Information Technology Management Research: Trends and ChallengesPresentation Transcript
Trends and Challenges in Strategic
Management of Information
Dr. Lazar Rusu
Stockholm University/Royal Institute of Technology (KTH)
Department of Computer and Systems Sciences
Information Systems Laboratory (SYSLAB)
• Strategic Management of IT: Concepts
• Examples of Challenges in Strategic
Management of IT:
• Strategic Alignment in Swedish Healthcare
• IT Leadership in Swedish Leading
Strategic Management of IT:
Concepts and Trends
Strategic Management of IT-
• Today in many organizations information technology (IT) is playing a strategic
role and has become more important than it was before for the business
strategy. Moreover aligning IT with business strategy is a major concern for
many IT leaders.
• Strategic IT management is according to Bergeron et al. (2001) ”a
multidmensional construct that characterizes the extent to which organizations
are deemed to plan, implement and use information systems in a competitivly
oriented manner”. The four dimensions of this construct are the followings: IT
environment scanning (e.g. knowing the IT used by your competition), IT
planning and control (e.g.strategic planning of IS in relation to the
organization’s business objectives), IT acquition and implementation (e.g.
choosing IT related to the strategic orientation of your firm) and strategic use
of IT (e.g. use your IT to increase your firms’s profitability).
• Based on the above construct we have found in the research literature that
Strategic Management of IT is mainly concerned with IT Strategic Planning (by
including in this dimension the IT acquition and implementation dimension)
and Strategic use of IT (by including in this dimension the IT environment
Management monitors overall performance, develops business requirements and
business strategy and Information Systems/Information Technology needs to
meet this strategy.
Source: (Pearlson and Saunders, 2009)
The relationship among business,
IS and IT-strategies
• Business strategy - sets the
overall direction for the
• Information systems (IS)
strategy - define what
systems and IT architecture are
required to support the
• Information technology (IT)
strategy - indicates how the
infrastructure and services are Source: (Ward and Peppard, 2002)
to be delivered.
Triangle Source: (Pearlson & Carol Saunders, 2009)
• The Strategy Triangle shows that business strategy always drives
organizational and information strategies. (Pearlson and Saunders, 2009).
• Successful firms’ have an overriding business strategy that drives both their
organizational and IS strategies. In fact successful firms’ seek to balance these
three strategies: business, organizational, and IS strategies.
• IS Strategy will affect and is affected by the other strategies a firm uses.
Changes in IS strategy must be accompanied by constant adjustments in the
other two strategies.
• IS strategy can have (sometimes unintentional) consequences on business and
organizational strategies (therefore we have to consider business and
organizational strategies when we design IS deployment).
• The success can only be achieved by specifically designing all three
components of the strategy triangle.
IT Planning Process
• IT planning is the organized planning of IT
resources done at various levels of the
• The entire planning process begins with the
creation of a strategic business plan.
• The IT strategic (long-range ) plan starts
with the vision and strategy that defines what
IT should do to achive the goals, objectives
and strategic position and how this will be
• The IT medium-tem plan identifies general
project plans in terms of the specific
requirements as sourcing of resources as well
as the project portofolio.
• The IT tactical plan details budgets and
Source: (Turban and Volonino, 2009)
schedules for current-year projects and
• IT planning is a continuos process.
Tools and Methodologies in IT
The tools and methods that facilitate IT strategic planning
are used to:
• help organizations align their business-IT strategies with
the organizational strategies,
• identify opportunities to add value with IT or utilize IT for
competitive advantage and
• analyze internal processes (Turban and Volonino, 2009).
Among these methods we have:
• IT Dashboards
• Balanced Scorecard
• Critical Success Factors
Business service management - Source: (Firescope, 2009)
• Business service management is an approach for linking key performance indicators (KPIs) of IT to
business goals to determine impact on the business.
• KPIs measure actual performance of critical aspects of IT such as projects, servers, networks
against predefined goals such as growing revenue, lowering costs, reducing risk.
• KPIs measure real-time performance or predict future results and also measures results of past
• Business service management tool delivers real-time dashboards views for tracking the KPIs at the
executive, functional business areas, services and operations levels.
