IT STRATEGY & BUSINESS DYNAMICS OF THE IT INDUSTRY

Answer of Question Bank

Contents

Q.1 What is business strategy? What is IT strategy? Explain briefly their relationship.

Q.2 What do you understand by the term “context of business”? Explain briefly the steps involved in arriving at the IT Strategy after understanding the context of business?

Q.3 What do you understand by the term business transformation? What process practices (or factors) that one needs to consider enabling smooth transformation of IT during such transformation?

Q.4 Describe briefly various roles, responsibilities and accountability matrix that needs to be established at minimum for an IT department and briefly explain its strategic importance to the organization?

Q.5 Who is responsible for IT Strategy in an Organization? Explain how the members identified for the Organization shall drive IT Strategy across the organization?

Q.6 Describe briefly any three IT services provided from India. Based on the past experience, what should be the vision (strategy) for the next 3 coming years for the industry?

Q.7 Describe the role of venture capital funding for IT industry? How should one evaluate to minimize the risk of funding and enable contribute growth to the industry?

Q.8 what do you understand by the term “Business Dynamics”? Explain briefly the present IT industry scenario for each of the following factors or criteria.

a. Domestic market performance and forthcoming opportunities

b. International market performance and forthcoming opportunities

c. ITES opportunities in different verticals and countries

d. Opportunities in Cloud related business

e. Web technologies – build, operate and transfer

b. International market performance and forthcoming opportunities

c. ITES opportunities in different verticals and countries

d. Opportunities in Cloud related business

e. Web technologies – build, operate and transfer

Q.9 An IT company Tech Innovators LLC (TI) specialized in technology and provides services around it for the past 18 years. Another company specialized in financial services business (GFS PLC) merge to leverage best of both organizations to increase their global market share. Describe briefly the high level activities that you will take up as IT Director for the merged organization.

Q.10 With the current decline in performance of many IT companies over the past 4 years, what would be the top 10 strategies that India needs to take to bring change in IT scenario in next 2 years?

Q.11 Explain briefly the dynamics of IT business for the forthcoming years between India and United States with respect to the following statements arising out of recent political, financial / economic changes that has occurred recently.

a. Restricted IT and ITES outsourcing activities from India.

b. Utilization of local skill sets from United States of America.

Q.1 What is business strategy? What is IT strategy? Explain briefly their relationship.

Answer: -

Business Strategy: -

  • A business strategy is the means by which it sets out to achieve its desired ends (objectives). It can simply be described as a long-term business planning.
  • Company business strategy can be defined as a high level plan for reaching specific business objectives. Strategy describes how a company differentiates itself from competitors, how it generates revenues, and where it earns margins.
  • A strategy is judged successful if it leads to a strong competitive position, business growth, and good margins.
  • Business strategy help to understand, how the company will
  • Creates customer value,
  • Competes with others in the same industry,
  • Generates revenues and spends to create good margins.
  • Business strategy can be defined in either several paragraphs or be written as a set of strategic statements. It is a summary of how the company will achieve its goals, meet the expectations of its customers, and sustain a competitive advantage in the marketplace.
  • Business strategy should answer these questions:
  • Why is the company in business?
  • What are we best at doing?
  • Which customers should we continue to serve or start serving?
  • Which products/services should we stop offering, continue to offer, or start offering?
  • Why have we decided on these strategic directions?
  • Why we need of Business Strategy?
  • Retain Customers -

For every business, more important to retain customers than to constantly chase for new ones. This is one major area where business strategy is extremely necessary. In the absence of a sound business plan, you will find it hard to generate customer loyalty. Businesses that have no specific guidelines on how to cater to existing customers risk alienating the later, and a competitor can easily snatch them out of your hand just by emphasizing on customer service.

  • Robust System of Follow up -

What business need to do, is develop a robust system of follow-up where calls are made and emails are sent to repeat customers not only to ensure that their products are operating properly, but also to let them know that business cares for them. Also depending on line of business, business can send greeting card and gifts to loyal customers on special occasions like festivals, special occasions of customer’s life (birthday, anniversary, etc.)

  • Resource Allocation -

Resource allocation is another important area where business strategy comes in handy. Doesn’t matter what size of business, business will always need limited resources on hand, which necessities the need of efficient management so that these resources can be used with maximum efficacy. A sound business plan helps weave together resources like employees, brand value, clientele, trademarks, and supply partners etc., to achieve a competitive advantage and also create products and promotion that speaks directly to target market. If resources are not managed efficiently, then the business is likely to lose both revenue and customers in the long run.

