Managing the Information Technology Resource Instructor’s Manual
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CHAPTER 2 – IT STRATEGY
CHAPTER OBJECTIVES
Study of this chapter will enable the student to:
1. Understand the influence of the 21st century business environment on IT strategy
3. Recognize the role of IT strategy in a business
5. Be familiar with the processes involved in developing an IT strategy
CHAPTER OVERVIEW
This chapter discusses the concept of Strategic Alignment as the key framework for creating effective IT
strategies and the importance of creating an aligned IT strategy for competitive advantage. The
importance of IT as an enabler of business transformation is stressed. IT managers must work with
senior business managers to develop IT strategies that are aligned with the firm’s business strategy for
sustainable competitive advantage. The chapter also includes a detailed description of a process for IT
managers to use to envision and plan an IT strategy that is aligned with the firm’s business strategy.
CHAPTER OUTLINE
I. Today’s Business Environment
II. Strategy – A Definition
III. IT Strategy
A. IT and Business Transformation
IV. Strategic Alignment
V. Strategic Fit
VI. The Strategic Alignment Model
VII. Functional Integration
VIII. Planning IT Strategy
IX. IT Strategy Planning Activities
EXAMPLES IN ACTION
• How Important is “The Vision Thing”? – p. 27
Managing the Information Technology Resource Instructor’s Manual
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ANSWERS TO END-OF-CHAPTER REVIEW QUESTIONS
1. Describe the concept of Strategic Alignment and its importance to a company.
The concept of Strategic Alignment is centered upon the precept that the goals and
2. What are the major domains of the Strategic Alignment Model and their components?
The major domains of the Strategic Alignment Model are the Business domain and the IT
3. What are the domains of the Strategic Alignment Model and how are they interrelated?
The major domains of the Strategic Alignment Model are the Business domain and the IT
4. Name some examples of enablers and inhibitors to Strategic Alignment.
When senior business executives understand and support the role of IT as an important element
5. Name some symptoms of lack of alignment between IT and the business.
Symptoms of a lack of alignment between IT and the business would include an IT organization
6. What are “distinctive competencies” and “systemic competencies” and why are they important to
the formulation of an IT strategy?
Distinctive competencies are the core competencies and critical success factors that provide a
be based if the organization has achieved Strategic Alignment.
7. How might a company use IT to drive its business strategy?
8. What are the forces that affect profitability in any industry? Why is it important to understand
them?
9. What techniques or tools might be used to measure the effectiveness of an IT strategy?
10. How can the maturity of an organization’s strategic alignment impact its ability to execute an IT
strategy?
Strategic Alignment maturity addresses the ability of organizations to adapt their IT and business
ANSWERS TO END-OF-CHAPTER DISCUSSION QUESTIONS
1. Why isn’t a business strategy sufficient for a company to determine how it can leverage IT for
competitive advantage?
2. Does your company have an IT strategy? Has it been published or otherwise communicated?
What are its strategic goals and objectives?
3. What do you think are your company’s distinctive competencies?
4. Does your IT function have systemic competencies? What are they?
5. What do you think are the main external threats facing your company?