The Leading Cinema Exhibitor In Malaysia Information Technology Essay
Nowadays, it is vital for an organizations to align their business strategies with information technology. Information technology has become a key business function for every organizations in order to survive and success in competitive business world today. An example of organizations in Malaysia that align their business strategies with information technology is Golden Screen Cinema. Golden Screen Cinemas (GSC)Â is the leading cinema exhibitor in Malaysia. In their official website which is http://www.gsc.com.my, they introduced e-payment for online ticketing in order to attract their customer to watch movies at their cinema.
From these, we can see that by using information technology in their business strategy, they can attract many customers from middle class income to upper middle income. It is because, this type of customers like to shop online and they dont like to buy ticket at the counter. This type of customers usually busy and dont have much time. Moreover, this type of customers usually use online banking and like to shop online. From these, we can see that information technology has been an implement tool in shaping strategies.
There are many benefits for an organizations to align their business strategies with information technology. The objectives to align business strategies with information technology generally is to help an organization to improve their financial performance, marketplace competitiveness, can reduce cost, enhance prodcutivity, standardise process, gain competitive advantage by exploiting new technologies, improve workflow and communication and many more. In fact, by align their business strategy with information technology, it will help organizations to improve their performance and in the end, they will achieve their goals.
A business strategy is an analytical management tool used for planning a future business path. It addresses the internal and external business environment, the approach to competition, vision and allocation of company resources and which calls on strong commitment in its formulation and execution.
Information Technology Strategy
An IT strategy is a strategic business tool used to structure a future path and addresses the use and management of IT resources, business IT relationships both internal and external and the flow and storage of information throughout the organization.
Aligning Business Strategy With Information Technology
As we all know today’s market is dynamic, the competition between organizations has become more intensity than ever. In order to survive and thrive, one has to achieve the competitive advantages over the other competitors. Over the past decades, Information Technology has becoming more and more important to organizations. Indisputably, one particular organization treats Information Technology as the mean to define and leverage its business strategies, to build reliable partnership network, to allocate resources, and to create distinctive value proposition. Information Technology helps organization differentiate its business from others.
However, aligning Information Technology strategy with business strategy in order to achieve the competitive advantages is not an easy task. Lately, many researchers have indicated that the organization’s performance depends on the Information Technology and Business alignment. The more mature business Information Technology strategic alignment of one organization becomes the better that organization performs. Many frameworks and models have been given by researchers in order to help top managers to align their organization’s business strategy with their Information Technology strategy. Strategic Alignment concept was born from the need ofÂ utilizing Information Technology efficient and effective. In many organizations either the Information Technology doesn’t support the business strategy or theÂ business doesn’t use existing Information Technology at its full capacity.
This fact made the alignment between Information Technology and organizational strategies a top priority for the CIOs in both private and public areas. Business and Information Technology strategies can be considered aligned when business objectives are enabled, supported and stimulated by information technology strategies. However it is not the technology itself which created value but the business processes that make good use of the technology. Strategic Alignment is a technique for analyzing and derives the direction that needs to be followed by an organization. However, strategic alignment is not a single step to be completed but a continuous sequence ofÂ transformations which affects both business and Information Technology sides.
Strategic alignment is also defined using two concepts which are first, Strategic Fit and Functional Integration applied to the organizational strategy, Information Technology strategy, organizational infrastructure and Information Technology infrastructure and processes. The Strategic Fit represents the vertical alignment between Business Strategy and organizational infrastructure and similarly between Information Technology strategy and Information Technology infrastructure. The organization has to be able to adjust their position into the external marketplace and for this, the internal structure has to be able to be reconfigured in such a way that will supportÂ or fit in the best way this strategy of locating the best place into the market. In completion to the Strategic Fit the Functional Integration extends the relationship across functional domains.