  • Business Expansion

Business expansion is also a goal which cannot be achieved without strategy. If business expansion goals are laid out in great detail, then it will help team leaders and executives to explore opportunities outside of standard business practice to facilitate company expansion. Business will be able to set aside budget and hire appropriate people for market research that can not only collect and collate data, but also analyse trends to which help business to spot untapped niches.

  • Clarity, focus and direction

If business strategy in place, then business will be having clear idea on, where business is now, where it is going and what needs to do to get desire position. This will give business clarity, focus and direction to align business to achieving the business strategy.

  • A better understanding of your current business

To develop a business strategy, need to understand your business is now. This involves looking at overall business, including the key internal drivers such as financial performance, customer satisfaction, staff turnover, sales and marketing trends, conversion rates etc. Business also needs to consider the strengths, weaknesses, opportunities and threats associated with business. Also understand the external business environment, competitor’s and market position of business. This will help business to move forward in much better place.

  • Better business results

Developing a business strategy helps business to lead to better performance as focused on taking the business to where desire. Business less like to get distracted and waste time on areas that are not moving with long term objectives.

IT Strategy: -

  • IT strategy is a comprehensive plan that information technology management professionals use to guide their organizations.
  • IT strategy should cover all facets of technology management, including cost management, human capital management, hardware and software management, vendor management, risk management and all other considerations in the enterprise IT environment.
  • Executing an IT strategy requires strong IT leadership; the chief information officer (CIO) and chief technology officer (CTO) need to work closely with business, budget and legal departments as well as with other user groups within the organization.
  • IT strategy is a comprehensive plan that information technology management professionals use to guide their organizations.
  • IT strategy is the discipline that defines how IT will be used to help businesses win in their chosen business context.
  • IT Strategy is:
  • A long-term action plan for achieving a goal.
  • Those which not only link to a business strategy, but also combine tactics and logistics
  • It is about how IT will help the organisation win in its chosen markets.
  • IT strategy should cover all facets of technology management, including
  • Cost Management
  • Capital Management
  • Hardware / Software Management
  • Vendor Management
  • Risk Management
  • IT Strategy should answer the following questions:
  • Are we doing the right things with technology to address the organization’s most important business priorities and continuously deliver value to the clients?
  • Are we making the right technology investments?
  • Do we measure what is the real value to the organization derived from that technology?
  • Is our current Information Technology agile enough; flexible to continuously support a successful organization?
  • Is our Information Technology environment properly managed, maintained, secured, able to support the clients, and is it cost effective?
  • Can our strategy support current and future business needs?
  • IT Strategy should: -
  • understanding the aims and objectives of the business
  • establishing the information requirements
  • outlining the systems needed to provide the information
  • determining the role of information technology in supporting the information systems
  • agreeing policy, priorities and development and implementation plans
  • managing, reviewing and evolving the strategy, and planning to manage potential impacts such as the effect on culture and organization
  • An information technology strategy brings this information together into a plan to make the most appropriate use of both information and technology available in an organisation

Relationship between Business Strategy and IT Strategy: -

  • Business Strategy links to IT Strategy
  • IT Strategy follows from business strategy
  • Ensure the business is making best use of IT to deliver its strategy
  • Ensure the business is using IT effectively and efficiently

  • However, what makes this uniting between IT and business strategies works is the collaborating in the organization level between the IT senior managers and business top management, IT managers and IT professionals and all the departmental workers. There are so many factors that contribute to the uniting IT and business strategies together and the most important factor are having the right CIO, having the right top management team, having a good IT governance and having business drive IT strategy.
  • The CIOs need to have both the business and technical knowledge in order to know the business needs from IT and the expectations from IT. Also, the CIOs need to have a vision for the business and how IT will better incorporate and support the organization strategy, create and strong senior IT management team and information services. The CIOs need to propagate the company and business vision to the rest of top managements. Top management team they are the right hands for the CIOs and their role is very important, they are the ones who take the time to work and support the integrated strategies between IT and business.
  • Function Integration of Business Strategy & IT Strategy

Q.2 What do you understand by the term “context of business”? Explain briefly the steps involved in arriving at the IT Strategy after understanding the context of business?

Answer: -

Context of Business: -

  • Context analysis is a method to analyse the environment in which a business operates.
  • Environmental scanning mainly focuses on the macro environment of a business. But context analysis considers the entire environment of a business, its internal and external environment.
  • SWOT analysis helps business to understand its context of business.
  • The main goal of a context analysis, SWOT or otherwise, is to analyse the environment in order to develop a strategic plan of action for the business.
  • Workforce planning needs to be directly linked to business goals, and so the first step is to think about business context. Business should answer following questions: -
  • What are the business goals and vision?
  • Where is business heading? Is it growing, downsizing, transitioning, shifting skills, introducing new technology or is it in a maintenance mode?
  • What are the economic conditions that impact on industry sector and markets and does this impact on my business?
  • Who are my customers/clients?
  • What is going on internally in my business and how will this impact on my workforce requirements?
  • What are the short, medium and long term goals for my business and what workforce skills and capability will I need to achieve these business goals?
  • Having a good understanding of the current environment and context of the industry your business is operating in, as well as your goals for the future of your business, will help you to plan your workforce needs and develop strategies to turn your goals into business success.

