Week11 CS832 Doctor Steven Reynold Lesson to LEARN

SYNOPSIS OF CONCEPTS LEARNED

IN BUSINESS STRATEGIC AND

INFORMATION TECHNOLOGY ACTION

By

Tai Cleveland

Class CS 832

Doctor Steven Reynolds

Week 10th assignment

Table of Contents
Title Page 1
Table of Contents 2
Basic Perspectives of IT Benchmarking 3
Alignment of IT and Business Goals 4
Strategizing 7
Business Performance 8
Reference List 9


1. Basic Perspectives of IT Benchmarking
In information technology, benchmarking compares certain technological factors of a product or service as opposed to traditional specifications. IT benchmarking presents an outcome that determine an individual or a set of performance indicators (Ambuhl, et. al., 2004). The model IT benchmarking method is based on IT metrics. This method ensures that companies achieve pertinent IT benchmarks at a reasonable cost.
The measurement of value gained from investments in information technology is a guide to decision making regarding a company’s IT portfolio. Measurement involves the quality, productivity and business value of information technology. Consultants Ambhul and Bitterman emphasized the relation of benchmarking to competitive advantage. They wrote:
Building an IT-based competitive advantage has become a necessity. Ongoing benchmarking can ensure that your IT investment is delivering the best value to the organization (2004-2007, 8).

One perspective involving IT benchmarking is measurement of outcome, which addresses the gains accomplished from the implementation of an IT application. Rapidly rising information technology costs, questions about effective IT implementation, and the need for efficient delivery of IT projects have compelled organizations to focus on outcomes research, measurement, and management. Considering that there is no end in sight to escalating IT investment costs, corporations are motivated to zero-in on cost containment methodologies focusing on quality, cost-effective outcomes. As organizations move forward in this quest for more cost-effective IT solutions, it is imperative to adopt outcome information to measure and demonstrate the effectiveness of such solutions.
The measurement of output is another perspective in IT benchmarking. Corporations can no longer justify IT investments in terms of input, that is, in terms of the amount of new money they have provided, or the number of new IT professionals they have employed, or the range of powerful computers they have installed. It has been observed that businesses need to show how they have transformed current and new dollars into realistic results.
Both of the foregoing perspectives have their own application. The application depends on the objectives of the corporation and the kind of corporate culture that is nurturing when it comes to innovation. A casual perusal of literature on benchmarking would show that it has a different meaning depending on the discipline it is applied. For example, benchmarking has a different meaning in healthcare, manufacturing and in distance education, to name a few. It is the duty of the IT professional to exercise his creativity in analyzing which perspective is applicable in his line of business.
2. Alignment of IT and Business Goals
The concept of alignment was borne out of the desire of IT managers to close the gap “between the assumptions at the conception of a project and the reality that becomes visible only during execution” (Strassman, 1998). Corporations seem to jump to IT as the preferred choice in the solution of marketing and operational problems. The behavior is prompted by the desire to address the problems immediately and to formulate the solution early on. In the process, IT managers tend to design specifications that may not work as expected. IT managers appear to be promising the moon; however, this is hardly the case. Strassman pointed out that initial project plans lack specific details since such details will surface only when implementation starts. IT managers must be able to come up with measurable targets that are related to the proposed computer projects. In turn, the measurable targets must result to verifiable performance.
The critical aspects involved in alignment are process disconnects, legacy and entitlement mentality and management roles (Benson, Bugnitz & Walton, 2004). In the planning phase, the critical aspects must be addressed to achieve alignment. According to Benson and his co-authors (2004), affordability and impact are the key elements in making the right decisions for IT alignment. Company resources are limited amidst competing options and in the presence of these conditions, the right decisions are those that advance IT’s bottom-line impact and control IT spending (Benson, et al., 2004).
Benson and his colleagues has pointed out correctly that IT departments are primarily concerned with the deployment of technology. Businesses are giving more attention to the acquisition of computer equipment with the latest features in terms of memory capacity and processor speed. The value chain has changed all this. The Strategy-To-Bottom-Line Value Chain will prove to be the definitive tool in empowering IT departments to support the accomplishment of business objectives.
The use of the Strategy-To-Bottom-Line Value Chain implies that end users must undergo the relevant training to enable them to use the tool effectively. It is envisioned that the training should include workshops for each of the outcomes of the value chain. An expert in the method should guide the training participants to ensure learning of important concepts.
The value chain can only be as effective as the person who is using it. By itself, the workshop can focus on the actual situation as it obtains in the business. After the outcomes are identified, the business must be innovative and aggressive when implementation time arrives. Performance evaluation must be conducted to assess the impact of IT applications. Stepwise improvement may also be adopted to complement the value chain by providing the opportunity to implement improvements as it comes along during performance evaluation.
Alignment balances the IT portfolio across the short-term as well as the long-term vision of the business organization and delivers IT efforts fairly among competing business units. Alignment results to prioritization of IT efforts to encourage common understanding on what the company should do with IT. The absence of alignment would probably cause companies to loose money in prospective costs and wasted investments. Strategic opportunities result from aligning IT initiatives with business goals.
Alignment should also result to reduced cost characterized by innovative ways to maximize the use of resources to accomplish more with less. Harwell Thrasher (2003) identified reduced expense as a result of using IT to increase business benefit to remain competitive. He wrote:
This (reduced expense) is the benefit of IT that first comes to mind for most people. The original IT projects were put in place to “automate” processes in order to reduce cost, often by replacing large numbers of people with a few computers. Reducing expense is still a valid way for an IT project to pay its way, but this is becoming one of the least strategic IT investments. Most companies have already automated the obvious areas for savings long ago.

