Strategy is a much overused, misused, and abused word. It's tossed around by those who are unfamiliar with Strategy Making roles in businesses.
Strategy is creating fit among a company's activities. The success of a strategy depends on doing many things well - not just a few. The things that are done well must operate within a close nit system. If there is no fit among the activities, there is no distinctive strategy and little to sustain the strategic deployment process. Management then reverts to the simpler task of overseeing independent functions. When this occurs operational effectiveness determines the relative performance of the organization. - "What is Strategy," M. E. Porter, Harvard Business Review, Volume 74, Number 6, pp. 61-78.
Improving operational effectiveness is a necessary part of management, but it is not a strategy. In confusing the two, managers will be unintentionally backed into a way of thinking about competition that drives the business support processes (IT) away from the strategic support and toward the tactical improvement of operational effectiveness.
Managers must be able to clearly distinguish operational effectiveness from strategy. Both are essential, but the two agendas are different. The operational effectiveness agenda involves continual improvement business processes that have no trade-offs associated with them. The operational effectiveness agenda is the proper place for constant change, flexibility, and relentless efforts to achieve best practices. In contrast, the strategic agenda is the place for making clear tradeoffs and tightening the fit between the participating business components. Strategy involves the continual search for ways to reinforce and extend the company's position in the marketplace.
The concept of fit among functional units is one of the oldest ideas in strategy. Gradually, however, it has been supplanted with new concepts of core competencies, critical resources and key success factors. In fact fit is far more critical to the success of the IT systems than is realized. [3] Strategic fit among the various systems components and the business processes they support is fundamental not only to competitive advantage but also to the sustainability of that advantage.
Fit among a company's activities creates pressures and incentives to improve operational effectiveness. Fit means that poor performance in one activity will degrade the performance in others so that weaknesses are exposed drawing management's attention. Conversely, with increasing fit, improvements of one activity will pay dividends in other areas.
The challenge is how to create fit among the IT components and their matching business components.
The Framework for IT Strategy
Before proceeding with the IT Strategy, a framework is needed to represent the various views of the IT System. This Framework is based on the seminal work of John A. Zackman. [6] Using the architectural paradigm, the Framework provides answers to:
- What - is the system made of? What components are assembled to make the system what it is? How are these components connected? What are the mechanisms used to connect the components?
- How - does the system work? What are the details of the system integration? What tools have been used to integrate the components? Are these tools appropriate for the task at hand?
- Where - are the components of the system located relative to one another? What is the topology for the data and processes? How is this topology managed?
- Who - does what relative to these system components? How do the users interact with the system? How is access controlled to the system resources?
- When - do things happen in the system? What is the sequence of events within the system? How is work routed through the system? How are the users notified that work is ready, complete, suspended, canceled?
- Why - are various system choices being made? What is the underlying architecture of the system? How did the system components come to be connected? How will these components be migrated to the next generation?
The Framework provided through this approach is:
- Simple - since it is easy to understand. In its most elemental form, it provides three perspectives: The Owner, the Designer, the Builder and three abstractions: Material, Function, and Geometry.
- Comprehensive - is addresses the Enterprise in it entirety. Any issues can be mapped against the Framework to understand where they fit within the context of the Enterprise as a whole.
- Language - it helps develop a set of thought processes for addressing complex concepts and communicates them precisely with few, non-technical words.
- Planning Tools - it helps the participants make better choices since these choice are no longer made without a context.
- Problem Solving Tool - enables the participants to work with abstractions, to simplify, to isolate simple variables without losing sense of the complexity of the Enterprise as a whole.
- Neutral - is it defined totally independently of tools or methodologies and therefore any tool or any methodology can be mapped against it to understand their implicit tradeoffs.
The Framework for Enterprise Architecture is not the answer. It is a tool for thinking about the answers.
Influences of IT Strategy
The IT Strategy components described above are based on the physical and logical technologies of the IT Infrastructure. These describe how, what, when, and where for the technology of the IT Strategy is to be deployed. The effects of this technology deployment are another element of the IT Strategy. In the Zachman approach to IT Strategy is supply-side focused and the domain of IT professionals. In order to complete the IT Strategy the influences of these technologies on the organizational aspects of the business must be understood. The questions to be answered include:
- What IT applications should be deployed to yield competitive advantage?
- What technological opportunities should be considered?
- What IT platforms should be deployed and what IT policies are needed to manage these platforms?
- Which IT capabilities should be nurtured and which should be acquired from outside sources?
- How should IT activities be organized and what is the role of the IT function?
- What is management's role in the IT domain and what IT capabilities are required for today's managers?
The answers to these questions involve determining how the components of the IT Strategy Fit together and how they are Interrelated. The influences approach to IT Strategy is based in a simple and effective view of how business executives are able to conceptualize strategic decision-making processes in the domains of:
- Organizational Strategy
- Information Systems Strategy
- Information Technology Strategy
- Information Management Strategy
It is the discovery and description of the interdependence between these four (4) strategies to forms the basis of this approach.
