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Critical Analysis on IT Strategic Planning

Introduction

Companies utilize an IT strategy to be at the forefront of the development and growth across industries. Managers of the company’s divisions must have technical knowledge and skills to establish significant interaction with IT systems, adjust and communicate changes properly. Both business and IT directions need a coherent strategic plan to align actions towards future innovations while managing core assets, making investments, and counting costs. This paper will discuss two theories associated with IT planning and development, their benefits, drawbacks, and application in organizations, and recommendations about utilizing specific approaches towards technological systems implementation.

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The theory of IS planning and business strategy

The first approach towards IT strategic planning described by Baets has several essential considerations. The idea is based on the assumption that successful Information System (IS) planning and utilization is only possible if there is a close bond of the IS strategy to the business strategy of the organization (Baets, 1992). Although it is proved that strategic planning is useful for the organization, companies still have challenges in realizing IS strategic planning (Bert et al., 2019). To address this, researchers proposed a framework that includes four main activities and their linkage: business strategy, organizational infrastructure, and process; IS infrastructure and process; IT strategy (Baets, 1992). Besides, the model for IS strategic planning consists of a competition, organizational change, and human resource issues; IS implementation processes and tools; global IT platform.

The implementation of the IS strategic theory proposed by Baets showed several benefits, drawbacks, and specific results. It can be stated that the main advantage of the framework is the combination of IS strategy and business strategy that oblige managers to set common strategic steps (Kekwaletswe & Mathebula, 2014). Furthermore, the corporate process and the communication flow between teams and different hierarchical levels in the organization can be enhanced, ensuring that various departments work on a common goal. General understanding of the strategy and changes helps to create shared IS and business planning steps.

However, the framework has its disadvantages that are primarily connected to excluding organizational culture, people, and structure (Baets, 1992). The framework is focused more on processes, hierarchy, and technological support, and less on employees, their vision, and collaboration regarding the IS strategic planning. Nevertheless, it was proved that the theory gives reliable results in strategic planning in banking and other industries (Pijpers et al., 2008). Therefore, the framework’s universalism is questioned for specific sectors that require tailored approaches to people, technological, and economic value.

The theory of strategic thrusts

The second approach towards IT strategic planning proposed by Rackoff, Wiseman, & Ulrich presents another theory regarding the implementation of the IS planning process. The idea is based on the view that information technology and systems have transformed from the managerial support function to more strategic steps to support service and competitive advantage (Rackoff et al., 1985). The authors decided to summarize the information and define strategic information systems (SIS) as those used to nurture the organization’s advantages, plan strategic moves for future growth and stability (Rackoff et al., 1985).

The proposed framework includes a model for SIS opportunities identification, SIS planning process, idea-generation meeting steps, evaluation, and discussion points. Authors named the framework “the theory of strategic thrusts” aimed to identify SIS opportunities (Amrollahi et al., 2014). Strategic thrusts are considered as primary competitive steps (offensive or defensive) made by the company. It is proved by other analysts that IT systems have a significant positive effect on the strategic planning process in organizations (Yoshikuni et al., 2018). Therefore, the theory can be used to facilitate the process of SIS utilization.

The implementation of the SIS strategic framework proposed by Rackoff, Wiseman, & Ulrich has several benefits and drawbacks. The main advantage of the framework is its focus on combining the SIS opportunities and planning process and its alignment with the competitive advantages of companies. The framework is comprehensive and includes broad aspects that consider SIS innovations, planning, and development based on existing models, such as Porter’s forces, which is proved to help companies understand the scope of the external and internal environment. The theory of strategic thrusts helps the company track its SIS opportunities, invent new ones, and create a stable pipeline of high-quality ideas.

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Even though the second framework provides companies with the methodology to use IT systems as tools for creating competitive value, it has several drawbacks. The theory states that SIS is the significant step that defines the success of the company’s competitive strategy; however, other analysts argue that IT systems should be integrated with business development steps and growth (Baets, 1992). Therefore, the drawback of the theory lies in the exclusions of business aspects of SIS planning and utilization of IT systems by employees. Moreover, the evaluation of the SIS ideas and opportunities includes feasibility (from technical and resource view), cost, risk (of not fulfilling the competitive advantage, Rackoff et al., 1985), but does not consider the technical skills of employees and existing company’s environment, that can substantially influence the process.

Application of both theories in an organization

The theory of IS planning and business strategy and the theory of strategic thrusts can be utilized together in organizations. While both approaches include several models and frameworks inside, companies’ managers can implement essential parts of them to the IT systems. The theory of aligning information systems with business strategy helps uncover the layers that facilitate the IT planning process. In the organization, it is needed to research and define organizational infrastructure and operations (first layer), then summarize external market conditions and internal growth moves (second layer) and define corporate strategy and internal economic conditions (third layer, Baets, 1992). The combination of three layers ensures that IT systems planning and implementation will be aligned closely with the business strategy.

