Strategic Analysis And Selection Of Information Systems

Business strategic management is an ongoing process that assesses the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment. It is the process of specifying the organization's objectives, developing policies and plans to achieve these objectives, and allocating resources to implement the policies and plans to achieve the organization's objectives. Strategic management, therefore, combines the activities of the various functional areas of a business to achieve organizational objectives.

The processes of strategic management are formulation, implementation and evaluation. The three-step strategy formulation process is sometimes referred to as determining where you are now, determining where you want to go, and then determining how to get there. Implementation involves allocation of sufficient resources (financial, personnel, time, and technology support), establishing a chain of command, assigning responsibility of specific tasks, process monitoring and management, and acquiring the requisite resources, developing the process, training, process testing, documentation, and integration. Evaluation involves measuring the effectiveness of the organizational strategy. It’s extremely important to undergo SWOT to figure out the strength, weaknesses, opportunities and threat of both internal and external to the entity in question.

The primary goals for information technology governance are to assure that the investments in IT generate business value, and mitigate the risks that are associated with IT. This can be done by implementing an organizational structure with well-defined roles for the responsibility of information, business processes, applications, infrastructure, etc. Depending on the size, business scope, and IT maturity of an organization, either centralized, decentralized or federated models of responsibility for dealing with strategic IT matters are suggested. A well defined control of IT is the key to business survival and success. However, achieving a balance between financial transparency and cost-effective data capture in IT management strategy continues to evade many companies today.

The key relationships between business and information technology strategy and issues inherent in their development and integration are outlined below.

RELATIONSHIP BETWEEN BUSINESS STRATEGY AND IT STRATEGY.

If the business strategy is to reduce costs and become more competitive, the business should adopt an IT strategy that helps reduce costs and collaborate closely with suppliers.

If the business strategy is to differentiate by producing a better product, the IT policy of linking ERP, product data management and other systems help improve the product.

A company can gain competitive advantage by collaborating in a meaningful manner with the customers and supplier in a supply chain. A well devised IT strategy can help achieve this objective.

One way to reduce costs and gain competitive advantage is to reduce inventory costs as well as avoid stock out situation. IT strategy that allows a supplier to examine the business’s inventory and order processing system is an efficient way of achieving this goal.

PROBLEMS WITH STRATEGY FORMULATION

Essentially there is no problem with strategy formation, who does not want to differentiate his products or decrease costs?

PROBLEMS WITH STRATEGY IMPLEMENTATION

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