It Strategy For Business

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   

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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 

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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 

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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 5

Key challenges of IT 

Synchronized demand and supply

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Drive cost reduction

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Improve performance management

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Synchronized demand and supply 

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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 

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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 8

Improve performance management 

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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 9

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 

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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 

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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 in the Strategy in place organization?

IT Strategies exist IT Strategy fully but not aligned with aligned with business Business Strategy

IT project owner IT initiative by IT users only. No participation by business users

Business heads IT projects owned participate in IT by business users. decisions. No IT facilitators 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 13

Business – IT Strategy Alignment LAGGARDS How is IT perceived in organization?

FOLLOWERS

Treated as pure Considered as a utility. No strategic business enabler / value attached. support function

LEADERS Perceived as a Strategic business driver

Are investments On ad-hoc basis. in IT well No formal plan or planned budget

Budget exists – not Investments based aligned with on business business strategy objectives

How is the resistance to change?

Resistance at operational level

High resistance to change

Low resistance to change across organization

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Business – IT Strategy Alignment LAGGARDS How is the Silos of application applications, architecture of multitudes of the organization? platforms and lack of data integration

FOLLOWERS

LEADERS

Integration Application and dependant technical applications is a architecture drawn primary IT objective fully integrated and straight-thruprocessing (STP) model

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Alignment of Business through IT 

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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 16

Adaptability to change 

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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 17

Structural Alignment 

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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 18

Alignment of Business through IT

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Alignment of Business through IT 

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Alignment should be comprehensive in nature Encompasses four critical components that build a synergistic IT strategy    

Business Architecture Application Architecture Technical Architecture Organization Structure 20

Business Architecture  

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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 21

Application Architecture 

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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 

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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 

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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 

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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 25

ICICI Bank- Challenges 

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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 26

ICICI Bank- Challenges 

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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 

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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 

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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 

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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 

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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 32

ICICI Bank- Benefits 

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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. 33

ICICI Bank- Benefits 

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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  

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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 36

Thank you

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