Strategi - Alignment

Question 1

Reich & Benbasat / Henderson & Venkatraman

What is alignment

Answer 1

Reich & Benbasat - how IT support and is supported by the business mission.

Henderson & Venkatraman - Fit and integration among business strategy, IT strategy, business infrastructure and IT infrastructure

Question 2

Henderson & Venkatraman

2 perspectives with Business strategy as the driver.

Answer 2

Perspective One: Strategy Execution (Most Common): IT is seen as a tool to implement existing business strategy. IT managers focus on efficiently designing and implementing IT infrastructure to support the chosen business strategy. Performance is measured based on cost efficiency.

Perspective Two: Technology Transformation: This perspective looks for the best IT strategy (considering both internal and external factors) to support a chosen business strategy. IT managers act as technology architects, ensuring the IT infrastructure aligns with the IT vision. Performance is measured based on technology leadership.

Question 3

Henderson & Venkatraman

2 perspectives with IT Strategy as the enabler

Answer 3

Perspective Three: Competitive Potential: This perspective focuses on how IT capabilities can be used to create new business strategies or enhance existing ones. IT managers act as catalysts, identifying trends in the IT environment to inform business strategy. Performance is measured based on business leadership (e.g., market share growth).

Perspective Four: Service Level: This perspective focuses on building a world-class IT service organization that meets the needs of IT users. IT managers act as service-oriented leaders, allocating resources to meet user demands. Performance is measured on customer satisfaction.

Question 4

Wu et al. - Governance impact on alignment - investigates a lot of firms in Taiwan

Define IT Governance Mechanisms and strategic alignment

Answer 4

IT Governance Mechanisms: These are frameworks that ensure IT activities align with organizational goals.

Strategic Alignment: This is when IT strategies and business strategies are well-matched.

Question 5

Wu et al. - Governance impact on alignment - investigates a lot of firms in Taiwan

Key findings for:
- IT governance mechanisms
- Strategic alignment
- Communication
- Performance

Answer 5

IT governance mechanisms (decision-making structures, formal processes, communication approaches) positively influence the intellectual dimension of strategic alignment (alignment of IT strategy with business strategy).

Strategic alignment fully mediates the relationship between IT governance mechanisms and organizational performance. This means that IT governance mechanisms only affect performance through their impact on strategic alignment.

Strong communication between IT and business units is important for achieving strategic alignment.

Customer focus is the most affected performance element by strategic alignment, followed by operational excellence and financial returns.

Question 6

Njanka, S. Q., Sandula, G., & Colomo‐ Palacios, R. (2021). IT‐Business alignment: A systematic literature review

The paper emphasizes that in today’s competitive business world, companies cannot afford to have separate IT and business strategies.

What are some of the benefits?

Answer 6

• Common understanding leads to better communication and collaboration.
• Competitive advantage
• Smoother operations
• Improved performance

This somehow still sees IT as “only” support for the business strategy

Question 7

Njanka, S. Q., Sandula, G., & Colomo‐ Palacios, R. (2021). IT‐Business alignment: A systematic literature review

SAM?

Answer 7

Strategic Alignment Model (SAM): This model focuses on four key areas:
- Business Strategy: The company’s overall goals and direction.
- IT Strategy: How IT will be used to support the business strategy.
- Organizational Infrastructure and Processes: The way the company is structured and how it operates.
- IT Infrastructure and Processes: The technology and processes used to deliver IT services.

SAM emphasizes the importance of achieving a good “strategic fit” between these four areas and strong “functional integration” within each area.

Question 8

Njanka, S. Q., Sandula, G., & Colomo‐ Palacios, R. (2021). IT‐Business alignment: A systematic literature review

SAMM?

Answer 8

Strategic Alignment Maturity Model (SAMM): This model is a tool used to assess the current level of IT-business alignment within an organization. SAMM focuses on six key areas of maturity:
- Communication: How effectively IT and business teams communicate with each other.
- Competency/Value Measurement: How well the organization measures the value and effectiveness of IT.
- Governance: The processes and structures in place to guide IT decision-making.
- Partnership: The strength of the working relationship between IT and business teams.
- Scope and Architecture: How IT systems and architecture are aligned with business needs.
- Skills: The skills and knowledge of IT and business professionals.

SAMM assigns a maturity level (from 1 to 5) to each of these areas, providing a roadmap for improvement.

Question 9

Njanka, S. Q., Sandula, G., & Colomo‐ Palacios, R. (2021). IT‐Business alignment: A systematic literature review

Challenges on the road to alignment?

Answer 9

• Demonstrating IT Value: Sometimes it can be difficult to quantify the exact benefits of IT investments, leading some to question their value.
• Maintaining Alignment Over Time: Keeping IT and business strategies aligned in the long term can be challenging, requiring ongoing communication and adaptation.
• Communication Silos: Ineffective communication between IT and business leaders can create misunderstandings and hinder collaboration.
• Poor IT Governance: If IT is excluded from key decision-making processes, it can lead to misalignment and frustration.
• Skills Gap: The rapid pace of technological change can leave IT professionals and business leaders struggling to keep their skills current.