Chapter 1:

Business Process and Information System

Roshan Chitrakar, MBA

Associate Professor,
Nepal College of Information Technology
Organization Process
●
Organizations create and deliver value in the form of a
product or service, which they offer to consumers or to
other organizations.
●
A product or service is created trough a business process.
– Business Process is a sequence of tasks or activities that
take a set of inputs and convert them into the desired output.
Business Process : Examples

●
In reality, business processes are complex, and they differ among companies
and industries.
●
What about a Production Process ?
Functional Structure of an Orgz.
●
Organizations are divided into
functions, or inter-related
departments.
●
This structure involves the
principles of division of labor and
specialization.
●
Business processes are cross
functional i.e. they rely on more
than a functional group.
●
Functional structure includes rules
and procedures to help manage
organizations.
The Silo Effect
●
People in different functional areas perform their steps in isolation,
without understanding what steps happen before and what next.
●
"By focusing narrowly on specific tasks, they lose sight of the big
picture of the larger process" is referred to as the Silo Effect.
●
Key Point : The silo nature of the functional organizational structure
and the cross-functional nature of processes are at odds with each
other.
●
Challenge : To effectively coordinate the activities among the different
functions or departments.
●
Solution : To exchange information efficiently and effectively.
 Pictures of Silos

Ancient Greek vases Steel grain silos

shaped as silos
8' diameter by 150 feet silo bag silo
Delays in Execution
●
Caused by the time it takes to exchange information among
different parts of the process.
●
Two types of delays: -
– Lead time delay
●
(e.g., how far in advance a company must plan to obtain raw materials from
its suppliers)
– Cycle time delay
●
(e.g., the amount of time needed to produce a product or process a customer
order)
●
Manual process further increases delay
more reasons for Poor Co-ordination
●
Excess Inventory
– {Read the Case : Cisco Systems}
●
Lack of Visibility Across Processes
– {Read the Case : Nike}
●
To overcome these problems, organizations must break out of silos
and focus on processes.
●
Need to substitute a process view for the traditional functional view.
– {Read the Case : Dell}
Global Business Environment
●
The big picture of modern business environment contains
– Global competition
– Information revolution
– knowledge worker
●
They have major impacts on the global business and will
continue to have in foreseeable future
Global Competition
●
More often,
– the product is designed in one country,
– the parts to make the product are produced in several countries,
– the product is assembled in another country, and
– service and support for the product are provided by people in yet another country.
●
organizations have relocated parts of their operations to places outside their
home countries to take advantage of unique business efficiencies e.g.
– companies have moved manufacturing to places where labor is less expensive,
– they have transferred research and development to locations that offer an abundant
supply of highly educated scientists and engineers
●
Increased global competition puts pressure on companies to be more efficient
and productive
Information Revolution
●
Organizations should develop strategies to integrate their
operations, which can be distributed across many different
geographic locations.
– Hence, Information Revolution is required.
●
Information Revolution is "increased use of information and
communication technology to create, deliver, and use information."
●
ICT helps organizations to globalize their operations by enabling
them to coordinate business processes that are performed
around the world.
Knowledge Workers
●
Use ICT to create, acquire, process, synthesize, disseminate, analyze, and use
information to be more productive.
●
Perform work that often requires both
– structured information (well defined, and its source is known) and
– unstructured information (not well defined or not readily available)
●
Knowledge work is typically non-routine in that it is not repeated throughout the course
of the workday or workweek. (note: task workers perform routine works)
●
knowledge workers must have a thorough understanding of the business processes
that occur across different areas of the company.
●
Knowledge workers are employed in all parts of an organization.
●
Point to Ponder : You will be a knowledge worker at some point in your career.
– you must develop the skills to find and use the information you need rather than rely on others to
find it for you
Knowledge Workers : Attributes
●
Strategic Thinking
– ability to see the big picture and understand how your
organization works as a whole.
●
Information Literacy
– ability to determine what information is needed, where to find
it, and how to use it.
●
Communication and Collaboration
– ability to function as an effective part of a project team where
you understand your role as well as the roles of others.
Importance of Information Systems
●
Business processes span multiple departments across
companies—and across multiple countries.
●
These processes cannot be managed manually; ICT is an
essential part of the process view of organizations.
●
A class of ICT, known as enterprise systems (ES) or
enterprise resource planning (ERP) systems, is essential
to managing business processes.
●
SAP introduced the first integrated enterprise systems.
Functional Information Systems
●
Most information systems
focus on functions rather
than processes and are not
well integrated i.e. they do not
share data and information
with one another.
●
Systems in organizations have
evolved over the years in
isolation i.e. exchanging
information among them is
either difficult or exchanged
manually.
Bibliography
●
Jeffery & R. Simha, Essentials of Business Process and
Information Systems
Chapter 2:
Enterprise Systems (ES)

Roshan Chitrakar, MBA

Associate Professor,
Nepal College of Information Technology
 Evolution of Enterprise Systems
●
Enterprise systems have
evolved from stand-
alone systems to
distributed systems.
●
ES include hardware,
software, and a
database.
●
Stages of ES evolution:-
1)Stand-Alone Mainframe
Systems
2)Client-Server
Architecture
3)Service-Oriented
Architecture
Stage 1: Mainframe Systems
●
In the early days of ES, hardware typically consisted of large, expensive mainframe
computers.
●
Software includes specialized operating system software, custom applications that
provide capabilities needed to complete specific tasks etc.
●
Early databases were extremely complex and difficult to manage.
●
They had to use a terminal that was physically connected to the mainframe to input
commands to the system using punch cards.
●
Drawbacks of the mainframe architecture are its limited scalability, unable to be easily
used by other companies etc.
●
The early ES has packaged applications instead of proprietary applications, the
concept being pioneered by SAP in 1972,
Stage 2: Client-Server Architecture
●
Three components or layers are
called the presentation layer,
application layer, and data
layer .
●
The shift to the three-tier client
server dramatically reduced the
costs of acquiring,
implementing, and using an ES
while significantly increasing the
scalability of the systems.
Stage 3: Service-Oriented Architecture
●
Web-enabled their three-tier applications so that users could
access the systems through a Web browser.
●
By using Web services, companies could now integrate several
client-server applications and create an enterprise mashup , or
composite applications.
●
Companies such as SAP have invested billions of dollars to
service-enable their core ES so that these systems can be
exposed and connected to an infinite number of composite
applications and third-party ES.
Types Of Enterprise Systems
●
Enterprise resource planning (ERP) systems
●
Best-of-breed applications
●
Niche applications
Types Of Data In Es
●
Transaction Data
●
Master Data
●
Organizational Data
SAP OVERVIEW
SAP ERP
SAP Application Suite
SAP SCM
SAP SRM
SAP PLM
SAP CRM
Bibliography
●
Jeffery & R. Simha, Essentials of Business Process and
Information Systems
Chapter 3: IT and Strategy

