1. Business Objectives and Goals
2. Competitive Advantage
3. Core Competencies
4. Industry Trends and Regulations
5. Resource Availability:
Companies consider their available resources, such as budget, personnel, and technology, when choosing IS to develop or use. A company with limited resources may opt for off-the-shelf solutions, while a company with more resources may choose to develop custom solutions.
6. Risk Management
7. Growth and Expansion Plans
8. Innovation and Differentiation
9. Organizational Culture:
A company with a culture that values collaboration may choose to develop or use a collaboration platform to improve communication and teamwork.
1. Alignment with Goals:
· IT projects must support core business objectives ( “IT Portfolio Management”emphasizes selecting IT projects aligned with strategy) For example, if the strategy is cost optimization, companies may choose SaaS or outsource non-core functions( “Globalization and Outsourcing Strategies”).
2. Resource Prioritization:
·Strategy determines resource allocation( “IT Financial Management” discusses the trade-off between capitalizing and operational expenses).
3. Technology Selection:
·Strategy drives technology choices ( “Cloud Governance”requires cloud services to align with business continuity strategies).
4. Risk Management:
·Strategic risk tolerance influences system security design (“Information Security Management” requires compliance with the organization’s risk appetite).
Growth-focused companies (e.g., e-commerce) prefer cloud-based and big data solutions to scale quickly.
Cost-driven companies (e.g., manufacturing) adopt ERP systems to streamline operations and financial management.
Innovation-driven companies (e.g., tech firms) develop custom software to gain a competitive edge.
Traditional businesses may purchase off-the-shelf software or integrate old and new systems to balance cost and efficiency.
Highly regulated industries (e.g., finance, healthcare) require compliance-focused IS with stringent security measures.
Customer-facing businesses (e.g., Retail industry) prioritize customer relationship management (CRM) and digital engagement platforms.
The impact of strategy on information system selection is mainly reflected in the following aspects: strategy determines the priority of information systems, and the company’s decision on the direction of corporate focus will lead to the selection of different types of information systems, for example, focusing on finance will lead to the selection of ERP systems; strategy leads to the selection of technology paths, for example, a cost-leading strategy may choose cloud services or open-source software, whereas a differentiation strategy may choose customized development or hybrid solutions; Strategy affects system integration needs, if the enterprise strategy emphasizes process standardization, it may choose a highly integrated ERP system, if it emphasizes flexibility, it may adopt a modular cloud service; strategy matches system lifecycle management, the security strategy directly affects the design of the development process; and the agile strategy needs to be matched with an iterative development methodology.
A company’s strategy is critical to the information systems it chooses and develops for use. First, the business needs of the company define what kind of information system the company needs, and the information system needs to support the company’s day-to-day business and bring convenience to the company. Secondly, the company’s strategy will determine how much resources will be invested in building the information system and where the information system will fit into the company’s strategy. Moreover, the company’s strategy determines what kind of information system the company will use, which will drive the company’s business improvement and the direction of the company’s future business development.
Strategy determines what systems are built, why they matter, and how they create value. By aligning IS with strategic priorities—whether through cost-cutting, innovation, customer focus, or compliance—organizations ensure technology acts as an enabler, not a bottleneck. Regularly revisiting strategy and IS alignment (e.g., via SWOT analysis or balanced scorecards) is critical to adapt to changing markets and sustain competitive advantage.
Determine business needs：As described in “CISA® Official Review Manual 28th Edition”, an enterprise’s strategy helps define its business goals and objectives. Information systems are developed and used to support these business goals. For example, if a company’s strategy is to expand market share by improving customer service, it may choose to develop or use information systems that enhance customer relationship management. In “Modern systems analysis and design”, it is also emphasized that understanding the business and its goals is crucial for systems development.
Guide technology selection：A company’s strategy can influence the selection of information systems technology. In “CISA® Official Review Manual 28th Edition”, when considering infrastructure development or software acquisition, the alignment with enterprise standards, security requirements, and future growth needs are important factors. If a company’s strategy is to be at the forefront of technology in its industry, it may choose to adopt more advanced and innovative information systems. “Modern systems analysis and design” also mentions that the choice of software or technology should be based on the organization’s needs, which are related to its overall strategy.
Affect project prioritization：Strategy plays a role in determining which information systems projects should be prioritized. In “CISA® Official Review Manual 28th Edition”, during the project identification and selection process in the planning phase of the SDLC, an organization determines which systems development projects should be undertaken based on its information system needs, which are influenced by the business strategy. For example, projects that are more closely aligned with the strategic goals of the company may be given higher priority. In “Modern systems analysis and design”, the concept of strategic planning in the SDLC also indicates that projects are selected and prioritized to meet the organization’s strategic needs.
1.For large teams (over 100 people) or projects requiring strict control over costs and scope, companies might opt for more traditional, structured development methods to ensure project controllability and predictability, reflecting resource allocation considerations.
