This document discusses IT strategy and its alignment with business strategy. It covers several topics: 1. IT strategy must be an integral part of business strategy and align with real business needs to deliver value. 2. IT governance aims to maximize value from IT through alignment with strategic objectives, risk management, and compliance. 3. Aligning IT and business requires understanding planning processes, CIO involvement in senior management, communication, and multi-level links. 4. IT can provide competitive advantage by creating value for customers through resources that are valuable, rare, imitable, organized, and substitutable. 5. Sourcing is an important IT strategy driven by focusing on core competencies and reducing

1. Information Technology for
Management
IT Strategy, Sourcing, and Vendor
Relationships
-Chapter 12-

2. Hello!
We are Group:
1Abdullahi , 2Yahye, 3Yusuf
4Mohamed, 5Abdikadir,
6Abdiwahid,7Mohamed Abdi.
2

3. 3
Objectives
IT Strategy and the Strategic Planning
Process
IT Governance
Aligning IT with Business Strategy
IT Operating Plans and Sourcing
Strategies
IT Vendor Relationships

4. 1.
IT Strategy and the
Strategic Planning
Process
1Abdullahi

5. “IT vision without a strategy
remains an illusion. " Lee
Bolman.
5

6. IT Strategy and the Strategic
Planning Process
● Can an effective business strategy exist today
without IT? Could nonprofits or government
● agencies fulfill their missions without a
technology strategy? Of course not.
● That’s why IT strategy begins and ends with
the business—and must be an integral part
● of the business strategy
6

7. Two of the biggest risks and
concerns of top management are
● (1) failing to align IT to real business needs
and, as a result
● (2) failing to deliver value to the business.
Since
● IT has a dramatic effect on business
performance and competitiveness, the failure
to
● manage IT effectively seriously impacts the
business.
7

8. The four main points of IT strategic
plans
● 1. Improve management’s understanding of
IT opportunities and limitations
● 2. Assess current performance
● 3. Identify capacity and human resource
requirements
● 4. Clarify the level of investment required
8

9. BUSINESS AND IT
STRATEGIES DEFINED
9

10. IT STRATEGIC PLANNING
PROCESS
10

11. Tools and Methodologies of IT
Strategic Planning.
● Business Service Management.
● Business Systems Planning Model
● Balanced Scorecard
11

12. A major aspect of IT planning
● is properly allocating IT resources to the right
set of projects. Organizations simply cannot
afford to develop or purchase each
application or undertake each application
enhancement that business units and end
users might like. The IT steering committee
has an important responsibility in deciding
how IT resources will be allocated.
12

13. IT
Governance2Yahye
13

14. Resource Allocation.
● Resource allocation consists of developing
the plans for hardware, software, data
communications and networks, facilities,
personnel, and financial resources needed to
execute the master development plan
14

15. The purpose of IT governance
● is the creation of a management framework
that maximizes the value that an
organization derives from IT in support of its
strategic objectives.
● In short, IT governance is about doing things
right the first time around. IT governance is
part of a wider corporate governance activity,
but has its own specific focus.
15

16. The benefits of effective IT
governance
● reduced costs and damages caused by IT
failures.
● more trust
● Teamwork, and confidence
16

17. IT GOVERNANCE AND
PERFORMANCE
● IT governance is concerned with insuring
that IT investments deliver full value. As
● such, IT performance management—being
able to predict and anticipate failures before
it’s too late—is a big part of IT governance. IT
performance management
17

18. ● functions include the following: verifies that
strategic IT objectives are being achieved;
reviews IT performance, and assesses the
contribution of IT to the business.
● For example, IT performance management
assesses outcomes to answer the question:
Did the IT investment deliver the promised
business value? In order for IT to deliver full
value, three objectives must be met (the first
objective you’re already familiar with).
18

19. objectives of IT
Governance
3Yusuf

20. Three objectives of IT Governance
● 1. IT has to be fully aligned to business
strategies and direction.
● 2. Key risks have to be identified and
controlled.
● 3. Compliance with laws, industry rules, and
regulatory agencies must be demonstrated.
20

21. Individuals Concerned with IT
Governance
● Top-level business leaders, who are the
Board, executives, managers, and especially
heads of finance, operations, and IT
● Public relations and investor relations
managers
● Internal and external auditors and regulators
● Middle-level business and IT management
● Supply chain and business partners
● Customers and shareholders
21