Roshan Chitrakar, MBA

Associate Professor,
Nepal College of Information Technology
Introduction
●
In Greek, “strategos” means “general in the army”.
●
Strategy is the plan to gain advantage over the enemy in war. It could involve
losing some of the battles, but the ultimate objective is to win the war.
●
Strategy in business means
– to create new opportunities,
– To position the product, and
– To beat competition
●
IT is nowadays used as a strategic tool as well as a strategic partner of an
organization.
●
Effective use of information, knowledge building, and the use of all IT
resources are some of the major aspects of IT strategy.
Strategy : Definition
●
A plan, which when put into action, drives business, manages
knowledge, and various initiatives in an organization. It positions
products and leads you to success.
●
The science and art of effective use of all possible forces of a
nation or entity to execute approved plans optimally or as
effectively as possible during different social and political
situations including peace or war.
●
The science and art of military command as applied to the overall
planning and conduct of large-scale combat operations.
IT Management and IT Strategy
●
IT management and IT strategies sit at
the centre of many activities
●
IT facilitates knowledge management and
transaction across the organization viz.:-
– Knowledge workers and related transactions
– Market and sales
– Overall optimization of processes
– Gathering, building, and processing the
available knowledge
– Building knowledge assets IT
– Optimization of overall knowledge flow
Business and Strategy
●
Achieving sustainable success requires
– proper strategy,
– proper technology, and,
– a strategic balance between the technology and business.
●
A strategy needs to be dynamic and agile.
●
Quinn (1992) says that an effective business strategy should
have: -
– A clear and decisive statement of the primary goals or objectives to be
achieved;
– An analysis of the main policies guiding or limiting the company’s
actions; and
– A description of the major programmes that will be used to accomplish
the goals within the limits.
●
The overall business strategy is made up of different strategies:
– Marketing strategy,
– Competitive strategy,
– Knowledge management strategy, and
– Technology strategy.
Information Technology Strategy
●
Definition:
– The science or art of effective use of information and allied technologies, and IT resources of
the organization to execute strategic plans optimally or as effectively as possible to achieve
business objectives.
●
IT strategy is about rethinking of information technology, the allied technology, and
existing information technology resources to achieve the ultimate business objective.
●
Driving forces of IT strategies are: -
(1) Company : Business is about the company and its resources and their optimal use to
achieve the business goals,
(2) Customer : Customers are the most important part of the business, and
(3) Competition : Business is about building a sustainable competitive advantage over rivals.
Customer
and Related Parameters
●
Available customer segment
●
His needs
●
Customer pain points
Company
and Related Parameters
●
The knowledge base of the
company
●
Resources and their skills
●
Money and time
 Competition
and Related Parameters
●
Core competitors
●
Promotion strategies
●
Market share

Now the IT strategy can be termed as

the effective use of IT and resources to help an organization fight

competition, satisfy customer needs in the interest of the company,
and position IT to achieve the business objectives.
Strategies and Success
●
Challenges to build a right IT Strategy
– High expectation from IT
– IT brings technological changes in organizations
– Ongoing changes
– IT managers often are too specialized and poor in leadership
– Difficult to alight IT with business objectives
– Difficult to measure RoI (Return on Investment) in case of IT
Strategies and Success (contd.)
●
Reasons of IT strategy failure
– Misaligned with business objectives
– Inappropriate
– Not dynamic
– Too common
– Based on wrong figures
●
Generic successful strategies may be
– Unable to learn categorized under 3 main heads: -
– Improper application / bad implementation – Gain leadership
– Delayed – Differentiate
– Environment ignorant – Gain focus
– Complicated
Strategies and Success (contd.)
●
Factors influencing IT Strategy
– Customer needs
– IT infrastructure
– Business Impact
– ROI on IT investment
– Internal and external factors
– Technological innovation and
capabilities
Strategies and Success (contd.)
Relationship between IT and business:-
Strategy Design Parameters
●
Marketing
●
Knowledge management
●
Customer segment
●
Future and scope
●
Resources
●
Competitive environment
●
Co-operative relations
●
Innovation
Strategy Design
Parameters (contd.)
●
Besides enabling
business strategy, IT
strategy leverages IT to
enrich new business
strategies and helps drive
the business by
empowering it to achieve
the business objectives.
Strategic Positioning
●
IT is positioned as the information backbone and decision-making tool
of many institutions/organizations.
●
In 1988, Charles Wiseman added to the general framework the
following five thrust areas:
– Differentiation IT allows better positioning of products and
– Cost organizations, by providing organizations the
knowledge required for such positioning.
– Innovation
– Growth Advanced technology shapes the products and
services of the future by allowing information
– Alliances management and correcting positioning errors.
Strategic vs. Operating Plan
●
The nature and type of business and
business goals together help in
describing the strategic representation of
the goals.
●
Strategic representation of goals is
exemplified by various parameters e.g. : -
– Strategic positioning
– Strategic actions for the goal
– Strategic initiatives
– Goals from the perspective of strategic
actions
Evolution of Strategy
●
The process of evolution of a strategy
includes:
– Development of basic strategy
– Deciding strategic sequence
– Analysis and deployment of different strategic
initiatives
– Study of the environment and forces in the
market
– Study of the impact of strategic actions
– Learning based on the impact of strategic
actions
– Re-tuning and finalizing the strategic sequence
– Re-deciding the strategic sequence

Fig. 1.9: Strategic Evolution on a Timescale

Basis of Successful Strategies
●
Vision
●
Re-inventing the business, market, and
organization
●
Looking at the big picture
●
Reality
●
Core competencies
●
Charismatic leadership
●
Shared vision, shared values, and shared
processes
●
Attention to details
●
Mapping between organizational strengths and
market opportunities