2.High-risk and highly complex projects typically choose traditional methods due to their enhanced controls and documented processes, aiding risk management. Conversely, low-risk, small-scale, and simple projects benefit from Agile methods, allowing faster response to changes.
3.When a significant portion of the system will be outsourced, detailed design specifications become crucial to ensure subcontractors understand the requirements. In such cases, companies might choose more detailed development methods to support the outsourcing process.
4.Organizational culture and existing standards also influence the choice of development methods. For example, some organizations may have established mature Agile practices, while others may lean towards traditional waterfall models or other methodologies.
A company’s strategic objectives significantly influence its choice between Agile and Traditional information systems development approaches. Strategic alignment between Agile and Traditional methods depends on market dynamics, scale of operations, and organizational culture. Agile is ideal for rapid innovation and small-scale, customer-centric projects, thriving in unstable environments through iterative design. Traditional methods are better suited for predictable, large-scale initiatives, offering structured processes that reduce risks. Organizational culture and resource management also play key roles, with Agile favoring autonomy and continuous expert access, while Traditional methods align with hierarchical structures and concentrated early expertise. —Sabrina_ ZHANG Ruizhen
1.Competitive Advantage: Information systems can provide a competitive edge. A company might invest in advanced analytics platforms or customer relationship management (CRM) systems to better understand market trends and customer preferences, thereby enhancing its competitive position.
2.Operational Efficiency Streamlining Processes: To improve operational efficiency, companies opt for systems that can automate routine tasks, reduce manual errors, and optimize workflows. For instance, implementing an Enterprise Resource Planning (ERP) system can integrate various business processes like finance, HR, and supply chain management.
3. Enhancing Customer Experience: For companies focused on customer satisfaction, choosing systems that enhance customer interaction and service quality is crucial.
1、Corporate strategy defines long-term goals and direction and information systems need to align with them.
2、Corporate strategy takes into account industry trends and regulatory requirements and information systems must comply with relevant regulations.
3、Corporate strategy has a preference for its risk tolerance, which can influence the choice of information systems.
4、Corporate strategy determines the allocation of resources, and the development and acquisition of information systems requires a lot of resources such as time, capital and manpower.
5、Strategies are designed to gain competitive advantage, and information systems can be a key enabler.
1.Strategic Risk, “Arises when the business goals are identied and weighted without taking theenterprise strategy into account. The strategic importance ofthe business goals depends on thestrategic importance of the related business area.”
2.Business Drivers: “All critical business objectives (from the enterprise strategy) have to betranslated into key business drivers for all parties involved in business operations during asystems development project.”
3. Key Business Drivers: “Thus, all crilical business objectives (from the enterprise strategy)have to be translated into key business drivers for all parlies involved in business operationsduring a systems development project.”
4.SMART Objectives: “Objectives should be SMART (see section 3.5.9 Project Objectives) sothat general requirements will be expressed in a scorecard form, which allows objectiveevidence to be collected to measure the business value of an application and to prioritizerequirements.”
5. Business Process Reengineering (BPR): “BPR is the process of responding to competitiveand economic pressures and customer demands to survive in the current businessenvironment. This is usually done by automating system processes so that there are fewelmanual interventions and manual controls.”
6. Alignment with Enterprise Standards: “The suggested solution must accomplish thefollowing: Ensure alignment of the lCT with enterprise standards.”
7. Future Operational Flexibility: “Provide future operational flexibilily to support businessprocesses.”
8. Maximize ROl and Operational Efficiency: “Maximize ROl, cost transparency and operationalefficiency.”
9. Support for Business Goals: “The system should be installed according to the enterprise’schange control procedures.”
The company’s strategy has a profound impact on the development and application of information systems at multiple levels, including goal setting, competitive landscape, resource allocation, risk tolerance, and industry background.
Strategy influences a company’s choice of information systems in multiple ways. It guides the overall planning of information systems according to the company’s long – term goals. For example, a growth – oriented strategy may lead to the development of a customer – facing information system. Strategy also determines business requirements, which in turn define the functions of the information system. If the strategy focuses on cost – reduction, the system needs to optimize internal processes.
Moreover, strategy helps assess the feasibility and prioritize information system projects. Projects that align closely with the strategy and can bring significant strategic value are given priority. In the decision – making process of system selection or development, strategy serves as a key reference. It affects whether to develop a custom – made system for differentiation or purchase a ready – made system for cost – effectiveness.
Finally, strategy impacts the control and management of information systems. To ensure that the system supports the strategic goals, the company formulates control measures such as data security protection and performance monitoring, which guarantee the stable operation of the information system and the reliability of data, providing strong support for the implementation of the strategy.
Corporate strategy has multifaceted impacts on the information systems a company chooses to develop and use. In my view, there are three areas generating mainly.
1.Business Requirement Definition Drives System Selection: Corporate strategy clearly defines the direction and focus of the business, which directly determines the functional requirements of information systems. These systems can help the company manage information more efficiently, gain a deeper understanding of relevant needs, and thus provide better services.
