ENTERPRISE IT STRATEGY MANAGEMENT
In the digital age, businesses must increasingly create and deploy intangible assets-for instance customer relationships, employee skills and knowledge; information technologies and a corporate culture that encourages innovation.
BY SURESH .V. MENON-PRINCIPAL CONSULTANT & BUSINESS ADVISORY ON SIX SIGMA, ISO AUDITING & BUSINESS PROCESS DOCUMENTATION.
The ideal strategic management planning process includes decision makers from all the three company levels (the corporate, business and functional) -for example the chief executive officer (CEO), the product managers, and heads of functional areas. In addition, the team obtains input from company planning staff, when they exist, and from lower level managers and supervisors. The latter provide data for strategic decision making and then implement strategies. Because strategic decisions have a tremendous impact on a company and require large commitments of company resources, top managers must give final approval for strategic action.
As we have known the 7 pillars of strategic management we come to strategy mapping, strategy maps let an IT Company describe and illustrate in clear and general language-its objectives, initiatives, targets markets, performance measures and the links between all the pieces of strategy. Employees get a visual representation of how their jobs are tied to the company’s overall goals, while managers get a clearer understanding of their strategies and a means to detect and correct any flaws in those plans.
Strategy maps provides such a tool. They give employees a clear line of sight into how their jobs are linked to the overall objectives of the IT Company, enabling them to work in a coordinated, collaborative fashion toward the company’s desired goals. The maps provide a visual representation of a company’s critical objectives and the crucial relationships among them that drive IT Company’s performance. For this tools like process maps with the strategy to be applied in each department should be designed.
Strategy maps can depict objectives for revenue growth; targeted customer markets in which profitable growth will occur; value propositions that will lead to customers doing more business and at higher margins; the key role of innovation and excellence in products, services and processes; and the investments required in people and systems to generate and sustain the projected growth. Strategy maps show the cause and effect links by which specific improvements create desired outcomes for example, how faster process-cycle times and enhanced employee capabilities will increase retention of customers and increase company revenues.
In the digital age, businesses must increasingly create and deploy intangible assets-for instance customer relationships, employee skills and knowledge; information technologies and a corporate culture that encourages innovation.
The balanced scorecard strategy map stresses on phases like learning and growth perspective of the employees in the IT Industry, internal process perspective like operational excellence and reducing operation costs by using applied statistical analysis and six sigma, then customer perspective, in any business customer is king so we have to use data analytical tools to find the trends in customer purchase and achieve product leadership or service leadership. Then last is financial perspective which focusses on increase in the share price and improve shareholder value.
The best way to build strategy is focus from the top down, starting with the destination and then charting the routes that will lead there. Corporate executives should first review their mission statement and their core values, with this information managers can develop a strategic vision, or what the company wants.
Building a strategy map typically starts with a financial strategy for increasing shareholder value; companies have two basic levers for their financial strategy: revenue growth and productivity.
Revenue growth can be increased by having very experienced personnel in the top management and employing tools like Six Sigma, Statistical Analysis, Budget analysis, workforce empowerment, using ERP software packages to speeding up the manufacturing, financial and distribution activities of the Organization. The IT Industry has faced recession in 2008 and post corona after effects in 2021 which affected the revenues of the IT Firm. So futuristic strategy based on disaster management and technical vulnerability has to be taken into account while laying down the blue print for strategic decisions. Business Impact Analysis has to be a periodic exercise involving the top management in the IT Company. Lessons learned from the past has to be documented and the software company should have a robust risk management plan to be implemented and all the vulnerabilities to be taken into account and prioritizing high risk parameters and the plan to treat the risk. Logistics also play an important role as delivery of the product on time to the customer is important.
Productivity has to be planned by futuristic predictions on purchase of good quality raw materials; production floor having the latest equipment and efficient staff so the defects in production is minimized. Proper budgeting is one of the key in strategy so also is the logistics procedure employed by the IT Industry. The activity of mapping the business process of the IT Company in a diagrammatic form helps to understand the gaps in the functionalities of the IT Company; the gaps can be later filled by using either a software, person or a change in the particular process as change management is the key for boosting innovation. Gap analysis and gap remediation is one of the important part of strategic management.
