The Alignment of Technology and Corporate Planning

Introduction

In the digital age, information technology plays an important role in the success of an organization. Technology provides edge in this globalized world. Companies are facing competition not only from local companies but from international companies as well.

In such a scenario, it is important that company invest in technology which is aligned with overall strategy of the company. This calls for technology strategy formulation.

Technology Strategy Formulation

Technology strategy formulation talks about alignment between technology strategy and the overall strategy of the organization. Here the role of the Chief Information Officer comes into prominence. The CIO should have short term as well as long term vision of technology advancement. CIO should bridge implication of technology advancement and organization strategy. A clear communication of technology impact on organization needs to reach executive leadership.

This alignment between CIO and CEO revolves around issues like:

  • CIO roles and involvement in overall strategy formulation of organization.
  • Financial resources available to make investment in technology.
  • Earlier results of alignment between technology and organization strategy.
  • External business conditions.

CIO faces challenge to provide technology value adds for organization in achieving its objective.

Planning

Corporate planning plays an important role in alignment of technology with organization strategy. In a perfect scenario CIO and CEO will have a same planning horizon. However, it is observed that the CEO and CIO do not share same vision, from planning to execution.

This introduces the concept of planning lead time. In some organization, strategy execution does not match to technology planning horizon and execution. By the time technology strategy is executed, more advancement is observed in that system, thus competitive edge is lost.

In the above scenario, companies become reactive rather than pro-active. Companies need to adjust with challenges posed by market leaders and trend setters. A strong CIO-CEO relationship ensure organization develop understanding of technological challenges and its impact on overall organization.

Organizational Structure

Organization needs to ensure that their structure is agile and flexible as to accommodate changes in the technology. They should be efficient and effective enough to deal demands of the market change.

Organization needs to develop and maintain technology systems, which are flexible and adaptive. There are three types of technology infrastructure available with companies’ ERP, data warehousing and knowledge management.

All three dimensions ERP, Data Warehousing and Knowledge Management provide cutting edge to the organization.

Organizational Systems

Organization invests in technology looking at its present needs; future requirements and its capability to provide a competitive edge. Systems can be classified into three categories depending upon technology timeline, new systems, matured systems and declining systems.

New systems have latest technology and provide a competitive edge. As time progresses system and technology are adopted by more companies, thus losing competitive edge. Finally, systems and technology reach the obsolete stage where its usage has declined and is to be phased out.

Executive leadership of organizations is responsible to manage new systems range as to enjoy competitive edge. However, this requires substantial investment and clear vision of future technology state. Therefore, organization has to walk a tight rope in investment in new technology and phasing out the obsolete.


❮   Previous  Article Next  Article   ❯


Authorship/Referencing - About the Author(s)

MSG team comprises experienced faculty and professionals who develop the content for the portal. We collectively refer to our team as - “MSG Experts”. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.

Management Information System