This document discusses strategic issues related to information technology. It covers topics like aligning IT strategy with corporate strategy, examples of technology strategies from Blockbuster and Napster, the value chain framework, steps for an effective IT strategy, and creating and sustaining competitive advantages through strategic use of IT. The document provides overviews of these topics in different sections and subsections.

1. Unit 5
Strategic Issues of
Information Technology
BY - KANIKA VIJ

2. oIT and Corporate Strategy
oSome examples of Technology strategy,
oValue chain,
oA framework for the strategic use of IT.
oCreating and sustaining a Competitive edge
oUsing resource to advantage,
oProtecting an IT innovation.
oIntegrating Technology with the Business Environment.

3. IT and Corporate Strategy
A corporate strategy is a long-term vision that organizations set, seeking to create corporate value
and motivate the workforce to implement the proper actions to achieve customer satisfaction. In
addition, corporate strategy is a continuous process that requires a constant effort to engage
investors in trusting the company with their money, thereby increasing the company’s equity.
Organizations that manage to deliver customer value unfailingly are those that revisit their corporate
strategy regularly to improve areas that may not deliver the aimed results.
An IT strategy is an integral part of your business strategy that aims to align technology and
operations with business goals. It clearly sets goals and objectives for how those technologies will be
implemented and used, as well as articulates how the technology strategy supports key business
objectives.
1: An IT Strategy Assures You’re Leveraging Technology to its Fullest
2: An IT Strategy Gives You a Differentiator Over Competitors
3: An IT Strategy Assures You’re Meeting – And Driving – Business Needs

4. ROLE OF INFORMATION TECHNOLOGY IN
BUSINESS
◦ Safeguarding data and information
The ultimate goal of safeguarding is to protect data from compromise. The IT department will
ensure data Safeguarding, meaning industry-standard safeguards are in place, company-wide to
protect against the destruction, loss, misuse, unauthorised disclosure, or alteration of the
company-related data or employee confidential information. IT also has to ensure they are
abiding by data-protection laws through safeguarding important information from corruption,
compromise or loss.
◦ Troubleshooting of problems
Troubleshooting refers to problem-solving in the digital world. Troubleshooting can be applied to
a number of different things such as the repairing of failed digital products or processes on a PC
or a system. When a problem is troubleshot, a systematic and logical search is carried out for the
source of a problem with the aim to solve it and make the product or process fully operational
again. Troubleshooting is also used to identify the symptoms when something is wrong.

5. o Security And The Maintenance Of Databases
IT is also there for the creation, maintenance and administration of databases for things such as
businesses sales transactions, financial records, product catalogues, trends, customer profiles
and marketing activities to name but a few.
◦ The management of cloud-based solutions
So what is a cloud-based solution? It is an on-demand service for almost anything and
everything you can ‘save’ such as computer network information, storage, applications or
resources accessed via the internet and through an external provider’s shared cloud ( servers
that are accessed over the Internet,) computing infrastructure.

6. ◦ Analyse data
Information technology is able to analyse specific data and help to plan the business journey
accordingly using the trends and information presented in data. IT can also efficiently equip
businesses with plentiful tools which can solve challenging business obstacles and help to plan
the future growth of the company.
◦ Quick and effective communication
The beauty of being in the 21st century for business is the ease of communication. We live in an
era where you can usually contact a business in an instant. The success of a company largely
depends on understanding its customer’s needs, behaviours, buying trends, behaviours and
satisfaction scales. Efficient and quick communication is the best mechanism when it comes to
dealing with customer demands, problems and solutions.

7. Examples of Technology Strategy –
Blockbuster & Napster
Example #1 – In 2000, the founder of Netflix, approached Blockbuster’s CEO with a proposal for
partnership, in which Netflix would run Blockbuster’s brand online, while Blockbuster would
promote Netflix in stores. Blockbuster’s CEO laughed at the idea and Netflix went on to
dominate the online video rental industry, leading to Blockbuster’s bankruptcy in 2010. In this
case, Blockbuster failed to recognize the emergence of new technology which would disrupt
what had been traditionally a very profitable business model.

