An IT Business’ Strategic Capabilities and Resources
To understand an IT business’ strategic capabilities and resources within an organization, we must first familiarize ourselves with the following strategic capabilities definitions of capabilities, resources, and assets within the context of an IT organizational structure. Understanding the nuances between capabilities, resources, and assets is essential to harnessing their use in creating value for your customer.
Understanding Strategic Resources
In general, a resource is categorized as a broad term that encompasses the IT money, people, infrastructure, or anything else that goes into the delivery of an IT Service. A strategic resource can be bought or acquired when given a determined budget. Resources are tangible, and are an asset that can be obtained using monetary funds.
For IT organizations, the following are examples of strategic resources:
- Capital (Financial)
- Tangible Infrastructure
- Essential Information
Service Strategy for Strategic Management
Strategic Capabilities and Strategic Resources Capabilities
Creating Goods or Services
Management & Coordination
Creates a Return
Demand for Goods or Services
Supply of Goods or Services
Customer —> Generated Interest
Understanding Strategic Capabilities
Unlike strategic resources, strategic capabilities are the abilities an organization possesses but are not tangible or easy to purchase with funds. These are the abilities of a person, process, application, organization, configuration item (CI), or an IT service to perform an activity. Strategic capabilities are intangible and can’t be bought.
For IT organizations, the following are examples of strategic capabilities of an organization:
As an example, a company may hire a talented and knowledgeable manager from a larger company. The manager’s skills and knowledge are strategic capabilities within the company.
Now, strategic resources and strategic capabilities go hand in hand. If the company that hired the manager was a fledgling company with little financial resources, thus no strategic resources, then the manager would not be able to use his skill at the full capabilities. Therefore, a company needs sufficient strategic resources to allow their strategic capabilities to thrive and vice versa. A company needs sufficient strategic capabilities to manage, grow, or obtain more strategic resources, in turn strategic resources would lay dormant without strategic capabilities. Without one or the other, the company would not meet its output goals.
Understanding Service Asset
By general definition, the word “asset” is any resource or capability. Anything that contributes to the delivery of a service by a service provider is considered an asset. Although an asset is a broad term, for a service company it identifies what your company has to meet your service delivery goals. Strategic resources and strategic capabilities are both assets when you understand that they both improve service outcomes and delivery. Therefore, a Service Asset is a capability or resource held by a Service Provider.
In the Service Strategy stage, all the following needs to be considered when developing an IT strategy: assets, capabilities, resources, and assets. There must be a sufficient amount of each, because a new service can not successfully launch without an adequate amount of every item.
How do strategic capabilities affect the delivery of services?
Using its strategic capabilities and strategic resources, an organization develops its services to create value for customers. To do this, the grateful capabilities coordinate, utilize, and deploy their strategic resources. The services and goods delivered to customers consume strategic assets. However, if the services and goods add value for customers, this generates money. The money then allows the organization to replenish their assets and, perhaps, grow them.
Strategic Capabilities and Resources in an IT Business: Supply and Demand
Additionally, a supply and demand balance exists between an organization and its customers. When the goods and services offered by an organization sees a high demand, then the organization must have the ability to adapt to the scale of that demand.
As an example, say a mobile operator released a new service for its video game fans which allows for chats during a game. If there’s a significant demand for this option, the operators must meet the required demand otherwise customers will become dissatisfied.
Strategic Capabilities and Resources: Environmental Factors
The last, but not least, is the factor of enterprise environmental factors. Outside influences like competitors, prospects, regulators, unions, and suppliers have an impact on the goods and services an organization puts to market. A competitive market requires an organization to outplay competitors with new or improved goods and services in order to remain viable.
Similarly, regulating authorities can dictate what a company can and cannot do to scale their goods and services to meet demands. Regulations pertaining to employees, health codes, or security requirements, whether local or global, can affect the goods and services brought to market and affect the ability to compete.
The strategic capabilities and strategic resources held by a company directs which goods or services can be successfully launched or deployed. What makes a successful operation? One that provides value to its customer and, thus, results in customer satisfaction. Customer satisfaction draws in new customers, creates repeat sales, and can grow an organization. Taken from a strategic business perspective, new services that add value can be integrated into the marketing plan to attract new customers. For every new service released, the IT service manager must prepare for sufficient strategic capabilities and strategic resources to effectively execute the service as well as maintain existing ones.
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