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Strategic Integration
Strategic Integration is a process that addresses the business-strategic impact of technology on organizational processes. That is to say, the business-strategic impact of technology requires immediate organizational responses and in some instances zero latency. Strategic Integration therefore recognizes the need to scale resources across traditional business-geographic boundaries, to redefine the value chain in the life cycle of a product or service line and generally to foster more agile business processes (Murphy 2002). Strategic Integration, then, is a way to address the changing requirements of business processes caused by the sharp increases in uses of technology. Evolving technologies have become catalysts for competitive initiatives that create new and different ways to determine successful business investment. Thus, there is a dynamic business variable that drives the need for technology infrastructures capable of greater flexibility and of exhibiting greater integration with all business operations.
Historically, organizational experiences with IT investment have resulted in two phases of measured returns. The first phase often shows negative or declining productivity as a result of the investment; in the second phase we often see a lagging of, though eventual return to, productivity. The lack of returns in the first phase has been attributed to the nature of the early stages of technology exploration and experimentation, which tend to slowdown the process of organizational adaptation to technology. The production phase then lags behind the organization's ability to integrate new technologies with its existing processes. Another complication posed by Technological Dynamism via the process of Strategic Integration is a phenomenon we can call "factors of multiplicity"-essentially what happens when several new technology opportunities overlap and create a myriad of projects that are in various phases of their developmental life cycle. Furthermore, the problem is compounded by lagging returns in productivity, which are complicated to track and to represent to management. Thus it is important that organizations find ways to shorten the period between investment and technology's effective deployment. Murphy (2002) identifies several factors that are critical to bridging this delta:
1. Identifying and establishing methodologies for processes that can provide acceptable business returns
2. Finding ways to actually perform and realize expected benefits
3. Integrating IT projects with other projects
4. Adjusting project objectives when changes in the business require them.
Technology complicates these actions, making them more difficult to resolve—hence the need to manage the complications. To address these compounded concerns, strategic integration can shorten life-cycle maturation by focusing on the integrating factors below:
- Addressing the weaknesses in management organizations in terms of how to deal with new technologies and how to better realize business benefits.
- Providing a mechanism that both enables organizations to deal with accelerated change caused by technological innovations and that integrates them into a new cycle of processing and handling change.
- Providing a strategic learning framework whereby every new technology variable adds to organizational knowledge.
- Establishing an integrated approach that ties technology accountability to other measurable outcomes using organizational learning techniques and theories.
In order to realize these objectives, organizations must be able to:
- Create dynamic internal processes that can function on a daily basis to deal with understanding the potential fit of new technologies and its overall value to the business
- Provide the discourse to bridge the gaps between IT and non-IT related investments and uses into an integrated system
- Monitor investments and determine modifications to the life cycle
- Implement various organizational learning practices including Learning Organization, Knowledge Management, Change Management, and Communities of Practice, all of which help foster strategic thinking and learning that can be linked to performance (Gephardt and Marsick 2003).
Another important aspect of Strategic Integration is what Murphy (2002) calls "consequential interoperability," in which "the consequences of a business process" are understood to "dynamically trigger integration" (p. 31). This integration occurs in what he calls the Five Pillars of Benefits Realization:
1. Strategic Alignment: the alignment of IT strategically with business goals and objectives.
2. Business Process Impact: the impact on the need for the organization to redesign business processes and integrate them with new technologies.
3. Architecture: the actual technological integration of applications, databases and networks to facilitate and support implementation.
4. Payback: the basis for computing ROI from both direct and indirect perspectives.
5. Risk: identifying the exposure for underachievement or failure in the technology investment.
Murphy's Pillars are useful in helping us understanding how technology can engender the need for Responsive Organizational Dynamism (ROD), especially as it bears on issues of Strategic Integration. They also help us understand what becomes the Strategic-Integration component of ROD. His theory on strategic alignment and business-process impact supports the notion that IT will increasingly serve as an under girding force, one that will drive enterprise growth by identifying the initiators (such as e-business on the Internet) that best fits business goals. Many of these initiators will be accelerated by the growing use of e-business, which becomes the very driver of many new market realignments. This e-business realignment will require the ongoing involvement of executives, business managers, and IT managers.
The combination of evolving business drivers with accelerated and changing customer demands has created a business revolution that best defines the imperative of the Strategic-Integration component of ROD. The changing and accelerated way businesses deal with their customers and vendors requires a new Strategic Integration to become a reality, rather than remain a concept given discussion to but affecting little action. Without action directed toward new Strategic Integration, organizations would lose competitive advantage, which would ultimately affect profits. Most experts see e-business as the mechanism that will ultimately require the integrated business processes to be realigned, thus providing value to customers and modifying the customer/vendor relationship. The driving force behind this realignment emanates from the Internet, which serves as the principle accelerator of the change in transactions across all businesses. The general need to optimize resources forces organizations to rethink and to realign business processes in order to gain access to new business markets.
Summary
Strategic Integration represents the objective of dealing with emerging technologies on a regular basis. It is an outcome of Responsive Organizational Dynamism, and it requires organizations to deal with a variable that forces acceleration of decisions in an unpredictable fashion. Strategic Integration would require businesses to realign the ways in which they include technology in strategic decision making.
My next issue of The Langer Report will cover the Cultural Assimilation component of ROD—stay tuned!!
References:
Murphy, T. (2002). Achieving Business Practice from Technology: A Practical Guide for Today's Executive. New York: John Wiley.
Gephardt, M. A. and Marsick, V.J. (2003) 'Introduction to Special Issue on Action Research: Building the Capacity for Learning and Change', Human Resource Planning, 26, 2, June 2003
Columbia University's Dr. Arthur M. Langer is Senior Director of Technology, Innovation and Community Engagement, Fu Foundation School of Engineering and Applied Science; Associate Director, Instruction and Curricular Development, School of Continuing Education; and a faculty member in the Graduate School of Education (Teachers College) and Continuing Education. He also is a member of the CIOZone's advisory board.
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