Volume 14, Number 4 Article by R Ramaswamy December, 2002
Blending Business and IT Strategy: A Conceptual Model :
In this new age of the knowledge-based economy, the search for a more dynamic and sustainable competitive advantage has led to many organisations investing substantially in IT–based tools and solutions. But in most cases these investments have not been justified by the returns. The main reason for this is the disjointed manner of framing business and IT strategies leading to the segregation of the people, process, and technology aspects of management. Moreover, the benefits are marginal if carried out over existing strategies, structures, and processes. To derive the real benefits of investments in IT and paradigms of transformation in the information era, there have to be corresponding changes in organisational characteristics — hierarchy has to be replaced by networks, bureaucratic systems transformed into flexible processes, and control-based management must evolve into empowering relationships.
R Ramaswamy proposes a conceptual model evolved from the Nolan and Croson (N&C) six-stage transformation process model and Deming’s PDCA (plan, do, check, act) model to provide a framework for organisations to achieve an appropriate blend of business strategy and IT strategy, and simultaneously pay attention to the human angle of management. Although the N&C model proposes seven infrastructures (IT, performance management, human assets, resource allocation, shared knowledge and database, project tasking and core competencies) for organisational design, it does not elaborate on the precise mechanisms of interactions between the infrastructures that would actually support strategic management for innovative performance. The proposed model supplements the N&C model with the models for knowledge-based strategic management process and infrastructures for strategic management process. It illustrates how the IT infrastructure in conjunction with the integrated PDCA model (which works on the basis of iterative improvements at the operations, kaizen and innovations levels), can directly support the strategic management processes through interactions with the other infrastructures. The proposed model also integrates a framework for applying the concepts of knowledge management and learning organisations with emphasis on adopting a people-oriented approach.
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