Most organizations have adopted and embraced the use of Information Technology (IT) in their conduct of business. IT has made the conduct of business easier and smooth for many organizations. However, aligning IT with business operations remains a big issue for many organizations (Boom, 2010). Alignment in this sense means adopting an IT strategy that suits the overall business strategy for an organization.
IT strategy is now a very important tool in management and formulation of overall strategies in an organization. This is the reason why most organizations now have a full IT department that is well supported in order to work in conjunction with all other departments. Alignment of IT strategy with business strategy remains to be a big challenge because of the debate on the role of IT in the business (Betz, 2002).
Application of IT in Business Organizations
An IT department in an organization can adopt various strategies. One of the strategies is the table stake strategy in which the IT department is empowered to support only basic operations of the business in the cheapest method possible. Another strategy is giving the IT department critical capability whereby the department supports basic operations as well as finds ways to boost the competitive advantage over other competitors (Dubey, 1999).
Under this strategy, the IT department has a wider responsibility of gaining competitive advantage, growth in revenues and enhancing overall business performance. The looming debate is whether adoption of an IT strategy that maintains a cutting-edge position on technology is the most effective way of supporting any overall business strategy.
I agree that an IT strategy that maintains a cutting edge in technology over competitors is the most effective way to support any overall business strategy.
Primarily, any overall business strategy does not require the job to be just done. In the increasing competitiveness and globalization of the business environment, organizations must ensure that they perfect what they do (Sutherland, 1991). An IT department that is focused on maintaining a cutting edge is the best to ensure that the organization achieves perfection rather than getting things ‘just done.’
IT acts as a competitive differentiator and a strategic asset that is needed especially in this era when businesses are keen on value addition (Boom, 2010; Betz, 2002). In order to beat competition, an organization must ensure that there is creation of value in the organization. Since all organizations have adopted the use of IT in creation of value, an organization that wishes to out-compete the competitors should use an IT strategy focused at maintaining a competitive edge over the competitors.
The role of IT in an organization is perceived to be beyond the support of basic operations of the organization. The application of IT in a firm processes should be redesigned in order to ensure value addition. Businesses and organizations operate in a dynamic environment with many changes.
For any business strategy to be able to work, a business must understand and forecast the future. In order to be able to perform the above functions that are critical in any overall business strategy, innovation in IT department is required. This innovation can only be achieved through maintaining a cutting-edge position in terms of IT in the industry (Dubey, 1999).
Any overall business strategy must be developed with the understanding that the environment of operation is very dynamic in terms of industry trends, customer requirements, employee requirements and general changes in the business. Overall business strategy should incorporate these trends in order to be able to gain a competitive edge over other businesses.
An IT strategy that aims at supporting the basic business operations will not be sufficient to provide support to formulate and implement an effective business strategy given the dynamic environment (Sutherland 1991). An IT strategy that focuses on maintaining innovation and efficiency is thus the most effective tool to support the overall business strategies since it will create a competitive edge in innovation for the firm over its competitors.
The formulation, implementation and evaluation of overall business strategy require the use of IT. The effectiveness of the IT department in the firm should be maintained in order to be of help to the firm. A good IT department should thus ensure that it maintains a competitive edge in order to ensure effectiveness in formulation, implementation and review of business strategy (Boom, 2010).
In conclusion, an IT department especially one that maintains a competitive edge strategy in innovation and efficiency is hard to set up and maintain. However, such IT strategy is the most effective way to support any business strategies.
IT is a strategic tool in an organization and the better the IT department is, the better the overall strategies and competitiveness of the business will be. IT supports all departments in an organization. Thus, an IT strategy that emphasizes on maintaining a cutting edge will lead to efficiency in the organization hence effectiveness of the overall business strategy.
Betz, F. (2002). Executive Strategy: Strategic Management and Information Technology. New York: John Wiley and Sons, 2002
Boom, C. (2010). An Introduction to Business Information Management. Brussels: Asp / Vubpress / Upa.
Dubey, S.S. (1999). IT Strategy and Management. New Delhi: PHI Learning Pvt. Ltd.
Sutherland, E. (1991). Business strategy and Information Technology. London: Taylor & Francis.