8. Example #2 – In 1999, Napster was founded as an independent peer-to-peer files sharing
service. Napster specialized in sharing MP3 files of music through a user-friendly interface. It
became widely popular with college students sharing songs from their dorm rooms for free.
However, Napster was sued by the music industry for copyright infringement and ultimately was
shut down by the courts in 2001. In 2003, Apple launched its iTunes Music service in
cooperation with record labels and consisting of digital rights management, which was an
evolution of Napster’s idea. In this case, Napster failed to consider how the use of this new
technology would impact the music industry and business models in this relevant tech strategy
examples.

9. VALUE CHAIN
A value chain is a concept describing the full chain of a business's activities in the creation of a
product or service -- from the initial reception of materials all the way through its delivery to
market, and everything in between.
The value chain framework is made up of five primary activities –
1. inbound operations
2. operations
3. outbound logistics
4. marketing and sales
5. service

10. Inbound logistics.
Amazon's primary inputs can be identified as products sold through its own fulfilment services, as
well as data centre resources that fuel Amazon Web Services (AWS) cloud offerings.
Here, Amazon can use its size as a large operation to lower the costs per unit of items it purchases
from external suppliers.
Operations. This is where Amazon transforms its inputs into outputs.
Amazon's core offering, its online marketplace, offers a secure platform that makes e-commerce
easy for both customers and sellers. As Amazon's fulfilment and logistics can offer two-day shipping
to Prime members, the result is a secure, user-friendly customer experience with dramatically lower
shipping times than competitors for a similar price point.
Another Amazon business unit, AWS, transforms inputs into outputs by creating and
maintaining cloud servers, storage and other data centre resources into a streamlined service for
client organizations to host applications and other data.
Outbound logistics. Amazon's outbound logistics includes Amazon fulfilment centres, digital
delivery, co-sourcing and outsourcing, and brick-and-mortar stores.

11. 5 Steps to Creating an Effective IT strategy
framework:

12. SUSTAINABLE COMPETITIVE ADVANTAGES
The factors that play into a competitive advantage are numerous, and their sustainability can be
greatly affected by external factors.
Unique products
Having a unique product or service can keep a company at the forefront of consumers’ minds –
but this might only last as long as the competition doesn’t outperform the original. First mover
advantage can only go so far as time goes on.
Renown for customer experience
Brand differentiation due to great customer service is frequently enough to sway consumers to a
brand. Great customer service, quick issue resolution, and fast responses can put companies
above the competition with better products. Of course, the high level of customer experience
needs to be maintained over time for the competitive advantage to be sustainable.

13. A low-cost advantage
A company that can keep its operational and supply costs low can keep its prices low – and this can tempt
consumers away from other providers. However, keeping costs low enough is a delicate balancing act between
weathering supply chain and manufacturing price hikes and undercutting competitors.
Brand reputation
A brand that attracts its customers on the strength of its reputation alone is powerful – but it can be a fragile
advantage if this reputation is not upheld. Committing to particular company values, monitoring brand
reputation, and ensuring customers continue to be happy over time is necessary for sustaining this advantage.
Pricing power
A company that can raise its prices without disrupting its share of the market has pricing power. Companies that
can leverage this as their competitive advantage have usually built a strong reputation that can withstand price
increases. However, as mentioned before, brand reputation can be fragile without maintenance.