2.Alignment with Business Objectives Determines System Characteristics: Different corporate strategic objectives require specific characteristics of information systems for support. If a company pursues a cost – leadership strategy, the selected information system should have highly efficient process automation functions to reduce operating costs.For companies that focus on product innovation and differentiation, the information system needs to have strong research and development support and data analysis functions to better collect and analyze market data and provide a solid basis for product innovation.
3.Addressing Competition and Risks Affects System Selection: In a highly competitive market environment, to gain a competitive edge, a company may choose to develop innovative information systems. In addition, considering data security and business continuity risks, companies will select information systems with strong security protection and disaster recovery capabilities to ensure the stable operation of the business and reduce potential losses caused by risks.
1.Alignment of Strategy with Information Needs:
A company’s strategic goals guide how it determines which information systems align best with its needs. For instance, a growth-oriented strategy might favor transactional systems that manage daily tasks efficiently, while a innovation-focused strategy could choose decision support systems to generate new ideas and solutions.
2.Selection of Systems:
The choice of system is influenced by criteria such as type (transactional, decision support), alignment with organizational goals, budget constraints, and user needs. For example, a risk management system might be selected based on its ability to assess and mitigate risks effectively within the company’s scope.
3.Implementation and Use of Systems:
Once chosen, systems are implemented with considerations for architecture (how components fit together), integration strategies (how these components integrate with other systems), and user roles (who interacts with the system). Companies plan their use by evaluating how well the chosen system aligns with strategic objectives and integrates seamlessly with existing processes.
In summary, strategy influences which information systems a company selects by guiding alignment with organizational goals, considering factors like type, budget, and integration. The implementation of these systems is further shaped by criteria that ensure they meet strategic objectives and facilitate effective use within the organization.
1. Alignment with business goals and objectives.
2. Risk management and compliance requirements.
3. Resource allocation and cost-benefit analysis.
4. Technology infrastructure and scalability.
5. Business process optimization and transformation.
6. Competitive advantage and market positioning.
7. Vendor and product selection criteria.
8. Focus on user-centric or organization-centric systems.
I think company’s strategy plays a critical role in determining which information systems (IS) it chooses to develop and use. Here’s how strategy influences IS decisions:
1. Alignment with business goals
The IS chosen must support the company’s overall strategic objectives, such as increasing market share, improving customer satisfaction, or reducing operational costs. Information systems should enable the company to create value for its customers, employees, and stakeholders, whether through innovation, efficiency, or enhanced service delivery.
2. Competitive advantage
Differentiation and innovation are crucial. Companies may develop or adopt IS that differentiate them from competitors, such as customer relationship management (CRM) systems for personalized service or advanced analytics for data-driven decision-making. And companies pursuing innovation strategies may prioritize cutting-edge technologies like artificial intelligence (AI), blockchain, or the Internet of Things (IoT) to stay ahead of the competition.
3. Operational efficiency
Process optimization and resource management both determine the operational efficiency. IS can be selected to automate and optimize business processes, reducing manual effort and improving accuracy. For example, workflow automation systems or robotic process automation (RPA) tools.
And about resource management, I think that systems like ERP or supply chain management (SCM) software help manage resources effectively, ensuring timely delivery and cost control.
1. The system suitable for strategy can better support the company’s business development; Conversely, systems that are poorly aligned with the company’s strategic goals will be eliminated;
2. Whether the system can improve the operation efficiency of the company, realize process automation, and provide effective data for the company;
3, the company needs to maintain a competitive edge; Companies guarantee competitive advantage by selecting systems for emerging technologies (AI, blockchain, etc.);
4, avoid risks, avoid some artificial risks.
The strategic choices of a company will affect the development and use of its information systems. Firstly, the development cycle of information systems has a fixed order, and enterprises will adjust specific steps and sequences according to project needs and management methods based on their strategies. Secondly, the company proposes information system development requirements based on the problems faced in the current program and the desire to perform additional tasks, and determines whether the cost of developing the system exceeds the benefits it can provide. Finally, companies should choose to use information systems that align with their business goals, rather than blindly accepting indiscriminate and overly promoted products provided by third parties. Moreover, using this information system can improve work efficiency and optimize office processes.
It can be affected in the following aspects:
Firstly, organization’s strategy determines the priority of information systems. If the company strategy focus on cost control, an existing and mature ERP system will be more appropriate.
Secondly, the strategy can direct the system integrity, such as an ERP system will be suitable to an enterprise who is emphasizing process standardization.
Furthermore, different strategy requires different information system capacity, such as waterfall model which is traditional and limited, would not meet the demand to agile system or further system development with responses from users.
In conclusion, Strategic planning from an IS standpoint relates to the enterprise’s long-term direction in leveraging IT to improve its business processes.
1. Aligning IS with Business Goals
· Objective-Driven: IS must directly support strategic goals like cost reduction, market expansion, or customer retention.
· Value Creation: Prioritize systems that enhance efficiency (e.g., ERP) or innovation (e.g., AI-driven analytics).
2. Driving Competitive Edge
· Differentiation: Invest in IS that enable unique capabilities (e.g., proprietary algorithms for personalized marketing).
