Question 1

What are some of the challenges in developing IT solution to solve business

problem and meet new business opportunities?

As often happens in organizations, recognition of a need precedes the ability to put it into place.
IT leaders are now making significant strides in articulating IT strategy and linking it more
effectively with business strategy. Business leaders are also more open to a more integrated
process. Nevertheless, there are still important organizational barriers remaining that often
inhibit strategy development. First, a supportive governance structure is frequently lacking.
“Now that so many strategies are enterprise-wide, we need a better way to manage them,”
explained a focus group manager. Often there are no formal
structures to identify and manage interdependencies among different business processes. “It used
to be that everything was aligned around organizational boundaries, but strategy is now more
complex since we’re working on programs with broader organizational scope,” said another.
Similarly, current managerial control systems and incentives are often designed to reward
thinking that is aligned to a line of business, not to the greater organizational good. Second,
enterprise-wide funding models are also
lacking. “Everything we do now requires negotiation for funding between the lines of business
who control the resources,” one manager stated. Even within IT, the focus group suggested, it is
not always clear who in the organization is responsible for taking IT strategies and turning them
into detailed IT plans. Third, traditional planning and budgetary practices are a further challenge.
This is an often-neglected element of
IT strategy. “Our business and IT strategies are not always done in parallel or even around the
same time,” said a focus group participant. As a result, it is not easy to stay aligned or to
integrate the two sets of plans. Another commented, “Our business plans change constantly. It is
therefore common for IT strategy to grow farther and father apart over time.” Similarly, an
annual budgeting process tends to
lock an organization into fixed expenditures which may not be practical in a rapidly changing
environment. Today’s IT organizations therefore need both a longer term view of their
resourcing practices and the opportunity to make changes to it more frequently. While rolling
budgets are becoming more acceptable, they are by no means common in either IT or the
business world today. Fourth, both business and IT leaders need to develop better skills in
strategizing. “We’ve gotten really good at implementing projects,” said an IT manager. “Strategy
and innovation are our least developed capabilities.” In recent years, IT has tended to push
business towards better articulation of their goals. “Right now, in many areas of our business,
strategy is not well thought through,” said another manger. “IT has to play the devil’s advocate
and get them to think beyond generalities such as, ‘we are going to grow the business by 20%
this year’”.
With more attention to the process, it is almost certain to get better, but at present,
managers’rudimentary skills in this area limit the quality of strategy development. Finally, over
and over, the focus group stressed that IT strategy is mainly about getting the right balance
between conflicting strategic imperatives. “It’s always a balancing act between our tactical and
operational commitments and the work that builds our long term capabilities,” said a participant.
Deciding how to make the trade-offs between the different types of IT work is the essence of
effective strategy. Unfortunately, few businesses do this very well [3]. According to the focus
group, traditional business thinking tends to favor short term
profitability while IT leaders tend to take a longer-term view. Making sure some types of IT
work (e.g.,
infrastructure, new business opportunities) are not underfunded while others (e.g., utility,
business improvement) are not over-funded is a continual challenge for all IT and
business leaders these days.
Each IT Solutions company that achieves success becomes knowledgeable and skilled at
managing in three different areas. That is not to say that companies don’t have unique issues.
Nor does it mean that as a company goes through growth stages, it won’t encounter the bumps
and obstacles common to a particular growth stage. What it does mean is that no matter what
your current or future challenges, you stand a higher chance of overcoming them successfully
when you gain competency in these three areas:

 Business Intelligence Management: Knowing

 Process Management: Doing
 Performance Management: Measuring

It boils down to this: You need to know what to do, you need to have effective methods of doing,
and you need tomeasure what you have done. ConnectWise PSA gives you what you need in
these three key areas to be able to overcome both your management and workflow issues. Our
solution was developed based on ITIL (Information Technology International Library) best
practice standards precisely to help you have the information and control you need to succeed.

1. Business Intelligence Management: Knowing

The first requirement to successfully manage an IT Solutions company is being able to know. To
know about what is happening right this second in each critical function in your company, and to
know what has happened over time.

Each day, as your employees conduct their daily business, there is a rich amount of important
data gathered in the transactions. To prevent becoming overwhelmed with data, your business
automation solution should provide you reports and dashboards that present just what you need
to know, and just when you need to know it. Additionally, information must be available to you
from a historical perspective, so you can see trends and changes over time, again presented in a
format that provides a meaningful basis for any actions you might need to take.

2. Process Management: Doing

Once you have a clear picture of the critical functions within your company, you need to be able
to execute effectively and efficiently. You will need to have automated process support, be able
to monitor important milestones, know when exceptions happen within processes, and know
when important activities are completed. And you will need to be able to engage in a continuous
improvement program so that you can continually drive down your direct and operational costs
of doing business.

While all companies within a given industry have common processes they perform, the details of
processes –or step-by-step procedures to do an activity –are often unique to individual
companies. So any business automation solution must allow for both: first, that the critical
processes are supported through automation, and second, that you have the flexibility to
customize the flow to meet your unique requirements. ConnectWise PSA offers rigorous process
support specifically for IT Solutions companies, as well as workflow configuration set-up tables
so you can customize our software based on your unique needs. And, we help you get it all set
up, so you can hit the ground running.

3. Performance Management: Measuring

The final requirement for successful management of your IT Solutions company is that you
measure performance. You need to know what is working well and what is not working well, all
the way from the high-level company view down to the individual employee view. In addition to
knowing the effects of any programs you put into place, this information is critical for other
reasons: You need to be able to replicate instances of high performance across your company
and be able to see the appropriate information to be able to take immediate corrective action on
poor performance. Finally you may not have ever thought of this you also need to measure the
‘performance’ of your clients, to understand who is profitable and who is not, what the cost-to-
serve is, and more.

