Joe Peppard and John Ward present a structured framework with tools, techniques and ways of thinking which provide a practical approach to building a digital strategy, expressed primarily in the language of business and management. This approach can be used by executives, managers and IS/IT professionals, working together, to combine their experience and skills to identify what can and needs to be done and how best to do it, so that IS/IT is managed strategically.

• Preface to the Fourth Edition ixAbout the Authors xvii1 The Evolving Role of Information Systems and Technology in Organizations: A Strategic Perspective 1Information Systems (IS), Information Technology (IT) and ‘Digital’ 2‘Digital Disruption’: The Impact of IS/IT 7A Three‐era Model of Evolving IT Application in Organizations 15A Classification of the Strategic Uses of IS/IT 17Success Factors in Strategic Information Systems 25A Portfolio Management Perspective on IS/IT Investments 27What Is an IS/IT or Digital Strategy? 29From Strategic Alignment to Strategy Co‐evolution 35Digital Strategies for the 21st Century: Building a Dynamic Capability to Leverage IS/IT 39Summary 43Endnotes 442 An Overview of Strategic Management and the IS/IT Strategy Implications 49The Evolving Nature of Strategic Management in Organizations 50Scope of Strategy Development 54A Framework for Strategy Formulation 55Where to Compete 57How to Gain an Advantage 60What Assets do We Have? What Assets are Required? 77How to Change – the Need for Dynamic Capabilities 81Strategy Implementation 82Summary 83Endnotes 843 Establishing an Effective Process for Developing Information Systems and Technology (or Digital) Strategies 87Some Definitional Clarity 88The Evolution of the IS/IT Strategy Process: From Technology Deployment to Strategic Focus 89The Business Context for Developing and Managing the Strategy 94Establishing an Effective Process: Continuous and Flexible 97Setting the Scope for the Strategy 104A Framework for IS/IT Strategy Formulation 108Other Deliverables from the IS/IT Strategy Process 119Summary 122Endnotes 1234 IS/IT Strategic Analysis: Achieving Alignment with Business Operations and Strategy 125Understanding the Current Situation 126The Business Operating Model: Processes, Activities and Key Entities 130Organizational Environment 136Examining the Existing IS/IT Environment 139Information and Systems to Meet Current Business Objectives: the Use of Balanced Scorecards and Critical Success Factors 146Process Analysis 153Redesigning Processes 158Evaluating the Gap between Existing and Required IS/IT Environments 161Summary 162Endnotes 1635 Innovating with Technology, Systems and Information 165Understanding What It Means to Innovate with IT 166The Process of Digital Business Innovation 168The ‘push’ and ‘pull’ of Innovating with IS/IT 173Getting Management Attention for Ideas and Innovations 177Joining the Dots: the Search for Ideas 180Innovating by Leveraging Information: Exploration and Exploitation 184The Big Data Challenge 188Discovering Strategic IS/IT Opportunities from Information 191Building an Analytic Capability 198Summary 201Endnotes 2026 Exploiting Information Systems for Strategic Advantage 207Achieving and Sustaining Advantages across the Value Disciplines 208Exploring New Value Propositions: Informating Products and Services 210Analysis of Competitive Forces to Identify IS/IT Opportunities and Threats 216Value Chain Analysis 220Customer Life‐cycle Management and the Value Chain 228From Value Chain to Value Network 235The Internal Value Chain 239The Uses of Value Chain Analysis 244Summary 247Endnotes 2487 Determining the Business Information Systems Strategy 251Business Strategy and IS/IT 252Tools for IS/IT Strategy Formulation and Their Relationships 256A Framework for Using the Tools and Techniques Effectively 258Identifying how IS/IT Could Impact the Business Strategy 260Establishing the Relative Priorities for IS/IT Investments 265Large Organizations, Multiple SBUs and Strategy Consolidation 270Summary 272Endnote 2728 Managing the Portfolio of Business Applications 273Conclusions from Various Portfolio Models 275Classifying the Applications in the Portfolio 277Reconciling Demand and Supply Issues in the Portfolio 280Generic Application Management Strategies 282Portfolio Management Principles Applied to the Application Portfolio 291Aligning Development Approaches to the Portfolio Segments 298The ‘Special Case’ of Enterprise Systems 304Managing Application Portfolios in Multi‐unit Organizations 306Summary 309Endnotes 3099 Justifying