It Strategy Vs Business Strategy Essay

988 words - 4 pages

In most organizations IT expenditure is considered as one of the larger if not the largest contributor to capital investment and expenditure. Technology has a significant effect on the business landscape of most organizations and the market place they operate in. The goal of IT as such should be directed toward the alignment of IT strategy with an organization's overall business strategy (Mulcay, 2001). It is argued though that the inability to successfully derive value from IT investment is, for the most part due to a lack of alignment between IT and business strategies.Johnson and Scholes cited by Riley (2012) define strategy as follows "Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations". In unpacking the definition, simply the business strategy that the business has decided to follow needs accurate configuration of resource - human resource, technology resource, financial resource etc., so as to gain competitive advantage, meet objectives and stakeholder expectation.Henderson & Venkatraman (1999) argue that there is no IT application or system, regardless of how cutting edge or sophisticated it maybe, that will build and sustain a competitive advantage for an organization for a sustained period of time. Organizations, in order to sustain competitive advantage should continuously endeavor to exploit it's IT functionality and resource to maintain an advantage. In my opinion this is achieved by out of the box, evolutionary thinking by both business and IT leaders. Furthermore, both business and IT leaders need to understand fully the role that IT can support and re-shape business strategy decisions and improve IT effectiveness and ultimately improve business performance.Should a company's IT Strategy follow its business strategy or should it lead its business strategy? WhyIn my opinion IT is vary rarely the core business unless of course we mention Microsoft or Google and the like where technology is the primary focus area but it must noted that the actual business process for each is different and intellectual property is what is regarded most valuable. Hence, I agree with (Abate 2009, Henderson & Venkatraman 1999, Skriletz 2013) and many other researchers and commentators, that IT's role should be regarded as the enabler or driver of the business strategy. IT's strategy, investment; architecture even projects all need be dictated by overall business strategy, but should be part of process that helps the formation of the overall strategy.IT leaders need to possess the knowledge of new enabling technologies and how these technologies can be integrated into the business. Very often the business strategy is formed and developed in isolation and IT is seen as a support function only, rather than as function that can contribute to...

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