Chapter

11
Developing Business/IT Strategies

McGraw-Hill/Irwin Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
 Learning Objectives

Discuss the role of planning in the business

use of information technology, using the
scenario approach and planning for
competitive advantage as examples
Discuss the role of planning and business
models in the development of business/IT
strategies, architectures, and applications
Identify several change management
solutions for end user resistance to the
implementation of new IT-based business
strategies and applications

11-2
 Planning Fundamentals

IT created a seismic shift

Just knowing the importance and structure of
e-business is not enough
Must be able to transform an old business
design to a new e-business design

11-3
 Scenario Approach

Gaining popularity
Less formal
Virtual world (microworld) exercises
Business scenarios are created and
evaluated
Alternative scenarios are then created

11-4
 SWOT Analysis

Strengths
Core competencies and resources
Weaknesses
Areas of substandard business performance
Opportunities
Potential for new business markets or
innovative breakthroughs
Threats
Potential for business and market losses

11-5
 Balanced Scorecard
Measures activities in terms of vision and strategies
Financial performance
Impact on customers
Performance of key business processes
Companys learning curve and growth
Four processes
Translate vision into operational goals
Communicate vision and link to performance
Business planning
Feedback/learning and strategy adjustment

11-6
 Strategic Matrix

Cost and Efficiency Improvements

Low internal and low external connectivity
Recommend Use the Internet as a fast, low-
cost way to communicate and interact with
others
Performance Improvement in Effectiveness
High internal but low external connectivity
Recommend Increase use intranets and
extranets

11-7
 Strategic Strategies
Global Market Penetration
High external but low internal connectivity
Capitalize with e-commerce websites using
value-added information services and
extensive online customer support
Product and Service Transformation
High external and high internal connectivity
Develop and deploy new Internet-based
products and services to create a new
strategic
position in the marketplace

11-8
 E-Business Strategy Examples

Market Creator
Channel Reconfiguration
Transaction Intermediary
Infomediary:
Self-Service Innovator
Supply Chain Innovator
Channel Mastery

11-9
 Implementation Challenges

Implementation
Do what you planned to do
Critical skill for managers
Many companies are good at planning
Few are good at executing the plan
Even if senior management consistently
identifies e-business as an area of great
opportunity and critical need

11-10
 Implementing Information Technology

Developments that have generated

organizational change
Business process reengineering
ERP systems
Y2K compliance
Shared service centers
Just-in-time manufacturing
Sales force automation
Contract manufacturing
Introduction of Euro currency
E-business is the latest catalyst

11-11
 End User Resistance and Involvement
Change generates resistance
Examples:
Customer Relationship Management (CRM)
Knowledge Management Systems (KM)

CRM failures
CRM failure rate up to 75 percent
Causes for failure
Sales force automation problems
Unaddressed cultural issues
Sales staffs fearful and thus resistant

11-12
 Keys to Solving End User Resistance

Create relationships
Understand the end-users situation
Provide education and training
Require involvement and commitment
End-users
Top management
All stakeholders
Eliminate frustration and inconvenience

11-13
 Change Management Programs
Develop a change action plan
Assign managers as change sponsors
Develop employee change teams
Encourage open communications and
feedback about organizational changes

11-14
 Change Management Tactics

Involve as many people as possible in e-

business planning and application
development
Make constant change an expected part of
the culture
Tell everyone as much as possible about
everything, as often as possible, in person
Make liberal use of financial incentives and
recognition
Work within company culture, not around it

11-15