Information and IT governance - IS Strategy

11 important questions on Information and IT governance - IS Strategy

Which new business models are there?

Subscription-based businesses: Netflix, Spotify
Platforms: Uber, Airbnb
Cutting out the middleman: HelloFresh, Dell

What is porters five forces theory? And what are its pros and minusses

- Threat of new entrants
- Bargaining power of suppliers
- Bargainin power of buyers
- Threat of substitute products or services
- Rivalry among existing competitors = center

- generic, applicable to any company in any industry
- provides detailed explanatins for profitability
- reason about an organisations strategic position with respect to its external environment

- of limited use for fetermining future strategy
- few concrete guidelines on how to operationalize

What is the value chain model?

Sequence of activities through which inputs are transformed into more valuable outputs

Information systems play a crucial role in both primary as well as support activities
Goal: creating and sustaining competitive advantages
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What are the primary activities in the value chain model?

- raw materials, quality control
- receiving process
- supply schedules
- IT: automated warehousin system   

- manufactoring
- maintenance
- IT: computer controlled machining, operational efficiency

- finished goods
- order handling
- dispatch, delivery, invoicing
- IT: automated shipment, online point-of-sale 

- customer management
- order taking
- promotion
- sales analysis & market research
- IT: computersized ordering systems, targeted marketing               

- warranty
- maintenance
- education and training
- upgrades
- IT: Customer Relationship Management Systems (CRM)

What are the support activities in the value chain model?

Administrative coordination and support services
- decision support ystem
- collaborative workflow systems

Human resource management
- workflow planning systems
- employee benefits intranet
- HR analytics

Product and technology developtment (R&D)
- computer aided design systems
- partner product development extranet

- E-commerce web portal for suppliers
- Reverse auctions

What is the strategic alignment model?

From Henderson & Venkatraman (1993)

External(strategy level):
- business strategy
- ICT strategy

Internal (opterational level)
- operational infrastructure & processes
- ICT infrastructure & processes

Strategic fit = between external and internal
Functional integration = inbetween external or internal

What is the strategic fit in the strategic alignment model?

Business strategy addresses both external and internal domains
- external: business environment of a company, differentation from competition
- internal: administrative structure + design of business processes

The fit between external and internal domain is critical for maximizing economic performance   

IT strategy should also be addressed as such
- external: how positioned in the IT marketplace
- internal: how should the IT infrastructure be managed

Which strategic aligment models are there?

1. Strategic execution (de Lijn)
Business strategy -> operational infrastructure & processes -> ICT infrastructure & processes

2. Technology transformation (colruyt)
Business strategy -> ICT strategy -> ICT infra & processes

3. Competitive Potential (amazon)
ICT strategy -> Business strategy -> Operational infrastructure & processes

4. Service level (KULeuven)
ICT strategy -> ICT infra & processes -> Operational infrastructure & processes

What is the functional integration in the stategy alignment model?

Strategic integration: integrate IT strategy and business strategy
- what is the impact of IT strategy on business
- what is the impact of business strategy on IT 

Operational integration: organizational infrastructure and processes and IS infrastructure and processes
- internal coherence between organizational requirements and expectations and what IS can deliver

What are the potential problems for functional integration?

Top manager
- ill informed
- uneasy
- reluctant to be involed

End user
- increasing awareness
- impatient to use IT

IT professional
- lacks a strategic view

What is this chapters conclusion?

Strategic alignment model
- both strategic and functional fit are essential for realizing alignment
- role of IT strategy largely remains subordinate ot business strategy

Digital business strategy
- digital technologies are fundamentally transforming business strategies, processes, capabilities, products and services
- IT strategy is not functional nor resource based
- fusion of IT stratey and business strategy

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