Still, if your business is not competitive in your industry because of a higher than normal expense level, then this may be the most important way that IT can contribute to your business success.

Most American businesses look at IT as means to reduce cost on business operations. Business operations were streamlined and restructured to meet the objective of reducing cost. In the midst of trying to reduce cost, businesses did not notice that the cost of technology was going haywire while the promised achievements of IT applications were not fully realized. Moreover, the deadline for project implementation had been moved several times already. This situation was given attention in a Computer World article entitled “CFO’s Cite Poor Alignment Between IT and Business”. The expenses for IT Business/IT alignment is an issue that has to be addressed to make IT enabled-business to achieve its goals. In a nutshell, there is business/IT alignment when the IT strategy supports the business strategy; the business strategy supports the IT strategy and the two strategies do not contradict each other (Thrasher, 2008).
3. Strategizing
Intuitively, our idea of strategy derives from military operations or business planning. One might be tempted to reach for the dictionary to get the meaning of strategy but this meaning is tentative at best. Nickols (2008) observed that “strategy means so many things to so many people that it is difficult to have a meaningful conversation about strategy unless you define your terms”.
Corporations also get a notion of strategy through certain formulas, such as, Citicorp Interaction Analysis, Boston Consulting Group matrix, Blue Ocean Strategy, General Electric/McKinsey Matrix. An examination of these strategy development methods might reveal that they are not attuned to the demands of information technology. The foregoing discussion highlighted that benchmarking and alignment are the important concepts in the management of IT resources. It should follow that IT strategy must address the concerns of benchmarking and alignment. Said differently, IT managers should base their strategy on the situation. The intense competition brought about by globalization and the current economic slowdown will continue to provide a challenging environment to American enterprise. Since risk cannot be avoided, strategic thinkers must adopt a strategy consistent with the principles of IT benchmarking and alignment of business and IT goals.
As corporations employ strategy to obtain value from IT investments, the limitations on strategizing must not be forgotten. Pukszta stressed that strategy may be limited by “unforeseen changes that are stimulated by the actions of competitors, customers, and suppliers” (Pukszta, 1998).
4. Business Perfomance
Wallgum reported that in “a survey of 158 organizations in February and March 2009, (…) Nearly 65 percent of respondents reported declines in employee productivity up from 58 percent in the 2008 survey” (Wallgum, 2009). Wallgum proceeded to report adverse effects on customer satisfaction and the company’s brand as a result of poor application performance from among the organizations in the survey.
The survey results should serve to emphasize the importance of business performance as an indicator of effective IT application performance.
Business performance can be evaluated in terms of IT benchmarking, alignment of IT and business goals and strategy. Planners must take into consideration those concepts as an integrated approach to understanding and aiming for excellent performance. The IT concepts could not be considered independently from each other. Following the foregoing precepts will result to better than expected performance. Taken together, the principles of IT action will justify the investment in IT to accomplish business goals.
The foregoing discussion gave more ground to benchmarking and alignment as these two concepts are considered the foundation of a robust IT philosophy. The formulation of strategy is the starting point that sets IT projects in motion. Strategy need not be fixed but must allow some flexibility to consider risk and unpredictable business environment. The role of business performance is to provide feedback on whether the IT project is on track or not.


















References

Ambuhl, Charles and Bitterman, Michael. (2003-2007). IT Benchmarking: A Baseline For Improving Performance. Retrieved on August 31, 2009, from: http://www.rfgonline.com/events/highperformance.pdf


Benson, R. J., Bugnitz, T. L., & Walton, W. (2004). From Business Strategy to IT Action. John Wiley an Sons. Retrieved on August 31, 2009, from: http:books.google.com/books?id=2wYZbaKzuwAC&printsec=frontcover&dq=From+Business+Strategy+to+IT+Action

Nickols, Fred. (2008). Strategy is Execution. Retrieved on August 31, 2009, from: http://home.att.net/~nickols/strategy_is.htm

Pukszta, Helen. (1998). Limitations of Strategizing.
Retrieved on September 1, 2009 from: http://www.informationweek.com/712/12uwhp.htm;jsessionid=SXAYYPFUORYZ5QE1GHOSKH4ATMY32JVN

Wallgum, Thomas. (2009). Business to IT: Poor App Performance is Killing Us. Retrieved on August 31, 2009, from: http://advice.cio.com/thomas_wailgum/business_to_it_poor_app_performance_is_killing_us