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Strategic IT Alignment

Strategic IT Alignment. Paul Mak’Abong’o D61/79785/2012 Michael Nganga D61/60676/2013 Cliff Nderi D61/79194/2012 Alex Kamiru D61/79111/2012 Phyllis J Sitienei D61/61469/2013 Rose Katunge D61/60033/2013. Group 2.

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Strategic IT Alignment

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  1. Strategic IT Alignment PaulMak’Abong’o D61/79785/2012 Michael Nganga D61/60676/2013 Cliff Nderi D61/79194/2012 Alex Kamiru D61/79111/2012 Phyllis J Sitienei D61/61469/2013 Rose Katunge D61/60033/2013 Group 2

  2. introduction • What is strategy? • A long term plan of action designed to achieve a long-term or overall aim. (Strategic Management, Concept and Cases, Fred R. David, Thirteenth Edition) • Companies can only succeed in the long run if they have solid strategies to confront the five competitive forces (Michael Porter’s) • Strategic planning involves the buildings of a structured framework to identify the main components of anticipated business needs and possible solutions , identifying and evaluating different approaches to arriving at these solutions and producing a comprehensiveness costed plan and time table for the preferred strategy.

  3. IS STRATEGY • IS Strategy involves creating a structured framework for information systems needs as expressed in information requirements and business applications together with information technology solutions. • IS strategy is developed in IS strategy Triangle which is a simple framework for understanding the impact of IS on organizations.

  4. IS STRATEGY TRIANGLEGY TRIANGLE

  5. Cont….. • Business Strategy drives all other strategies. • Organizational and Information Strategy are then dependent upon the Business Strategy. • Changes in any strategy requires changes in the others to maintain balance. • IS Strategy is affected by the other strategies a firm uses. • Four key IS infrastructure components are key to IS strategy i.e. hardware ,software, networking and data • These key components are sufficient to allow the general manager to assess critical IS issues CONT..

  6. Purpose of Strategy – IT Alignment Objective is to optimize the value IT contributes to an enterprise. An organization has successfully aligned IT strategy to business strategy when: • Support from key executives to participate in developing the IT Strategy. • Clear expectations of how IT will contribute to reaching the company’s business goals and objectives. • A good working relationship between the IT department and the rest of the organisation. • There’s a shared focus on where to expend scarce resources, time and money.

  7. Strategy – IT Alignment is achieved through the completion of four main steps: • Set Conditions to Achieve Alignment • Scan for Potentially Enabling Technologies • Determine IT Value Imperatives • Develop IT Vision and Mission

  8. STRATEGIC ALIGNMENT MODEL The concept of the model is based on two building blocks: • Strategic fit • Functional integration

  9. Strategic fit recognizes that the IT strategy should be articulated externally in terms of the organizational strategy, and internally on how the infrastructure should be managed.Two types of functional integration exist: • Strategic integration • Operational integration • Strategic integration is the link between business strategy and IT strategy reflecting the external components. • Operational integration covers the internal domain and deals with the link between organizational infrastructure and processes and IT infrastructure and processes.

  10. Porter’s five forces model

  11. What can firms do to counter action of competitive forces?

  12. What is the role of it to support this strategies? • Technology is no longer an afterthought in forming a business strategy but the actual cause and driver.

  13. The move from innovation to competitive advantage quickly becomes competitive necessity when other firms learn how to respond strategically

  14. Value chain model • Also developed by Michael Porter. • This are activities that are performed on the creation of a product or service. • Can be separated in • Primary activities • Secondary activities • Activities either add cost or value to the process of creating product/service • Firms should harness IT to then either reduce cost of operations on the value chain or/and increase more value.

  15. Value chain model

  16. What is the role of it to support the value chain? • Firm Infrastructure: LAN, WAN • Human Resource: HRMIS • Technological Development: CAM • Procurement: E-Business, E-Commerce • Inbound Logistics: Automated Just-In-Time Logistics • Operations: CAM, Employee Scheduling Systems • Outbound Logistics: Online Point-Of-Sale, Order Processing System • Sales and Marketing: Online Marketing • Service: CRM Systems

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