ConnectWise PSA gives this capability to you. Because the information is gathered from
workflow processes, employees do not have an increased administrative burden. Yet you have
what you need to understand how your company is performing. Everything from KPIs (Key
Performance Indicators) for employees, groups of employees or the whole company, to gross
margin reports by function or client. And you can have this information in any time frame you
choose, even real time for to-the-minute results.

Question 2
Can business use of IT help a company to give competitive advantage? Give
Example

A strong relationship continues to exist between the employment size of a business and the
likelihood that the business is using IT. As employment size increases, so does the proportion of
Australian businesses making use of IT. For example, during the year ended June 2004 all
businesses with 100 or more persons employed used computers, 99% used the Internet, while
83% had a web presence. A much lower level of IT adoption existed for businesses with 0–4
persons employed: 80% used computers, 67% used the Internet and only 16% had a web
presence. While use of computers and the Internet for businesses with 100 or more persons
employed has been complete or near complete for a year or two (also 100% and 99%
respectively, during the year ended June 2003), the proportion of these businesses with a web
presence continues to grow with an increase of 3 percentage points from 2002–03 to 2003–04. In
contrast, businesses with 0–4 persons employed increased the level of IT adoption for computer
use and Internet use by 2 percentage points over the period, while a smaller increase of 1
percentage point was experienced for web presence. Proportions of businesses employing 5–19
and 20–99 persons also show increases of 2 percentage points for computer use but show larger
increases for Internet use (4 and 3
percentage points respectively) and web presence (5 and 7 percentage points respectively).
As with employment size, a relationship exists between the total income of businesses and the
use of IT. For example, 68% of businesses with income of $5 million or more had a web
presence while only 12% of businesses with income less than $100,000 had a web presence.

During the year ended June 2004, the proportion of Australian businesses using IT varied
considerably across industries. The proportion of businesses with computer use was lowest in the
Accommodation, cafes and restaurants industry (72%). The industries with the highest
proportion of businesses using a computer were Electricity, gas and water supply and Property
and business services, 95% and 94% respectively. Web presence was highest in Cultural and
recreational services (41%) and Wholesale trade (40%). Construction had the lowest proportion
of businesses with a web presence (11%). The next lowest proportion of businesses with a web
presence was 17% shared by Transport and storage, Communication services and Health and
community services. At the broad industry level, the highest increases in the proportions of IT
adoption between 2002–03 and 2003–04 were experienced by: Electricity, gas and water supply
and Health and community services for computer use (5 percentage points); Retail trade
for Internet use (9 percentage points); and Manufacturing and Wholesale trade for web presence
(7 percentage points for both). Users interested in movements in industry statistics need to be
aware that considerable compositional change may occur within an industry between surveys.
Additionally, the level of IT usage may also vary with the nature and characteristics of
contributing businesses. For example, between 2002–03 and 2003–04, estimates for
Communication services show significant decreases in the proportions of businesses with
computer use, Internet use and web presence of 7, 8 and 5 percentage points respectively.
Communication services is comprised of Postal services, Courier services and
Telecommunications services. For the 2003–04 survey, there was a relatively high number of
births to the survey frame of Postal services and Courier services businesses
with 0–4 persons employed. Consequently, the proportion of businesses in Communication
services with 0–4 persons employed increased in comparison to other employment size ranges.
This change has driven the decreases in proportions for Communication services, as businesses
with low employment typically have lower levels
of IT adoption.

The information revolution is sweeping through our economy. No company can escape its effect.
The authors of this article provide a useful framework for analyzing the strategic significance of
the new information technology. They identify tree specific ways that the technology affect
competition. They also outline five step to help managers assess the impact of the information
revolution on their own companies.

The information revolution is affecting competition in three vital ways:

1. Changing industry structure
The structure of an industry is embodied in five competitive force that collectively determine
industry profitability: the power of buyers, the power of suppliers, the threat of new entrants, the
threat of substitute products, and the rivalry among existing competitors. Information technology
can alter each of the five competitive force and, hence, industry attractiveness as well. The
technology is unfreezing the structure of many industries, creating the need and opportunity for
change.

2. Creating Competitive Advantage

In any company, information technology has a powerful effect on competitive advantage in
either cost or differentiation. The technology affects value activities themselves or allows
companies to gain competitive advantage by exploiting changes in competitive scope. Aim of
competitive edge itself are: Lowering Cost, Enhancing Differentiation, and Changing the
competitive scope (and also in another journal will be found quick responsive).

3. Spawning New Business

The information revolution is giving birth to completely new industries in three distinct ways.
* It makes new businesses technologically feasible;
* Information technology can also spawn new business by creating derived demand for new
products;
* Information technology creates new businesses within old ones.

Five steps to assess the impact of the information revolution

1. Asses information intensity;
2. Determine the role of information technology in industry structure;
3. Identify and rank the ways in which information technology might create competitive
advantage;
4. Investigate how information technology might spawn new businesses;
5. Develop a plan for taking advantage of information technology.

But things have to emphasize here are, these change do not means that a central information
technology function should play an insignificant role; IS manager should coordinate the
architecture and standards of the many applications throughout the organization, as well as
provide assistance and coaching in systems development.

So here, Information technology can help in the strategy implementation process. Reporting
systems can track progress toward milestones and success factors. By using information systems,
companies can measure their activities more precisely and help motivate managers to implement
strategies successfully.