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Chapter 5 E-business strategy 319

Focus on Information systems strategy and e-business strategy

An essential part of any e-business strategy is consideration of how information systems
strategy supports change. The importance to e-business success of utilizing information sys-
tems to manage information is highlighted by Willcocks and Plant (2000) who found in a
study of 58 major corporations in the USA, Europe and Australasia that the leading com-
panies were astute at distinguishing the contributions of information and technology, and
considering them separately. They make the point that competitive advantage comes not from
Business-alignment
IS strategy technology, but from how information is collected stored, analysed and applied.
An established aspect of information systems strategy development is the focus of IS strat-
The IS strategy is
generated from the egy on business impact or alignment. In the business-alignment approach, a top-down
business strategy through
techniques such as CSF approach is used to review how information systems can be used to directly support a defined
analysis. business strategy. Referring to e-business strategy, Pant and Ravichandran (2001) say:
Alignment models focus on aligning the information system’s plans and priorities with
organizational strategy and business goals.
The importance of alignment is stressed in digital channel strategic initiative business-case
prioritization investment matrix Figure 5.7 Linking information systems to objectives and
critical success factors (CSF) (Table 5.6), is one approach for using the alignment approach.
Another is the use of business systems planning methodology which focuses on deriving
data and applications needs by analysis of existing business processes.
Business-impacting In the business-impacting approach, a bottom-up approach is used to determine
IS strategy
whether there are new opportunities from deploying information systems that may impact
IS strategy analyses
opportunities for new positively on a business strategy. New hardware and software technologies are monitored by
technologies and the IS manager and other managers to evaluate whether they can achieve competitive
processes to favourably advantage. Pant and Ravichandran (2001) say:
impact the business
strategy.
impact models focus on the potential impact of information technology on organizational
tasks and processes and use this as a basis to identify opportunities for deploying infor-
mation systems.

The impacting approach may also involve redesigning business processes to integrate with part-
ners such as suppliers and distributors in new ways. This point is made by Sultan and Rohm
(2004) who, based on a study of three organizations, identify different forms of aligning Inter-
net strategies with business goals with their framework identifying these strategic objectives:

Cost reduction and value chain efficiencies. For example, B2B supplier AB Dick used the
Internet to sell printer supplies via the Internet to reduce service calls.
Revenue generation. Reebok uses the Internet for direct licensed sales of products such as
treadmills which do not have strong distribution deals.
Channel partnership. Partnering with distributors using extranets.
Communications and branding. Car company Saturn developed the MySaturn site to foster
close relationships with customers.

Value chain analysis (Chapter 6, p. 351) is one method that can be used for the impact
approach. For example, this might identify the need for e-procurement which can be used as
part of an effort to reduce costs and increase efficiency as part of business strategy. This
technique has merit in that it not only considers internal use of information systems, but
also how they can be used to integrate with external organizations such as suppliers, perhaps
through innovative methods such as marketplace exchanges.
The impact and alignment techniques need not be mutually exclusive. During initial
development of an e-business strategy, a business-alignment approach can be applied to
ensure that IS strategy supports e-business strategy. A business-impacting approach is also
useful to see which new opportunities IS produce. For instance, managers could consider