CHAPTER 3

IT AND
STRATEGY
(5 HRS)

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Sub-topics :
• 3.1. Information revolution
• 3.2. Business and Strategy
• 3.3. Information Technology Strategy
• 3.4. Strategies and success
• 3.5. Design parameters and Strategic positioning
• 3.6. Evolution and development of strategy
• 3.7. Strategic planning and IT strategies
• 3.8. Evolving a dynamic nature of the Business

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Strategy
• Strategy originates from Greek word 'strategos' meaning
'general in the army'.

• Strategy is the plan to gain advantage over enemy in the war.

• Strategy in business means to create new

opportunities, position, the product, and beat competition.

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3.1. Information revolution
• 'Information Technology' refers to the technology that
provides means to transmit text, voice, and video data to any
place in the world in real time.
• Provide capability to process and transform information
available in different forms.
• Enable easy storage of data and provide the ability to
retrieve required data at any time.

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• IT refers to technologies that enable :

1. Information acquisition
2. Information processing
3. Information management
4. Information transmission
5. Information transformation

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• The term Information Revolution describes the current
economic, social and technological trends beyond the
Industrial Revolution.
• The information revolution's main idea is it provides easier
access of information using internet and technology.
• Through the past years, it was evolved and improved by the
professionals for the user to conveniently obtain while they
do their other activities.
• IT has revolutionized the business and social environment of
the organization.

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Some outcomes of Information Revolution are :

• IT has become a dominant part of our culture. Has changes the

way we interact and carry out our day-to-day activities.

• connected the world through the information highway.

• Accelerated development and created the need for proactive

measures in decision-making to sustain organization in the
market.

• Has become part of all industries, businesses, and

communication infrastructure.
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Some ways in which IT has revolutionized business :

• It changed the face of the economy. Cyber economy and

electronic transactions have penetrated the domain of the
common man.

• Companies are connected and the workforce is wired together.

More information in employees' hand and create virtual
communities.

• Customer are now better informed.

• Trends like monopoly and 'fixed price for longer duration or

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• Customer behaviour is captured in various ways. Dynamic
behaviour tracking and behavioural pattern matching tools
have become integral part of businesses.

• Experience communities and data banks are now integral

parts of business.

• Learning in today's environment is more dynamic and real

time. Companies like Apple and Google are bulit around
leaning and innovation.

• Knowledge force is driving the business and market. Business

can no longer build around the ignorance of the customer.
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IT Management

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IT management is the process of overseeing all matters related
to information technology operations and resources within an IT
organization. It deals with :

• Knowledge workers and related transactions : makes

information available to knowledge workers.

• Market and sales : influence sales and marketing by processing

sales and marketing data and by reducing the marketing time.

• Overall optimization of processes : analysis of demand and

supply data and the capability to forecast requirement which
allows to optimize the overall process.
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• Gathering, bulding and processing the available knowledge :
better insight into the system and decision making.

• Buliding knowledge assests : helps to build knowledge assests

such as optimal method, pattern of sales etc.

• Optimization of overall knowledge flow : induce

communication and information processing with helps in
optimization of the overall flow of knowledge flow of
organization.

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3.2. Business and Strategy
• Strategy for business has business objectives at
the center and is driven by various forces like time,
available resources, overall knowledge and business
guidelines.

• It considers past experiences for learning, present

situation for action and future forecast to identify avenues.

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• It involves out of the box innovative techniques to
achieve business goals.

• It is dynamic, knowledge enabled, clear and simple.

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3.3. Information Technology Strategy
• IT strategy is defined as : The science or art of effective use of
information and allied technologies and IT resources of the
organization to execute strategic plans optimally or as effectively
as possible to achieve business objectives.

• During early days of IT, it was used more to organize information

and increase the pace of execution.

• Later, It has become part of

all activities and impacts areas like quality, penetration, user
satisfaction, user experience and decision-making.

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• There are different resources within organization. These
include money, skilled employees, information,
infrastructure, physical property, time, knowledge base,
extended organizations, and contacts with them. Using these
resources optimally with the help of IT is defined as IT
strategy.

• The clarity about a goal in terms of business strategy,

resources in terms of availability and environment in terms
of market and competition helps in building a proper
strategy.

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• IT Strategy is about rethinking of information technology, the
allied technology, and existing information technology to
achieve the ultimate business objective.

• IT Strategy is positioning a set of actions related to IT

technology.

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• 3.4. Strategies and success

Strategy drives the company to business goals, and it leads

an organization to success.

Few challenges in implementing IT strategies are as follows :

• Organization have higher expectation about the benefits

they derive from technology and software purchases.

• Technology brings structural change in organization.

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• Unmanaged expectations and ongoing changes test the
personnel management skills of IT managers.

• IT managers must be technological leaders and superb

generalists.

• It is difficult to align IT with business objectives.

• It is always difficult to measure ROI (Return of the

investment)

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For IT strategy to succeed, it should follow the things
mentioned below :

• IT strategy of an organization should always be in alignment

with the business strategy to achieve the business objectives.

• Organizations need to develop one's own IT strategy in

consonance with one's business requirements, objectives and
constraints.

• IT strategy should be dynamic. It should change with the

advancement of Information Technology.