Balanced Scorecard (Kaplan and Norton, 1992)
The Balanced Scorecard has been
created by Kaplan and Norton (1992) by
focusing attention on the organization’s Source: (Kaplan and Norton, 1992)
value drivers. Companies use it to asses
Balanced Scorecard applied to IT departments
the full impact on their corporate Source: (Pearlson and Saunders, 2009)
strategies, on their customer and
workforce and their financial performance.
Critical Succes Factors
The Critical Success Factors (CSFs) are
“the limited number of areas in which
satisfactory results will ensure a successful
competitive performance for the individual,
department or organization” (Rockart and
Van Bullen, 1986).
- What objectives are central to
- What are the CSFs for meeting the
-What information can be used in achieving Critical success factors-basic processes
those CSFs considered? Source: (Ward and Pepper, 2002)
-How information systems/information
technology help to achieve the CSFs?
CSFs are areas of activity that should
receive constant attention from the 12
IT- Business Alignment
or Strategic Alignment
• IT-business alignment is according to Luftman (2000) concerning on the
“applying of IT in an appropriate and timely way in harmony with business
strategy, goals and needs”.
• The alignment of IT with the business strategies is also named strategic
alignment (Chan 2002; Moody 2003).
• IT-business alignment is still today a top management concern (Luftman et al.
2006; Luftman and Kempaiah 2008), but no comprehensive model of the
construct is commonly used.
• A number of models of IT-business alignment have been proposed till now like
are Henderson and Venkatraman (1993), Luftman (2000), Maes et al. (2000)
and Reich and Benbasat (2000) to mention only a few of them.
• The research findings of Luftman and Kempaiah (2007) are mentioning that
there is a positive correlation between the maturity of IT-business alignment, IT
organizational structure, CIO reporting structure and firm performance.
• IT governance is considered to be ”an integral part of enterprise
governance and have potential to provide mechanisms for leadership and
organizational structures and processes that ensure the organization’s IT
sustains and extends the organization’s strategies and objectives” (ITGI,
• “An effective IT governance structure is the single most important predictor
of getting value from IT” (Weill and Woodham, 2002)
• The difference between IT management and IT governance is in opinion of
Wilbanks (2008) the following: “If a company wants to grow and be
successful, it must not only manage its IT resources, but also use those
resources throughout the company as part of the governance structure”.
• The successful application of IT Governance can provide the mechanisms
to increase the effectiveness of IT. "Firms with superior IT Governance
have at least 20% higher profits than firms with poor governance, given
the same strategic objectives" (Weill & Ross, 2004)
• According to Karahanna and Watson (2006) IS leadership “sets directions,
creates commitment, mobilizes institutional, political, psychological and others
resources, facilitates action and adapts the IS unit to fit a changing environment
such that it adds value and achieved shared objectives”.
• Leadership is the primary role and skill required for a CIO position and this could
be an explanation of why many CIOs fail.
• In opinion of Smaltz et al. (2006) “the most effective CIOs should have business
and strategic IT knowledge, know how to communicate interpersonally, and
posses the political savviness to catalyze and stimulate IT-based innovation and
• “CIOs are effective when they are members of the top management team and
develop trusting relationships” (Smaltz et al., 2006).
• The importance on focusing the research on the CIO and the development of a
theory of IS Strategic Leadership is coming from both theoretical and pragmatic
reasons (Karahanna and Watson 2006).
Key IT capabilities that enable
Sustainable Competitive Advantage
According to Applegate et al. (2009) the key
IT capabilities that enable sustainable
competitive advantage are:
• Highly competent IT leaders and staff
• An agile IT infrastructure
• A strong partenership relationship with
• A strong governance system for managing IT
Trends coming out from IT
Source: Luftman et al., Key Issues for IT Executives, MIS Quarterly Executive, Vol. 8, No. 3, p. 152, Sep 2009
The table above presents the major findings based on the surveys received from 291
organizations and done by the Society for Information Management (SIM) in order to
help IT leaders around the globe to understand the important issues and trends in IT
Examples of Challenges in
Strategic Management of IT
Strategic Alignment in Swedish
Lazar Rusu, Yu Hunag, Ali Turab Rizvi, “Strategic IT Alignment in Swedish
Public Healthcare System”, Lecture Notes in Artificial Intelligence, 5288, pp.
