Strategic Management of Information Technology

Abstract

In most companies information technology has by tradition been treated as a separate supportive function that is handled and managed best by IT skilled persons on their own. The management has often not seen themselves competent enough to participate in IT issues. The role of the management has mostly been to approve or reject specific IT investment decisions that other persons have planned. To manage IT issues in this manner is however very shortsighted. In the competitive business community of today, IT has more and more become an important factor to consider in the competition between companies.

A company's IT investments are also not anymore independent issues, but investments that affect and build on each other. This has made it increasingly important that companies have long-term perspectives on how to utilize IT, so that it best supports the business strategy and operations. In order for the management to be able to align the IT possibilities with the company's strategy and activities, an active involvement from their side in IT issues is essential, because the top management is the group of people, who has the far best knowledge on the company strategy and what the company's activities will look like in the future.

In my master's thesis I present a methodology that helps the company management to deal actively and continuously with IT issues. The methodology is based on existing knowledge that have been modified and further developed based on my own working experience. The methodology is formed out of tree parts, the first of which concentrates on enlightening the importance of the management's active involvement in IT issues: "There is no separate IT strategy, there is only the business strategy, and the management must see to it that IT in the long term supports it". The second part of the methodology presents a way of working, a model, which helps the management to continuously align IT with the business strategy and the operations. The future is split up into shorter cycles, and the focus is put on the next cycle. By analyzing the company situation with the help of strategical models, objectives can be identified for the cycle, where after the next step consists of formulating the optimal IT framework to support or achieve the objectives set. The rest of the cycle includes the steps of planning the development options for implementing the framework, analyzing the effects of the changes and doing the actual implementation, where after the next cycle starts. The third part of the methodology suggests a way to manage the cycle in the organization, so that the top management, IT skilled persons and end users are involved in the process.

This master's thesis presents relevant existing strategy and IT theory behind the methodology, after which the methodology is described and analyzed. A case study of implementing the methodology is there after presented to illustrate the utilization of it.