A strategy can be a combination of two strategies

e.g. differentiation + cost efficiency.
Strategy Development
●
There is a need for enabling conditions to develop strategies.
●
Skills and willingness balanced with tasks result in commitment and insights
that provide those conditions.
– Skill and insight leads to the ability to adapt and spread new concepts,
– Willingness and insight leads to the inclination and desire to spread these concepts.
– Skill and commitment leads to the development of policies,
– Willingness and commitment leads to the willingness for innovation.
●
The most important aspect of this development is keeping it as simple as
possible.
Strategic Sequence
●
The overall strategy of a company may consist
of a number of strategic moves.
●
The strategic sequence deals with a set of
strategic moves that follows a particular order.
●
IT makes required information available for
strategic decision-making.
●
Once the overall business and IT strategy is
formulated, there is a need to define strategic
sequence and tactics associated with each
state.
●
Deciding the strategic sequence and prioritizing
various moves are an important part of strategy
formulation.
Development of a Strategy
●
There are soft aspects for enabling
conditions to develop any strategy.
●
Strategy without alignment and
willingness will not be effective.
●
There is a need to balance willingness
and ability, and insight and
commitment.
●
Employees at various altitudes and at
various strategic positions in the
organization should be made to
understand and sign for the strategy.
Strategic Development Framework
●
A strategy development framework has
three axes:
– Who
– How
– Level of strategy
●
Strategy is a three-legged stool and is
the act of balancing innovation,
positioning, and competition with
business objectives sitting at the top.
●
It can further be extended to IT strategy
development framework.
Strategy Implementation:
Difficulties
●
Agreement of all employees
●
Disaster
●
Changes in business
environment
●
Wrong reward systems
●
Confusion between
management and strategy
●
Learning blockage
SWOT Analysis
●
In SWOT analysis of a strategy, one of
the factors can be information
technology and there could be listing of
strength, weakness, opportunity, and
threats with reference to business
strategy.
●
But IT also drives various categories
such as material, methods, and
manpower.
●
Further, there are knowledge
management aspects of business that
help in overcoming these obstacles.
Strategy Hierarchy
●
Corporate strategy
●
Product group strategy
●
Site strategy
●
Business unit strategy
●
Manufacturing/Development/Project management
strategies
●
Implementation technology infrastructure strategy
●
Resource management strategy
●
Knowledge management strategy
●
Competitive strategy
●
Portfolio management strategy
Strategic Planning and IT
●
Phases in strategic
development planning
– 1. Financial and resource-
based planning
– 2. Forecast-based planning
– 3. Externally-oriented
planning
– 4. Strategic management
●
Types of IT Strategies
●
Three categories
– Based on types of companies
– Based on Business objectives
– Based on types of business
●
A few types of IT strategies are : -
– IT marketing strategy
– IT competitive strategy
– IT project strategy
– IT product strategy
– IT infrastructure strategy
Types of IT Strategies (contd.)
●
IT strategy drives IT
governance, which in turn drives
programme management,
development, quality,
architecture, and sourcing.
●
IT strategy makes the
organization capable of
prospering in a changing
environment.
Context and Strategy
●
Business context drives an IT strategy.
●
In case the business is dynamic, it could lead to different sorts
of issues.
●
It acts as a major correcting factor in a business context.
●
In case of a change in business context a need may arise to
change or re-orient the IT strategy.
●
Reality, survival, and perception are some of the important
components of this strategy.
IT Strategy in Dynamic Business
●
Knowledge is at the centre of all evolving organizations.
●
IT strategy enables proper knowledge management in a business and
helps business to succeed in such dynamic and evolving situations.
●
Strategy is about learning, de-learning, and re-learning, to acquire or
hold a winning position.
●
The changing business environment will change external factors, even
if the business objectives remain the same.
●
IT strategy in such context is to “retain simplicity”, abrupt changes are
not recommended.
Compiled from
●
Parag Kulkarni & Pradip K Chande, IT Strategy for
Business
Chapter 4: Managing IT

Roshan Chitrakar, MBA

Associate Professor,
Nepal College of Information Technology
Introduction
●
IT is transforming from a ●
IT Management includes: -
technology provider to a – IT risk management,
strategic partner. So, IT – IT resource management,
IT personnel management,
management has three
–

– Measurement of IT,
facets: - – Impact Analysis,
– (1) Technology, – System management,
– (2) Business, and – Process and Transaction
management,
– (3) Management – Technology management etc.
Role of IT Management
●
Selection of Technology ●
Knowledge management
●
Financial Management related to IT
●
IT- related resource
●
Developing IT
management ●
IT-related innovation
●
Positioning of IT ●
Adapting new technologies
●
Managing IT issues ●
Getting maximum benefits
● out of IT
Stages of IT Life-Cycle
●
Identification of need for IT ●
Use and maximization of IT
and related technologies ●
IT integration
●
Technology selection ●
Understanding limitations of
●
Adapting IT existing IT and technologies
●
Building and implementing IT in the next context
●
Innovations for future and ●
Transition to new technology
maximizing benefits
●
Growth and maturity of IT
Technology Evaluation Parameters
●
Stand-alone technology
assessment
●
Suitability assessment
●
Compatibility study
●
Survivability study
●
Return on Investment (RoI)
●
Growth and futuristic issues
IT Management Framework
●
Factored into: -
– Corporate strategy
– IT-enabled decision making
– IT and organizational structure
– IT initiatives
– IT infrastructure
– IT services
– Alliances
IT : a Service Provider vs. a Strategic Partner
IT as a Service Provider IT as a Strategic Partner