After creating the collaboration between IT and business strategy, the theory of strategic thrusts can be used. The business strategy defined at the first stage of IT planning can be added by a framework of strategic moves in the SIS creation and development to present an innovative solution in the technological field and link it with its primary competitive advantages. At this step, SIS’s idea generation can be launched to encourage managers to create relevant IT solutions for strategic planning. Finally, the approach of strategic thrusts implies the necessity to evaluate efforts and IT planning to check how SIS ideas and strategies align with the organization’s goals. Different functions can create their key performance metrics to comprehensively assess the IT planning and elaborate steps to integrate technologies.

Recommendations

Talking about recommendations that companies should stick to while applying both approaches towards IT strategic planning and business processes, it is crucial to mention the necessary steps for the implementation. For the first framework that combines IS and business strategies, it is essential to check the framework with external and internal economic conditions and employees’ behavior within the organization. It is also suggested to create a mapping of necessary steps that would include organizational processes, competitive advantage, and vision (Baets, 1992). The inclusion of these variables would allow managers to align well with different functions and adjust accordingly, encouraging the exchange of knowledge and growth. However, it is crucial to have a clear corporate strategy before all these steps and link the growth steps to IS strategy execution (Baets, 1992). Finally, multiple approaches towards implementing the IS steps connected to business steps can be used to facilitate the process.

Considering the second framework that focuses on competitive advantage and SIS planning, several recommendations can be proposed. First, it is crucial to establish training for employees and decision-makers to facilitate the process and give an overview of the theory, its goals, and strategic moves towards SIS (Rackoff et al., 1985). Second, it is also needed to check employees’ understanding after training and establish practical examples so that those who would develop the SIS planning and ideas have substantial knowledge about objectives and thrusts for the selected IT systems and their utilization (Rackoff et al., 1985). Third, it is possible to present different topics and cases to employees to create new ideas and proper steps for SIS planning implementation, including the strategic models, such as SWOT, and the company’s information about clients and products. Cases should provide knowledge of IT application and planning for managers and support the business strategy.

For both theories, it is central to discuss all the steps created and evaluate the process correctly. To address this point, brainstorming sessions and regular discussion meetings with managers should be established to manage the communication and suggestions, achieve joint decisions, and avoid ambiguity. Furthermore, brainstorming sessions with people from different functions can be fruitful for IT systems implementation planning to uncover new opportunities for technologies and get various opinions across the organization (Briggs & Hodgetts, 2017). Evaluation and adjustment are also a part of the application of frameworks; therefore, it is suggested to establish clear assessment points for the models. Ranking of ideas and prioritizing steps should be made to ensure that the progress is tracked against specific criteria, such as costs, feasibility, resources needed, risks, and benefits (Watt, 2014).

Conclusion

The business strategy with a combination of IT strategic planning articulates clear goals, creates options and ideas for achieving these goals, defines a plan for achieving objectives and their evaluation to widely utilize information technology opportunities. Theories that help create IT innovations and implement them in the organization consider how the company will change towards its goals and enforce relevant technical solutions.

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When analyzing the feasibility of strategic planning of IT innovations, one should examine the stability of the business situation and the feasibility of strategic planning for IT development. It is crucial to explore theories and utilize them according to the recourses and objectives that exist in the organization. The management of the organization should choose approaches that would give the most significant boost for operations of the company and technical advancement in the competitive environment.

References

Amrollahi, A., Ghapanchi, A., & Talaei-Khoei, A. (2014). Three decades of research on strategic information system plan development. Communications of the Association for Information Systems, 34, 1439-1467. Web.

Baets, W. (1992). Aligning information systems with business. The Journal of Strategic Information Systems, 1(4), 205-213. 

Bert, G., Walker, R., Monster, J. (2019). Does strategic planning improve organizational performance? A meta‐analysis. Public Administration Review, 79(6), 810-819. 

Briggs, B., & Hodgetts, C. (2017). Tech trends 2017: The kinetic enterprise. Deloitte. 

Kekwaletswe, R., & Mathebula, P. (2014). Aligning information systems strategy with the business strategy in a South African banking environment. Proceedings of the Conference for Information Systems Applied Research. Maryland: Education Special Interest Group of the AITP.

Pijpers, V., Gordijn, J., & Akkermans, H. (2008). Aligning information system design and business strategy – A starting internet company. The Practice of Enterprise Modeling Working Conference. 

Rackoff, N., Wiseman, C., & Ullrich, W. (1985). Information systems for competitive advantage: Implementation of a planning process’. MIS Quarterly, 9(4), 285-294.

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Watt, A. (2014). Project management. BCcampus. Web.

Yoshikuni, A., Favaretto, J., Albertin, A., & Meirelles, F. (2018). The influences of strategic information systems on the relationship between innovation and organizational performance. Brazilian Business Review, 15(5). 

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