IT strategy

IT strategy

1. Business Models

   • Driving Forces in the Marketplace Business Definition Competitive Advantages Money
     • Globalization of markets Information technology in the forms of the Internet, e-commerce, broadband communications, increasing microprocessor power at decreasing costs, convergence of information forms (data, image, sound, and video), and mechatronics (adding intelligence to all kinds of mechanic devices) Deregulation of formally monopolized industries Decline in market barriers to entry Dis-intermediation of traditional marketplace intermediaries and reintermediation with new electronic intermediates that create marketspaces (electronic marketplaces) Dramatic increase in customer power and churn due to commoditization of products and services and customer access to increased competitive information Emergence of one-to-one marketing, in which each customer is treated as a distinct market segment
     • A business can choose who are its customers, what products and at what price points it will sell them, how it will organize itself, and so forth. The answers to these questions and others define the business. Because the answers to the questions are inexhaustible, the definitions of businesses are boundless
     • Cost advantage. Differentiation advantage. Focus advantage. Execution advantage. Knowledge advantage. Maneuverability advantage.
       • Advantage comes in four flavors: Sustainable competitive advantage Temporary competitive advantage Competitive disadvantage Competitive parity
     • defining a business model is the synergy between how the company makes money, the business definition, and the competitive advantage.

2. Hyper-competition is a state of intense and often lethal competition within an industry.

   • Advantage. It is increasingly difficult, if not impossible, to create and maintain sustainable competitive advantages
     • End of customer loyalty.
       • End of chivalry. There is no respect for the status quo by competitors
   • Strategic Paradox
     • Coming together of opposites
     • Reversal of opposites.
     • The first four paradoxes occur at the information-age level. The last one is a paradox specific to IT.
       • Information-age strategic paradox I. As the world get smaller, small companies get bigger and big companies get smaller.
         • Information-age strategic paradox II. To create advantage, you must quickly destroy your advantages.
           • Information-age strategic paradox III. To make money, you don’t need money.
             • Information-age strategic paradox IV. To remain innovative, don’t listen to your customers too carefully.

3. A strategic thinker does the following: Chooses a problem (or set of problems). Samples strategic ideas (singularly and simultaneously). Thinks about solving the problem(s) by applying the strategic ideas

   • the three dimensions of strategic thinking: Time. Strategists think across time. They think about a problem from the perspectives of the past, the present, and the future. Substance. Strategists think about problems in turns of both their concrete and their abstract natures. Cardinality. Strategists think about multiple issues concurrently. Synthesis, not analytical decomposition, lies at the heart of strategic thinking.
     • The IT strategic planning process
       • Assessment culminates in the identification of “conclusions” that pinpoint critical issues
         • Strategy consists of identifying strategy statements for the business, the specific objectives to be achieved
           • Execution is the action of putting the plan into motion. It is the translation of intent into reality
   • Benefits
     • Completeness
       • Integration
         • Analytically Based
           • Participatory
             • Quality Focused

4. IT architecture as the mechanism to create hypercompetitive advantage is as follows:

   • Companies in all industries are confronting global hyper-competition. An endless stream of temporary advantages must replace sustainable advantage as the means to marketplace success. The ability to build temporary advantages is a function of the ability of the business to maneuver. In the information age, the ability to maneuver the business is a function of the malleability of information technology. What must be maneuvered, literally, are your information systems. The malleability of your information technology is built on your information technology architecture.
   • Data Architecture Choices
     • Dedicated file architecture. Each application has a set of privately designed files.
       • Closed database architecture. A database management system (DBMS) is used to provide technological advantage over file systems (exemplary advantages are views, security, atomicity, locking, recovery, etc.),
         • Subject database architecture.
           • Data warehouse database architecture

5. E-commerce means conducting these business activities online and worldwide: Company promotion Product marketing Negotiating and taking orders through virtual storefronts Receiving payment Interacting with customers for pre- and post-sales support

   • The competitor who has a deeper and more far-reaching strategy for commanding e-commerce will have a definitive advantage in an endless war of turning the fronts
   • Diffusion is the process by which a marketplace adopts a substitute technology. Substitution is the process by which one technology challenges and replaces another, and diffusion is the process through which the substitute is accepted or rejected by the marketplace
     • Commitment is given by each as he or she emotionally, intellectually, and politically embraces the strategy. Commitment is something that is earned and must be won. It is something that must be planned for and managed. The absence of commitment, not the poor selection of technology, is often the primary cause of IT strategy failure
       • Commitment Design Step 1: A Technology Plan Step 2: Barrier Analysis Step 3: Political Groups Segmentation Step 4: Commitment Map Step 5: Root Cause Analysis Step 6: Commitment Action Design Step 7: Document Commitment Objectives and Actions Step 8: Commitment Execution
       • Breeding Strategy is a bold action to distribute strategic thinking capabilities across the enterprise

6. To be successful, any competitive business must address four fundamental drivers: There must exist a market for your product/service and that market must exhibit one or more compelling needs. You must have a portfolio of competitive advantages that satisfy the compelling needs. You must have a way to exploit/leverage your competitive advantages. You must have a way to control costs.