THE RELATIONSHIP OF IT TO BUSINESS STRATEGY

The Relationship of IT to Business Strategy

The Relationship of IT to Business Strategy

Companies today have the challenging task of seamlessly integrating technology and business into their operations. Business information technology is integral in business improvement and reaching business goals. Managing business technology, learning how to improve business with new technology, and the technology development process can make or break a company.

But even more important is business technology management. It's not always easy to marry the business office technology you deal with every day with general business requirements such as effective communication skills, management skills, and business risk. Leaders today need to understand business technology management, recognize barriers to effective communication when explaining business IT solutions, and possess project management skills. Peter Drucker had theorized the rise of the “knowledge worker” back in the 1950s. He described how fewer workers would be doing physical labor, and more would be applying their minds. In 1984, John Nesbitt theorized that the future would be driven largely by information: companies that managed information well could obtain an advantage, however the profitability of what he calls the “information float” (information that the company had and others desired) would all but disappear as inexpensive computers made information more accessible.

A Technology strategy (e.g. as in Information technology (IT)) is a particular generation of an organization's overall objective(s), principles and tactics relating to the technologies that the organization uses. Such strategies primarily focus on the technologies themselves and in some cases the people who directly manage those technologies. The strategy can be implied from the organization's behaviors towards technology decisions, and may be written down in a document. Potts in FruITion (novel) conveys through the book's characters that an IT strategy needs to be focused on creating and measuring business value from the business investment in IT, and not as traditionally done which is starting with IT and figuring out how to deliver business value.[1]

Other generations of technology-related strategies primarily focus on: the efficiency of the company's spending on technology; how people, for example the organization's customers and employees, exploit technologies in ways that create value for the organization; on the full integration of technology-related decisions with the company's strategies and operating plans, such that no separate technology strategy exists other than the de facto strategic principle that the organization does not need or have a discreet 'technology strategy'.

A technology strategy has traditionally been expressed in a document that explains how technology should be utilized as part of an organization's overall corporate strategy and each business strategy. In the case of IT, the strategy is usually formulated by a group of representatives from both the business and from IT[2]. Often the Information Technology Strategy is led by an organization's Chief Technology Officer (CTO) or equivalent. Accountability varies for an organization's strategies for other classes of technology. Although many companies write an overall business plan each year, a technology strategy may cover developments somewhere between three and 5 years into the ...