Lecture 4

A strategy is a theory about how to gain competitive advantages. A good strategy is a

strategy that actually generates such advantages.
Strategic management is the process of specifying an organizations objectives,
developing policies and plans to achieve these objectives, and allocating resources so
as to implement the plans.
Organizations have failed to realize the value in their investment in IT and manage the
operational risks associated with their IT assets.
IT Asset Management (ITAM) is all about being able to cohesively merge the physical,
financial and contractual attributes of software and hardware to enable the delivery of
cost-efficient, timely business solutions and minimize the operational risks to the
organization.
It has a logical connection to Configuration management

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 IT asset classification system
 Standards for each IT asset classification
 To minimize the risks to:
 Achieve the organizations strategic objectives
 Leverage off the investment in information technology
 Optimize the availability and performance of IT assets
 Secure the IT assets from unauthorized access

 Want to expand the value

 Look beyond the traditional IT Asset to Information Assets
 Start building your Risk Management practice around of this

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 Mission
Statement

Strategic Goals/Plans
Senior Management
(Organization as a whole)

Tactical Goals/Plans
Middle Management
(Major divisions, functions)

Operational Goals/Plans
Lower Management
(Departments, individuals)
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Companies should have the capabilities to:
1) understanding customer value,
2) creating customer value,
3) delivering customer value,
4) capturing customer value, and
5) sustaining customer value.

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 When we can’t articulate the value, we tend to focus on the
cost
 To many executives, the cost of I. T. appears:
 substantial; even excessive
 never-ending
 not well managed

 Creates I. T. direction toward:

 under-investment
 down-sizing
 outsourcing
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 Complex business processes/calculations
 Complex data/data types
 Large/valuable data volumes
 Distributed access
 Security requirements

IT Value is challenging to achieve

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 Aspects Traditional Value
View View
Focus Cost/benefit Business Strategy
includes Cost
Measurement Efficiency Effectiveness
Approach Doing Things Doing the
Right Right Things
Advantages Easy to Sell Creative
and Accept Thinking
Problems Missed Organizational
Opportunities Resistance 8
 What are you trying to achieve?
 Identify the business objectives
 Define supporting business strategies

 What are your competitors/peers doing?

 Assess competitor actions
 Check direction/thinking of other industries Align I. T.
with the
 Why are the business objectives important to you?
 Articulate the business value to be gained
Business

 How will you know you are successful?

 Identify business end outcomes
 Identify what business indicators will be measured
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 Identify required business process changes
 Determine I. T. support for business:
 I. T. organization style
 staff competencies
 application portfolio
 I. T. infrastructure

 Define I. T. strategy that supports business

 Make I. T. investments to support business success

I. T. value is achievable 10
 Tightly
Integrated
V Loosely Solution
a Integrated
l Interfaced Solution
u Multi- Solution
e Point
Single Solution
Point
Manual Solution
Support
Tool
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Improving System Capability
 Optimum
Data Integration
V Range Complexity Drivers:
a  number of interfaces
l
u  number of users/departments
e  number of locations
 amount of business change
 sophistication of end-users

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Increasing Costs
 Align IT Strategy
with Business
V
Enhance for
a
l Integration
u Plan & Manage
e Operation
Establish Data
Custodianship
Install
Software
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Improving Application Management
 Working poorly
 CIO fired
 most/all of IT outsourced
 business objectives under-achieved; IT value missed

 Working well
 CIO well-regarded member of top management team
 valuable parts of IT managed internally
 business objectives achieved with IT value

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 View IT as a support function
 Focus on IT cost minimization
 Believe that IT doesn’t apply to his industry
 Manage IT as an adjunct to the business
 Position the CIO as specialist functional manager
 See the CIO as a high-paid technologist

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 Position the CIO as agent for change
 Focus on IT effectiveness within business initiatives
 Institutionalize business values for I. T.
 Include the CIO on the top management team
 Manage I. T. as integral to the business

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 I. T. investments must deliver value to:
 meet competitive threats
 capture business opportunities
 Business strategy can be successful if it incorporates I. T. strategy
 The CIO is the coach/mentor who keeps hammering this
point home to the business.
 The best way is through solid delivery of small number of
key initiatives.

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 IT/Strategy Alignment - Identifying the Role of Information Technology in Competitive
Strategy C. Lawrence Meador, MIS Quarterly

 Measuring the Strategic Value of Information Technology Investments

 Kurt Conrad, The Sagebrush Group
 http://www.sagebrushgroup.com/value.htm

 Presentation Slides: Yogi Schulz- Corvelle Consulting

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