14. Corporate strategic assets
If a company has advantageous assets – such as patents for technology, intellectual property trademarks, or
copyrights, for example – they can often hold a stronger position over competitors in the same industry. That
being said, if competitors create new inventions that are more effective, these assets can end up being less
important.
Products and services that can evolve
If a brand has products and services that can change with the needs of the market, rather than remaining static,
they can outdo their competition more effectively over time. Additionally, new products on the same line can
attract a loyal audience. Investing in this factor as a competitive advantage means considering product and
service lines’ futures right from the beginning and planning ahead carefully.
A strong cash flow
Companies that have a strong cash flow have the power to make risky plays for market share – and can weather
storms more effectively than their competitors. However, this can easily be depleted if brand, product, or service
issues become numerous and costly.

15. The benefits of a competitive advantage
1. Growth: An edge above the competition means you can attract greater numbers of new
customers – and grow exponentially as a result.
2. Market share: With a competitive advantage, a brand can take more of the market share.
3. Increased customer lifetime value: Providing something unique that customers can’t find
elsewhere – from products to customer experience – means that your audience stays with
you longer.

16. USING INFORMATION TECHNOLOGY TO
ACHIEVE COMPETITIVE ADVANTAGE
Cost Reduction Through IT
Differentiation Through IT
Innovation Through IT
Customer Lock-In Through IT

17. Protecting an IT innovation.
1. COPYRIGHT
Copyright arises automatically and can protect (among other things):
•Written materials;
•Music;
•Design drawings; and
•Artistic works.

18. 2. UNREGISTERED DESIGN RIGHT
If you are creating a tangible product, your product may also benefit from unregistered design
right which arises automatically to protect the appearance of purely functional products. To be
protected by design right, a design must:
Comprise an aspect or shape or configuration (whether internal or external) of the whole or part
of an article;
Be original and not commonplace; and
Be recorded in a design document or be the subject of an article made to the design.
Unregistered design right enables the owner to prevent copying of the protected design for a set
time period.

19. 3. REGISTERED DESIGNS
Registered designs protect the way a product appears. You can apply for either a UK or EU
registered design. Other countries may also offer different protection for designs.
With a registered design you can stop people making, offering, putting on the market,
importing, exporting, using or stocking (for the aforementioned purposes), a product to which
your design is applied. You can protect two-dimensional designs or surface patterns as well as
shape and configuration with a registered design.
The test for validity of a registered design requires that the design is:
New; and
Has individual character.

20. 4. PATENTS
Patents protect how something works. Patent applications can be made for products which
meet the following criteria:-
Are new or novel;
Have an inventive step that is not obvious to someone with relative knowledge, skill and
experience in the subject; and
Are capable of being made or used in some kind of industry.
Certain items are not suitable for patent protection, such as ways of doing business, scientific
theories and certain computer programs and mobile applications.

21. 5. TRADE MARKS
You also need to protect your name and brand.
Registered trade marks are a cost-effective way to ensure you gain a monopoly right over the
name of your products in the sectors in which you operate and help differentiate your products
from others in the market.
You should consider applying for trade marks for your business name and logo and any product
lines.

22. Integrating Technology with the Business
Environment.
Technology integration is the process of aligning business and technology must be aligned so
that business strategies can be successfully implemented. It means that systems and devices are
able to work harmoniously with one another and share data back and forth.
Following are the benefits of technology integration to your business:
Better productivity and efficiency
Integrated technologies allow you to organize and share your business data across departments,
drastically saving the time and energy needed to look up and verify information. Syncing your
systems and sharing the same database means there’s no more need to (re-)enter data manually
every time, minimizing the window for error.

23. More effective communications
When devices are integrated, they share the same information and can “talk to each other”
while working or analyzing information. Much in the same manner, people using these devices
can also “talk to each other” in much quicker ways. They can collaborate on documents and
spreadsheets virtually without having to meet face to face. What’s more, because team
members can work together in real time, they can make quick and informed decisions which
reduce turnaround time and ensure that projects are finished promptly.
Potential for growth
When small- and medium-sized businesses (SMBs) integrate their technology, they should see
positive results such as improved communications, streamlined workflows, and higher customer
satisfaction. Together, these changes can propel enterprises to grow in unprecedented ways.