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3.5. Design parameters
Strategy design is influenced by various internal as well as external
parameters. These include :

• Marketing : The market, relationships among different segments

and marketing initiatives influence the marketing strategy and the
overall IT and business strategy of an organization.

• Knowledge Management : Understanding the knowledge

repositories and the Knowledge management initiatives.
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Compiled by Er. Subek Acharya
• Customer Segment : Understanding customer need and how
the business is going to address those needs.

• Future and scope : Strategy is always futuristic and needs to

take into account the future and score of the business and
products.

• Resources : The available resource and resource constraints.

• Competitive environment : The competitive environment

and the different competitive forces influence the business
strategy
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• Corporative relations : Organizations should consider the
relationships among different entities and extended
organizations while designing their strategies.

• Innovation : Understanding the need of innovation in

technology and business process.

These parameters have an impact on deciding the strategy

design parameters. They act as a dynamic inputs in the
strategy design.

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Strategic positioning
• Strategic positioning is focused on how an organization sets itself
apart from the competition and delivers a benefit to different
groups of target customers.

• Startups must create a unique positioning strategy that

influences the customers' minds to choose the organization's
product or service that can solve a problem.

• Effective strategic positioning ensures that an organization's

marketing tactics are oscillating with customers and obliging
them to take some sort of action.

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• By informing the target audience of how valuable the
product is and how the organization can solve a problem,
newer startups can achieve the long-term success they need
to maintain their operations.

• It's best to tweak and add on to a positioning strategy to

remain competitive, rather than revamp the entire message.

• Example : Tara Airlines

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3.6. Evolution and development of strategy
• The process of evolution of IT business strategy begins as
soon as a business starts.

• With evolution, the strategy enables an organization to build

up its competitive strength.

• The following figure depicts the strategic evolution on a time

scale

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Compiled by Er. Subek Acharya
• The initial stage is business objective analysis followed by
strategy development at the next level.

• Then strategy is fine-tuned with the help of learning and

analysis.

• The overall strategy of a company could be represented as a

strategy statement, where there is a particular direction and
a strategic sequence.

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Development of Strategy

• There is always a need for enabling condition to develop

strategies. These are depicted in the figure below.

• Skill and insight leads to the ability to adapt and spread new
concepts.

• Willingness and insight leads to the inclination and desire to

spread these concepts.

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Compiled by Er. Subek Acharya
• Skill and commitment leads to the development of policies.

• Willingness and commitment leads to the willigness for

innovation.

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Strategy development framework

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Strategy development framework has three axes :

• Who
• How
• Level of Strategy

It can be used to map the roles of various level of

management in strategy development.

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Strategy Hierarchy
Strategy hierarchy begins with high level strategies and move
to lower levels. The various level of strategies can be
categorized into :

• Corporate strategy : deals with scope of business.

• Product group strategy: high level strategic initiatives and
industries specific.
• Site strategy : strategy with reference to site and may include
more than one business unit.

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• Business unit strategy : concerned with the profitability,
operation and all other strategic aspects of a business unit.

• Manufacturing/Development/Project management strategies :

related to various activities carried out at a business unit.

• Implementation technology infrastructure strategy : strategic

use and management of infrastructure.

• Resource management strategy : optimal use of

organizational resource.

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• Knowledge management strategy : strategic use of
knowledge which is the building block of overall strategy.

• Competitive strategy : positing of resource, products and

services strategically to derive competitive advantage.

• Portfolio management strategy : strategic management of

portfolio to optimize the gains and deal with difficult
scenarios.

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3.7. Strategic planning and IT strategies
The various phases in the strategic planning are as below :

• Financial and resource-based planning.

• Forecast based planning.
• Externally oriented planning.
• Strategic management.

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Compiled by Er. Subek Acharya
• Financial and resource-based planning : It considers the
financial feasibility and resource optimization. This planning
involves resource assets valuation.

• Forecast based planning : undertaken to deal with the

various scenarios in the future.

• Externally oriented planning : done in consideration with the

external forces such as competition, economy etc.

• Strategic management : involves strategic decision to fetch

competitive advantage for the business.

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 IT marketing strategy

Types of IT competitive strategy

IT IT project strategy

strategies IT product strategy

IT infrastructure strategy
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Marketing Strategy
• A marketing strategy is a business's game plan for reaching
prospective consumers and turning them into customers of
their products or services.
• Marketing strategies should revolve around a company's
value proposition.
• The ultimate goal of a marketing strategy is to achieve and
communicate a sustainable competitive advantage over rival
companies.
• A thorough marketing strategy covers "the four Ps" of
marketing—product, price, place, and promotion.
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3.8. Evolving a dynamic nature of the Business
• All the components of business are constantly evolving.

• Knowledge is at the center of all evolving organization.

• IT strategy helps to enable proper knowledge management in a business and

succeed in such dynamic and evolving situation.

• Innovation is the major aspect of this process.

• The most important aspect of IT strategy in dynamic situation is to retain its

simplicity.

• Sudden changes in the business strategy are recommended and changes in

business strategy should be mapped to IT strategy.
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Assignment:
1. What is the relationship between IT (Information
Technology) strategy, business strategy and marketing
strategy?

2. “IT strategy plays crucial role in business growth.” Justify

this statement.

3. What are the challenges on the implementation of IT

Strategies?

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