As business strategies are changing all the time the Information Technology strategies and processes have to be kept aligned with the changes, also when Information Technology strategy drives achange the business strategy has to react to be able to optimal use the new Information Technology strategy. Also the alignment should take into account both external and internal domains. The external domain is the business environment where the organizations are pre-occupied with decisions regarding offerings, strategies, alliances and partnerships. However the internal domain deals with redesign of critical business process, human resources, administrative structures and development of organizational competencies. Strategic Alignment Model presents a strategy landscape focused on Organizational, Technology, External and Internal views of an organization.Â
Challenges of Alligning Business Strategy with Information Technology
First, many Information Technology decisions are driven by business executives who know little about technology. Except, what they read in magazines or have been told by salespeople. This group includes CEOs, CFOs and COOs. They look to technology to drive the company. They believe that ERP, SCM, KM, data mining and a variety of software solutions will enhance revenue through efficiency gains or new customer sources. In some cases they do, but in most, the costs offset the gains. The company structurally stronger, but on paper it looks the same or worse.
Second, many companies are directed by Information Technology organizations that are technology-driven but don’t understand the real needs of the business. They cannot translate business needs into technology solutions. Many Information Technology executives cannot present a business case for or against a particular technology. Their condemnation or approval is based entirely on the performance of the technology. They present factors that should be considered during the technology evaluation stage but not at a strategic alignment level. Third, those who run the business and those who run technology cannot agree on what alignment is. In reality, it is all perception based on expectations. There are companies that could be greatly enhanced through the use of technology but believe that they are perfectly aligned already.
Example of Company that Align Business Strategy with Information Technology
Starting in the mid-1980s, Dell Computer sold PCs directly to end-users over the telephone, and offered custom configuration to meet customer requirements. As a result of its effective execution of this direct sales model, Dell’s sales grew to $2 billion by the end of 1992, and reached $12 billion in 1997. Gateway 2000 used a similar strategy aimed at the consumer market and saw its sales grow to $6.3 billion by 1997.
Both of these companies were able to reduce their costs by “cutting out the middleman,” while also developing close direct relationships with their customers. Starting in the mid-1990s, Dell and Gateway offered sales, product configuration, and services over the Internet, creating a new distribution channel for PCs. Selling on the Internet further reduces distribution costs, as the transaction can be completed entirely electronically. It also expands the vendor’s reach at a very low marginal cost, because the Internet is a public infrastructure that can be accessed by customers anywhere in the world.
In this paper, I am conducted a literature review about aligning business strategy with Information Technology. My aim was not to conduct an exhaustive analysis but merely suggest linkage points between strategic management approaches on one hand, and various approaches to business and Information Technology alignment on the other hand, in an attempt to uncover ontological assumptions underlying alignment research toward strategy and strategizing. The literature review is useful for evaluating different alignment approaches, with the aim of discovering similarity, maturity, capability to measure, model, asses and evolve the level existing among business and technological assets of an enterprise.
After reviewing the literature on alignning business and aligning Information, I am view that the current alignment discussion is still biased towards a mindset, in which aligning Information Technology is seen as a separate, value-adding function, whose focus is on present-day value realization, operational quality and reliability rather than as the source of strategic advantage. Most business and Information Technology alignment models adopt a static, mechanistic and segmented worldview on organizations and technology, in which alignment is conceived as known, quantifiable, achievable and measureable.
A narrow focus of alignment underestimates the systemic complexity of Information Technology that addresses different business needs. As the role and importance of information and information systems in contemporary organizations increase, new perspectives are needed in managing, operating and innovating Information Technology based business models. The agile, networked and complex business environment of today calls for the extension of existing management principles and practices to embrace higher levels of complexity and multifaceted nature of alignment and adaptive capabilities.
New concepts and theories that can provide the genesis of a new management paradigm are needed. Accordingly, I am view that the future of business and Information Technology alignment research and discussion should be based on more contemporary notions of strategic advantage. Since Information Technology is an extension of strategy in contemporary organizations, the alignment discussion and models should reflect the notion of strategic ambidexterity which is the balance between exploitation and exploration capabilities.Order Now