Chapter 11 – Developing Business/IT Strategies
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11 Developing Business/IT Strategies
CHAPTER OVERVIEW
Chapter 11: Developing Business/IT Strategies emphasizes the importance of the planning process in developing
IT/business strategies and the implementation challenges that arise when introducing new IT-based business
strategies and applications into an organization.
LEARNING OBJECTIVES
1. Discuss the role of planning in the business use of information technology, using the scenario approach, and
planning for competitive advantage as examples.
SUMMARY
• Organizational Planning. Managing information technology requires planning for changes in business goals,
processes, structures, and technologies. Planning is a vital organizational process that uses methods like the scenario
• Business/IT Planning. Strategic business/IT planning involves aligning investment in information technology
with a company’s business vision and strategic goals such as reengineering business processes or gaining
• Implementing Business Change. Implementation activities include managing the introduction and
implementation of changes in business processes, organizational structures, job assignments, and work relationships
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KEY TERMS AND CONCEPTS
1. Business model (455):
2. Business/IT planning (457):
The business planning process focuses on discovering innovative approaches to satisfying a company’s
customer value and business value goals.
a. Business Application planning (461):
Application planning begins after strategic planning and includes the evaluation of proposals, business case
assessment, application development, and implementation.
3. Change management (469):
Change management describes the process of implementing major changes in information technology, business
processes, organizational structures, and job assignments to reduce the risks and costs of change and optimize
its benefits.
4. End-user involvement (468):
5. End-user resistance (468):
End user resistance describes employees‘ natural aversion to risk associated with change.
6. Implementation (464):
7. Implementing business/IT change (not found in text):
8. Information technology architecture (458):
9. Organizational planning (448):
10. Planning for competitive advantage (453):
This type of planning involves an evaluation of potential benefits and risks an organization faces for strategic
use of IT-based strategies and technologies.
11. Scenario approach to planning (451):
Chapter 11 – Developing Business/IT Strategies
12. SWOT analysis (453):
Strengths, weaknesses, opportunities, and threats, a SWOT analysis helps managers evaluate the impact that
each possible strategic opportunity can have on an organization and its use of information technology.
ANSWERS TO REVIEW QUIZ
Q.
A.
Key Term
Q.
A.
Key Term
1
9
Organizational planning
9
3
Change management
2
2
Business/IT planning
10
5
End-user resistance
3
8
Information technology architecture
11
4
End-user involvement
4
Planning for competitive advantage
12
7
Implementing business/IT change
5
Scenario approach to planning
13
1
Business model
6
Business application planning
14
Strategic planning
7
SWOT analysis
15
E-business architecture planning
8
6
Implementation
ANSWERS TO DISCUSSION QUESTIONS
1. “Planning is a useless endeavor because developments in e-business and e-commerce and in the political,
economic, and societal environments are moving too quickly nowadays.” Do you agree or disagree with this
statement? Why?
Disagree. Planning is never a useless endeavor – whether it is in the old economy or in the new economy. The
2. “Planning and budgeting processes are notorious for their rigidity and irrelevance to management
action.” How can planning be made relevant to the challenges facing a business?
Planning brings forward activities for consideration and prioritization by management. As such, planning is not
irrelevant. In fact, planning helps eliminate projects made irrelevant due to rapid changes in the market and
technology.
Organizational planning components:
• team building, modelling, and consensus
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3. Refer to the Real World Case on IT/Business Alignment in the chapter. Companies where IT is an
important part of their product offerings presumably also have a sales force that is well versed in technology.
Why is it then necessary to take the CIO along on customer visits? Discuss.
While a sales force may be able to address technical questions, they are not able to address questions at the
4. What planning methods would you use to develop business/ IT strategies and applications for your own
business? Explain your choices.
Four models:
• Competitive forces model – competitors, customers, suppliers, new entrants, and substitutes.
5. What are several e-business and e-commerce strategies and applications that should be developed and
implemented by many companies today? Explain your reasoning.
Suggestions
• Market creator – use the Internet to define a new market by identifying a unique customer need. This
model requires you to be among the first to market and to remain ahead of competition by continuously
6. Refer to the Real World Case on Centene, Flowserve, and Shaw Industries in the chapter. Where is the
value in the approach taken by Flowserve to reaching consensus on their massive project? Discuss.
Value
When business leaders take upon themselves the responsibility for setting the priorities, they are less likely to
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7. How can a company use change management to minimize the resistance and maximize the acceptance of
changes in business and technology? Give several examples.
Change management strategies
• Involve top management
8. “Many companies plan really well, yet few translate strategy into action.” Do you think this statement is
true? Why or why not?