· Innovation Catalyst: Use IS to pioneer new business models (e.g., subscription platforms or IoT-enabled services).
3. Boosting Operational Efficiency
· Process Automation: Deploy IS to eliminate manual tasks (e.g., RPA for repetitive workflows).
· Data-Driven Insights: Leverage analytics tools (e.g., Tableau, Power BI) for strategic decision-making.
4. Enhancing Customer Focus
· Engagement Tools: Implement CRM systems (e.g., Salesforce) for personalized customer experiences.
· Market Intelligence: Use IS to analyze customer behavior and predict trends (e.g., predictive analytics).
5. Ensuring Scalability & Flexibility
· Scalable Solutions: Choose IS that grow with the business (e.g., cloud-based platforms).
· Adaptive Architecture: Opt for modular systems that can quickly adjust to market shifts.
6. Meeting Compliance & Ethical Standards
· Regulatory Alignment: Ensure IS comply with industry regulations (e.g., GDPR for data privacy).· Ethical Integration: Align IS choices with corporate values (e.g., AI systems with built-in bias checks).
7. Leveraging Emerging Technologies
· Tech Adoption: Prioritize IS that incorporate AI, IoT, or blockchain for future-proofing.
· Digital Transformation: Use IS as enablers for transitioning to agile, digital-first operations.
8. Optimizing Resource Allocation
· Investment Focus: Allocate resources to IS with the highest ROI (e.g., ERP for cost savings).
· Talent Utilization: Ensure the team has the skills to maximize IS potential (e.g., upskilling in cloud tech).
9. Managing Risks
· Threat Mitigation: Use IS to identify and counter risks (e.g., cybersecurity tools for threat detection).
· Resilience Building: Choose IS that enhance operational stability during market volatility.
1.Alignment with Strategic Objectives
2.Competitive Advantage, systems are selected to create or sustain a competitive edge.
3.Resource Allocation Priorities, strategic priorities dictate budget and talent allocation.
4.Adaptation to Market Dynamics, strategies responding to market shifts require agile IS.
5.Organizational Structure and Processes, decentralized vs. centralized strategies influence IS design.
6.Regulatory and Environmental Factors, compliance-driven strategies shape IS requirements.
7.Long-Term vs. Short-Term Focus. Long-term strategies may invest in scalable, future-proof systems. Short-term goals might favor off-the-shelf solutions or outsourcing IS development.
Strategy shapes the choice of information systems by aligning them with the company’s goals, priorities, and competitive needs. It determines which systems will support key business processes, improve efficiency, or create a competitive advantage.
I think there are four main aspects.
The first aspect is whether the functionality of the information system aligns with the organization’s business objectives. For example, If the organizational goal is to expand into global markets, then a global supply chain system would be chose priority.
The second aspect is whether the functionality of the information system aligns with the organization’s strategy. If the organization adopts a “just-in-time” inventory strategy, then an efficient inventory management system would be chose priority.
The third is the cost-effectiveness of the information system itself. Organizations will prioritize selecting information systems that can bring higher returns while keeping lower costs, based on strategic objectives and risk tolerance.
The fourth is the allocation of resources. Organizations will allocate limited resources to key projects and at the same time choose suitable information systems for these key projects.
1.Clarify business objectives and drive system requirements: “COBIT5” indicates that enterprises aim to create value for stakeholders, and this is translated into specific goals. For example, an enterprise focusing on customer service quality may choose a CRM system. Projects should match business needs. A company expanding into new markets will prioritize information systems for market research, etc.
2.Guide system planning and ensure strategic alignment: “COBIT5” suggests that enterprises need an IT strategy in line with the overall strategy. When planning, consistency with the enterprise strategy and support for business process optimization should be considered. For instance, a cost leadership oriented enterprise may prefer an ERP system. In practice, information system projects must be consistent with the enterprise’s strategic direction.
3.Evaluate project value and screen system solutions: Strategy helps assess the value and feasibility of information system projects. Through the “COBIT5” goals cascade, the contribution of each project to strategic goals can be determined. Enterprises evaluate system solutions based on strategic goals and select the most suitable ones. Innovation oriented enterprises will favor systems with innovative functions and comprehensively assess project costs, benefits, and risks.
4.Affect resource allocation and ensure system implementation: Enterprise strategy determines resource allocation, which impacts information system development and use. “COBIT5” emphasizes resource optimization. Enterprises will prioritize resource allocation to key information system projects. For example, an enterprise focusing on online business expansion will support related systems. Rational resource allocation is crucial for project success, and allocation in line with the strategy can enhance the success rate and ensure information systems support enterprise strategies.
A company’s strategy determines its goals and priorities. If it aims for cost – leadership, it may choose systems that optimize operations and cut costs, like automated inventory management. For a differentiation strategy, it might adopt systems enabling unique customer experiences, such as personalized marketing platforms. A focus strategy could lead to specialized systems tailored to a niche market.