Used for efficiency Used for business growth

Budget driven by external requirements Driven by business strategy

Can be separated from business Integral part of the business

Treated as an expense Treated as an investment

Technical experts manage IT Business managers with technical

knowledge manage IT
No role in business decisions Has a role in business decisions
IT Governance
●
IT governance ensures that IT performance is aligned with the
enterprise in such a way that it can understand the technology
and IT positioning requirements to obtain maximum benefits.
●
It also ascertain that an enterprise is taking benefits
– By appropriate use of resources
– By correct technology positioning
– By managing IT related risks
– By taking competent decisions to achieve business objectives.
Framework of IT Governance
●
The “learn” and “compare” functions act as
prime moves, which can be identified along : -
– Dealing with present scenario
– Futuristic arrangements
– Auditing
– Setting and analyzing objectives
●
IT governance includes: -
– Overview and direction of IT
– Built-in strategic road map
– Strategic interrelationship between IT and
business
– Roles of IT for fulfilling strategic objectives
IT Governance Implementation
●
IT delivers value through: -
– IT strategic alignment
– Risk management
– Technology management
– Performance improvement
– Enhancing the overall
value of the business
IT Gov. overlaps IT Mgmt.
●
The roles of IT governance and IT
management are somewhat
overlapping.
●
IT governance is more external
and has futuristic element in it,
whereas IT management is more
internal and business oriented.
●
IT governance sits very close to
business objectives and needs to
drive IT based on these objectives.
Reln betn IT Gov.
and IT Mgmt.
●
Effective IT governance
results from understanding
business, IT and their
relationships.
●
IT governance keeps IT and
business together to improve
performance of the business
processes, projects, IT itself
and infrastructure, along with
resources withing the
organization.
IT Governance and Strategy
●
IT government strategy should be established with the backing of the top
management, which
– Clarifies who owns the IT resources
– With whom rests the ultimate responsibility
●
The proper IT governance strategy ensures that the senior management retains
control and responsibility for the IT operations of the organization.
●
IT governance deals with overall control, communication and execution.
●
Technical architecture needs to be designed taking into account the soft and
hard aspects.
●
Technical architects / experts must be involved in the development of business
strategy; they may involve in the system development process and also in
various technology and product decisions.
Roles of IT Governance
●
In many cases, it was found that there was a gap between what IT was supposed to do and what it was
doing.
●
Roles of IT are, but not limited to, the following: -
– Monitoring and measurement of IT
– Process improvement
– Change Management
– Planning IT
– Opportunities and expansion
– Selection of project, sub-projects, and options
– Issue identification and prioritization for action
– Measurement
– Project scope planning and expansion
– Learning
Technology Management Process
●
A technology life cycle
includes the following: -
– Conceptualization
– Innovation and Discovery
– Proof of Concept
– Proficiency and Maturity
– Maintenance and Support
– Technology decline
– Extinct
Steps in Technology Management
●
There is a need for careful assessment of the requirements before
going in for a new technology.
– Know the gap between the technology you have and that you would like to
have.
– Identify the technology that meets your requirements.
– Develop a framework for implementing and supporting the new technology
– Educate and train your resources
– Implement the new technology
– Keep a watch on the integration of the new technology.
Evaluating New Technology
●
Some of the aspects that are considered before deciding on the suitable technology: -
– Value and benefits
– Stability and consistent value creation
– Interfaces and adaptability
– Long-term support
– Management
– Learning period
– Time required to recover investment
– Appropriateness
– Position among the available options
– Integration efforts
– Technical fitness
Assessment of Existing
Technology
●
The following parameters are considered for assessment of
the existing technology: -
– Issues
– Need of new technology
– Gaps
– Business-based analysis
– Need of replacement
– Impact
Identification and Selection of New
Technology
●
Technology selection is based on the following: -
– Business requirements
– Present technology limitations
– Business compatibility
– Technology future
– Technical compliance
Strategic Aspects of IT
●
Following are the strategic aspects of IT: - ●
Positioning the company for change
– IT for positioning the product includes
– IT as a strategic tool for development – Understanding of the need for a change
– IT as a business enabler – Identifying the technology for the future
– IT for differentiation – Arrange company resources for the change
– IT for penetration – Building technical capabilities
– IT for quality ●
The preparedness for such a
– IT for cost-effectiveness transformation includes
– IT positioning within and outside the company
– Making the organization ready for change
– IT to manage knowledge
– Keeping track of the after-effects
– IT strategy to balance IT and business
objectives – Understanding and adapting to change
IT and Business alignment
●
Three frameworks are dealt here: -
– IT-Business (Isolated) framework
– Embedded framework
– Hybrid framework
●
IT business alignment is influenced by : -
– Acceptance of new technology
– Learning new technology
– Creation of visibility
– Execution
– Optimization
– Learning from experience and outcomes
IT and Business alignment (contd.)
IT-Business Architecture
●
IT-Business architecture has three
parts: -
– Business architecture
●
comprises business strategy, people,
processes and other business inputs.
– IT execution architecture
●
has various IT infrastructure and
performance-related elements.
– IT management architecture
●
includes management of IT tools, IT
processes and IT people
Implementing IT
●
The success of
implementation is
determined by: -
– Cost effectiveness
– Cost-benefit study
– Technical compliance for a
particular function
– User satisfaction
– Performance
– Impact of the system
– Accomplishment of the
objectives
IT Design
●
IT design has roles at every stage ●
IT design project may be
of IT management – from the
introduction of IT to enhancement
impeded by: -
and usage during various stages. – Hight complexity
●
Initial work on design, analysis, and – Changing requirements
prototyping form the basis for
deciding which of the outlined – Conflicts of interest
visions for future IT implementation
and usage best meets the business
– High situation dependence
goals and user needs for IT support
in their work.
Exploiting IT Capabilities
●
In many cases, IT is under- ●
Using IT in a Strategic
utilized or the organization fails manner
to exploit IT capabilities due to
the following reasons: - – IT should be positioned
– Incompatibility within the organization, in
– Lack of knowledge
such a manner that
maximum benefit could be
– Training
derived from it, without
– Reluctance to use having any negative impact
– Improper selection of technologies on other processes.
Measuring IT
●
There are a number of methods for measuring IT, Balance Score Card (BSC) is
one of them.
●
The main indicators of IT performane are: -
– Impact of IT in various areas
– Return of investment (RoI)
– Initiatives, and return on them in future
●
Some of the benefits of IT measurements are: -
– Process improvement
– Speed of delivery
– Availability of information
Balance Score
Card (BSC)
●
Different
perspectives of
BSC are: -
– Corporate
contribution
– Customer
orientation
– Operational
excellence
– Future orientation
IT-BSC
●
IT-BSC is used for measuring
business contribution and the
positioning of IT and IT perspectives.
●
The relationship between IT and
business can be more explicitly
expressed through a cascade of
BSCs.
●
IT-BSC is a fusion of IT and business
measurement models, where IT
department BSD and IT operational
BSC are defined as enablers.
Compiled from
●
Parag Kulkarni & Pradip K Chande, IT Strategy for
Business
Chapter 5: e-Strategy