and Managing Information Systems and Technology Investments 311Investment and Priority Setting Policies 313Justifying and Evaluating IS/IT Investments 314Justifying Business Applications 322Justifying Infrastructure Investments 326Assessing and Managing Investment Risks 332Managing the Portfolio of Investments 336Setting Priorities amongst IS/IT Investments 338Organizational IS/IT Portfolio and Investment Management Maturities 344Summary 349Endnotes 35010 An Organizing Framework for the Strategic Management of IS/IT 353The Strategic Management Requirement 354Positioning and Managing IS/IT in an Organization 356From a Functional View of IS/IT to an Organization‐wide Perspective – Capability and Competences 359IS/IT Governance and Why It is Important 366What Decisions Need to be Governed? 371Creating the Organizing Framework for IS/IT Decision Making 374Instruments of Governance 375Summary 391Endnotes 39211 Strategic Management of IS/IT Services and IT Infrastructure 395Creating and Sustaining Business Change: Projects and Services 396The Need for the Strategic Management of IS/IT Services and IT Infrastructure 397IS/IT Service Categories 400Managing Operational and Value‐enabling Services 410Strategies for Managing IT Infrastructure and Infrastructure Services 414Understanding and Managing IT Risks 420Sourcing of IS/IT Resources and Services 423Business Process Outsourcing 434Innovation and Outsourcing 436Back‐sourcing and Switching Suppliers 438Summary 440Endnotes 44112 The Strategic Management of Information Systems: Quo Vadis? 445The Evolution of IS/IT Strategy in Theory and Practice 447A Brief Résumé of some Core Ideas 452Building an IS/IT or Digital Capability 455From Creating IS/IT Assets to Improving Organizational Performance: Joining the Means to the Ends 458Achieving Alignment: a Multi‐themed Perspective 459The Co‐evolution of Business and Digital Strategies 463The Opportunity for CIOs to Have a Key Strategic Role 466Conclusion 468Endnotes 469Index 475

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Joe Peppard and John Ward present a structured framework with tools, techniques and ways of thinking which provide a practical approach to building a digital strategy, expressed primarily in the language of business and management. This approach can be used by executives, managers and IS/IT professionals, working together, to combine their experience and skills to identify what can and needs to be done and how best to do it, so that IS/IT is managed strategically.

• Preface to the Fourth Edition ixAbout the Authors xvii1 The Evolving Role of Information Systems and Technology in Organizations: A Strategic Perspective 1Information Systems (IS), Information Technology (IT) and ‘Digital’ 2‘Digital Disruption’: The Impact of IS/IT 7A Three‐era Model of Evolving IT Application in Organizations 15A Classification of the Strategic Uses of IS/IT 17Success Factors in Strategic Information Systems 25A Portfolio Management Perspective on IS/IT Investments 27What Is an IS/IT or Digital Strategy? 29From Strategic Alignment to Strategy Co‐evolution 35Digital Strategies for the 21st Century: Building a Dynamic Capability to Leverage IS/IT 39Summary 43Endnotes 442 An Overview of Strategic Management and the IS/IT Strategy Implications 49The Evolving Nature of Strategic Management in Organizations 50Scope of Strategy Development 54A Framework for Strategy Formulation 55Where to Compete 57How to Gain an Advantage 60What Assets do We Have? What Assets are Required? 77How to Change – the Need for Dynamic Capabilities 81Strategy Implementation 82Summary 83Endnotes 843 Establishing an Effective Process for Developing Information Systems and Technology (or Digital) Strategies 87Some Definitional Clarity 88The Evolution of the IS/IT Strategy Process: From Technology Deployment to Strategic Focus 89The Business Context for Developing and Managing the Strategy 94Establishing an Effective Process: Continuous and Flexible 97Setting the Scope for the Strategy 104A Framework for IS/IT Strategy Formulation 108Other Deliverables from the IS/IT Strategy Process 119Summary 122Endnotes 1234 IS/IT Strategic Analysis: Achieving Alignment with Business Operations and Strategy 125Understanding the Current Situation 126The Business Operating Model: Processes, Activities and Key Entities 130Organizational Environment 136Examining the Existing IS/IT Environment 139Information and Systems to Meet Current Business Objectives: the Use of Balanced Scorecards and Critical Success Factors 146Process Analysis 153Redesigning