22. WHAT IT GOVERNANCE COVERS
● Supports the strategy
● Delivers value
● Risk management
● Resource management
● IT Performance management
● Strategic planning
22

23. Skill Set of the CIO (Chief Information Officer
● Political savvy
● Influence, leadership, and power
● Relationship management
● Resourcefulness.
23

24. Aligning IT with
Business Strategy
4Abdikadir

25. Aligning IT with Business Strategy
● Alignment is a complex management
activity, and its complexity increases as the
pace of global competition and technological
change increases.
25

26. business alignment can be improved by focusing
on the following activities:
● 1. Understanding IT and corporate planning.
● 2. CIO is a member of senior management.
● 3. Shared culture and good communication.
● 4. Commitment to IT planning by senior management.
● 5. Multi-level links
26

27. STRATEGIC ROLE OF IT
● Companies must determine the use, value,
and impact of IT to identify opportunities that
create value and supports the strategic
vision. This requires that the CIO, and other
senior IT staff, closely interact with the CEO
and the senior management in functional
areas or business units. And the CIO must be
in a position to influence how IT can assume
a strategic role in the firm.
27

28. COMPETITIVE
ADVANTAGE
5Abdiwahid

29. COMPETITIVE ADVANTAGE THROUGH IT
● Competitive advantage is gained by a
company by providing real or perceived value
to customers. To determine how IT can
provide a competitive advantage, the firm
must know its products and services,
29

30. Six characteristics of resources give firms the potential
to create a competitive advantage:
● 1. Value
● 2. Rarity.
● 3. Appropriability
● 4. Imitability
● 5. Mobility
● 6. Substitutability
30

31. BUSINESS IMPROVEMENT OPPORTUNITY MATRIX
31

32. IT Operating Plans and
Sourcing Strategies
6Mohamed Muse

33. IT Operating Plans and Sourcing Strategies
● The core competencies of many
organizations—the things they do best and
that represent their competitive strengths—
are in retailing, services, manufacturing, o
some other function. IT is an enabler, and it is
complex and constantly changing. IT is
difficult to manage, even for organizations
with above-average IT management
skills.Therefore, many organizations have
implemented outsourcing as an IT strategy.
33

34. FACTORS DRIVING GROWTH IN SOURCING AS AN IT STRATEGY
The major reasons why organizations are increasingly sourcing are:
• To focus on core competency, as you read in the AstraZeneca
opening case.
• It’s a cheaper and/or faster way to gain or enhance IT capabilities.
• To cut operational costs.
• Offshoring has become a more accepted IT strategy.
• Cloud computing and SaaS have proven to be effective IT
strategies.
34

35. Benefits of Sourcing
● Financial benefits
● Technical benefits
● Management benefits
● Human resources benefits
● Quality benefits
35

36. RISK CONCERNS
7Mohamed Abdikadir

37. RISK CONCERNS AND HIDDEN COSTS
● Shirking
● Poaching
● Opportunistic repricing
37

38. IT Vendor Relationships
● The starting point in building a positive and
strong vendor relationship is vendor
selection. If a company makes a bad
selection, most likely the vendor-provided
system software, app, or implementation will
fail, and the vendor won’t be able to resolve
the problems fast enough, if at all.
38

39. How to Select Vendor?
● 1. Experience with very similar systems of
similar size, scope, and requirements
● Financial and qualified personnel stability.
39

40. OUTSOURCING LIFE-CYCLE
● 1. Strategy
● 2. Reassessment
● 3. Selection
● 4. Negotiation
● 5. Implementation
● 6. Oversight Management
● 7. Build Completion
● 8. Change
● 9. Exit
40

41. 41
Thanks for your Reading!
1)Eng. Abdullahi Mohamed Ahmed
2)Eng. Yahye Abdirahman Ahmed
3)Eng. Yusuf Mahad Abdullahi
4)Eng. Mohamed Muse Ali
5)Eng. Abdulkadir Mukhtar
6)Eng. Abdiwahid Hamud
7)Eng. Mohamed Abdulkadir Osman
We are Senior students at SIMAD UNIVERSITY | Faculty of
Computing , Department of Information Technology (IT).
Feel free to contact us :
abdullahi37448.student@simad.edu.so
Yahye8625@gmail.com

42. End!!