Yes
9. Review the real-world examples on user resistance and involvement in the chapter. What else would you
recommend to encourage user acceptance in both cases? Explain your recommendations.
Recommendations in the book
• Answer questions
• Provide information
Other ideas
Invite end user discussion regarding problems with the current system
End users tend to grow accustomed to and overlook flaws in legacy systems. By inviting discussion about the
These bullet points are not part of the required answer – they are for reference only. As per the question, students
should present ideas that are not included in the book.
This is not an exhaustive list.
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Identify natural leaders among users and give them one–on-one training and support
The opinions of some employees carry more weight than others. By identifying these users and targeting them
10. What major business changes beyond e-business and e-commerce do you think most companies should be
planning for in the next 10 years? Explain your choices.
10 year planning
• Significantly increased mobile computing
ANSWERS TO ANALYSIS EXERCISES
1. Business on the Fly
a. Research credit card readers. What are the popular brands? What features do they offer? How much do
they cost?
Features:
• Computer connection type
In one case, an IT manager identified a critical administrative assistant as a “trouble spot” prior to a rollout. The
call center feared her temper, and over a dozen managers stood to suffer from any changes to her productivity. The
IT manager assigned a team member to literally sit next to this assistant’s desk for three days following an important
roll-out in order to answer questions with minimal delays. By week’s end, the IT staff had the administrative
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b. Research mobile point-of-sale devices. What are the popular brands? What features do they offer? How
much do they cost?
Searching on “mobile point of sales” produces useful results
Features:
• Type of wireless network (computer, cell phone)
c. Look up “Authorize.Net” and explore the Web site as a prospective retail merchant. Read and
summarize a retail merchant case study.
A two page case study illustrates a self-serve payment solution for hotel-based business centers by Showcase
2. Online University Degrees
a. Use news.google.com to find and read three articles about successful online degree programs. What are
the key elements for success mentioned in the articles?
This is a hot topic in education, and students should have little difficulty finding articles. Examples:
b. Prepare a SWOT analysis describing this business opportunity for your university’s administration.
Example:
Strengths
Weaknesses
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c. What sorts of concerns might the faculty have about an online degree program? What steps would you
recommend the administration take in order to make an online degree initiative attractive to the faculty,
whose help is required to make the endeavor a success?
The faculty may be concerned about the affect on their traditional students, the university’s reputation, and the
intellectual property rights of the content they develop for the on-line course. The chapter highlights several
application itself (via feedback mechanisms, reward systems, etc.)
3. Strategic Opportunities Matrix
a. Online sale and distribution of digital college textbooks.
Low ability to deliver with IT: while anyone can distribute digital files, no technology has yet fully prevented
b. Customized news alerts by topic, industry, region, business function, or other key word.
able to provide access to information not currently available.
c. Online college degrees from accredited universities.
Low ability to deliver with IT: it is technically difficult to provide online performance evaluation while keeping
d. Brainstorm opportunities that might fit both the “High Ability to Deliver with IT” and the “High
Strategic Business Potential” categories. Present your best idea to the class and explain how it fits both
classifications.
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Students’ answers will vary. However, students will quickly realize that high-value, easy-to-deliver with IT
4. Practical Change Management
a. Briefly describe the proposed change.
(see below)
b. What group or groups oppose the change? What motivates them?
(see below)
c. What group or groups benefit from the change? What motivates them?
(see below)
d. Apply the change management principles outlined in this chapter to describe the steps you think
leadership could take to ensure success at the lowest reasonable cost.
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ANSWERS TO REAL WORLD CASES
RWC 1: IT Leaders
Case Study Questions
1. How does the job of the CIO change with the assumption of customer responsibilities? Do you agree with
this new development. Why or why not?
Job Change
• More travel
2. Why would there be internal resistance to CIOs becoming more externally customer-focused than they
were before? Does this present a threat to executives in other areas of a company?
Customers “belong” to sales and marketing, people who carefully guard their customer relationship. At worst,
3. How do companies benefit from having their CIO meet customers and generally become more involved
with product development? What can companies do now that was not possible before? Provide a few
examples.
Opportunity
• Improved customer service
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Real World Activities
1. The IT function is notorious for being dynamic, and its leaders are no exception. Go online to research
recent trends affecting the traditional roles of senior IT executives and how those roles are changing. Prepare
a presentation to share your findings with the rest of the class.
Search terms
2. “In the future, the prevalence of IT in product offerings will blur the distinction between IT and other
areas of the company, to the extent that the IT function will cease to exist as a separate entity.” Do you agree
with this statement? Why? Break into small groups with your classmates to see if you can reach a consensus
on the issue.
