Enablers And Inhibitors Of Strategic Alignment

Published Date: 02 Nov 2017

1.0 Introduction

Business & IT Alignment is the degree to which the IT applications, infrastructure and organization, the business strategy and processes enables and shapes, as well as the process to realize this. Business-IT alignment refers to applying Information Technology (IT) in an appropriate and timely way, in harmony with business strategies, goals and needs. It is still a fundamental concern of business executives. Information Technology (IT) has become an important enabler of business strategies in such areas of mass customization, competitive differentiation, quality improvements, and process automation and improvement. The alignment of business and IT strategies has been utilized by organizations to create and improve efficiencies, reduce costs, create barriers to entry, improve customer and buyer/supplier relationships, and to create new products and business solutions. Beside that , IT one of the prime enablers of change that has created "a new way of working."Alignment seems to grow in importance as companies strive to link technology and business in light of dynamic business strategies and continuously evolving technologies (Papp, 1995; Luftman, 1996). Information Technology has become key business function for almost every company and this aligning process give greater benefit and less losses to organization ,such as reduce cost , standardize processes, improve workflow and communications, improve risk control mechanism, gain competitive advantage by exploiting new technology , enhance productivity and sustain repeatable service levels . From this benefit it help company to constraints and maintain the sustainability of the company in their industry and increase the systematic of every part of department within the organization. Other definition is Strategic alignment between IT and the business occurs when IT is used to dynamically create and exploit business opportunities. It can be used then to transform business processes and also to create business dislocations in the market place."(Boar: 1994). Alignment exist when , there are Information capabilities that support the business capabilities that are needed to execute the business strategy and there are the flexibility to accommodate business strategy changes . Other that IT investments are justified by the business on the basis of benefit from the business transformations that they enable and the directional aspects (principles , policies , standards and architecture of IT strategy are driven by the business strategy. This alignment degree to which these occurs depends on maturity of the organization in the practices involved.

2.0 Objective

To present and discuss an approach to alignment of IT and business strategies, that addresses the following questions:

What is alignment ?

Why Alignment Is Important

What does it mean to align IT strategy and business strategy?

Why must IT align with Business strategies?

How can organizations manage business-IT strategic alignment?

3.0 BODY OF ARTICLES

Alignment of IT strategy with the organization's business strategy creates new roles for IT and business leader and staff .For example there four critical roles in the arena include political and cultural negotiators , business problem solvers , project sellers(including the ability to identify and explain cost or benefit of IT offering and interpersonal and cross-functional communicator (Anon.2005). IT investment has been increasing for years as managers are looking for ways to manage IT successfully and to integrate it into the organization's strategies. As a result, IT managers need to (Rockart et. al, 1996):

Knowledgeable about how the new IT technologies can be integrated into the business as well as among the different technologies and architectures

Privy to senior management's tactical and strategic plans

Present when corporate strategies are discussed, and

Understand the strengths and weaknesses of the technologies in question and the corporate-wide implications

This will related The maturity assessment applies the previous research that identified enablers and inhibitors to achieving alignment strategies:

ENABLERS

INHIBITORS

Senior executive support for IT

IT/business lack close relationships

IT involved in strategy development

IT does not prioritize well

IT understands the business

IT fails to meet commitments

Business - IT partnership

IT does not understand business

Well-prioritized IT projects

Senior executives do not support IT

IT demonstrates leadership

IT management lacks leadership

Table 1. Enablers and Inhibitors of Strategic Alignment

What is striking about Table 1 is that the same topics (executive support, understanding the business, IT-business relations, and leadership) show up as both enablers and inhibitors. Achieving and sustaining alignment demands focusing on maximizing the enablers and minimizing the inhibitors that cultivate alignment.

Alignment continues in importance today as companies strive to link technology and business (Papp, 1995, Luftman, 1996, Luftman & Brier, 1999). Alignment addresses both

doing the right things (effectiveness), and

doing things right (efficiency).

