How can Cheryl Smith help managers at WestJet better understand the role of information technology in corporate strategy?
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As a newly appointed Chief Information Officer, one of Cheryl’s duties involves helping managers understand the role of information technology in corporate strategy. Namely, she should explain the interconnectedness between IT, customer satisfaction, revenues, response-times, and decision-making (Andriole, 2012). In the world of aggressive competition, the speed and efficiency of information transactions define the leaders of the industry. WestJet managed to get ahead of its competition by implementing IT before anyone else. To maintain a competitive advantage, it is necessary to reorganize the IT department, so that it could face new challenges and work on new projects.
How might WestJet’s experience influence the way your organization aligns its IT and business strategies?
Modern air companies are required to have dedicated IT departments run by a CIO. It has historically proven to be the most efficient manner of organizing labor in the IT industry. Although WestJet was one of the first companies to pioneer the extensive use of IT in airline industries, their organization remained unchanged since. The lack of change and the inability to adapt was the reason why WestJet’s IT department struggled when it was necessary to integrate its systems with other companies’ ticketing and billing services (Munro & Khan, 2013). The situation changed only with the arrival of Cheryl Smith and radical reformations that took place after. From this case study, I have learned that any organization needs to have a clear understanding of what its departments do, have a stable planning and budgeting structure, and strict adherence to corporate strategies and goals.
Based on an Internet or Walden Library search, describe the best tools and techniques organizations can use to align IT strategy with business strategy. What alternatives do organizations have to ensure their IT and business strategies are in alignment?
To align IT strategy with business strategy, a company must clearly understand the need for IT and its place in the corporate structure. Otherwise, WestJet’s story is likely to repeat itself, as managers and executives will understand the purposes of their own IT department, whereas the IT would work utilizing a reactionary approach in dealing with any potential issues. This strategy does not facilitate growth. To determine the company’s business strategy and the place of IT in it, it is possible to utilize SWOT and PESTEL analyses. These techniques highlight strengths and weaknesses of a company in the industry, thus enabling the use of IT to make up for them. Alternative techniques include Porter’s Five Forces and the ADL Matrix (Munro & Khan, 2013).
What risks does the organization take if it does not invest in the resources necessary for maintaining alignment between IT and business strategy?
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Modern corporations are required to invest in their IT departments, as the potential consequences of falling behind are very severe. Some of the potential consequences of a faulty IT department are as follows (Sabegh & Motlagh, 2012):
- The gradual loss of competitive advantage.
- The slower pace of adoption of new technologies.
- Loss of customers and market share due to technologically inadequate services.
- Lack of productivity in the IT department can lead to a loss of time, money, and resources.
Therefore, it is necessary to invest in IT and ensure that the company’s technological department remains in-line with the established corporate goals.
Offer additional practices or tools organizations could use in aligning IT strategy and business strategy. Explain why those are important and effective. What specific steps does an organization need to take to make sure it continuously monitors how well these strategies align?
The Value Net Model is a more complex system when compared to easy-to-understand SWOT or PESTEL, but are effective at aligning IT and business strategies. In the scope of this strategy, it is necessary to conduct a high-level assessment to identify the weak points and challenges in the company’s current operations. Then, a model is developed to target these weaknesses, correcting them, and providing a strategic IT approach. This includes identifying the governing bodies within the organization, redefining organizational structure and processes to help support the new model, and conducting evaluations to determine whether the existing staff can fit the newly defined IT roles or not (Sabegh & Motlagh, 2012).
Andriole, S. J. (2012). Managing technology in a 2.0 world. IT Professional, 14(1), 50-57.
Munro, M., & Khan, S. (2013). WestJet Airlines: Information technology governance and corporate strategy. Web.
Sabegh, J., Ali, M., & Motlagh, S. M. (2012). The role and relevance of IT governance and IT capability in business – IT alignment in medium and large companies. Business & Management Review, 2(6), 16-23.