Processes 158Evaluating the Gap between Existing and Required IS/IT Environments 161Summary 162Endnotes 1635 Innovating with Technology, Systems and Information 165Understanding What It Means to Innovate with IT 166The Process of Digital Business Innovation 168The ‘push’ and ‘pull’ of Innovating with IS/IT 173Getting Management Attention for Ideas and Innovations 177Joining the Dots: the Search for Ideas 180Innovating by Leveraging Information: Exploration and Exploitation 184The Big Data Challenge 188Discovering Strategic IS/IT Opportunities from Information 191Building an Analytic Capability 198Summary 201Endnotes 2026 Exploiting Information Systems for Strategic Advantage 207Achieving and Sustaining Advantages across the Value Disciplines 208Exploring New Value Propositions: Informating Products and Services 210Analysis of Competitive Forces to Identify IS/IT Opportunities and Threats 216Value Chain Analysis 220Customer Life‐cycle Management and the Value Chain 228From Value Chain to Value Network 235The Internal Value Chain 239The Uses of Value Chain Analysis 244Summary 247Endnotes 2487 Determining the Business Information Systems Strategy 251Business Strategy and IS/IT 252Tools for IS/IT Strategy Formulation and Their Relationships 256A Framework for Using the Tools and Techniques Effectively 258Identifying how IS/IT Could Impact the Business Strategy 260Establishing the Relative Priorities for IS/IT Investments 265Large Organizations, Multiple SBUs and Strategy Consolidation 270Summary 272Endnote 2728 Managing the Portfolio of Business Applications 273Conclusions from Various Portfolio Models 275Classifying the Applications in the Portfolio 277Reconciling Demand and Supply Issues in the Portfolio 280Generic Application Management Strategies 282Portfolio Management Principles Applied to the Application Portfolio 291Aligning Development Approaches to the Portfolio Segments 298The ‘Special Case’ of Enterprise Systems 304Managing Application Portfolios in Multi‐unit Organizations 306Summary 309Endnotes 3099 Justifying and Managing Information Systems and Technology Investments 311Investment and Priority Setting Policies 313Justifying and Evaluating IS/IT Investments 314Justifying Business Applications 322Justifying Infrastructure Investments 326Assessing and Managing Investment Risks 332Managing the Portfolio of Investments 336Setting Priorities amongst IS/IT Investments 338Organizational IS/IT Portfolio and Investment Management Maturities 344Summary 349Endnotes 35010 An Organizing Framework for the Strategic Management of IS/IT 353The Strategic Management Requirement 354Positioning and Managing IS/IT in an Organization 356From a Functional View of IS/IT to an Organization‐wide Perspective – Capability and Competences 359IS/IT Governance and Why It is Important 366What Decisions Need to be Governed? 371Creating the Organizing Framework for IS/IT Decision Making 374Instruments of Governance 375Summary 391Endnotes 39211 Strategic Management of IS/IT Services and IT Infrastructure 395Creating and Sustaining Business Change: Projects and Services 396The Need for the Strategic Management of IS/IT Services and IT Infrastructure 397IS/IT Service Categories 400Managing Operational and Value‐enabling Services 410Strategies for Managing IT Infrastructure and Infrastructure Services 414Understanding and Managing IT Risks 420Sourcing of IS/IT Resources and Services 423Business Process Outsourcing 434Innovation and Outsourcing 436Back‐sourcing and Switching Suppliers 438Summary 440Endnotes 44112 The Strategic Management of Information Systems: Quo Vadis? 445The Evolution of IS/IT Strategy in Theory and Practice 447A Brief Résumé of some Core Ideas 452Building an IS/IT or Digital Capability 455From Creating IS/IT Assets to Improving Organizational Performance: Joining the Means to the Ends 458Achieving Alignment: a Multi‐themed Perspective 459The Co‐evolution of Business and Digital Strategies 463The Opportunity for CIOs to Have a Key Strategic Role 466Conclusion 468Endnotes 469Index 475

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Joe Peppard and John Ward present a structured framework with tools, techniques and ways of thinking which provide a practical approach to building a digital strategy, expressed primarily in the language of business and management. This approach can be used by executives, managers and IS/IT professionals, working together, to combine their experience and skills to identify what can and needs to be done and how best to do it, so that IS/IT is managed strategically.