Agree
At least the management end of IT (MIS) may cease to exist as a separate entity for the simple reason that the
RWC 2: Centene, Flowserve, and Shaw Industries
Case Study Questions
1. Why do you think the practices described in the case led to success for these companies?
2. How do they change the structure of projects so that the likelihood of a positive outcome increases?
Senior management becomes more involved. Communications increases. IT spends less time waiting for
3. In the case of Shaw Industries, how did Scrum help?
Scrum forced interaction between IT and the business. It required participants to identify top priorities and
4. Provide three specific examples from the case, and explain where and how those activities helped the
company move their projects along.
a. Centene used proven technology, experienced implementers, and good team relationships to implement its
new financial system. This approach reduced risk and helped identify problems early on.
Chapter 11 – Developing Business/IT Strategies
5. Using examples from the case and your own understanding of how those worked, can you distill a set of
recommendations that companies should follow when managing technology–based projects? Would these be
universal, or would you add any limitations to their applicability?
Recommendations
• Business considerations (business value) must drive IT projects
Real World Activities
1. The Scrum approach to project management has become quite popular in recent years. Go online and
research other companies that are using it to organize their projects. Have those experiences been positive as
well? What can you tell about how the approach works from your research? Prepare a report to summarize
your findings.
2. Would the issues discussed in the case be solved by making a business executive the head of any projects
involving IT? Why or why not? Break into small groups with your classmates and develop a justification for
both alternatives.
RWC 3: Forrester, NMSU, Exante Financial Services, and Others
Case Study Questions
1. Consider statements made in the case about business often not having an overarching business strategy
that can serve as guidance for the development of a strategy for IT. How is it possible that companies get by
without some sort of stable and clear direction? What does this tell you about the business and industry
environment in which they operate?
Perhaps the company operates in a chaotic competitive environment where strategic planning documents
2. Dave Aron of Gartner notes that in some cases the lack of clear business strategy provides an opportunity
for IT leaders to step in and help articulate it and the role IT will play in the new strategy. This sounds like a
good thing for IT people. What is the downside of being in this situation?
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3. Why do you think IT’s success is dependent on the overall business strategy of an organization? Why
must they be tied together? Provide several reasons.
Real World Activities
1. Go online and follow up on some of the organizations featured in the case (note that Exante Financial
Services has recently merged with OptumHealth). How have these organizations been doing lately? Research
what the news media and their own financial reports say, if anything, about the role of their IT investments
and practices on their current status. How does that relate to what you read about them in the case?
New Mexico State University (NMSU)
Office of the CIO
2. One of the organizations featured in the case is New Mexico State University (NMSU). Think about how
IT can be of strategic importance to universities and educational institutions. Break into small groups with
your classmates to discuss some possibilities and how these apply to your educational experience. What
suggestions would you have for improving its performance?
Suggestions:
Implement a single log-in portal for students to access all their school-related accounts. This would help
eliminate redundant authentication systems and provide a significant service to students. Systems affected
would include:
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Partner with researchers to help them prepare grant applications with IT components so their proposals make
RWC 4: Blue Cross and Blue Shield and Others
Case Study Questions
1. Although a very detailed change proposal may prevent people from making their own connections, as
discussed in the case, it may lead others to consider the proposal to be vague and unfinished. How do you
balance these two concerns? What guidelines would you use to ensure that you are not veering too far off in
either direction?
Balance:
IT managers need typically need detailed proposals in order to obtain resources for their project. However, this
2. Kevin Sparks of Blue Cross and Blue Shield of Kansas City had a difficult time convincing his people of
the need for change. What would you have suggested that he should do before you read the case? What about
afterwards? How did your recommendations change as a result?
Before: My thoughts upon reading this case were that Kevin had scarce resources, and he should bring in
3. Organizational change goes beyond promotions and the threat of layoffs. What ways other than those
discussed in the case would you use to entice people to embrace proposed changes? Provide several
suggestions and justify their rationale.
Note: answers to this question should involve suggestions other than variations on the carrot/stick theme.
Chapter 11 – Developing Business/IT Strategies
Real World Activities
1. Search the Internet for examples of recent successful and failed IT implementations. What was the role of
employee involvement and resistance in each one of those? What strategies did companies use to manage the
change process, and how much success did they have in doing so? Prepare a report to share your findings
with the class.
Successful:
2. Break into small groups to discuss what change management strategies and tactics you would use to
ensure a smooth transition, either at a company you are familiar with or at one you know about from
previous research for this or another class. How would you achieve a good balance between positive and
negative consequences, as well as involvement in the process? Choose one of your members to share your
insights with the rest of the class.
Change management is a huge and highly relevant topic that goes far beyond IT, though IT is a major driving
factor. Project managers should complete the following tactics:
• Outline the change required