Strategic Planning for IT Business

Information Technology or IT is a byword in business or organizations. A foundational understanding of IT is however essential before the strategic planning task is to begin. Information technology or IT refers to the collective means to assembly and electronically store, transmit, to process and retrieve words, numbers, images, and sounds, as well as to electronic means to control machines of all kinds, from everyday appliances to vast automated factories. This simplified definition according the MIT Center for Information Research is helpful in a better understanding of IT.

The implications of IT in strategic planning and as a strategic weapon are profound. Part of this is the fact that new technology redefines the nature of competition entirely. Since most business or organizations possess an IT backbone and have the means and the control via these tools, strategic plans have to be tailored to maximize the potential of such a backbone or infrastructure.

The modern marketplace calls for the competitive positioning through IT. The general approach that business or organizations have to employ in strategic planning will be any of the following: advance and attack, avoid and stay clear, acquire and seek advantage, alter and transform.

Advance and attack refers to head-to-head competition. It is meeting competitors on a level playing field. Strategic planners seeking competitive positioning and long term advantage must take caution for this may not be effective against strong industry leaders. But laziness, greed, miscalculating customer values and psychology may just be an open door for such kind of strategy. The often-quoted classic example is the transistor, originally invented by Bell Labs but licensed to Sony for a measly US$ 25,000. The rest of course is history; the tube-based radios of Bell proved no match to Sony’s transistor powered radios.

Avoid and Stay Clear

Avoiding and staying clear simply means to go where the competitors refuse to go. Not a particularly macho strategic stance but very viable. The strategic planner must utilize IT to select industries, needs categories and geographical areas where there is far less investment. This strategy may not be as lucrative in the initial stages but in the long term it certainly pays off. The reason is clear. By occupying what is unoccupied territory, one is assured of establishing a strong presence in the future.

Today it is difficult to locate unoccupied territory but they exist somehow in certain market niches, needs categories, and market segments. A psychological approach to identifying needs categories might be helpful. Since man basically is affected by his surroundings, his surroundings somehow create a need that in return creates segments and market niches. Business or organizations may be able to identify such unoccupied territory but must make provision for a rise in competition once others take notice. Industry giants might choice to compete head-to-head and this might be too costly. The strategic planner must take these into consideration.

Despite the difficulties and the accompanying risks, avoiding competition by going elsewhere is a strategy worthy of serious consideration. Toiling alone and undisturbed in an unidentified market niche is such an incentive to work faster and to work longer. It is also an incentive to work in anticipation of the expected returns. Long-term preparation and good resource allocation may be the best tool to prepare, when you go elsewhere. Simply because when the business or organization starts reaping the harvest, the competition comes. Excellent homework by the strategic planner may just be the factor to aid in survival.