• Preface to the Fourth Edition ixAbout the Authors xvii1 The Evolving Role of Information Systems and Technology in Organizations: A Strategic Perspective 1Information Systems (IS), Information Technology (IT) and ‘Digital’ 2‘Digital Disruption’: The Impact of IS/IT 7A Three‐era Model of Evolving IT Application in Organizations 15A Classification of the Strategic Uses of IS/IT 17Success Factors in Strategic Information Systems 25A Portfolio Management Perspective on IS/IT Investments 27What Is an IS/IT or Digital Strategy? 29From Strategic Alignment to Strategy Co‐evolution 35Digital Strategies for the 21st Century: Building a Dynamic Capability to Leverage IS/IT 39Summary 43Endnotes 442 An Overview of Strategic Management and the IS/IT Strategy Implications 49The Evolving Nature of Strategic Management in Organizations 50Scope of Strategy Development 54A Framework for Strategy Formulation 55Where to Compete 57How to Gain an Advantage 60What Assets do We Have? What Assets are Required? 77How to Change – the Need for Dynamic Capabilities 81Strategy Implementation 82Summary 83Endnotes 843 Establishing an Effective Process for Developing Information Systems and Technology (or Digital) Strategies 87Some Definitional Clarity 88The Evolution of the IS/IT Strategy Process: From Technology Deployment to Strategic Focus 89The Business Context for Developing and Managing the Strategy 94Establishing an Effective Process: Continuous and Flexible 97Setting the Scope for the Strategy 104A Framework for IS/IT Strategy Formulation 108Other Deliverables from the IS/IT Strategy Process 119Summary 122Endnotes 1234 IS/IT Strategic Analysis: Achieving Alignment with Business Operations and Strategy 125Understanding the Current Situation 126The Business Operating Model: Processes, Activities and Key Entities 130Organizational Environment 136Examining the Existing IS/IT Environment 139Information and Systems to Meet Current Business Objectives: the Use of Balanced Scorecards and Critical Success Factors 146Process Analysis 153Redesigning Processes 158Evaluating the Gap between Existing and Required IS/IT Environments 161Summary 162Endnotes 1635 Innovating with Technology, Systems and Information 165Understanding What It Means to Innovate with IT 166The Process of Digital Business Innovation 168The ‘push’ and ‘pull’ of Innovating with IS/IT 173Getting Management Attention for Ideas and Innovations 177Joining the Dots: the Search for Ideas 180Innovating by Leveraging Information: Exploration and Exploitation 184The Big Data Challenge 188Discovering Strategic IS/IT Opportunities from Information 191Building an Analytic Capability 198Summary 201Endnotes 2026 Exploiting Information Systems for Strategic Advantage 207Achieving and Sustaining Advantages across the Value Disciplines 208Exploring New Value Propositions: Informating Products and Services 210Analysis of Competitive Forces to Identify IS/IT Opportunities and Threats 216Value Chain Analysis 220Customer Life‐cycle Management and the Value Chain 228From Value Chain to Value Network 235The Internal Value Chain 239The Uses of Value Chain Analysis 244Summary 247Endnotes 2487 Determining the Business Information Systems Strategy 251Business Strategy and IS/IT 252Tools for IS/IT Strategy Formulation and Their Relationships 256A Framework for Using the Tools and Techniques Effectively 258Identifying how IS/IT Could Impact the Business Strategy 260Establishing the Relative Priorities for IS/IT Investments 265Large Organizations, Multiple SBUs and Strategy Consolidation 270Summary 272Endnote 2728 Managing the Portfolio of Business Applications 273Conclusions from Various Portfolio Models 275Classifying the Applications in the Portfolio 277Reconciling Demand and Supply Issues in the Portfolio 280Generic Application Management Strategies 282Portfolio Management Principles Applied to the Application Portfolio 291Aligning Development Approaches to the Portfolio Segments 298The ‘Special Case’ of Enterprise Systems 304Managing Application Portfolios in Multi‐unit Organizations 306Summary 309Endnotes 3099 Justifying and Managing Information Systems and Technology Investments 311Investment and Priority Setting Policies 313Justifying and Evaluating IS/IT Investments 314Justifying Business Applications 322Justifying Infrastructure Investments 326Assessing and Managing Investment Risks 332Managing the Portfolio of Investments 336Setting Priorities amongst IS/IT Investments 338Organizational IS/IT Portfolio and Investment Management Maturities 344Summary 349Endnotes 35010 An Organizing Framework for the Strategic Management of IS/IT 353The Strategic Management Requirement 354Positioning and Managing IS/IT in an Organization 356From a Functional View of IS/IT to an Organization‐wide Perspective – Capability and Competences 359IS/IT Governance and Why It is Important 366What Decisions Need to be Governed? 371Creating the Organizing Framework for IS/IT Decision Making 374Instruments of Governance 375Summary 391Endnotes 39211 Strategic Management of IS/IT Services and IT Infrastructure 395Creating and Sustaining Business Change: Projects and Services 396The Need for the Strategic Management of IS/IT Services and IT Infrastructure 397IS/IT Service Categories 400Managing Operational and Value‐enabling Services 410Strategies for Managing IT Infrastructure and Infrastructure Services 414Understanding and Managing IT Risks 420Sourcing of IS/IT Resources and Services 423Business Process Outsourcing 434Innovation and Outsourcing 436Back‐sourcing and Switching Suppliers 438Summary 440Endnotes 44112 The Strategic Management of Information Systems: Quo Vadis? 445The Evolution of IS/IT Strategy in Theory and Practice 447A Brief Résumé of some Core Ideas 452Building an IS/IT or Digital Capability 455From Creating IS/IT Assets to Improving Organizational Performance: Joining the Means to the Ends 458Achieving Alignment: a Multi‐themed Perspective 459The Co‐evolution of Business and Digital Strategies 463The Opportunity for CIOs to Have a Key Strategic Role 466Conclusion 468Endnotes 469Index 475

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