Strategy and IT Stages of Strategy and IT Stages of development and Alignmentdevelopment and Alignment

Jatinder N. D. GuptaJatinder N. D. Gupta

The Competitive Environment The Competitive Environment

In an intensifying competitive In an intensifying competitive environment, companies rightly want environment, companies rightly want to know...to know...

1. How do we compare with our1. How do we compare with our best competitors? best competitors?

2. What do we need to improve2. What do we need to improve first? (or most?) first? (or most?)

The Four Stages of CompetitivenessThe Four Stages of Competitiveness

1. Make it/deliver it -- without1. Make it/deliver it -- without any surprises. any surprises.

2. Don’t let our better2. Don’t let our better competitors gain too much of competitors gain too much of an advantage over us. an advantage over us.

3. Let’s get our act together.3. Let’s get our act together.

4. We want to be the best in the4. We want to be the best in the world at what’s important to us. world at what’s important to us.

Four Stages in IS/T’s Strategic RoleFour Stages in IS/T’s Strategic Role

Stage 1: Internally NeutralStage 1: Internally Neutral ““Minimize the Negative Impact”Minimize the Negative Impact”

Stage 2: Externally NeutralStage 2: Externally Neutral ““Achieve Parity with our Competitors”Achieve Parity with our Competitors”

Stage 3: Internally SupportiveStage 3: Internally Supportive ““Provide Credible Support to our Provide Credible Support to our

Business Strategy”Business Strategy”

Four Stages in IS/T’s Strategic RoleFour Stages in IS/T’s Strategic Role

Stage 4: Externally SupportiveStage 4: Externally Supportive ““IS/T as a Significant Contributor to IS/T as a Significant Contributor to

our Competitive Position”our Competitive Position”

Minimize the Negative ImpactMinimize the Negative Impact

Outside experts are called in to make decisions about strategic IS/T issues

Internal, detailed management control systems are the primary means for monitoring performance

IS/T is kept flexible and reactive

Achieve Parity with our Achieve Parity with our CompetitorsCompetitors

“Industry practice” is followed The planning horizon for investment

decisions is extended to incorporate a single-business cycle

Capital investment is the primary means for catching up with competition or achieving a competitive edge

Provide Credible Support to our Provide Credible Support to our Business StrategyBusiness Strategy

IS/T investments are screened for consistency with the business strategy

An IS/T strategy is formulated and pursued Longer-term IS/T developments and trends

are addressed systematically

IS/T as a Significant ContributorIS/T as a Significant Contributor

Efforts are made to anticipate the potential of new IS/T practices and technologies

IS/T is involved “up front” in major marketing and engineering decisions (and vice versa)

Long-range programs are pursued in order to acquire capabilities in advance of needs

The Competitiveness ContinuumThe Competitiveness Continuum

Reactive/NeutralReactive/Neutral Proactive/LeaderProactive/Leader FacilitiesFacilities General Purpose/ Flexible General Purpose/ Flexible Special Purpose Special Purpose

/Focused/Focused Static/DecayingStatic/Decaying Cont. Being RenewedCont. Being Renewed

Proc. Eqpt.Proc. Eqpt. Purchase from Outside Purchase from Outside Internal Development of Internal Development of General Purpose/StandardGeneral Purpose/Standard Critical Parts/Source of Critical Parts/Source of “Safe”“Safe” Advantage/”Better”Advantage/”Better”

Make vs. Make vs. Based on Cost SavingsBased on Cost Savings Based on Need to Dev. Based on Need to Dev. BuyBuy Gain Lev. over SuppliersGain Lev. over Suppliers Special Cap./Suppliers Special Cap./Suppliers

as Equalsas Equals

WorkforceWorkforce ConstraintsConstraints Resource to Solve Prob.Resource to Solve Prob.

RelationsRelations Deskill/EliminateDeskill/Eliminate Develop CapabilitiesDevelop Capabilities

The Competitiveness ContinuumThe Competitiveness Continuum

Reactive/NeutralReactive/Neutral Proactive/LeaderProactive/Leader Measurement/Measurement/ Std. Cost AcctingStd. Cost Accting Specialized Specialized

Control Control Budgets/StandardsBudgets/Standards MeasuresMeasures

IS/T RoleIS/T Role Service FunctionService Function Equal PartnerEqual Partner

SpecialistsSpecialists Valued Valued Source of Source of General General

MgrsMgrs Use of OutsideUse of Outside ExtensiveExtensive ExceptionException

ExpertiseExpertise Tech Strat AdviceTech Strat Advice ”We are the ”We are the ”Bring in experts” ”Bring in experts” experts” experts”

View of theView of the “Don’t get blindsided” “Don’t get blindsided” “Use IS to “Use IS to

FutureFuture blindside the blindside the competition” competition”

Warning SymptomsWarning Symptoms

ComplacencyComplacency Getting all your new ideas and Getting all your new ideas and

technology from otherstechnology from others Short-term scorekeeping in a long-term Short-term scorekeeping in a long-term

gamegame PredictabilityPredictability

Unwillingness to take certain kinds of Unwillingness to take certain kinds of risksrisks supplierssuppliers

Warning SymptomsWarning Symptoms

VulnerabilityVulnerability Not making use of all your resourcesNot making use of all your resources

functions functions human resourceshuman resources

Impediments to Competing Impediments to Competing ThroughThrough IS/TIS/T

Within the IS/TWithin the IS/T

Organization ItselfOrganization Itself In Other FunctionsIn Other Functions

Threatens existing Balance of PowerThreatens existing Balance of Power At Corporate LevelAt Corporate Level

Providing Resources and Providing Resources and ContinuingContinuing SupportSupport

Impediments to Competing Impediments to Competing Through Through IS/T, cont.IS/T, cont.

Procedures and SystemsProcedures and Systems

Organizational StructureOrganizational Structure Measurement and RewardMeasurement and Reward Management Selection and Management Selection and PromotionPromotion

Capital Budgeting/Resource Capital Budgeting/Resource AllocationAllocation

Proactive or ReactiveProactive or Reactive Generally, IS/T is reactive to he Generally, IS/T is reactive to he

organizational goals and plans and organizational goals and plans and waits to be told to do certain things.waits to be told to do certain things.

However, time has come for IS/T to be However, time has come for IS/T to be proactive and say how they can proactive and say how they can contribute to the formulation of contribute to the formulation of business goals and plans.business goals and plans.

Which one do you prefer?Which one do you prefer?

Thanks for Listening!Thanks for Listening!

Any Questions or Any Questions or Comments ?Comments ?