Explaining the relationship between organisational, IS and ICT strategy.
If we are to look into the strategic role of IS/ICT, in a sense we could say that there is no such thing as IS/ICT strategy. The same way as there is no such thing as marketing strategy or finance strategy. These functional strategies are all aspects of the organisational strategy. For instance, the marketing strategy is not an independent entity; it is the marketing dimension of the organisational strategy. What makes it a little more complicated in the case of IS/ICT is that we need to separate the IS from the ICT.
The starting point therefore is always the organisational strategy which is closely related to the vision(s) of the leader(s) and it is therefore decision-based. This means that the organisational strategy is concerned with those strategic decisions, and from the vision we can derive the goals of the organisation. Therefore the organisational strategy is goal oriented; it answers the question of where (and in which direction) the organisation is going in the future. As strategy is always associated with change, changes that are happening to the organisation as well as changes that the organisation is making, we can also say that the organisational strategy is change-centred. Next we can try to see how the same logic (what it is based on, what it is oriented towards and what it is centred on) applies to the IS/ICT levels, and how the levels influence one another.
The second level is the IS (information system) and here it is important that we think about it as a system. The organisational strategy provides the IS strategy with the business direction. This is what I mean by the IS strategy being business-based. The IS strategy is then demand-oriented, meaning that it is informed by what is needed for doing the business in the sense of following the business direction of the organisational strategy. Therefore the IS strategy is centred on the user and more precisely on the usage, i.e. on what the users need in order to do what the business needs them to do. So we will have business processes that need to be supported by the IS and carried out by the users in order to meet the demands of the organisational strategy. The fundamental question for the IS strategy is ‘what is needed?’ and so the IS needs to give the users what they need for their work. However, the users cannot tell this as they don’t know enough about IS and thus the IS strategy requires a good understanding of the overall organisational strategy as well as of the primary organisational processes that it needs to support. As you perhaps realise, we did not talk about computers or any technology yet; the IS strategy is at a higher conceptual level.
The IS strategy will provide demands and priorities to the ICT strategy. While the IS strategy was to answer the question of what was needed, the ICT strategy needs to answer the question of ‘how can this be realised?’, i.e. how the demands and priorities of the IS strategy can be met using the technology. The ICT strategy is activity-based in the sense that the primary organisational processes are broken down into smaller units that can be supported using a particular technology. The primary knowledge needed here is about technology, i.e. what technology is available and what particular technology could best support the particular activities. Therefore the ICT strategy is technology-centred. The ICT strategy is supply-oriented in that it will know the suppliers that can deliver the needed technology and can communicate with them given that they speak the same technical language.
However, as the ICT strategy is working towards meeting the demands and priorities of the IS strategy, it is also building an infrastructure and developing services. The infrastructure and the service portfolio will inform the IS strategy and as they are thinking about what is needed, it will be informed by what is possible with the current infrastructure and service level. Based on this, the IS strategy can offer business support (i.e. IS support for business) to the organisational strategy which will be informed in the next iteration by the support that is available from the IS. There is only one additional point to mention here; the IS/ICT market is also directly (or through the ICT strategy) providing a possible input for the organisational strategy in terms of the effect of the upcoming technology and about the potential threats and opportunities for the organisation. This information is sometimes obtained through the business intelligence, i.e. in terms of how our competitors use technology.
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