It strategy vs business strategy

Essay by andicappUniversity, Master'sA, June 2014

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In most organizations IT expenditure is considered as one of the larger if not the largest contributor to capital investment and expenditure. Technology has a significant effect on the business landscape of most organizations and the market place they operate in. The goal of IT as such should be directed toward the alignment of IT strategy with an organization's overall business strategy (Mulcay, 2001). It is argued though that the inability to successfully derive value from IT investment is, for the most part due to a lack of alignment between IT and business strategies.

Johnson and Scholes cited by Riley (2012) define strategy as follows "Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations". In unpacking the definition, simply the business strategy that the business has decided to follow needs accurate configuration of resource - human resource, technology resource, financial resource etc.,

so as to gain competitive advantage, meet objectives and stakeholder expectation.

Henderson & Venkatraman (1999) argue that there is no IT application or system, regardless of how cutting edge or sophisticated it maybe, that will build and sustain a competitive advantage for an organization for a sustained period of time. Organizations, in order to sustain competitive advantage should continuously endeavor to exploit it's IT functionality and resource to maintain an advantage. In my opinion this is achieved by out of the box, evolutionary thinking by both business and IT leaders. Furthermore, both business and IT leaders need to understand fully the role that IT can support and re-shape business strategy decisions and improve IT effectiveness and ultimately improve business performance.

Should a company's IT Strategy follow its business strategy...