Information Technology Reference
In-Depth Information
changes work at the level of true systems. Revolutionary ventures such
as Amazon (.com) affect retailing more than the development of retailing
software.
Aligning Information Strategy with Business Strategy
IT managers are often told to align their information strategy with the
company's business strategy. What in fact does it mean? How does one
do the alignment? Does the alignment happen naturally if the systems are
delivered according to proper business specification? To give an example
of such an alignment, take a look at the auto insurance industry. Studies
have shown that when there is an accident, a quick settlement of the
claim is to the company's advantage. This results in lower amounts for
settlement because “extraneous” influences, which tend to enhance the
settlement claims, have not yet acted on the customer. At the same time,
a quick settlement makes the customer happy with the service provided,
and makes them appreciate the responsiveness of the insurance company.
An IT strategy of investing in CRM (customer relationship management)
for improved customer relationship aligns well with the business strategy
of reducing costs through quicker settlements.
IT managers need to have a keen understanding of the larger strategies
driving their projects to align their deliveries better with business strategies.
Everything Important Is Not Strategic
The fact that a project has a business impact does not necessarily mean
that it is strategic. Every IT effort appears to have some business impact,
directly or indirectly. The number of strategic projects or initiatives in any
IT department is small. They may be large, long, and expensive but they
are few. These are the ones that should be well-aligned with business
strategies. If there is a business strategy that requires one to strengthen
the security of one's information assets for competitive, liability, or other
reasons, then spending a lot of money making applications secure is a
strategic initiative. Otherwise, it is one more improvement to existing
systems, similar to other business enhancements and system upgrades —
important, useful, but not necessarily strategic.
What Is Strategic?
How does one identify strategic requirements? As discussed previously,
everything important is not necessarily strategic. Attaching the ter m