Roshan Chitrakar, MBA

Associate Professor,
Nepal College of Information Technology
Introduction
●
E-Strategy is the strategy use of electronic capabilities to
achieve business objectives.
●
It refers to the delivery of powerful combination of stratefy,
issue advocacy, and cutting -edge web-technology services
(including all services that can come under umbrella of ‘e’) to
empower, activate, educate and mobilize support business
strategy, marketing strategy, IT and infrastructure strategy
and resources of a business to achieve business objectives.
Nine Dimensions of e-strategy
●
IT infrastructure
●
Knowledge and technology
●
Knowledge management and learning
●
Customer and market
●
Leadership
●
Service
●
Time to market / turnaround time /
learning time
●
Scalability and adaptation
●
Economy
Readiness for Implementation
●
To implement and e-strategy, an organization
should be ready and equipped for its realization
●
An organization that is ready for e-strategy
realization should have net readiness and
strategic alignment with business.
●
The readiness is also about the social
acceptance of the technology.
●
The e-business strategy is a subset of the
overall business strategy of an organization.
●
The organization’s readiness and market will
help it to prioritize the objectives of initiatives
and this prioritization will drive its e-strategy.
Governance Structure
for e-strategy implementation
●
Any e-business initiative involves
representation from both the
business and the IT team, who work
in close co-ordination to reach the
overall e-strategic plan or goals.
●
There is a need for a clear
governance structure that is able to
look across the different initiatives,
monitor their health, resolve
conflicts, and provide the requisite
funding and resources.
E-Business and E-Strategy
●
E-Strategy cannot be discussed in isolation, nor can e-business be talked about in the
same breadth as e-strategy.
●
Analysis of strengths and opportunities of e-strategy against that of e-business is
essential.
●
Strengths
– Target group is reached; low investments within traditional sector; reputation of traditional brands;
e-commerce shops are expandable; e-commerce prices respond according to the demand; e-
commerce lowers the cost of stocks and personnel; e-commerce is available 24 hours a day; e-
commerce personnel are highly educated.
●
Opportunities
– Use of ‘gimmicks’ for promotional activities online; e-commerce partnerships with wholesale trade
companies; starting e-commerce application with familiar retailer; operated in a niche market;
integrate e-commerce applications with the back office; Selling known brands using e-commerce
has an advantage over unknown brands; sell a complete range of products by using partnerships;
Price can be selling strategy because an e-retailer has lower costs;
Developing e-Strategy
●
Keys to successful development of an e-commerce strategy: -
– Support from senior executives
– Develop strategy prior to web presence
– Focus on technology, branding, marketing and service
– Match IT infrastructure to strategic objectives
– Identify and use of knowledge in the organization
– Add value for customer
●
With e-strategy, it is possible to transform a traditional fixed-asset
company into a nimble Internet company.
E-business Models
●
A business model is a set of business processes through planned activities to achieve business objectives.
●
Business models and their objectives have different strategic decision making aspects.
●
Components of business models are: -
– Value proposition
– Revenue Model / Cash flow
– Market forces and available opportunities
– Competition
– Positioning of Product
– Market Strategy
– Technology and IT Strategy
– Organization structure and development
– Management team
– Knowledge management
E-business Models (contd.)
●
Amazon and Dell from e-business models:
– They are approaching the whole business in different manner.
– Their value proposition and revenue models are completely
different from those of their traditional business counterparts.
●
E-transactions and e-commerce have become a
common place over the past few years.
●
The flow of information and data has replaced the
intermediaries while electronic monetary transactions
have replaced actual financial transactions
●
The strategy of distributors, suppliers, and physical
penetration has been replaced by e-strategy of electronic
transactions and positioning of the technology.
●
The complexity of the overall models has increased
along with the evolution but it has resulted in improved
usability.
e-Commerce and e-Business
●
E-business is the function of deploying technology to
maximize customer value while e-commerce is the function
of creating financial exchange with the use of electronic
medium.
●
E-commerce is an important part of e-business.
●
e-business offers flexibility to business. It comes in various
forms such as outsourcing, off shoring and integrating
various business components
●
Businesses nowadays are being strategized. They are no
longer a function of physical reach for various organizations
because most of them have expanded through the Internet.
This has increased the visibility of companies also.
●
Businesses have changed the way they communicate
externally and internally.
●
An e-business system enables marketing, buying, selling,
delivering, servicing, and payment of products, services, and
information primarily across non-priority networks, in order to
link enterprise with its current and target customers, agents,
suppliers, and business partners.
E-business models
●
E-business components that are applicable to e-business models also are: -
– Value proposition
– Customer group
– The way value will be created
– Money
●
Some of the popular e-business models are: -
– B2C
– B2B
– Others are P2P, C2C etc.
B2C (Business to Consumer)
●
B2C could be divided into: -
– Different portals
– Sale of goods electronically (e-tailors)
– Content providers
– Transaction enablers/brokers
– E-auctions
– Service providers
– Community information providers
– Hybrid models
B2B (Business to Business)
●
These are the models in which businesses focus on buying/selling to other
businesses.
●
The companies which help to bring buyers and sellers together, distribute
products to other businesses, and which act as a service provider for other
businesses.
●
Other models are: -
– C2C (Consumer to Consumer)
●
Transactions take place without the presence of any middlemen.
– P2P (Peer to Peer)
●
It is about the connectivity between peers for business
Making e-strategy work
●
To make e-strategy work, an organization has to deal with the
changes in technology, educate its employees and customers,
and decide and plan its actions in the light of the changes.
●
The two major phases are: -
– Pre-implementation
●
The management of the organization needs to make it ready for the changes
– Post-implementation
●
The management has to understand the after effects of implementation and
changes, and deals with them accordingly.
Strategy Process Model
Porter’s Five Forces and e-Strategy
●
Michael Porter provided a framework that shows that an industry is
influenced by five forces, namely: -
– Supplier power
– Barriers to entry
– Threat of substitutes
– Buyer power
– Degree of rivalry
●
Five Forces model also describes the fundamental forces to formulate
business strategy. In order to make e-strategy work, there is a need for
iterative strategy model.
Five Forces: Impacts & Solutions
Force 1 : Bargaining power of buyer
e-Impact e-Strategy to make business work
●
Increased due to choices ●
Quality beyond technology
●
Increased because of increase in ●
Service with apt technology
customer knowledge and transparency ●
‘e’ for extra
●
Increased because of availability of
different channels
●
Increased because of availability of
different sources
Force 2 : Bargaining power of supplier
e-Impact e-Strategy to make business work
●
Reduced due to choices ●
Limit commoditazation by new
●
Commoditization of e-procurement and measurement
e-market places ●
Let business drive commerce
● ●
Five Forces: Impacts & Solutions
(contd.)

Force 3 : Threat of substitute products and services

e-Impact e-Strategy to make business work
●
New products being introduced because ●
Proper tracking with technology
of the availability of knowledge and ●
Strategy to build barriers
market place from different resources ●
Innovation with ‘e’
●
Monitoring such entries has become
easier
●
Faster production of services
Force 2 : Barriers to entry
e-Impact e-Strategy to make business work
●
Reduced for service organizations and ●
Build barriers with innovation and new
retailers who need mobile sales force techniques
●
Monitoring new entrance has become ●
Optimal use
easier ●
Barriers with service
Five Forces: Impacts & Solutions
(contd.)