1. Business Objectives and Goals
2. Competitive Advantage
3. Core Competencies
4. Industry Trends and Regulations
5. Resource Availability:
Companies consider their available resources, such as budget, personnel, and technology, when choosing IS to develop or use. A company with limited resources may opt for off-the-shelf solutions, while a company with more resources may choose to develop custom solutions.
6. Risk Management
7. Growth and Expansion Plans
8. Innovation and Differentiation
9. Organizational Culture:
A company with a culture that values collaboration may choose to develop or use a collaboration platform to improve communication and teamwork.
Camellia_HUANG Jianwei
1. Alignment with Goals:
· IT projects must support core business objectives ( “IT Portfolio Management”emphasizes selecting IT projects aligned with strategy) For example, if the strategy is cost optimization, companies may choose SaaS or outsource non-core functions( “Globalization and Outsourcing Strategies”).
2. Resource Prioritization:
·Strategy determines resource allocation( “IT Financial Management” discusses the trade-off between capitalizing and operational expenses).
3. Technology Selection:
·Strategy drives technology choices ( “Cloud Governance”requires cloud services to align with business continuity strategies).
4. Risk Management:
·Strategic risk tolerance influences system security design (“Information Security Management” requires compliance with the organization’s risk appetite).
Growth-focused companies (e.g., e-commerce) prefer cloud-based and big data solutions to scale quickly.
Cost-driven companies (e.g., manufacturing) adopt ERP systems to streamline operations and financial management.
Innovation-driven companies (e.g., tech firms) develop custom software to gain a competitive edge.
Traditional businesses may purchase off-the-shelf software or integrate old and new systems to balance cost and efficiency.
Highly regulated industries (e.g., finance, healthcare) require compliance-focused IS with stringent security measures.
Customer-facing businesses (e.g., Retail industry) prioritize customer relationship management (CRM) and digital engagement platforms.
The impact of strategy on information system selection is mainly reflected in the following aspects: strategy determines the priority of information systems, and the company’s decision on the direction of corporate focus will lead to the selection of different types of information systems, for example, focusing on finance will lead to the selection of ERP systems; strategy leads to the selection of technology paths, for example, a cost-leading strategy may choose cloud services or open-source software, whereas a differentiation strategy may choose customized development or hybrid solutions; Strategy affects system integration needs, if the enterprise strategy emphasizes process standardization, it may choose a highly integrated ERP system, if it emphasizes flexibility, it may adopt a modular cloud service; strategy matches system lifecycle management, the security strategy directly affects the design of the development process; and the agile strategy needs to be matched with an iterative development methodology.
A company’s strategy is critical to the information systems it chooses and develops for use. First, the business needs of the company define what kind of information system the company needs, and the information system needs to support the company’s day-to-day business and bring convenience to the company. Secondly, the company’s strategy will determine how much resources will be invested in building the information system and where the information system will fit into the company’s strategy. Moreover, the company’s strategy determines what kind of information system the company will use, which will drive the company’s business improvement and the direction of the company’s future business development.
Strategy determines what systems are built, why they matter, and how they create value. By aligning IS with strategic priorities—whether through cost-cutting, innovation, customer focus, or compliance—organizations ensure technology acts as an enabler, not a bottleneck. Regularly revisiting strategy and IS alignment (e.g., via SWOT analysis or balanced scorecards) is critical to adapt to changing markets and sustain competitive advantage.
Determine business needs：As described in “CISA® Official Review Manual 28th Edition”, an enterprise’s strategy helps define its business goals and objectives. Information systems are developed and used to support these business goals. For example, if a company’s strategy is to expand market share by improving customer service, it may choose to develop or use information systems that enhance customer relationship management. In “Modern systems analysis and design”, it is also emphasized that understanding the business and its goals is crucial for systems development.
Guide technology selection：A company’s strategy can influence the selection of information systems technology. In “CISA® Official Review Manual 28th Edition”, when considering infrastructure development or software acquisition, the alignment with enterprise standards, security requirements, and future growth needs are important factors. If a company’s strategy is to be at the forefront of technology in its industry, it may choose to adopt more advanced and innovative information systems. “Modern systems analysis and design” also mentions that the choice of software or technology should be based on the organization’s needs, which are related to its overall strategy.
Affect project prioritization：Strategy plays a role in determining which information systems projects should be prioritized. In “CISA® Official Review Manual 28th Edition”, during the project identification and selection process in the planning phase of the SDLC, an organization determines which systems development projects should be undertaken based on its information system needs, which are influenced by the business strategy. For example, projects that are more closely aligned with the strategic goals of the company may be given higher priority. In “Modern systems analysis and design”, the concept of strategic planning in the SDLC also indicates that projects are selected and prioritized to meet the organization’s strategic needs.
1.For large teams (over 100 people) or projects requiring strict control over costs and scope, companies might opt for more traditional, structured development methods to ensure project controllability and predictability, reflecting resource allocation considerations.
