B622 IT Strategy

Overview

Paula Goulding

Why Strategy ?

Sun Tzu When your strategy is deep and far reaching, then you gain much so you can

win even before you fight. When your strategic thinking is shallow and near-sighted, then you gain little and you lose before you even do battle. Much strategy prevails over little strategy as those with no strategy cannot help but be defeated. Therefore it is said that victorious warrior wins first and then goes out to war while defeated warriors go to war seeking to win.

(Boar, 2001)

Strategy in Today’s WorldFor all the changes in global and world economies, the principal objective of business — and thus the objective of strategy — has remained fairly stable: to earn superior returns on shareholders’ capital.

Strategy development, therefore, still must start with a fundamental analysis of what it takes to win in the market — what creates customer value, what drives costs, and how to maximize profit ?

Key Considerations :

•New and disruptive technologies

•Deregulation and globalization

(Demos, Chung,Beck , 2001)

The Changing Face of Strategy

• Over the last decade there has been a movement to reevaluate the traditional policies and tools of strategy

• Away from traditional –– Top down control– Formal planning– Industry analysis

Many recipes – often portrayed as “the only way” , including

Downsizing Complexity Theory

Reengineering Game Theory

Strategic Alliances

Knowledge theory

Strategic Innovation

Competence based competition

Revitalizing Strategy

Hypercompetition

Schools of thought in strategy:Prescriptive

• Design – SWOT - search for fit between internal SW and external OT

• Planning – formalised version of above utilising a planning division

• Positioning – economic analysis of competition (Porter)

All see environment as relatively constant.

In turbulent times can lead to rigidity

Schools of thought in strategy:Descriptive

• Entrepreneurial – environment not stable, can be influenced

• Cognitive – focus on individuals, not planned, incremental and emerging

• Learning – strategy emerges incrementally,”muddling through”

• Political – adds power element, moves and countermoves

Schools of thought in strategy:Descriptive continued

• Cultural – strategy comes from a collective perspective. Needs to be congruent with culture

• Environmental – Ecology, successful strategies thrive in an environment, fails if environment changes

Attempts at synthesis:

• Boundary school – focus on make/buy/cooperate decisions

• Dynamic Capability – Internal focus, analysis of firm specific capabilities, how to complement and substitute

• Configurational – Strategy is an episodic process….different approaches relevant in different environments

The challenge:

• Strategy needs to give employees clear strategic direction but also inspire flexibility and risk taking

Reference List

http://www.strategy-business.com

http://classics.mit.edu/Tzu/artwar.1b.txt

http://www2.cio.com/conferences/august2001/coverage13_content.html

Volberda Henk W & Elfring Tom (eds) Rethinking Strategy chapter 1 SAGE 2001