DETERMINING IT’S ROLE
With strategy defined, the next step is to perform a gap analysis to determine whether or not IT can enable the implementation of the strategy. For example, a major retailer has a strategic intent of “cost leader” and a strategy of supply chain optimization. This retailer recognizes that IT can enable their supply chain optimization strategy in at least two ways. They have built a highly successful product and inventory analysis system that quickly determines sell-through and adjusts distribution accordingly, and they have also taken the lead in pallet- and box-level tracking (RFID) in order to further contract its supply chain. These activities are all aligned with the goal of maintaining its low cost leadership. For this retailer, these IT activities enable their strategy of supply chain optimization. Will IT always enable their supply chain optimization strategy? It depends. Perhaps at some point the RFID technology will be an industry standard and their competitors will match their product analysis capabilities. If so, IT could become a tactical enabler. This retailer should then treat their IT as one of its parity activities. Otherwise, they would be wasting their resources in an area that will not generate a maximum return.
Organizations can use this gap analysis to identify areas where IT can be an enabler of previously unknown differentiating activities. For example, a financial services company used the Process Purpose Model to define their strategy. This caused them to identify rapid delivery as their best customer solution strategy. The associated gap analysis revealed that the company could leverage IT to automate some of its manual processes in order to reduce their lead times. They then revised IT’s role and allocated resources to close this gap and use IT to better achieve its strategy. Without using these tools, they would have missed an opportunity and sub-optimized their strategy. Note that in accelerating marketplaces, IT activities or projects can move in the Process Purpose model in mid-project. Structuring projects to have iterative delivery and incremental funding using agile development allows the organization to reevaluate projects to ensure that IT resources are being utilized effectively and efficiently.
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