Introduction
Strategic planning is an important factor in the growth of the organization. It steers the organization to attain its desired objectives by analysing the present business scenarios and discover the areas of improvement or growth to achieve competitive advantage. Setting aims or objectives is very important for an organization to achieve enhance productivity through planning. It facilitates the organization to predict the outcomes and take suitable measures to amplify productivity so that organization revenue can be increased.
In the era of technology, industries are transforming very rapidly and every organization should be capable enough to adapt to new changes. The management should observe the shortcomings of rivals and develop strategies to gain competency in the organization. The link between IT planning approach and Philosophy Every IT planning approach is based on some or sometimes blend of certain philosophies. Considering Nolans stages of growth and IT for CA which focuses on the role and use of IT in an organization and their underlying philosophy and how they influence these IT approaches. IT for Competitive Advantage An organization can achieve the competitive advantage over other rival companies by creating a product or service in a way that it creates more value for the customers than other. And IT for competitive advantage is an approach by which an organization can produce a product or service at a lower cost for customers to achieve competitive advantage.
However, there are several other ways to gain a competitive advantage like Differentiation and new business opportunities and this approach can help the organization in identifying them. The value chain is a concept which describes the importance of IT in competition. It divides the whole activities of the company which are needed in developing and delivering product or services into primary and supportive activities. Primary activities involve activities like inbound logistics, Marketing and Sales etc which are needed to manufacture the product while support activities include procurement, Human resource management etc which support the primary activities to take place.
And IT has changed the whole value chain by permeating each and every activity and make it much more efficient and increased in a way or other example Automation has increased the production capacity by a huge number. IT can help the organization in achieving competitive Advantage in several ways Lowering cost IT is changing the nature of work organization were doing traditionally by involving in each of value chain activities for example in the garment industry more of the activities are now automated like fabric cutting, pattern drawing, sewing which drastically reduced the manufacturing cost and the final product can be delivered to the customer at a much lower cost than others who are doing it manually which eventually support the organization in gaining competitive advantage through cost differentiation. Enhancing Differentiation The organization can gain the competitive advantage by making the product more specific to certain target groups like corporate, senior citizens etc. for example Credit cards company which provide exclusive offers for certain customers by analyzing their spendings and income like American express travel card for corporate customers which provide exclusive deals like lowest flight tickets etc for their customers.
Create New business opprotuniities IT can also help the organizations in getting new business opportunities for example for an organization who has information processing implant in their value chain has great scope or skills that can be sold outside as by product and get benefits from new business opprtunity like selling data regading customers to research firm. Benefits of IT for competetive advantage If effectively done, the IT can help the organization with increased productivity, Reducesd cost and high capacity utilization of their resouces. It creates the clear communication among all the business processes through which senior management can gather the information about their business can use it for effective business strategies which can be fruitfull for the organization. Disadvantages One of the major drawback of IT for CA that it is an endless process like an organization should always be up to date about the technology and implement it in their organization. It require huge investment so very detailed analysis of change is required and if not done catiously can result in huge moetory loss for the organization. It is an continious process which demand organization to adapt change quickly which sometime create resistant iin the work culture of the organizaion.
Philosophies on which IT for CA is based Directedness In IT for CA first plan has to be made about what to do And How to to do only after that actions can be performed. Senior management has to be clear with their intentions and detailed master plan need to be made than the action can be performed ie. Detailed planning required prior to the actions which is also a characterstic of philosophy priciple Directedness. Secondly, the whole organization follow the master plan which was developed by senior management for implementing IT which is also a charactersic of diretdness principle that whole organization work collectively on action plan without any dispel. Continuous Growing is a gradual and continuous process for organization also they need to be updated and make changes into their system as new opprtunity knock and also for the maintenance of system continuous planning needs to be done to keep it well functioning. Aditionally, for spawning new business managers needs to analyse the information on regular basis and make plans to create the new business opprtunities in the market to achieve competetive advantage.
Episodic This philosophy means that planning needs to be done periodically. While in IT for CA planning only needs to be done before actions and once master plan is made the whole effort goes in the implementating and executing that plan. Which means it is contradicting with the philophies on which IT for CA is based on which are directedness, continuous and emergent mainly. Nolans Stages of Growth Richard L. Nolan proposed a four-stage model of an organization.
The four stages are Initiation, Expansion, Formalization and Maturity. The main purpose of this model is to describe communication, analytical, decision making and predictive purposes. Initiation In the initiation phase the main focus is on cost saving and only specific applications can run with the expertized staff. System monitoring totally ignored during this phase which is one of the biggest disadvantage of this stage.
Expansion the staff and application expand as the user needs increases. Formalization emphases on control of information system in the organization. Maturity the end result of the process is achieved by using information as a resource. Consequently, resulting in gradual growth during maturity Nolan proposed version 2 of stages of growth due to failure in four stage model. A revised version of stages of growth identifies the key indicators which can define every stage of development in an organization.
The graph depicts the different stages included in Nolans Stages of Growth Two stages which are Integration and Data Administration were added later in version 2 of Nolans stages of growth. Integration organization shift their approach from information systems based on the ad-hoc solutions to service-based information systems which result in their change in behaviour toward information system. Nolans stages of growth focus on formal planning instead of ad-hoc planning methods within data processing. Data administration – In this phase organization start exploiting the generated data or information for strategic planning. Shortcomings of Nolans SOG In the era where technology is transforming day by day Nolans SOG doesnt align with rapidly changing environment because it doesnt adapt change easily.
Nolans stat very generalize statement that the sole reason behind the growth of computing is the phases involved in technical change. However, there are several other factor which should be considered like time and budget. Advantages of Nolans SOG The model provide detail insight about using IT for their benefits through which they can plan and manage their firm through benchmark variables. Nolans model can help organizations to identify changes in the market which they can use to gain competency. Philosophies on which Nolans SOG is based.
Directdness Nolans SOG required prior planning to be done before any action. In the rapidly changing world of technology it become extremely important to closely analyse and plan for the risk involved with the implementation process before any actions and also requirements changes as the time passes so it is very important to plan and predict the changes. Which is also a characteristic of directdness principle which emphases on creating master plan first thn comes action. Continuous Industries are changing daily and the organization should be aware of these changes and in order to gain competency continuous planning need to be done for adapting the changes and create new business opportunities for the organization and to gain competency through innovation the organization should be very aware about the requirement of customers which can be analysed through the information produced in data administration phase of Nolans SOG.
Episodic Nolans SOG requires the system to go through several phases to achieve maturity and for all those phases planning need to be done and keep updating it periodically whenever there is a change in the requirement happens or get initiated through the market. Comparing IT for CA and Nolans SOG Both the approaches is about exploiting IT for gaining competitive advantage. However, IT for CA is about the use of IT in existing activities to make them more efficient and increase productivity to gain the competency while Nolans SOG is about evolution of IT and its transformation within the organisation up to the phase of maturity it is more about analysing the current status of IT in the organization and how it can be improved to achieve maturity while IT for CA is more about gaining competitive advantage through IT. Both the approaches is based on the philosophies of directedness and continuous as prior planning is need before action in both the approaches while Episodic is the third philosophy on which Nolans SOG is based contrary to IT for CA in which planning needs to be done once not episodically.
REFERENCES
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