Force 5 : Rivalry among existing competitors

e-Impact e-Strategy to make business work
●
More intense because of shorter product ●
Capturing complete value chain
life cycles ●
E-strategy to target niche market
●
Commoditizations ●
Knowledge-enabled business

●
To make an e-strategy work, organization should be ready for ‘e’.
●
This readiness not only involves technological readiness but is also involves
psychological readiness.
●
This readiness pertains to the effective usage of ‘e’ and further effectiveness of e-
strategy.
●
There is a need for e-awareness, and a need for market to accept.
●
There is also need to derive competitive advantage and a proper way to measure
RoI.
Bonds of e-commerce strategy
●
The strength of e-commerce strategy depends
upon addressing the three functional issues: -
1) Leadership
2) Infrastructure
3) Organizational learning
●
Bond-1: Leadership
●
Executives have to expand their vision for their
organization and develop creative strategies.
●
Leaders should
●
Keep an open mind
●
Not isolate themselves from new and experimental technologies
●
Encourage new research work
●
Be ready to make the necessary change
Bonds of e-commerce strategy
(contd.)
●
Bond-2: Infrastructure
– Put in place the requisite infrastructure at several levels.
– The focus should be paid on determining the impact that future technologies will have on the market
and the organization.
– Ensure that the organization has the capability to adapt to the changes in the technologies and market.
– The execution occurs at the physical level in hardware and software with telecommunication
infrastructure.
●
Bond-3: Organizational learning
– E-commerce solution depends upon its ability to leverage and deploy organization learning
– Organization learning is linked to leadership competencies.
– Learning occurs in formulating and creating a brand, technology, market and service leadership
positions.
– Leaders with learning culture facilitate new concepts and technologies.
– Successful organizations always internalize learning by developing an understanding of their
processes and functions, which is important for company’s long term survival
Five Pronged e-Strategic Directions

1)Technology leadership
2)Brand leadership
3)Service leadership
4)Market leadership
5)Knowledge leadership
E-Strategy Barriers
●
Weaknesses
– Traditional workers are not aware of new technologies
– The e-commerce target group is difficult to reach; other channels are required along with internet.
– Most of the e-commerce companies sell using only the email; back office is usually not integrated
in the e-commerce applications.
– The e-commerce logistical costs can be high.
– The current e-commerce investment climate is not very positive.
●
Threats
– Many websites offer the same products.
– The logistics of the business processes are often a bottleneck.
– Different prices for different customers or different prices on different days.
– The delivery time, terms of delivery, and the after-sales service have to be efficient. ( A customer
is unlikely to return to the system in case of a negative experiences.)
Best Practices
●
Some of the best practices for implementing e-strategy : -
1) Understanding and implementing the electronic integration
needs for new customer facing systems.
2) Analyzing and identifying the strategic route for transition from
old or legacy system to new or next generation information
systems.
Compiled from
●
Parag Kulkarni & Pradip K Chande, IT Strategy for
Business
Chapter 6: IT Strategy for Knowledge Management

Roshan Chitrakar, MBA

Associate Professor,
Nepal College of Information Technology
Knowledge Management (KM) :
Introduction
● Knowledge is the force which decides direction of overall knowledge and
business strategies. Managing this force, directing it, using it optimally etc.
are some of the functions of Knowledge management.
● KM is often confused with Information Management and Data Management.
● Knowledge within an organization may be:- tacit, explicit or semi-tacit.
● Knowledge has a time axis – yesterday’s knowledge may be today’s
information.
● Making knowledge available at the right time to the right person is the key
aspect of Knowledge Management.
● Knowledge workers in an organization hold most of the tacit knowledge,
which may be lost in cases of attrition and inter-departmental transfers.
KM and IT Strategies
● One important aspect of KM is to build and use knowledge within and
outside the organization optimally, whereas IT enables knowledge
codification, knowledge storage, and knowledge reuse.
● IT makes it possible to represent, map and position knowledge within and
across an organization.
● IT strategy for KM is not about developing new IT applications but about
strategic visioning in IT that can build a strong KM strategy.
● KM consists of facets like: - technology, culture, management, knowledge
workers, prioritization, auditing, and measurement.
● Information system architecture is one of the most important edifices of
KM. IT strategies enable KM strategies and vice-versa.
Components of KM Platform
● Document management
● Various automation processes
● Intelligent business flow
● Work flow
● Decision Support System
● Data warehouses
● Intranet
● Communication platforms
● Knowledge and process building tools and packages
● Data capturing and pattern analysis tools
● Collaboration tools
IT Strategy and KM Road-map
● The knowledge forces in the organization are
divided into
– Internal knowledge forces
– External knowledge forces
– Internal – External knowledge forces
● IT resources (e.g. Internet, AI, DSS, Intranet, Email,
Communication systems, BBS, BI systems etc.)
support KM. Using these resources and systems
strategically along with embedding the in IT strategy
is necessary in KM.
Role of KM in IT Strategy
● KM enables effective strategy design and
implementation which can help an
organization succeed.
● IT strategies for KM are driven by
requirements of knowledge flow and
minimizing the knowledge loss.
● Knowledge loss can be evident or non-
evident. Evident loss is seen directly and
has direct impact on business, whereas
measuring a non-evident loss is difficult.
● IT strategy and strategic decisions are
driven by knowledge about the situation
and historical data. Moreover, KM drives
learning for better strategic decision-
making.
● KM heps in transition of an organization
from one knowledge state to another.
Knowledge Industry and Knowledge Strategy

● In a knowledge industry, knowledge strategy is built

around knowledge workers.
● Tacit, implicit and explicit knowledge need to be
transformed, built and stored.
● IT enables all knowledge transactions and KM activities.
● Knowledge economy is based on knowledge advantage
that is on what you know (not what you make).
– The more exclusive and extensive the knowledge, the greater
is the price they command.
– The more knowledge the work is, the greater is the value of
the knowledge.
● A company must exercise knowledge building exercises
for the following decisions:-
– (1) Startup product;
– (2) Continuing service or product;
– (3) Complementing existing products;
– (4) Different services for product.
Strategic Knowledge Management

● KM strategies, though based on the ● Objectives of KM Strategy: -

same guidelines, differ from one
knowledge industry to another. – Positioning knowledge
strategically
● Aspects (components) of Knowledge – Using knowledge optimally
space: - – Transforming knowledge with
– Knowledge creators minimum loss
– Knowledge carriers – Motivating knowledge
– Knowledge repositories workers
– Knowledge mining – Tapping knowledge across
organization
– Knowledge transformers
– Aligning knowledge force
– Knowledge loss with business objectives
– Knowledge agents / catalysts – Allowing organization to use
– Knowledge driver knowledge as a strategic tool
Knowledge Transformation
● Includes: - ● Knowledge in an organization can be divided
into four types, based on levels.
– Knowledge creation – Elementary knowledge
Core knowledge
– Knowledge acquisition –
– Advanced knowledge
– Raising awareness – Innovative knowledge
– Knowledge transformation ● Based on application, knowledge may be
divided into: -
– Knowledge mapping – Administrative knowledge
– Knowledge application – Declarative knowledge
– Procedural knowledge
– Problem solving – Analytical knowledge
– Learning and knowledge – Transaction knowledge
creation – Derived knowledge
KM and IT for Integration

