A Method for Aligning It Strategy to Service Customer Value Creation

All firms including manufacturing firms are becoming service centered, focused on the customer. Service centered firms co-create value with their customers through the dynamic configuration of their people, processes, and systems, known collectively as organizational capabilities. The core of these capabilities is knowledge, which is underpinned by information technology. This book explores the relationships of the service firm's knowledge, capabilities, IT, and strategy in its quest for superior value co-creation with customers. It analyzes and explains the principles of service, knowledge, and organizational capabilities , and describes the methodologies for crafting and executing a successful business-aligned IT strategy—an integrated end-to-end process from business strategy to customer value delivery. The book explains the ways by which IT strategy formulation and management practices of a technology-enabled service enterprise are used to shape the firm's knowledge organizations and the attendant dynamic capabilities , and to facilitate service innovation and superior customer value co-creation. Summaries of selective case examples are drawn from the literature to illustrate how these basic principles of service innovation and strategic alignment management are applied in practice. It concludes by a real-life case example of an organization to illustrate the direct link and positive contribution of knowledge management to service innovation. Information technology is a means to the business end. IT is a tool designed to perform a business task within an overall business context. A service-oriented firm is successful when its customer value proposition is always aligned with the customer's evolving needs. Thus, IT creates value only when it contributes directly or indirectly to value co-creation with the service-oriented firm's customers. A successful IT strategy must therefore align with the business and its service strategies, fully, from strategy setting, planning to detailed programs execution and delivery. The goal of IT strategy is to help business create and implement the unique customer value proposition. An effective IT strategy therefore starts with an in-depth understanding of the firm's business, mission, vision, strategic goals, and positioning in the competitive market environment. It must analyze the firm's business and service models, value configuration and core business processes required for differentiation. Naturally, IT organizations should also possess in-depth knowledge of the ways by which IT is embedded in the firm's differentiating, and dynamic organizational capabilities, which underpin the firm's competitive advantage. From these insights the business-aligned service and IT strategies are developed, together with the requisite future target enterprise and technology architectures. The target …