Miles & Snow Typology (from least to most aggressive)
1. Reactor
2. Defender
3. Analyzer
4. Prospector
The Reactor
does not have proactive strategy, often reacts to events as they occur, goes without direction or
focus (keeps status quo).
The Defender
finds and maintains a secure and relatively stable market, avoids changes wherever possible.
- Focus on cost efficiency and economies of scale
- Tend to be mature, with well defined technology, products and market segments
- Try to insulate themselves from changes wherever possible
Problems:
- Misses new potentials/market opportunitites
- Sensitive to price wars
The Analyzer
takes less risk and makes less mistakes than a prospector, but is less committed to stability than
defenders.
- "Second-but-better" strategy
- Risk prevention and growth
- Stable core competency but search for new opportunities
- No proactive initiation of new products but fast adaptation to them
Problems:
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