IT Strategy, E-Business Models, and Enterprise Architecture

Corporate Investment in Information Technology

There are several compelling reasons why corporations need to invest in information technology. First, the dynamic economic environments in which businesses operate today "have helped create a challenging business environment and an 'economic imperative' for information technology" (Bakos & Treacy, 1986). Second, technology increases a corporation's capability while significantly reducing costs (Bakos & Treacy, 1986). Third, the fact that businesses' technology-utilization abilities are improving due to globalization further necessitates corporate investment in information technology (Bakos & Treacy, 1986).

Strategic planning is crucial to the success of any organization because: (i) it enables organizations to respond to the dynamic business environment by providing platforms through which adjustments in organizational direction can be made (ASCO, 2009); (ii) it instills a sense of direction within the organization and contributes to the creation of a milieu in which employees focus on a common goal (ASCO, 2009); and (iii) it promotes the creative and open "exchange of ideas, including putting disagreements on the table and working out effective solutions" (ASCO, 2009).

Strategic Planning in Organizations

Strategic planning only becomes effective once the adopted business strategies are implemented (ASCO, 2009). Regardless of how well a strategic plan is conceived by management, it remains ineffective as long as the rest of the organization misinterprets or blocks it. An organizational unit in need of strategic planning would typically be characterized by a diminishing interest among workers and a failure to respond to its intended purpose, loss of community interest and finances (along with a preference for the status quo), members leaving to join competing organizations, and high levels of uncertainty regarding the future (ASCO, 2009).

The effectiveness of strategic planning rests on a three-stage process: the identification of core processes, the establishment of appropriate measures, and the establishment of accountability for changes (Cascella, 2002). Processes are the medium through which strategies are translated into actions. Once the core processes have been identified, they are measured against the adopted strategy (Cascella, 2002). If the strategies are found to be effective, accountability and quality implementation are ensured "through effective performance management or linking compensation, including both financial and non-financial rewards" (Cascella, 2002, p. 67).

An e-business model can be defined as "an approach to conducting electronic business on the internet" (Philips, 2003, p. 76). E-business, in addition to the buying and selling of goods (e-commerce), encompasses business-partner collaborations and customer service via the internet (Philips, 2003). Any online business transaction involves two entities — a consumer and a business — and the resultant business relationships give rise to four e-business models: business-to-business (B2B), which covers dealings between two businesses; business-to-customer (B2C) and customer-to-business (C2B), which apply in contexts such as e-shops and e-malls; and customer-to-customer (C2C), which characterizes online marketplaces such as eBay (Philips, 2003).

E-Business Models and Their Benefits

Reduced transaction costs, increased global reach, increased convenience, improved information content, increased customer loyalty, and higher accessibility are among the key benefits associated with e-business models (Philips, 2003).