● KM and IT have major roles in making the

integration happen
● Managing technical and business knowledge and
integrating them to achieve business objectives is
possible through effective KM.
● Data sharing, IT business mapping, IT
compatibility, and distribution are enabled with IT
strategies for KM.
Compiled from
● Parag Kulkarni & Pradip K Chande, IT Strategy for
Business
Chapter 7: IT Strategy for IT Companies

Roshan Chitrakar, MBA

Associate Professor,
Nepal College of Information Technology
Introduction
● IT companies are companies that have IT as a part of their business objectives.
● Strategies in IT and non-IT companies are different and the difference lies in the way IT is positioned.
● IT companies are categorized into: -
– Project companies : produce products based on information technology.
– Product companies : undertake projects based on customer requirements.
– IT consulting companies
– IT service companies
● Different types of IT companies
– Have different business outcomes and life cycles,
– Approach business in different ways,
– Need different business strategies, and so on.
● IT is the mean, source, tool and outcome of an IT company, where it also acts as a driver, objective
and strategic weapon too.
IT Product Company
● Among the 5 phases of product cycle, ● When product matures, process
the first phase is always an incubation innovation starts, and when process
period during the business idea matures. matures, service innovation begins.
● Company starts making more profit
from service than from marketing.
Product Company : Business Dimensions
● The Business model dimensions are: -
– Customer,
– Technology & Knowledge,
– Revenue & Profit
● 3 main drivers are: -
– Customer
– Delivery model
– Revenue model
● IT strategy impacts the customer dimension
by the way a product is positioned,
technology interface provided etc.
● IT also drives revenue, availability of
information and knowledge.
Product Company : Characteristics
● Incubation ● Excellence in a domain
● Innovation ● Understanding exact need
● Uncertainty of customer
● Different phases
● Specialization in a
particular area
● Product culture ● Skilled employees
Product Company : Strategic Aspects
● Propose a new product in market
differently with innovation, quality and
marketing.
● According to Moore (2002) a new
value proposition is disruptive as it is
either entirely a new product or
attacks as already existing value
proposition.
● A new IT product has to go through
technology adoption life cycles and
these phase come across numerous
chasms.
● To overcome such hurdles, company
need a good marketing strategy and
technological maturity.
Product Company : Strategic Aspects (contd.)
● Initial customers are innovators and
enthusiasts are ready to accept new
technology
● Visionary customers understand merits of
technology and want to take the lead.
● Pragmatic and practical customers want
the products proven by the market; they
wish to ensure that there is not risk
involved.
● Conservative customers are ones with
very low risk profiles.
● Laggard sceptic people act after re-
assuring themselves about the technology.
Project Company Characteristics
● Incubation: short time ● Excellence in a domain :
● Innovation : Process- less
oriented ● Understanding need of
● Uncertainty: Less amount customer : less exact
● Different phases : Short
● Specialization in a
period particular area : not
mandatory
● Process culture ● Big team of semi-skilled
employees
IT Strategies for Product Company
● IT functional strategy
● IT development strategy
● IT business strategy
● IT knowledge strategy
● IT distribution strategy
● IT learning strategy
● IT competitive strategy
IT Strategy Development
● Stage 1: Defining
● Stage 2: Planning
● Stage 3: Measurement
● Stage 4: Learning
● Stage 5: Execution
● Once IT strategy is developed, it is involved in various steps like: -
– Product planning step
– Product development step
– Identifying internal and external interfaces
IT Strategy Drivers
● What the customer wants?
● Service orientation
● Technical positioning of the product
● Risks
● Flexibility and adjustment in dynamic environment
● Innovation
● Sustainability
● Quality
● Technology appropriateness
● Knowledge management requirements
Start-up Company
● Innovation is at the heart of the Start-up companies
● Factors that drives innovation are: -
– Disruptive technology, innovation, risk (diversified approach)
– Pace of execution, speed response to rapid change, and
adaptation to the new environment
– Agility and flexibility
– Knowing the customer requirements and inventing the new
product or interfaces with them.
– Understanding and properly valuing the innovation
Project Life Cycle and Strategies
● Project life cycle and revenue models of projects are
different from product life cycle.
● IT products start generating revenues much earlier
than IT projects.
● Growth of product companies are faster than product
companies.
● The customer behaviour and technology
requirements are also different.
● Project company strategies can be divided into
– Short term strategies
– Long term strategies
● Project company strategies are
– Customer specific
– Project specific
● Project life cycle is collection of various phases and
strategy plays a role in each phase.
IT Strategy Implementation
● Formulation
● Strategy master plan
● Implementation of a plan
● IT strategy review and
updating
Compiled from
● Parag Kulkarni & Pradip K Chande, IT Strategy for
Business
Chapter 8: IT Strategy Implementation

Roshan Chitrakar, MBA

Associate Professor,
Nepal College of Information Technology
Introduction
● IT strategy implementation refers to: -
– Outlining of strategic plans
– Working on initiatives
– Executing
● IT strategy implementation takes an organization through different changes and transitions.
● IT strategy implementation has four major aspects: -
– Leadership
– Technology
– Infrastructure
– Market
● IT strategy implementation begins with
– Planning, and is followed by
– Development of IT strategic plan
– Identifying different activities and milestones in the process of implementation
– Prioritization of activities
– Executing the activities step-by-step.
Development of IT Strategic Plan
● Two types of IT Strategic plans: -
– Short term plan
– Long term plan
● Development of IT strategic plan requires to know
– What is an IT Strategic plan?
– Why do we need ?
– How do we execute? (steps needed)
Steps in developing IT strategy plan
● Analyze business plan
● Understand business objectives
● Analyze IT-centered business
● Know gap between IT requirements and IT capabilities
● Prepare the first version of IT strategic plan
Gain Competitive Advantage
● The implementation of IT strategy
needs to focus on building
competitive advantage.
● One simple way is to create an entry
barrier so as not to allow a competitor
to enter the business. Many
organizations use brand as an entry
barrier.
● Another way is to manage information
flow (knowledge !?) about competition
as well as individual competitors.
IT Strategy Implementation and Leadership

● The leadership role generally helps to drive the market. i.e.

