Digital Business Strategy


Which alignment perspective is the best?’. Henderson and Venkatraman argued that neither of their four strategy alignment perspectives was superior to formulate and implement strategy. The business strategy as well as the IT strategy could be chosen as starting point for guiding management decisions [1]. As a student we are very familiar with this ‘alignment thinking’ and in several of research studies this framework is applied. Essentially IT Strategy is seen as a function supporting the business strategy. Question is: does the framework itself still align reality with ongoing information technology and infrastructure developments?

Impressive improvements in information, communication, connectivity technologies, changes in social relations through social media and networking, cross-boundary industry disruptions and cloud computing let a few researches believe that it is time to formulate an overarching phenomenon in which IT-strategy and business strategy are fused together into an overarching phenomenon digital business strategy (DBS) [2].

In their definition of organizational strategy formulated and executed by levering digital resources to create differential value [2] importance in recognising digital resources for creating differential business value is being stressed. IT is no longer a simple mean of efficiency and productivity but a competitive advantage and strategic differentiation itself. Four themes have been selected to guide and better understand future developments. The drivers of the four key themes of digital business strategy are presented in figure 1.

Drivers

For example drivers that put pressure under the current view of Information Strategy are big data, that created abundance in data through is massive size, detail and direct availability. Consider the rapid digital scaling up and down capabilities that cloud computing offers to adapt to dynamic market demands or network effects that become to key differentiation and diver of value creation in certain industries. Scale through alliances can be easily established, as partnerships are more time-efficient to connect. Speed of product launches and decision-making can be the difference between keeping customers and seeing them move to competitors [2].

What do you think? Are digital resources in line with the resource-based view of strategy or are they rather at the functional-level of business strategy (and subordinate to)?

[1] Henderson, J. C., N. Venkatraman, N. Strategic Alignment: Leveraging information technology for transforming organisations.  IBM systems journal, VOL 32, NO 1, 1993.

[2] Bharadwaj, A., El Sawy, O. A., Pavlou, P.A., Venkatraman, N. Digital Business Strategy: Toward a Next Generation of Insights‘. MIS Quarterly VOL 37, NO 2, pp. 471-482, June 2013.

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