Steps for arriving at an Effective IT strategy: -

  • Step 1: Review Strategic and Tactical Goals and align with the Technology Projects and Goals.
  • Developing an effective technology strategic plan should first start with a review of the organization’s strategic plan. Often after listing out the strategic plans and tactical plans of the organization, the areas where technology could enhance or enable such plans becomes apparent. Many organizations that have reached the state where their IT planning is pro-active rather than reactive have used the strategic plans and tactical plans as the litmus test for whether a project should be funded. When reviewing projects during the budget process, consideration should be given to whether the project contributes to achieving the strategic goals of the organization.
  • Example: If one of your strategic goals is to become “a premier provider of health care services”, how is that goal going to be achieved? What is a premier provider, and what tools would enable your health care staff to become just such a provider?
  • Step 2: Interview the Executive and the Operational Staff
  • Example: The survey questions are designed to ask the users of the IT systems to rank their opinions about the mind-set of the organization as far as IT investment is concerned.
  • The data collected might be sorted to show the following common issues:
  • The organization as a whole has a desire to be perceived as an “Innovator or Early Adopter” in their use of IT
  • The current state of IT in comparison to other senior living communities is closer to “Laggard or Late Majority”
  • Technology that is currently available to the community is not being used properly, indicating the reasons (e.g. a lack of training or limited support)
  • Step 3: Benchmark the Current IT Organization and IT Spending
  • The benchmarking exercise may include the following aspects:
  • IT Leadership – does your company have a CIO or IT Director in strategic planning and growth? Is IT Leadership proactive or reactive?
  • What is the size and scope of the current IT organization? How does this compare to other similar senior living providers? Rank your internal IT staff and responsibilities in comparison to similar senior living providers to determine if your organization is a leader, follower, or laggard in providing IT solutions to your company.
  • Benchmark IT spending against other Senior Living providers to see how your organization invests their IT dollars. We typically find that many senior living providers “think” they are spending enough on IT, but they are really laggards in comparison to senior living organizations that view IT as a strategic investment over their competitors.
  • Example: Take a critical look at how IT is funded in your organization and ask yourself the following questions:
  • Is Information Technology considered a “cost” of doing business or an “enabler” of the business to succeed?
  • Are projects funded based on proactive or reactive thinking?
  • Do you replace systems when they break or are there multi-year plans to upgrade systems?
  • Do you include IT leadership on the organization’s Executive team?
  • How are new corporate directives and goals communicated to IT?
  • Would outsourcing some or all of IT for your organization lower IT expenditures?
  • Step 4: Software Application and Systems Review

Example: Your organization is being charged with looking for a new clinical system that will support EHR to meet the new regulatory requirements. Your current clinical system can be upgraded to support EHR but you are not sure that the DON and other users are happy with the current system. A suggested action plan might be:

  • Identify the current and anticipated needs by interviewing and working with the clinical staff and related departments such as finance)
  • Put the results of the needs analysis into a spreadsheet for review
  • Sit down with your current clinical vendor and determine where the existing application can or cannot meet the needs identified in the steps above
  • Consider performing the same process with alternative vendors, particularly if the current vendor cannot meet the required needs sufficiently
  • Step 5: Review the Gaps between the Strategic Goals and the Current Operations

Examples of some of the gaps could include:

  • Growth goals for the organization may not be in line with current IT investment
  • IT staff may be improperly sized to support growth or meet the current needs
  • Software Applications may be identified for replacement sooner than expected
  • End-users lack sufficient training to maximize the use of existing applications
  • IT systems (hardware and infrastructure) may need to be replaced to meet the goals
  • Step 6: Develop the IT Short-Term and Long-Term Project Plan/Timeline

Example: During the gap analysis, the following projects were identified as being needed to meet the strategic goals of the organization.

  • Clinical systems that support EHR, Home Health and Point of Care solutions
  • Wi-Fi support for multiple systems across the communities
  • Enhanced training for the clinical staff to support existing applications
  • Access to more computer systems across the organization
  • Step 7: Give Information Technology a “Seat at the Table”

Example: Here are some ways to accomplish this goal in your organization