Jan 12, 2018 in Business
Success in any business is usually attributed to sound strategies. These strategies are classified into various categories which are dependent on perspectives of business management. This paper seeks to show the interrelationship between different aspects of business strategies and narrows down into a specific aspect of the strategies. Three main strategies will include the business strategy, the organizational strategy, and the information systems or information technology strategy. These strategies interact with each other and lead to overall business success. Frist, the paper briefly explains what is meant by the information systems strategy triangle, after which it analyzes the role of information systems in sustaining business and organizational strategies. Thereafter, the paper focuses on an in-depth analysis and summary. Finally, it provides conclusions.
The Information Systems Strategy Triangle
The information Systems Strategy Triangle is a framework that connects the business strategy, the organizational strategy, and the information strategy. According to these two authors, the corporate balance should always be maintained lest a crisis results. However, Pollack (2010) asserts that the core aim of the triangle is actually to show how important information systems are in business success.
Although the three types of strategies are distinct, they are inter-connected and related. Pollack (2010) shows that the business strategy involves the creation of the company’s wider vision, purpose, and goal. This is followed by specific objectives and tactics. The organizational strategy is usually concerned with processes, people, structures, and ways of achieving the set goals. The third strategy involves provision of information services which would support the other two strategies. In expounding this relationship, Teuteberg and Gomez (2010) observe that the ‘business strategy must support both organizational and information strategies’ (p. 31). They also advise that both organizational and information strategies must complement the business strategy.
Analyzing the Role of Information Systems in Supporting Business and Organizational Strategies
Information technology plays a key role in the business world. In fact, it could be said that business cannot flourish unless there is a good information technology framework. In this regard, an information system is like a network of various integrated information technology initiatives geared towards supporting the business process. According to Pollack (2010), the information systems (IS) strategy is a plan carried out by a business organization to provide services related to information domains.
The role of information systems in any organization cannot be underscored. With regard to the business strategy, the IS strategy plays a complimentary role. This is because while the business strategy would involve envisioning the strategic direction that a company would pursue, the IS strategy seeks to help in the execution of wider strategy envisions. In any case, aspirations of the business exist in terms of information. The IS strategy supports business communication of the intended achievements. With the evolution of strategic management into what it is today, business strategies have integrated all the related components of a business venture. Therefore, a closer scrutiny of the IS strategy reveals that the relationship between the business strategy and the IS strategy is purely strategic. Consequently, changing the business strategy leads to a change in the IS strategy. If these changes are not consistent and in tandem with each other, there is an imbalance in the Information Systems Strategy Triangle (ISST).
While the business strategy involves how a business will tackle competition, for instance through positioning or segmentation, the IS strategy includes capabilities of an organization to achieve the set goals. It could be said that the IS strategy empowers a company to move ahead and face competition in the industry.
There is a need to demystify the exact ways through which the IS strategy supports business strategy implementation. Pollack (2010) identifies four components of the IS strategy. These include hardware, software, networking, and data. The hardware includes physical components of the IS system such as servers and desktop units. The IS strategy also determines who would be responsible for electronic machines and where they would be located. The second component, which is software, includes the intangible components of the IS. These are applications or programs that are used to enhance business communications, inter-system linkages, and smooth business operations. The IS includes people who will develop necessary programs and what applications would be compatible with the hardware at the disposal of the company. Thirdly, the IS stipulates how hardware will be networked. In other words, it specifies ways in which information will be shared between different computers or servers. A part of this strategy is a diagrammatic representation of how hardware and software will be aligned, where nodes will be located, and how wires will be connected. Lastly, the IS strategy includes policies regarding data or information of the company. This is perhaps the most important aspect of the IS strategy, as in case information about the company is not secure, confidential information about clients could be revealed to wrong people. In addition, secret company information could be accessed by competitors, which would be lethal to the company. The IS strategy specifies a formula that would establish which software contains what data in which servers.
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Lytras et al. (2008) gives an additional role of information systems in business processes. According to the authors, information systems help a business in communication, value measurements, corporate governance, partnerships, and skills enhancements among others. Information Systems assist in business communication. This comes in various ways such as emails, Intranet, blogs, and websites among others. As a result, processes of organizational and business attainments are made more effective. Neither the business strategy nor the organizational strategy can be implemented without effective communication. Other than communication, the IS or IT is useful in the storage of important company information. Before computers were invented, the processes of record keeping had been very tedious. However, with the invention of computers, Internet, and computer apps and systems, delivery of business and organizational objectives has become very easy.
In elucidating the strategic IS planning process, Pollack (2010) outlines five steps, which include strategic business planning, IS assessment, IS vision, IS guidelines, and strategic initiatives. The fact that strategic business planning is the first step points out that indeed IS strategies support business strategies. This is followed by the assessment of the existing information system in order to establish what needs to be adopted or disregarded. Thereafter, the IS vision is established which is usually in line with the business vision. Information system guidelines are equivalents of the business mission; they involve how the business will achieve its set goals or overall vision. Lastly, IS strategic objectives involve the exact tangible ways of achieving effective information systems. These are equivalent to business strategic activities.
The purpose of this paper was to discuss various issues regarding the information systems strategy triangle. This was to be done by singling out a narrower sub-topic for the discussion, which was to be based on the business strategy, the organizational strategy, and the information systems strategy. The paper has effectively managed to discuss the role of information systems in supporting organizational and business strategies. In order to explore the role of information systems in business, the paper divided information technology components into four: hardware, software, networking, and data. It was established that while the hardware includes physical components such as servers and computers, the software is intangible attributes such as applications and programs. The hardware and software are connected through networking which may involve wires and nodes. Lastly, one of the most important components is data or information of the company. The paper established that it should be handled with absolute care. The second perspective in the IS strategy is planning that includes five steps. These steps are strategic business planning, IS assessment, IS vision, IS guidelines, and strategic initiatives.
Across all industries, business operations are not possible without effective information systems. Some recent developments in technology have led to massive improvements in the way the business strategy is delivered and resulted in better organizational structures. Although the information systems strategy triangle has three components, information technology and systems is the one that holds all the strategies in place. Moreover, the IS strategy alone cannot take the organization to the next level. The information strategy must always complement a wider business strategy. Lastly, the information strategy should complement the organizational strategy. Undoubtedly, the IS strategy holds all the other components of strategy in place.
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