Aligning IT Strategic Goals with Corporate Business Goals

Introduction

Small and medium-sized enterprises (SMEs) continue to be a major driving force in a country's economy. When individuals decide to pursue their dreams and engage in commerce, their efforts create various opportunities — not least of which is employment for anywhere from 2 to 200 people. The main asset of these SMEs is their pioneering spirit; the unique ability to meet a certain need through innovative means is what makes them flourish. It is understandable, therefore, that these companies hold their owners and creative teams in the highest regard, since they represent the primary source of money-making ideas.

As these companies grow, the need to remain competitive intensifies and the source of ideas diversifies. It is now more than a matter of filling a need; it is a matter of creating a need. Whether offering a product or a service, SMEs must explore their target markets and define consumer habits, interests, and other nuances in order to identify where they can generate demand for what they have to offer.

In connection with this, SMEs should now turn toward becoming companies that keep pace with the times. To do so, they must become tech-savvy, able to penetrate markets at the speed of the latest technology. Their goals should evolve into keeping abreast of change rather than merely keeping afloat. It is crucial for such enterprising businesses to embrace IT and integrate it into their systems, creating a symbiotic relationship between core business functions and technology — one that enables the business to reach greater heights.

The Role of IT in Modern Business

Information technology (IT) is here to stay, and it would be very unwise for any company today to consider running its business without it. In fact, most organizations would find it next to impossible to function without IT, since even the most routine office equipment — such as the photocopier — has evolved into an all-in-one copier-scanner-printer-fax machine. So how does management integrate IT into their system?

The first step is to create an IT unit or department. Management should then determine the company's long-term goals in relation to the potential contributions of IT, and develop a strategy that integrates the IT unit's goals and plan of action with those of the revenue-generating and back-office business units. For example, it is no longer advisable to use a paper-based payroll system. In addition to being more susceptible to fraud, paper payroll represents a significant environmental burden — consider the filing requirements for a 100-person payroll over the course of a single year. Beyond payroll, the near-universal adoption of email has enabled immediate correspondence between separate entities and faster responses to urgent matters, further underscoring IT's value in day-to-day operations.

Integrating IT into strategic planning provides consistency in quality and the ability to build a system grounded in resource-based theory (RBT). According to a study by Mário Caldeira, Paul Cragg, and John Ward on information system competencies in small and medium-sized enterprises:

Resource-Based Theory and IT Competencies

"Resource-based theory (RBT) has been developed to explain how organizations can achieve competitive advantage. This theory focuses on the idea of costly-to-copy attributes of the firm as an essential way to achieve superior performance. According to resource-based theory, resources that are valuable, cannot be easily purchased, require a long learning process, or are the result of corporate culture, are more likely to be unique to the enterprise and difficult to imitate by competitors. Competitive advantage occurs when there are different resources across firms, and differentials in firms' performance depend on having a set of unique resources."

Applied to information technology, this framework suggests that IT capabilities which are deeply embedded in an organization's processes and culture — rather than simply purchased off the shelf — are the ones most likely to generate lasting competitive differentiation.

Conclusion

There remains much to be said about how integrating IT into long-term corporate strategic planning benefits a company, but the essential point has already been established. Any present-day corporate strategy that fails to incorporate IT goals and objectives into its core system is bound to fail — and fail significantly. IT is the nerve network through which the lifeblood of any modern, competitive company flows. It cannot be ignored.