IT STRATEGY

FOR
BUSINESS

PARAG KULKARNI
Chief Scientist
Capsilon
Pune

PRADIP K CHANDE
Group Director
TRUBA Group of Institutes
Bhopal

OXTORD
UNIVERSITY PRESS
 Contents

Preface v
Acknowledgements ix

1. IT AND STRATEGY 1
Information Revolution 2
Business and Strategy 7
Information Technology Strategy 8
Strategies and Success 13
' Design Parameters 17
Strategic Positioning 19
Evolution of Strategy 22
Strategic Sequences and Getting Them Right 24
Development of a Strategy 26
Strategic Planning and IT 31
Types of IT Strategies 33
Context and Strategy 35
Evolving a Dynamic Nature of the Business 36
Case Study: Strategic Decision-making -
Media Tel: Success Story 40

2. MANAGING IT 49
IT Management and its Role 51
IT Governance 56
IT Infrastructure 62
IT Governance and Strategy 62
Technology Management Process 66
II Contents

Steps in Technology Management 68

Strategic Aspects of IT 70
Positioning the Company for Change 71
Information Technology and Business Alignment 72
Risk Management 75
Implementing IT 78
Exploiting IT Capabilities 80
Using IT in a Strategic Manner 81
Measuring IT 81
Performance Measures and Balanced Score Card 82
Implementing Change in IT Management 87
Case Study: Information Technology Management
at Max Pipes 90

3. E-STRATEGY 94
What is E-strategy? 95
E-business and E-strategy 101
Developing an E-strategy 102
E-business Objectives 103
E-commerce and E-business 106
Business Model and E-business Model 106
Making e-strategy Work 111
E-strategy and E-economy 116
Best Practice and Competitive Advantage 125
Case Study: Product Repositioning -
E-strategy at IDD 129

4. IT STRATEGIES FOR IT COMPANIES 137

Knowledge Industries 139
Project Companies and Product Companies 139
Strategic Aspects for an IT Product Company 143
IT Strategic Perspective for Product Company 148
IT Strategies for Product Companies 150
Information Technology Strategy Development 152
IT Strategy and Innovation Driving Factors of
Start-up Product Companies 159
IT Strategies for Product Life Cycle and
Dealing with Chasm 159
Project Life Cycle and Strategies at Various Stages 160
Technology Selection and Its Strategic Aspects 164
 Contents xiii

IT Strategies for IT Companies and Non-IT Companies 167

Technology Change Management 168
Case Study: Strategic Decision-making at ER Private Ltd 171

5. IT STRATEGIES FOR OUTSOURCING AND OFFSHORING 177

Need for Offshoring and Outsourcing 178
Identifying Goals and Needs While Outsourcing 183
Costs of Outsourcing 186
The Outsourcing Environment 190
Outsourcing Special Scenarios 191
IT Strategies for Outsourcing 195
IT Strategies for Outsourcing and Measurement of Success 204
Case Study: Outsourcing and Offshoring at K-skills 206

6. IT STRATEGIES FOR KNOWLEDGE MANAGEMENT 211

Knowledge Management and IT Strategies 212
IT Strategies and Knowledge
Management Road Map 214
Role of Knowledge Management in IT Strategies
for IT Companies 215
Knowledge Industry and Knowledge Strategy -
Knowledge Workers 217
IT Strategic Services, Product and Consulting 218
Case Study: IT Strategies for KM at SIS Securities 225

7. IT STRATEGIES FOR NON-IT COMPANIES 228

Role of IT in Non-IT companies 229
IT Investment Decision 231
Measurement of IT 232
IT Strategies for Non-IT Companies 233
Technology Selection and Learning Methodologies 236
Managing IT as a Business 239
Strategies for Operations and Production Management 240
IT for Business Performance Management 242
Technology Selection and Learning Methodologies in.
Non-IT Companies 246
IT Strategies for Service, Product, and Consulting Companies 248
Enabling Business with IT in Various Sectors 248
Strategic Importance of IT and ROI on IT Investment 251
IT for Supply Chain Management and Constraint Management 253
XIV Contents

Offshoring and Outsourcing Strategies 256

IT-enabled Business Models and Security Aspects of IT Strategy 257
Case Study: IT Strategy for AB Autos 261

8. IT STRATEGIES IN SPECIFIC SCENARIOS 265

IT Strategies in Specific Scenarios 266
Enterprise Resource Planning Implementation 270
Mapping IT Strategic Initiatives to ERP 272
Supply Chain Management 273
Supply Chain Contribution and Business Strategy 273
IT Strategies for Business Process Outsourcing 276
Knowledge Process Outsourcing (KPO) 277
Customer Relationship Management (CRM) 278
Other Companies, Tools, Techniques, and IT Strategies 279
Case Study: IT Srategies and Security Issues at WS-BPO 283

9. IT STRATEGY IMPLEMENTATION 285

IT Strategy Implementation 286
Development of IT-strategic Plan 287
System and Technology Strategies:
Implementation Aspects 290
IT Strategy Implementation to Gain
Competitive Advantage 291
IT Strategy Implementation and Leadership 294
Implementation of an IT Innovation Strategy 295
IT Strategy Implementation for Differentiation 297
IT Strategy and Specialization 299
Staffing-related IT Strategies 300
Implementing IT Strategies for Execution 302
IT Strategy to Improve Various Aspects of Execution 309
IT Strategy and Business Strategy: Alignment, Measurement
Inter-relationship and Effectiveness Study 310
IT Strategy Audit 311
Case Study: IT Implementation at Broke-Anytime 315

10. GLOBAL IT STRATEGIES 317

IT Strategy in Global Environment 319
Global Product Life Cycle 320
Risks and Advantages of a Single-Country Strategy 322
 Contents XV

Parameters of Global Strategy 323

Making IT Work in a Global Environment 326
The Technology Environment and Global IT Strategy 329
Global Scenarios 331
Globalization and its effect on IS/IM/IT Strategy 334
Global IT-strategic Issues 336
Global Project Management 339
Security 340
Global Innovation and Knowledge Management 341
Cost/Benefit Analysis of Global Strategies 342
Strategic KM in Global Organizations 344
Convergence Model for IT and IS in a Global Organization 346
Case Study: Global IT Strategy at ADS Systems 350

11. IT STRATEGY FOR MERGERS AND ACQUISITIONS 354

Mergers and Acquisitions 355
Information Technology Compatibility in M&A 362
IT Organizational Changes Related to Mergers 365
Do Start-ups Need Merger-Ready IT Plans 367
Critical Technology Factors for Success 367
Identifying IT Competitive Advantages 369
IT Portfolio 370
Due Diligence 372
IT Strategic Positioning for M&A 373
Objectives and Methods for IT Strategic
Positioning from Merger Perspective 376
KM-related Issues in M&A and
Role of Information Technology 376
Pre-merger IT Strategies 379
Changes in IT Scenarios in M&A 382
IT Framework and Strategy matrix for M&A 384
Case Study: Merger and Acquisition at MST 389

12. IT SECURITY STRATEGIES 393

IT Security Issues 394
Security Strategy Framework 396
Need for Security Strategies 398
Security Strategies and Technological Security Measures 399
Outsourcing and Offshoring related Security Challenges 402
XVi Contents

E-commerce Security 408

Cyber Law and Other Legal Aspects of
Security Strategies 409
Security Policies and Strategies 410
Security Certifications and Audits 411
Case Study: Security Strategy Implementation to
Build Competitive Advantage 414

Bibliography 417
Index 422