2.High-risk and highly complex projects typically choose traditional methods due to their enhanced controls and documented processes, aiding risk management. Conversely, low-risk, small-scale, and simple projects benefit from Agile methods, allowing faster response to changes.
3.When a significant portion of the system will be outsourced, detailed design specifications become crucial to ensure subcontractors understand the requirements. In such cases, companies might choose more detailed development methods to support the outsourcing process.
4.Organizational culture and existing standards also influence the choice of development methods. For example, some organizations may have established mature Agile practices, while others may lean towards traditional waterfall models or other methodologies.
A company’s strategic objectives significantly influence its choice between Agile and Traditional information systems development approaches. Strategic alignment between Agile and Traditional methods depends on market dynamics, scale of operations, and organizational culture. Agile is ideal for rapid innovation and small-scale, customer-centric projects, thriving in unstable environments through iterative design. Traditional methods are better suited for predictable, large-scale initiatives, offering structured processes that reduce risks. Organizational culture and resource management also play key roles, with Agile favoring autonomy and continuous expert access, while Traditional methods align with hierarchical structures and concentrated early expertise. —Sabrina_ ZHANG Ruizhen
1.Competitive Advantage: Information systems can provide a competitive edge. A company might invest in advanced analytics platforms or customer relationship management (CRM) systems to better understand market trends and customer preferences, thereby enhancing its competitive position.
2.Operational Efficiency Streamlining Processes: To improve operational efficiency, companies opt for systems that can automate routine tasks, reduce manual errors, and optimize workflows. For instance, implementing an Enterprise Resource Planning (ERP) system can integrate various business processes like finance, HR, and supply chain management.
3. Enhancing Customer Experience: For companies focused on customer satisfaction, choosing systems that enhance customer interaction and service quality is crucial.
1、Corporate strategy defines long-term goals and direction and information systems need to align with them.
2、Corporate strategy takes into account industry trends and regulatory requirements and information systems must comply with relevant regulations.
3、Corporate strategy has a preference for its risk tolerance, which can influence the choice of information systems.
4、Corporate strategy determines the allocation of resources, and the development and acquisition of information systems requires a lot of resources such as time, capital and manpower.
5、Strategies are designed to gain competitive advantage, and information systems can be a key enabler.
1.Strategic Risk, “Arises when the business goals are identied and weighted without taking theenterprise strategy into account. The strategic importance ofthe business goals depends on thestrategic importance of the related business area.”
2.Business Drivers: “All critical business objectives (from the enterprise strategy) have to betranslated into key business drivers for all parties involved in business operations during asystems development project.”
3. Key Business Drivers: “Thus, all crilical business objectives (from the enterprise strategy)have to be translated into key business drivers for all parlies involved in business operationsduring a systems development project.”
4.SMART Objectives: “Objectives should be SMART (see section 3.5.9 Project Objectives) sothat general requirements will be expressed in a scorecard form, which allows objectiveevidence to be collected to measure the business value of an application and to prioritizerequirements.”
5. Business Process Reengineering (BPR): “BPR is the process of responding to competitiveand economic pressures and customer demands to survive in the current businessenvironment. This is usually done by automating system processes so that there are fewelmanual interventions and manual controls.”
6. Alignment with Enterprise Standards: “The suggested solution must accomplish thefollowing: Ensure alignment of the lCT with enterprise standards.”
7. Future Operational Flexibility: “Provide future operational flexibilily to support businessprocesses.”
8. Maximize ROl and Operational Efficiency: “Maximize ROl, cost transparency and operationalefficiency.”
9. Support for Business Goals: “The system should be installed according to the enterprise’schange control procedures.”
The company’s strategy has a profound impact on the development and application of information systems at multiple levels, including goal setting, competitive landscape, resource allocation, risk tolerance, and industry background.
Strategy influences a company’s choice of information systems in multiple ways. It guides the overall planning of information systems according to the company’s long – term goals. For example, a growth – oriented strategy may lead to the development of a customer – facing information system. Strategy also determines business requirements, which in turn define the functions of the information system. If the strategy focuses on cost – reduction, the system needs to optimize internal processes.
Moreover, strategy helps assess the feasibility and prioritize information system projects. Projects that align closely with the strategy and can bring significant strategic value are given priority. In the decision – making process of system selection or development, strategy serves as a key reference. It affects whether to develop a custom – made system for differentiation or purchase a ready – made system for cost – effectiveness.
Finally, strategy impacts the control and management of information systems. To ensure that the system supports the strategic goals, the company formulates control measures such as data security protection and performance monitoring, which guarantee the stable operation of the information system and the reliability of data, providing strong support for the implementation of the strategy.
Corporate strategy has multifaceted impacts on the information systems a company chooses to develop and use. In my view, there are three areas generating mainly.
1.Business Requirement Definition Drives System Selection: Corporate strategy clearly defines the direction and focus of the business, which directly determines the functional requirements of information systems. These systems can help the company manage information more efficiently, gain a deeper understanding of relevant needs, and thus provide better services.
