Strategy

Chandler defined strategy as follows: "Strategy is the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.". Talking about 'Business Strategy', there are a number of publications that I want to refer to, because I always used them as a practitioner:

1. 'Corporate Strategy' - Hans Igor Ansoff 1966 - this is one of the first publications on 'Strategy' that I know of. Everybody uses his matrix for defining growth strategies. The notion of 'Product/Market-combinations (P/MC's)' comes from this publication. Also the growth options that an enterprise has like:

• Growth of existing Products of existing Markets (Market Penetration)
• New Markets for existing Products (Market Development)
• New Products for existing Markets (Product Development)
• New Products for New Markets (Diversification)

This line of thinking was adopted by the Boston Consulting Group, which developed the 'BCG growth-share matrix' , leading to terminology like 'Cash Cows', 'Stars' and 'Dogs'.

2. 'Competitive Advantage' - Michael Porter 1985 - in this publication the 'value chain' was introduced. To me this is a key way of think in structuring a Business and its IT. Decision making is all about the 'value creation' effects of change. 'Value Driver Tree's' are a helpful mechanism to materialize the impact of change. Terminology like 'Value Creation Web' is directly derived from this thinking. The notion of 'Business Capabilities' and associated 'IT Capabilities' are essential in understanding and implementing Strategies. I will address this in a separate article.





3. 'New competitive strategies' - Boynton, Victor and Pine 1993 - in this publication term like 'mass customization' and 'continuous improvement' were introduced in a consistent strategical framework. I already worked with the results of this line of thinking with AT&T/Lucent, before I discovered this publication in the IBM Intellectual Capital. This publication was very helpful in understanding fundamental structures of products and services.








4. 'the Discipline of Market Leaders'- Treacy and Wiersema 1997 - this publication addresses 3 fundamental Business Strategies that everybody knows and uses: 'Operational Excellence', 'Product Leadership' and 'Customer Intimacy'. The chosen strategy (be it conscious or not) of an Enterprise has direct influence on the role and structuring of the IT within that Enterprise.







Explaining  'IT Strategy' is a bit harder for me. When a company is an IT Service Provider, all of the above goes for that company as well. However, within any other Company we can only talk of an 'IT Strategy', directly derived from the Business Strategy. Under the assumption that in this case 'IT is a Business within the Business' we can make use of the above strategic publications. E.g. when the Company perceives IT to be a supportive service, the dominant IT Strategy will be 'Operational Excellence'. However, when the primary 'goods flow' of a Company is an Information flow (like in Financial Institutions and Governmental Departments), the IT Strategy will be more like 'Customer Intimacy'.

In my opinion the key to a good IT Strategy is the answer to the question: "what is the perception of the Business of the role and added value of IT?"