FREE online courses on Information Technology - Chapter 4 IT AND CORPORATE STRATEGY - A Framework for the Strategic Use of IT

 

In the strategic cell, companies are critically dependent on the smooth functioning of information systems. These firms need significant amounts of planning. The firm would be at a considerable disadvantage if information processing did not perform properly. The authors found one bank that fit this cell well. Without computers, the bank would be awash in a sea of paper and it could not possibly keep up with the volume. The bank must think of how to use its systems strategically to offer services that will let it capture a greater market share. For instance, banks are offering new services connecting home computers to their computers.

 

In a turnaround company, there is a need for planning, too. It is likely that corporate performance is inhibited by poor performance in the information processing department. Cash and colleagues found a firm in this cell with adequate operating systems in production but limited new applications critical for keeping up with growth. Without new technology the firm could not maintain control over its rapidly expanding operations.

 

The authors argue that in the factory setting, there is not much to do but run existing applications. They maintain that strategic goal setting and linkage of information systems to the corporate plan are not too important here. Finally, in a support environment, information processing is probably not critical to the firm, so strategic integration will not be essential for success. The authors expect to find low levels of senior management involvement in this situation. The framework in Figure above is a useful one for diagnosing the state of an organization. We can look at the nature of the business, it plans for the future, and its existing and planned applications. In a turnaround situation, we may want to emphasize to management the importance of leading the information systems efforts, whereas in the strategic cell, management may already be aware of the importance of leading the information systems effort, whereas in the strategic cell, management may already be aware of the importance of technology to the firm.