2.Alignment with Business Objectives Determines System Characteristics: Different corporate strategic objectives require specific characteristics of information systems for support. If a company pursues a cost – leadership strategy, the selected information system should have highly efficient process automation functions to reduce operating costs.For companies that focus on product innovation and differentiation, the information system needs to have strong research and development support and data analysis functions to better collect and analyze market data and provide a solid basis for product innovation.
3.Addressing Competition and Risks Affects System Selection: In a highly competitive market environment, to gain a competitive edge, a company may choose to develop innovative information systems. In addition, considering data security and business continuity risks, companies will select information systems with strong security protection and disaster recovery capabilities to ensure the stable operation of the business and reduce potential losses caused by risks.
1.Alignment of Strategy with Information Needs:
A company’s strategic goals guide how it determines which information systems align best with its needs. For instance, a growth-oriented strategy might favor transactional systems that manage daily tasks efficiently, while a innovation-focused strategy could choose decision support systems to generate new ideas and solutions.
2.Selection of Systems:
The choice of system is influenced by criteria such as type (transactional, decision support), alignment with organizational goals, budget constraints, and user needs. For example, a risk management system might be selected based on its ability to assess and mitigate risks effectively within the company’s scope.
3.Implementation and Use of Systems:
Once chosen, systems are implemented with considerations for architecture (how components fit together), integration strategies (how these components integrate with other systems), and user roles (who interacts with the system). Companies plan their use by evaluating how well the chosen system aligns with strategic objectives and integrates seamlessly with existing processes.
In summary, strategy influences which information systems a company selects by guiding alignment with organizational goals, considering factors like type, budget, and integration. The implementation of these systems is further shaped by criteria that ensure they meet strategic objectives and facilitate effective use within the organization.
1. Alignment with business goals and objectives.
2. Risk management and compliance requirements.
3. Resource allocation and cost-benefit analysis.
4. Technology infrastructure and scalability.
5. Business process optimization and transformation.
6. Competitive advantage and market positioning.
7. Vendor and product selection criteria.
8. Focus on user-centric or organization-centric systems.
I think company’s strategy plays a critical role in determining which information systems (IS) it chooses to develop and use. Here’s how strategy influences IS decisions:
1. Alignment with business goals
The IS chosen must support the company’s overall strategic objectives, such as increasing market share, improving customer satisfaction, or reducing operational costs. Information systems should enable the company to create value for its customers, employees, and stakeholders, whether through innovation, efficiency, or enhanced service delivery.
2. Competitive advantage
Differentiation and innovation are crucial. Companies may develop or adopt IS that differentiate them from competitors, such as customer relationship management (CRM) systems for personalized service or advanced analytics for data-driven decision-making. And companies pursuing innovation strategies may prioritize cutting-edge technologies like artificial intelligence (AI), blockchain, or the Internet of Things (IoT) to stay ahead of the competition.
3. Operational efficiency
Process optimization and resource management both determine the operational efficiency. IS can be selected to automate and optimize business processes, reducing manual effort and improving accuracy. For example, workflow automation systems or robotic process automation (RPA) tools.
And about resource management, I think that systems like ERP or supply chain management (SCM) software help manage resources effectively, ensuring timely delivery and cost control.
1. The system suitable for strategy can better support the company’s business development; Conversely, systems that are poorly aligned with the company’s strategic goals will be eliminated;
2. Whether the system can improve the operation efficiency of the company, realize process automation, and provide effective data for the company;
3, the company needs to maintain a competitive edge; Companies guarantee competitive advantage by selecting systems for emerging technologies (AI, blockchain, etc.);
4, avoid risks, avoid some artificial risks.
The strategic choices of a company will affect the development and use of its information systems. Firstly, the development cycle of information systems has a fixed order, and enterprises will adjust specific steps and sequences according to project needs and management methods based on their strategies. Secondly, the company proposes information system development requirements based on the problems faced in the current program and the desire to perform additional tasks, and determines whether the cost of developing the system exceeds the benefits it can provide. Finally, companies should choose to use information systems that align with their business goals, rather than blindly accepting indiscriminate and overly promoted products provided by third parties. Moreover, using this information system can improve work efficiency and optimize office processes.
It can be affected in the following aspects:
Firstly, organization’s strategy determines the priority of information systems. If the company strategy focus on cost control, an existing and mature ERP system will be more appropriate.
Secondly, the strategy can direct the system integrity, such as an ERP system will be suitable to an enterprise who is emphasizing process standardization.
Furthermore, different strategy requires different information system capacity, such as waterfall model which is traditional and limited, would not meet the demand to agile system or further system development with responses from users.
In conclusion, Strategic planning from an IS standpoint relates to the enterprise’s long-term direction in leveraging IT to improve its business processes.
1. Aligning IS with Business Goals
· Objective-Driven: IS must directly support strategic goals like cost reduction, market expansion, or customer retention.
· Value Creation: Prioritize systems that enhance efficiency (e.g., ERP) or innovation (e.g., AI-driven analytics).