There are ten point plan for aligning IT with business strategy which continuous and iterative process which enable organization to identify the value chain of plan. (Collin Beveridge 2006).

1. Understand the business - On this step the organization identify and document all of organization business processes , formal and informal type.

2. Acknowledge the culture - analyze the structure , ethos and nature of the organization itself.

3. Know the IT estate - Identify and document IT assets , applications and delivery channels.

4. Discover the Value chains - Identify and document the relationship / touch points between the business and the IT estate

5. Interpret the context - Gather and collate intelligence about influential factors , internal and external

6. Determine the change agenda - Analyze the context , the business strategy and influential factors , identify impacts and implication for the IT estate

7. Chart the technology roadmap - Priorities , time-line and optimize the charge agenda

8.Plan the work programmed- Translate the technology road-map into business units pans

9.Populate the delivery framework - Resource the programmed

10. Achieve the business benefit - Implement the delivery framework

The Strategic Alignment Model (SAM) can be defined as a business-IT management framework to enable successful implementation of business and Information Systems/Information Technology (IS/IT) and their corresponding infrastructure components (Henderson and Venkatraman, 1991 & 1993; Luftman et al. 1993)

Figure (2) The research model

The research model in this study shown in Figure 2 identifies the relationship of the external components of the SAM model that involves achieving strategic alignment between business strategy and IT strategy. The strategic alignment in this model refers to the strategic harmony that can translate the deployment of IT into an actual increase in business performance.

Business strategy

The business strategy refers to a detailed plan of an organization for achieving success in business.

Business scope

Business scope refers to the organization’s business and everything that might affect the business activities and progress. It includes the markets, products, services, groups of customers/clients, and the locations where an enterprise competes as well as the business buyers, competitors, suppliers, and potential competitors that affect the business environment.

Business competencies

Business competencies refer to all attributes of business strategy that contribute to a distinctive, comparative advantage to an organization over its competitors

Business governance

Business governance or corporate governance is a wide framework of systems and rules

used to run and control the business process in a firm.

IT strategy

IT strategy consists of an IS component and an IT component, where IS defines the organization’s requirements for information and systems to support the overall strategy of the business.

IT scope

IT scope refers to those specific information applications and technologies (for example, electronic imaging, local- and wide-area networks, expert systems, and robotics) that support current business strategy initiatives

IT competencies

IT competencies refer to the characteristics of IS/IT (such as system reliability, cost performance levels, interconnectivity, flexibility) that could contribute positively to create new business strategies or better support of existing business strategy

IT governance

IT governance is a subunit of business or corporate governance that deals with IT functions in the firm. It involves a number of IT management activities for the board and executive management, such as assigning IT roles and responsibilities, defining constraints within which IT operates, measuring performance, and managing risk and obtaining assurance.

Strategic alignment

Strategic alignment refers to the state of congruence between business strategy and IT strategy in the firm to support the overall business purpose that influences the firm’s business performance.

Business performance

Based on literature, the impact of strategic alignment between business strategy and IT strategy should have a constructive impact on the business performance of the firm, which is defined as the measures of growth and profitability of the firm through its business effort and deployment of organizational and technological resources.

Discussion

This research study focused on the business strategic-IT alignment and basically aimed to improve and broaden knowledge and understanding to the concept of business strategic-IT strategic alignment in theory and practice, and to determine how can firms manage to achieve and sustain strategic alignment by bridging the alignment gap between business strategy and IT strategy to achieve competitive advantage and gain business value. Beside that on the section 3 mention about the enabler and inhibitors which will affect on the business performance from information technologies perspective . Beside that there are ten point plan for aligning IT with business strategy which determine the flow process of perfect aligning IT with business strategy and organization . Lastly is the strategy alignment between business strategy and Information technologies which both side is giving competitive advantage and enhance the business performance when the organization able to manipulate the information technologies to align with business strategies in organization.