 Hello and welcome to this session in which we will discuss the role of information technology ITs in business strategies Now information technology is the main Backbone of all businesses because all businesses are online all business and all businesses need computers to function all businesses They will need some sort of an e-commerce at least a website a web page. Maybe a key come e-commerce Website so the process over the years has been evolving and evolving rapidly The process is called digitization. It's the process of converting analog information such as images sounds taxed Anything into a digital data that can be processed store and transmitted by computers and as a result You will need IT and once it's on the computer. It's basically on the internet also this process involve Automating manual business processes into automated online system So the IT is here to stay the IT is an integral part of any business strategy What we're gonna be discussing in this session is what what problems we could have with it Because you know aligning IT with business is a good thing But what issues we could have that's gonna break this this synergy not make this energy as good as possible and a lot Of examples of IT digitization or the digitization of everything books magazine newspaper Camera smartphones and other devices captures capture store images and videos Digitization of financial transaction online banking mobile payment the use of sensors digital sensors GPS wearable devices to collect data digitization of medical record Digitization of the retail enabling online shopping and delivery services there's endless amount of examples everything is online So IT plays a major role, but we're gonna identify three problems that could potentially arise as a result of IT and business Strategies before we proceed any further. 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No credit card required One you could have no strategic focus or no goal alignment The second problem could be no strategic investment lack of big picture Three is an adequate scope and agility or flexibility, which is the technology solution is inadequate We're gonna discuss each one of these problems basically what not to do when it comes to IT and business Strategies the first is lack of strategic focus now many IT investments are initiated by business unit Well, because it's a company might be might be might have many business units. Okay, and maybe one one unit wants to initiate some sort of a Initiative IT initiative, but the problem is this IT initiative may not a jive with the overall company For example, a retail company might have business unit each responsible for different aspect of the business marketing finance operation One of the units identify a need for a new e-commerce platform For example, we want to have an e-commerce platform that allow customers to bid on our product and decide to invest in its development That's fine. It's it's an IT project However, the company overall don't want to get into this business business of offering a platform where Customers can bid on prices because they don't want to get into this business. That's not their strategies They want to enter the new market Through e-commerce, but not through that platform because it does not align with their broader strategy Okay, as a result the investment may not fully support the company's overall objective now an example of this in the real world I mean could be is Facebook which is now the company is called Mera the old company of Facebook They're investing in Mera and all the investors are saying well Mera is not really it's not aligned with your business Strategies although Mera is becoming a huge huge investment of Facebook. They have invested over 20 billion dollar in this strategy So far again I emphasize the word so far because you could be viewing this recording a few years later where meta is a big thing But so far investors don't like it. They think it's a lack of strategic focus Another reason it could be lack of strategic investment Which is the lack of investment in technologies or processes that can help an organization achieve its goal Now you're just lacking. You are not making any strategic investment at least met Facebook is trying Mera But now you're not you're not really doing things. Okay, due to the bottom up approach There may be excessive focus on existing business operation and insufficient attention to innovative technology that could shape the future of a business Here you are missing the whole thing You're not making investment because you are missing the big picture and this could happen Because you're focusing on your existing business operation. You're not looking outside the box For example a telecommunication company that maintain and improve existing network and infrastructure That's their job But the increasing demand of high speed internet and the rise of new technologies The company may be overlooking the potential benefit of investing in the next generation network technologies Now all what they're doing is they're maintaining the the system But maybe they need to invest in their own technology to kind of basically keep up with the 5g That could benefit them. Well, if they don't make the investment the lack of strategic investment Could result in the companies being left behind because they're only They're only they're only servicing the current the current technology and in a competitive market This could your limit your ability to grow and evolve And customers will not need your service and you become ineffective and the competition will be ahead of you So this is where you are lacking the strategic investment. You are not looking at the big picture What should I add to my portfolio and the prior and on the prior and the prior problem was you selected the wrong thing Now you're not selecting anything The third issue could be inefficient scope and flexibility Well, it investment are taken by business unit that might have limited vision limited scope And unable to adapt to changing business need because one unit within the company may not see the big picture So they might develop some sort of a software some sort of an application That's good enough for them But not good enough for the whole company and not good enough even for them if it when it comes to scaling So an example will be a financial services company have multiple business unit Each responsible for different areas of the business One of the business units decided to invest in a new customer relationship management crm To improve customer interaction. That's fine. That's a good idea However, because the investment was made at the business unit not the whole company unit Not the whole corporate unit the scope of the project might be limited as a result This crm system may not be able to accommodate changing business needs As the company grows and expand into new market. So that that's the problem So we did find the solution the solution is good But good on this business unit level not the corporate not the corporate level So the system may lack flexibility to adapt to new technologies. That could be the case And customer preferences which could eventually impact the company's competitiveness as customer satisfaction, which is not good So this is the third problem on the CPA exam. You might see questions like this Alex build an excel sheet To keep track of customer inquiries and questions the business grew at a rapid pace and the spreadsheet became unmanageable and complex What is an illustration of this problem? Well, is it lack of strategic focus? No, not at all Alex saw a need and what Alex did is Find a solution a temporary solution Which is a solution as far as Alex concerned, which is building an excel sheet to keep track of this So there's no strategic focus. There was a need of some sort of a system So the use of excel sheet to track customer was effective when the business was small and manageable However, as the business grew Well, we can't keep we can't use the same system. The system is not useful at a larger level Okay. Now again, here we said Alex build a system. We could have also bought a system Right and spend more money on this also Alex spent time on this project. So we did spend resources For a simple solution, but not that's not what we really needed. Did we lack strategic investment? Are we lacking strategic investment here? We are strategic investment Is the lack of investment in technologies or processing that calendar organization achieve its goal? Well, this is not a lack of strategic investment in a solution But rather an adequate solution of the chosen problem to scale. So yes, we did find the solution We have a solution, but it's not large enough to scale Is it an adequate scope and scalability? I would say yes So initially the the problem is solved. Maybe we had 10 to 15 20 inquiries per day But as we had 100 200 That the problem did not the the excel sheet did not serve the problem Maybe we need a crm a customer relationship management software that could solve this problem But the excel sheet is not good enough So this is what we mean by inadequate scope and scalability There is a solution the solution is small, but not good enough as we grow What should you do now go to far hat lectures? Look at additional mcqs That's going to help you understand these concepts whether you are a cpa candidate a cma candidate Studying for your accounting information system or taking any professional certification It's important that you don't only understand practice what you understand So you will be good to go and ready for the exam. They invest in yourself invest in your career. Good luck study hard and stay safe