Business strategy and IT

Posted: February 09, 2017

Introduction

The business systems planning is based on the argument that the organizational information needs can be understood through examination of the whole organization, including functions, processes, organizational units, and data elements. This planning can be helpful in identifying the key attributes and entities of the company’s data. The business systems planning also include critical success factors (strategic analysis) which are shaped by the manager, organization, and the environment. The information systems are supposed to provide information needed for the accomplishment of organizational goals. Many companies have grown their IT, but the scope and size of General Motors has been strikingly grown for the last four years. This giant automaker started by overhauling its entire approach to IT by replacing outsourcing contractors with at least 10,000 IT pros (Baldoni, 2014). The GM’s IT is assisting it determine profitability of its unit sales to ensure that the organization stays lucrative and delights customers beyond their expectations in the boom market. This paper aims at using GM’s information systems as a business case for analyzing critical success factors (CSFs) for IT managers and how IT department makes its goal congruence with organizational goals.  

Most significantly, CSFs are key conditions or variables that impart a huge impact on the manner in which organization effectively ad successfully meets its strategic objectives. The IT department should focus of those activities related to the critical success factors that align IT objectives with organizational objectives. One of the challenges facing IT managers is the alignment of IT with business. There are several critical success factors of General Motor’s IT managers. One of the critical success factors is effective communication. Lack of inter-departmental and cross-functional communication can lead to just moderate success. It is important to note that effective communication assists the stakeholders in understanding the goals of IT and those of organization – leading to more responsibility of IT employees towards their task. There are three elements of effective communication. First, the communication should be well-defined and clear so that IT employees understand their jobs and expectation. Second, the IT managers should make their communication as direct as possible, by avoiding loops. It is also the duty of IT managers to ensure that they use sufficient communication channels.

Leadership is another CFS for the IT managers. According to the study by Biehl (2007), the lack of effective leadership styles resulted in delay in the implementation phase. In this case, the IT managers should be able to coordinate all IT activities so that the company can achieve its objectives. The significant of effective leadership in IT department was successfully studied Fan (2010). In this study, it was found that IT managers should use their influence and charisma to ensure the success of IT activities with a common goal of achieving organizational objectives. Additionally, competency is also a CSF for an IT manager. This CFS is associated with the skills of IT managers which are crucial to the achievement of IT goals. As far as competency is concerned, the IT managers are supposed to have strong relational and technical skills so that they are able come up with IT solutions.

Training of IT employees is also a critical success of IT managers. Staff training would ensure that IT workforce know their responsibilities as far as IT system is concerned. Training also ensures that the IT activities are carried out more efficiently.   The data centers of the organization are also managed effectively. According to Biehl (2007), training is supposed to be carried for staff, managers, and final users to ensure the success of IT objectives. Clear IT goals are also critical success factors for IT managers. The realistic and clear goals are significant for IT success.

On the other hand, the IT department’s goals must be aligned with business strategy since information technology is a key business function for any organization. There reasons for aligning IT with business strategy include cost reduction, enhanced productivity, standardized processes, workflow and communication improvement, competitive advantage, and business strategy implementation. The IT function has become a pro-active role in the development of sustainable business strategy. The IT department capture, process, store, and distribute data or information. It is natural that the main principle of IT alignment with business is the understanding of the business itself. In this case, GM is in auto industry involved with design, manufacturing, distribution, and marketing of vehicles in the global market. The company has already replaced its outsourcing contractors with IT experts because IT function has became a competitive advantage in the globalized world of automakers (Information Week 2012).

There are several strategies that can be taken by the company to align IT with its business. It is the responsibility of the IT department managers to identify the business needs and transforming business needs into goals that the IT department must accomplished. Bearing in mind that IT department is not meant for just providing computing solutions. One of strategies to align IT with business is through organizational protocols (ITWorld, 2009). Organizational internal protocols have significant effect on the satisfactorily alignment of business needs with IT function. The organizational protocols are not just processes, how activities in organization are done. Navigating through bureaucracy layers where it is present, IT managers must identify key personnel who understand and articulate the rationales for IT function as business strategy. Another strategy is through expectation management. The IT and business managers should be levelheaded about their expectations of each departments. Such expectations can be accomplished through the critical success factors: business needs and communication. Organizational managers should be aware of IT limitations and some solutions are not easily achieved without engaging third party. On the other side, the IT managers should understand the technical aspects, and in other times, financial ones – business operation limitations.

Another strategy for successful IT-business alignment is through analysis of business needs since the success of IT department can only be evaluation on how it contributed in the achievement of business objectives (ITWorld, 2009). Finally, IT department need to maintain open communication lines that enable communication with other business counterparts. Communication allows IT department to get feedback from business departments and come up with the best solutions that permits business decision makers to make informed decisions.

Conclusion

In conclusion, the success of IT managers is driven by key success factors that helps in aligning IT function with business objectives. The critical success factors of IT managers include leadership (charisma), technical and relational skills, competency, and IT staff training. The IT department should focus of those activities related to the critical success factors that align IT objectives with organizational objectives. The company focuses on aligning IT goals with business goals for reasons, such as cost reduction, enhanced productivity, standardized processes, workflow and communication improvement, competitive advantage, and business strategy implementation. The strategies to align IT department’s objectives with business include expectation management, organizational protocols, analysis of business needs, and open communication lines. 

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