Chapter 2. Understanding the Strategic Context

Before an organization can consider or pursue the development of a particular information system, it is first necessary to understand the relevance of the investment to the three interrelated strategies that should have been defined by the organization. These are the business, the IS and the IT strategies. Only when these strategies have been agreed can it be determined how individual investments contribute to what the organization is trying to achieve. While projects that do not directly contribute to the identified strategy of the organization may well generate useful outcomes, the greatest benefits are likely to arise from projects that enable the organization to achieve its chosen strategy.

The chapter first discusses two different perspectives of business strategy formulation that consider the external or internal environment of the organization and how these different perspectives can be brought together. A number of tools or frameworks that can be used to determine and develop business strategies are then presented. Having described the formulation of a business strategy, consideration is then given to IS and IT strategies. A discussion of the distinctions between business, IS and IT strategies and how these are interrelated is presented. The issue of how organizations can better categorize and understand the mix of IS investments they are currently undertaking and have planned is then discussed by means of a framework termed ...

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