2. Driving Competitive Edge
· Differentiation: Invest in IS that enable unique capabilities (e.g., proprietary algorithms for personalized marketing).
· Innovation Catalyst: Use IS to pioneer new business models (e.g., subscription platforms or IoT-enabled services).
3. Boosting Operational Efficiency
· Process Automation: Deploy IS to eliminate manual tasks (e.g., RPA for repetitive workflows).
· Data-Driven Insights: Leverage analytics tools (e.g., Tableau, Power BI) for strategic decision-making.
4. Enhancing Customer Focus
· Engagement Tools: Implement CRM systems (e.g., Salesforce) for personalized customer experiences.
· Market Intelligence: Use IS to analyze customer behavior and predict trends (e.g., predictive analytics).
5. Ensuring Scalability & Flexibility
· Scalable Solutions: Choose IS that grow with the business (e.g., cloud-based platforms).
· Adaptive Architecture: Opt for modular systems that can quickly adjust to market shifts.
6. Meeting Compliance & Ethical Standards
· Regulatory Alignment: Ensure IS comply with industry regulations (e.g., GDPR for data privacy).· Ethical Integration: Align IS choices with corporate values (e.g., AI systems with built-in bias checks).
7. Leveraging Emerging Technologies
· Tech Adoption: Prioritize IS that incorporate AI, IoT, or blockchain for future-proofing.
· Digital Transformation: Use IS as enablers for transitioning to agile, digital-first operations.
8. Optimizing Resource Allocation
· Investment Focus: Allocate resources to IS with the highest ROI (e.g., ERP for cost savings).
· Talent Utilization: Ensure the team has the skills to maximize IS potential (e.g., upskilling in cloud tech).
9. Managing Risks
· Threat Mitigation: Use IS to identify and counter risks (e.g., cybersecurity tools for threat detection).
· Resilience Building: Choose IS that enhance operational stability during market volatility.
1.Alignment with Strategic Objectives
2.Competitive Advantage, systems are selected to create or sustain a competitive edge.
3.Resource Allocation Priorities, strategic priorities dictate budget and talent allocation.
4.Adaptation to Market Dynamics, strategies responding to market shifts require agile IS.
5.Organizational Structure and Processes, decentralized vs. centralized strategies influence IS design.
6.Regulatory and Environmental Factors, compliance-driven strategies shape IS requirements.
7.Long-Term vs. Short-Term Focus. Long-term strategies may invest in scalable, future-proof systems. Short-term goals might favor off-the-shelf solutions or outsourcing IS development.
Strategy shapes the choice of information systems by aligning them with the company’s goals, priorities, and competitive needs. It determines which systems will support key business processes, improve efficiency, or create a competitive advantage.
I think there are four main aspects.
The first aspect is whether the functionality of the information system aligns with the organization’s business objectives. For example, If the organizational goal is to expand into global markets, then a global supply chain system would be chose priority.
The second aspect is whether the functionality of the information system aligns with the organization’s strategy. If the organization adopts a “just-in-time” inventory strategy, then an efficient inventory management system would be chose priority.
The third is the cost-effectiveness of the information system itself. Organizations will prioritize selecting information systems that can bring higher returns while keeping lower costs, based on strategic objectives and risk tolerance.
The fourth is the allocation of resources. Organizations will allocate limited resources to key projects and at the same time choose suitable information systems for these key projects.
1.Clarify business objectives and drive system requirements: “COBIT5” indicates that enterprises aim to create value for stakeholders, and this is translated into specific goals. For example, an enterprise focusing on customer service quality may choose a CRM system. Projects should match business needs. A company expanding into new markets will prioritize information systems for market research, etc.
2.Guide system planning and ensure strategic alignment: “COBIT5” suggests that enterprises need an IT strategy in line with the overall strategy. When planning, consistency with the enterprise strategy and support for business process optimization should be considered. For instance, a cost leadership oriented enterprise may prefer an ERP system. In practice, information system projects must be consistent with the enterprise’s strategic direction.
3.Evaluate project value and screen system solutions: Strategy helps assess the value and feasibility of information system projects. Through the “COBIT5” goals cascade, the contribution of each project to strategic goals can be determined. Enterprises evaluate system solutions based on strategic goals and select the most suitable ones. Innovation oriented enterprises will favor systems with innovative functions and comprehensively assess project costs, benefits, and risks.
4.Affect resource allocation and ensure system implementation: Enterprise strategy determines resource allocation, which impacts information system development and use. “COBIT5” emphasizes resource optimization. Enterprises will prioritize resource allocation to key information system projects. For example, an enterprise focusing on online business expansion will support related systems. Rational resource allocation is crucial for project success, and allocation in line with the strategy can enhance the success rate and ensure information systems support enterprise strategies.
Yujing Gao
A company’s strategy determines its goals and priorities. If it aims for cost – leadership, it may choose systems that optimize operations and cut costs, like automated inventory management. For a differentiation strategy, it might adopt systems enabling unique customer experiences, such as personalized marketing platforms. A focus strategy could lead to specialized systems tailored to a niche market.