105-113, Springer-Verlag, Berlin Heidelberg, 2008
Research objective and methodology
• Research Objective:
– The objective is to analyze the path to strategic
alignment in the healthcare sector in Sweden.
• Research Methodology
– Using “The Four C’s” model (2004) for
analyzing the path to strategic alignment.
– Qualitative (through interviews in organizations
from Stockholm healthcare sector) and
quantitative (survey in 234 organizations acting
in Swedish healthcare sector, documents,
reports regarding e-health strategy in Sweden).
The four C’s model (Weiss and Anderson (2004) Model)
Weiss, J. W. and Anderson, D. (2004) Aligning Technology and Business Strategy: Issues & Frameworks, A Field Study of
15 Companies, Proceedings of the 37th Annual Hawaii International Conference on System Sciences IEEE Computer
The actors of the Swedish public
Sweden has a decentralized healthcare sector with 20 county councils and 290 municipal councils as
principals and care providers. Their responsibilities as principals includes the provision of adequate care
services and the requirement to develop quality assurances and finance of all care activities. 22
• The business strategy in the helthcare sector is
presented in the National strategy for e-health in Sweden
• Goal - The overall goal is to provide adequate health and
medical care services.
• Objective - The principal actors in the medical and
healthcare sector must take up a common position on
strategic issues crucial to the continued development,
renewal and improved efficiency of Sweden’s healthcare
services. IT should be used as a strategic tool at all
levels in the healthcare sector.
• The key issues of the IT Strategy in healthcare sector according to
National strategy for e-health in Sweden (2006) are:
– Bringing laws and regulations into line with extended use of ICT.
– Creating a common information structure.
– Creating a common technical infrastructure.
– Facilitating interoperable, supportive ICT systems.
– Facilitating access to information across organisational
– Making information and services easily accessible to citizens.
• In aligning the IT strategy with business strategy the main role is
played by Carlink which is an organization for national cooperation
and coordintaion concerning the development of IT and use of IT in
Swedish healthcare sector.
Strategic Alignment Analysis -
The results of the interviews and online survey using the “4C’s” model has shown the
• IT has a clear direction stated in the national e-healthcare strategy in which Carelink is
playing a coordination role of IT projects development and IT strategy implementation.
There are also IT standards that are emerging cross functions within the organization.
• The connections between IT strategy and Business Planning are looking more to
achive operational excellence rather than a partner that can create value. On the other
hand the IT managers from Carelink are committed to have good liaisons and good
partnership with people from different departments of Swedish healthcare
• The communications inside the organizations from healthcare sector are looking to
build relationships as partners. Moreover there is a knowledge transfer between these
organizations through different training initiatives.
• Regarding cross functional integration we have noticed that there is a willing for
change of organization’s business processes. Furthermore the level of IT innovation is
encouraged mostly internally but also externally with the partners and customers.
Example 1 - Conclusions
In summary the analysis of the path to strategic alignment using the 4C’s model
has brought the following findings:
• The Swedish healthcare sector has a clear direction on using IT strategically.
• The officials have shown a good level of commitment to achieve this goal and
the goal has been communicated well through out the organization.
• There is also a cross functional integration in the healthcare sector since the
knowledge and information are shared among different departments and is a
positive attitude concerning IT innovations.
• In achieving of a good level of strategic alignment Carelink has played and is
still playing an important role for the strategic alignment of IT with the business
strategy by acting in our perception like a Chief Information Officer in the
• A challenge coming out of this research will be to analyze the cultural effects on
strategic alignment in healthcare sector from Scandinavian countries.
Information Techology Leadership in
Swedish Leading Multinational
Lazar Rusu, Mohamed El-Mekawy, Georg Hodosi, “Information Technology
Leadership in Swedish Leading Multinational Corporations”, Lecture Notes in
Artificial Intelligence, 5736, pp.511-522, Springer-Verlag, Berlin Heidelberg, 2009
• The research concerns the analysis of CIO’s role and profile in five
Swedish leading multinational corporations.