transition from being market driven to market driving.
● Some of the initiatives of the leadership are : -
– Leadership through Innovation
– Leadership through Pricing
– Leadership through Quality
– Leadership through Technology
– Leadership through Leadership
Strategic IT Innovation
● Includes: -
– Technology innovation
– Technology usage innovation
– Technology positioning innovation
● Leadership through innovation has: -
– What you deliver to the market
– How you deliver to the market
– How you position the product
● Strategic innovation parameters Include: -
– Market innovation
– Process innovation
– Product innovation
– Knowledge
IT Strategy for Specialization
● Sometimes, differentiation is ● Specialization
achieved by moving away from
specialization. – Identify the specialized
area
● Specialization can help achieve
differentiation. – Market study and business
impact
● Differentiation can be related to
anything that satisfies and offers – IT for developing the
better service to a customer as product
compared to competitors. – IT for specialized customer
● Specialization is something segment
more about core competence.
Strategic Balance for Implementation
● Organization needs balance between
execution and implementation
● A balance act needs to be performed
between innovation and business.
● Also needed are balance between
external and internal factors, market
and organization, business and
technical initiatives.
● There has to be a straight balance
between numerous initiatives and
between the implementer and the
leader.
Soft and Hard aspects of implementation

● Soft aspects are related

to people and
processes
● Hard aspects have
more to do with
technology and
infrastructure.
IT strategy Audit
● There is need to audit IT strategy, its implementation, and
execution process.
● Audit helps the understanding the flaws in the IT strategy and
its implementation; also helps in improving its process.
● Organization needs to consider the alignment of IT and
business strategy; consistency in implementation, and efficient
information flow and analysis.
● IT strategy audit includes information system audit and study
of the impact of initiatives.
● It analyses change management besides scrutinizing the
dynamic nature of the strategy.
● An IT strategy audit is the auditing of strategic initiatives to
verify whether they can help the organization to achieve the
business objectives and ultimately gain competitive
advantages.
Compiled from
● Parag Kulkarni & Pradip K Chande, IT Strategy for
Business
Chapter 9: Global IT Strategy

Roshan Chitrakar, MBA

Associate Professor,
Nepal College of Information Technology
Introduction
● Global IT strategy is mainly driven by business strategy with global focus.
● Globalization of business has gained pace and IT has enabled various products to
reach distant corners of the world.
● There is a need to manage technology differently because of the spread and large
variations it has experienced during globalization.
● With the advent of globalization, both threats and opportunists increased for every
company in the world.
● Some barriers of competition which were very effective a few years ago have fallen
out with the advent of globalization and new market dynamics.
● Globalization, coupled with distributed computing, has increased the opportunities
and competition manifold.
● Globalization perceives the world as one big market place (boundary-less world).
IT Strategy in Global Environment
● Global strategy is about
competing and doing business
in global environment.
● It is about creating qualitative
and quantitative advantages,
handling issues in a global
environment, and enabling
efficient information
management (IM) and decision
making in the global scenario.
● Global scenario has changed
the dimension of competition,
the need of penetration, the
quality measures, and has
made it necessary for
organizations to keep
themselves abreast with new
technology.
Global Product Life Cycle
● Different strategies are taken at different phases of global product life cycle.
● Phases: -
– Global IT Entry
● Environment analysis is the most important strategy at the Entry phase. Trends of social, economical, technological,
legal and political nature etc should be considered . The IT strategy at this phase can handle overall global positioning
and decide when to enter, where to enter, and how to enter.
– Global IT Investment
● At this phase, the investment strategy is taken. There is always a need to strike a balance between IT innovation and
investment in meeting the immediate business goals.
– Global IT Expansion
● At this phase, strategy about expansion on the technology front, business offering front, and on the overall business
horizon etc. are considered. Also taken into account are distributed infrastructure and effective use of centralized
information storage in order to enable decision making.
– Global IT Penetration
● The market penetration strategy is taken at this phase of the global product life cycle. The desired market segment can
be achieved through IT strategy The IT strategy should be able to decide the use of technological innovation to
penetrate the market and further build on the existing customer base.
– Global IT Termination
● The ‘information and support tool’ for terminating a product from a global market is required and IT strategy helps
provide such tools. So, a strategy need to be designed for graceful exit or a part of the product, version of the product,
or the overall business.
Technological Environment and
Global IT Strategy
● IT aspects of global strategy include: -
– Producing / developing a product
– Standardization / configuration of product / system
– Global availability of product / system / service
– Servicing / supporting product / system globally
– Enhancement to product / system w.r.t. global context
– Global positioning of product / system
– Global Knowledge economy
Global Strategic Management
● Global Strategic management is built around general issues of products
which have a global visibility.
● Here are some common technology strategies for global environment: -
– Local Strategies
– Global Strategies
– Glocal (Customized) Strategies
– Global KM
● Managing the knowledge to obtain global competitive advantage
– Global strategic positioning of technology
● Positioning the product and the company globally to get strategic advantage over
competitors.
Global Distribution Channel
● There are two aspects of being global:-
– One, you have customers across the globe but do not have a presence everywhere.
– Two, even though you have a presence in many places across the world, you are
serving customers in a particular continent or country.
● The basic difference between local and global strategies, in relation to the
distribution channels, lie in the following factors: -
– Spread of market
– Difference in culture
– Intense competition
– Unknown variables
– Compatibility issues
Global IT Strategic Issues
● Information Acquisition
– It is important to make the acquired
information available strategically
when required to desired locations,
and build the knowledge on the
those information.
● Global Competencies
– Intercultural communication, global
knowledge, change management
and learning, and global mindset
contribute to global success.
● Uncertainty
– Globalization increases uncertainty
in some cases; and also reduces it
by providing a wider customer
segment.
● Global Decision-making
– There are various decisions which
are based on global strategy and
global environment such as
partnership, investment,
employment and strategic
positioning decision.
Global Project Management
● Includes: -
– Global technical forces
– Technical skill distribution
– Networks and communication
– Knowledge management
● Different activities of Project
management phases may be done in
different countries.
– e.g. the customer may be in one country
while project analysis and designing may
be done in another country.
● Project strategies are built around
project business objectives.
● Global project managers make use of
resources and opportunities available
across the globe. They make use of
different locations, people, and global
knowledge.
Global Innovation and Knowledge Management

● Knowledge and skills have become

the engine for economic growth.
● Global IT strategy and global KM
go hand in hand. The global IT
strategy enables organizations to
successfully manage global
knowledge.
● Global strategy goes through
different phases and as then
number of unknowns increase, so
do the learning and tuning at every
stage.
Convergence Model of IT
in a Global Organization
● Overall convergence is required in a global organization because of
variations in cultures, technologies, geographies, and requirements.
● Technical, Infrastructural, people-centric factors (soft and hard aspects)
should be taken into account to build a successful global organization.
● This convergence model has various components such as
– Organizational structure and
– Internal and external business processes
– People, processes, knowledge, and skills
– Information system components, communication methods.
● IT strategies for globalization need to ensure a smooth convergence.
Compiled from
● Parag Kulkarni & Pradip K Chande, IT Strategy for
Business