IT Strategy for Business

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Agenda
 Introduction to IT Strategy
 Key Challenges of IT
 Need and Importance of IT Strategy
 Alignment of Business through IT
 Case Study
 Conclusion

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Introduction to IT Strategy
 IT formerly perceived as a cost center
 Until recently a support function
 Increasingly perceived as a value
enhancer
 Now a key differentiator of service
levels among competitors

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Introduction to IT Strategy
 Boardroom Decisions now rely
increasingly on Technology
 Used for successful implementation of
business plan
 Used for strategic restructuring of
organization

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Introduction to IT Strategy
 IT Strategy provides a formal
structure to the IT function
 An IT Strategy is to be developed
such that the IT goals are streamlined
with the overall objective of the
organization
 Builds well deserved recognition for
IT as an important and integral
function of the organization

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Key challenges of IT
 Synchronized demand and supply

 Drive cost reduction

 Improve performance management

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Synchronized demand and supply
 Develop analytical software to
forecast future demand
 Gain customer insight, determine
what they want
 Enhance and streamline business
functions to cater to changes in
business environment

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Drive cost reduction
 Create new cost-effective channels to
meet customers requirements (Internet,
Mobile kiosks)
 IT enable existing processes to reduce
costs and time
 Implement and operate enterprise
solutions designed to deliver rapid
returns on investments

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Improve performance management
 Develop MIS software to help in
forecasting and decision making
 Enable IT to react in real-time to
changes in marketplace
 Centralize the information process
flow
 Create adequate backups to mitigate
risks

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Need and Importance of IT
Strategy
 Organizations increasingly devoting
resources to IT Strategy
 Important to build in alignment with overall
business strategy
 Unfortunately not the case with most
companies
 Failure to do so results in
 Opportunity losses
 Misplaced and redundant investments
 Operational inefficiencies
 Customer dissatisfaction

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Need and Importance of IT
Strategy
 Technology implementation not driven
by business needs results in operation
losses and unnecessary expenses
 Business moving from a low alignment
to a high alignment are characterized
by higher maturity in structural and
process oriented practices

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Need and Importance of IT
Strategy
 Technology implementation brings
about efficiencies in operations
 Alignment with business operations
also enables adaptation to be much
more effective

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 Business – IT Strategy Alignment
LAGGARDS FOLLOWERS LEADERS

IT Strategy exist No Formal IT IT Strategies exist IT Strategy fully

in the Strategy in place but not aligned with aligned with
organization? business Business Strategy

IT project owner IT initiative by IT Business heads IT projects owned

users only. No participate in IT by business users.
participation by decisions. No IT facilitators
business users involvement by staff

CIO’s position in CIO reports to CFO;CIO reports to COO; CIO reports to

organization not involved in key partly involved in CEO; Fully
hierarchy decisions key decisions involved in key
decisions

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 Business – IT Strategy Alignment
LAGGARDS FOLLOWERS LEADERS

How is IT Treated as pure Considered as a Perceived as a

perceived in utility. No strategic business enabler / Strategic business
organization? value attached. support function driver

Are investments On ad-hoc basis. Budget exists – not Investments based

in IT well No formal plan or aligned with on business
planned budget business strategy objectives

How is the High resistance to Resistance at Low resistance to

resistance to change operational level change across
change? organization

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 Business – IT Strategy Alignment
LAGGARDS FOLLOWERS LEADERS

How is the Silos of Integration Application and

application applications, dependant technical
architecture of multitudes of applications is a architecture drawn
the organization? platforms and lack primary IT objective fully integrated
of data integration and straight-thru-
processing (STP)
model

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Alignment of Business through IT
 Leading organizations are consciously
building the strategic synergies
between business and IT
 Mutually symbiotic relationships
provides two critical advantages to
organizations
 Adaptability to change
 Structural alignment

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Adaptability to change
 Facilitates better anticipation and
higher levels of preparedness for
technology driven market changes
 Gears organizations to capitalize on
technological advances faster than its
competitors
 Companies have a big competitive
advantage over competitors to launch
new products and innovative offerings

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Structural Alignment
 When IT is in alignment with business
goals, IT initiatives also inherit such
an alignment
 IT is transformed from support to a
facilitator
 Ownership of IT environment is
shifted towards business units,
resulting in better structural
alignment of IT and non-IT functions

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Alignment of Business through IT

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Alignment of Business through IT
 Alignment should be comprehensive
in nature
 Encompasses four critical components
that build a synergistic IT strategy
 Business Architecture
 Application Architecture
 Technical Architecture
 Organization Structure

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Business Architecture
 Reflects customer segment catered to
 Delivery channels that interface with
customers
 Products and services that are offered
through this channels
 Internal operations required to
support service offering
 Reflects current and future business
demands
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Application Architecture
 Based on the business architecture in
alignment with business strategy
 Reflects the scope, functionality and
interface that would be experienced
by internal and external users

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Technical Architecture
 Explains design and roll-out of the IT
environment of the organization
 Based on application and user
distribution, performance
expectations, investment implication
and future scalability

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IT Organization Structure
 Depends on the outsourcing model
determined by business strategy
 Determined in alignment with the
overall organization structure
 Application and technical structure
would influence the size and profile of
the IT organization structure

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Case Study – ICICI Bank
 ICICI bank has been successful in
linking the IT strategy to its business
objective
 banking products and financial services
to corporate and retail customers in
the areas of consumer banking,
investment banking, life and non-life
insurance, venture capital and asset
management

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ICICI Bank- Challenges
 To design a network with a strong
backbone
 Centralization of data and operations
 To ensure 24x7 service access and
connectivity to customers
 To have reliable backups and a robust
network ( with requisite bandwidth) in
place

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ICICI Bank- Challenges
 A disaster recovery system and Info
security
 Ensuring smooth operation and
minimum downtime
 Growth of the network, in line with
business expansion

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ICICI Bank- Business Strategy
 ICICI Bank, India’s second largest
bank
 wanted to provide an enriched
customer experience that would
encourage loyalty among existing
users and help it gain new business

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ICICI Bank- Business Strategy
 Banking in India was primarily restricted
to branches.
 Business strategy was to enter into the
retail space, have local, regional and
national presence, and provide alternate
channels to the customer

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ICICI Bank- Business Strategy
 Improve its operations, increase
efficiency
 Move from branch-centric model and
make its services available
nationwide
 Need was integration and the
flexibility in service to customers

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ICICI Bank- IT Strategy
 ICICI Bank has been successful in
rolling out a multi-channel strategy
that today includes a network of about
450 branches and offices, 1,750 ATMs,
a 1,500-seat call center and an
Internet banking user base of over five
million.

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ICICI Bank- IT Strategy
 the bank implemented an enterprise
middleware based on Microsoft®
BizTalk™ Server 2002 and Microsoft
SQL Server™ 2000
 used the business process
orchestration capabilities of BizTalk to
create drawings that describe loosely
coupled business processes

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ICICI Bank- Benefits
 With the centralization of data and
applications, customers and partners
can now avail various services through
any of the branches at any location in
the country
 The solution supports the ICICI group
offices, banks, branches, and over
1000 ATMs.

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ICICI Bank- Benefits
 Cost has been saved as the backend
operations of regional offices have
been eliminated.
 The data for all the customers is
centralized and processed from the
centrally located data center

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ICICI Bank- Benefits

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Conclusion
 The demand for IT power is growing
 Communicating the value of IT has to
be done in Business Terms so it really
has to linked to the business
initiatives
 Invest in infrastructure that will
create capabilities that will enable
Business to react quickly .This is the
whole spirit of On Demand Business

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Thank you

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