• The research serves in using a more up-to-date model to classify
CIOs and secondly in highlighting paths of development for CIOs
that allow them to become more aligned with the company’s IT
• Semi-structured interviews were performed with CIOs and IT
decision makers from five Swedish leading multinational
• The data has been collected from the last consecutive three years
2006, 2007, 2008.
• Additional data has been used from internal reports and published
• The study has as limitation the fact that is reflecting the situation
from the Swedish business environment.
Case study analysis
Company A Over 100 years old - over 100.000 employees – a high
percentage of the world market in one the brand and is a
global leader in other areas. The company’s strengths are a
high R&D budget; many patents and intellectual properties
rights on their products.
Company B Newer than A - over 100.000 employees - innovative design of
the products, own style, competitive prices, global presence
around the world.
Company C Over 100 years old - about 40.000 employees - belongs to the
largest European companies in their areas with a strong
brand. R&D is their competitive edge.
Company D Over 100 years old - over 100.000 employees - high tech is
their business area and is the global leader within several
areas. The company has a high R&D and global presence.
Company E Near 100 years old - about 50.000 employees - a global leader
in a business area. R&D and production are their competitive
edge on a global market.
Case study analysis
We have evaluated the role of CIO using Sojer et al. (2006) that “it is striking that
the CIO is seen as a highly valuable and strategic part of the company’s board”.
The Sojer et al. (2006) model is based on McFarlan’s strategic grid (1983) and the
authors argue that the role of CIO can be defined using two variables: strategic
importance of running IT and the strategic importance of changing IT.
The results of the analysis of the CIO role in our case study has shown the
•Supporter: none of the CIOs.
•Enabler: none of CIOs.
•Cost Cutter/Project Manager: none of the CIOs.
•Driver CIO & CTO: all five CIOs.
Case study analysis
Earl and Feeny (1994) have argued that is extremely important that a CIO is
able to add value. According to Earl and Feeny (1994) the profile of the CIO
who adds value has to fulfill the following criteria:
1. Behavior: is loyal to the organization, is open in management style and
2. Motivation: is goal oriented, creative and encourage ideas, change
3. Competencies: is a consultant/ facilitator, a good communicator, able to
achieve results through others and has IT knowledge.
4. Experience: has had an IS development role.
Regarding the above criteria we have found the following results in the case
of the five Swedish companies:
1. it is relevant to all 5 CIOs.
2. it is relevant to all 5 CIOs.
3. it is relevant to all 5 CIOs regarding consultant/facilitator, good
communicator, able to achieve results through others but regarding
IT knowledge, not for CIO of Company B, D and E and for CIO of
companies A and C is relevant.
4. not for companies: B, D and E but relevant for companies A and C.
Example 2 - Conclusions
• In only two out of the five companies the CIO is adding value more
precisely in case of companies A and C.
• In all the five companies the CIO is a driver and the strategic
importance of running IT is high. The current and the future IT initiatives
are of major strategic importance.
• In all the five companies the strategic importance of changing IT is high
which is in according to King (2008) that have stated “to be effective in
strategic business context, the CIOs must be strategic change agents”.
• A potential challenge coming out of this research could be in
constructing a role model of the CIO in various industries in Sweden.
• Information technology (IT) has become today more important than it
was before for the business strategy.
• For IT to be strategic and provide advantage, it must be tied to
business processes and aligned with business strategy.
• Strategic alignment is still a top management concern and there are
still challenges that remain to be researched.
• In achieving strategic alignment IT leadership is playing a key role.
• The profile of the new IT leader should be one who has a strategic
role and is part of the top management team.
• Adopting a strategic approach to measuring IT performance
supported by tools for strategic planning enables IT to better
demonstrate how it’s contributing to business growth and success.
• In using IT for strategic purposes the evaluation of how IT supports
business and organizational strategies and the continuously
assessment of strategic alignment have to be considered in this
perspective as the main two priorities by every IT executive leader.
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