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Strategic Planning for IT

Paper outline:

Business Strategy is the Key, not IT Investment

Example of Strategic Success and Conclusion

Strategic Planning for IT
IT no longer forms a critical competitive advantage for enterprises because it is not a scare and unique resource. IT only matters when it is used to leverage on an existing business strategy that provides competitive advantage to the enterprise. IT investments do not have a standardized and tangible mechanism of measuring their impact on the bottom line of the enterprise. They lack units of measuring the value created, thus cannot be fully accounted, whether they resulted to an increase in the overall competitiveness of the enterprise. However, attachment of IT investment into an existing strategy provides an opportunity for the enterprise to access its impact in relation to the success of the strategy employed (Epstein & Rejc, 2005).
Business Strategy is the Key, not IT Investment
Without the employee skills and business strategies, that IT investment will leverage, then an enterprise is better off forgoing the IT investment to avoid losses of misappropriation. When considering investments on IT infrastructure, enterprise managers should recognize that IT just like other infrastructures offers a platform for which to achieve the goals of the enterprise. For example, marketers have to inform and move products from the enterprise production centers to markets where consumers access them. IT only influences the speed of delivery of the marketers’ information and the cost of doing so. However, it does not eliminate the need for the marketers to carry out their marketing related assignments of prospecting and strategizing. Marketers still have to do their research and inform their enterprise on the best way to carry out their business strategy. IT only allows them to do it faster and in an efficient way. Therefore is the marketers are incompetent in their profession, IT investments will not solve their incompetency.
A possible way of measuring the inputs of IT investment lay in the adoption of a balanced scorecard for the enterprise. The mechanism provided in the balance scorecard, as it measures both financial and quality aspects of the business, are vital in elaborating the actual cost and benefit of IT investments in the enterprise. Balanced scorecards assist management and staff to evaluate their individual performance in relation to the goals of the enterprise. Unless a balanced scorecard system already exists in the enterprise that management can use to evaluate the return on investment of IT, a significant purchase of IT infrastructure should not be made by the enterprise.
Proponents for IT investments ague that well planned IT intervention result to massive cuts in costs to the enterprise in addition to making administrative tasks easy. While this concept is true and has been proven empirically, it must be observed within the context of the business environment. IT has become synonymous with efficiency because at the bare minimal it automates tasks and increases the accuracy of repetitive tasks. IT infrastructures that deliver such competencies and other additional ones are available publicly at costs that all competitors in a given industry can readily purchase. Therefore, in each industry there are minimal necessary IT infrastructures to be purchased by enterprises. They do not provide a significant competitive advantage but are mandatory for the enterprise to be at par with the competition. Such infrastructure is a mere replacement of the manual infrastructure for universal enterprise operations.
A wrong strategy for enterprises is to have IT departments being responsible for identifying new areas in the enterprise that require IT equipment. IT departments are not strategically positioned to understand the overall strategy of the enterprise in reaching its goals. In addition, the department does not actual staff productivity of using the IT equipment but depends on hypothetical analysis of the potential impact that cutting edge IT infrastructure will have on specific departments of the enterprise. A blind following of recommendation by the IT department result to unwanted shift in organizational way of doing things, which introduces new bottlenecks in form of employee adaptability and the reallocation of funds to finance implementation of the new system.
Example of Strategic Success and Conclusion
Companies that have succeeded in deploy IT infrastructure and maintained or recaptured their competitive advantage, have done so because their deployment of IT infrastructure was hinged on business strategies developed by their leadership. These companies have only leveraged their business operations with IT to benefit on the efficiency. Otherwise, their competitive advantage lay in their strategy. For example, Toyota has a just-in-time inventory management system similar to Wal-Mart that gives the company its competitive advantage. Without the just-in-time concept, the deployment of communication infrastructure across all its world operations would have been futile. However, with the just-in-time strategy of managing inventory, line managers have a specific use for the infrastructure and the deployment of additional IT infrastructure occurs in line with the needs identified during the daily operations rather than the hypothetical possible benefits that could be realized (Garettson, 2007). Management has to evaluate it business strategy in relation to the industry the business operates. IT investments should only be considered as necessities in the delivery of the strategy and an overall increase in the efficacy of the enterprise’s normal operations.

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