Data Arteries – Enabling Business Strategy through Information Technology
No matter the size of your company or industry, information technology is essential for every business. Every enterprise must have a plan to use it, especially with the advent of the internet. Information technology strategy is a key enabler for business strategy. An enterprise must not only manage its relationships with its constituents, but also be able connect electronically with them through data arteries (information supply, value and demand chains). Information supply and demand chains are external, while information value chains internal.
Information technology strategies are a unique case functional strategy. Every function within the enterprise requires electronic information delivery capabilities and many require electronic control. Strategy may be developed at the organizational unit and enterprise levels in large enterprises.
Linkages between applications systems and databases, as well as social networking sites, will become increasingly important in order to allow constituencies to communicate cooperatively and collaboratively. Social networking websites, especially for advertising or ecommerce, will be just as important as email. Email has been a main method of communication between enterprises.
Information from business intelligence can be used to spot opportunities for competitive advantage. Information technology can also be a competitive advantage, particularly when it is possible to digitally deliver products or provide information products electronically. In these cases, business strategy cannot be separated from information technology strategy.
Information technology refers to the operational and analytical application systems, databases and technical infrastructure (hardware, networks) of an organization. All computer technologies are not information-based. Computer technology can be used to control process in special-purpose equipment. As applications become more interconnected, connectivity is vital. As digital construction and manufacturing practices develop through such technologies as computer-aided design/computer-aided manufacturing (CAD/CAM), the processes, the control of processes, and the products and/or services delivered by processes all rely upon information technology for connectivity.
In the manufacturing industry, for example, design and manufacturing can be done electronically using integrated CAD/CAM processes.
Technology such as electronic money transfer and electronic data interchange allow data, both digital and physical products to flow through information supply chains. They are linked to the supply chains for material and service demand. Data flows within an enterprise through information value chains, from supply chains to demand chains.
It is important to create an information technology strategy document for describing the requirements, and for educating users.
It has a huge impact on the entire enterprise and organizational units. Without it, other elements of strategy can’t be implemented.
Information technology is essential for both administrative activities (e.g. legal, finance, and personnel) and operational activities (e.g. research and development, procurement or equivalent, distribution and marketing, sales, and service). Both operational and administrative functions can be supported by analytical and operational systems.
Time frames, costs, risks, and the magnitude of effort are often more complex than other initiatives. It is important to understand that information technology projects can be out of control and under delivered.
If the subject matter is not clearly explained, it can become complicated.
The information technology strategy is often packaged separately, but it is still part of the strategic plan. It is implemented and executed by specific programs and projects that create or improve existing applications systems, databases, or technical infrastructure.
Large projects in information technology development are often cross-functional and can be part of a larger initiative sponsored by multiple functions. Information technology is a component of many larger initiatives.
Market research and development
Research and development of products
Research and development of infrastructure for information delivery and processes
a:Digital manufacturing system that integrates both research and development and sales and product activities (sponsors are Manufacturing and Sales functions – impact on Research and Development and Procurement, Manufacturing Distribution, Sales and Service functions).
Financial, managerial and regulatory accounting and reporting system (sponsor Finance function – enterprise-wide impact)
Human resource management system (sponsor : Human Resources function – impact is enterprise-wide)
Sales tracking system (sponsor : Sales function – impact on all salespeople enterprise-wide
Sometimes projects are solely focused on the Information Technology function. In this case, it would be a customer.
To overcome cross-functional barriers, steering committees should be set up for major projects and programs. A planning and policy committee should be established at the enterprise level to review major programs.
Information technology strategy formulation can be considered an individual project at the organizational or enterprise level. Large projects can be grouped together as a group of interrelated components under the supervision of a program manager. You can also create projects on their own. One project can deliver multiple applications systems, databases and technical infrastructure. However, complex projects may require multiple projects.
It may be necessary to carry out marketing, product and infrastructure development projects when launching a product. This could include upgrades and delivery of new systems. If a product is added to the line later, it may be necessary to launch a new project or set up projects to improve or maintain existing systems or develop new ones.
The work breakdown structure for downstream enhancement and maintenance projects is broken down into planning, analysis and design, construction, implementation and performance measurement phases. Each phase must conclude with a performance review. The performance measurement phase may be performed in parallel to the others. To ensure that future planning activities can take the lessons from the past, a feedback loop must be created.