The Need For Aligning Business Strategies

Published Date: 02 Nov 2017

INTRODUCTION

For aligning business strategies with information technology (IT) where it is a active state in which the business organization is able to use the information technology (IT) effectively to achieve business objective where it also improved the financial performance or marketplace competitiveness. Where it is focus more on the outcomes means that the ability of the information technology to produce the business value where it`s sync between information technology and the business strategies "alignment is the capacity to demonstrate a positive relationship between information technologies and the accepted financial measures of performance" (Strassmann, 1998) [1] 

For now days current market it is very competitive among the organizations where it`s become more intense than ever so in order for the organization to survive, they has to get the competitive advantages over their competitors. Aligning their business strategies with IT can be the solution to those competitive advantages where IT has becoming more and more important to organizations. Where by aligning IT with business strategies can help to build reliable partnership network, to allocate scare resource and to create distinctive value proposition where it give the distinctive value to differentiate its business from others. Actually for aligning business strategies with IT so that the organizations can gain the competitive advantages is not an easy task.

For aligning business strategies with information technology (IT) for the organizations it is said that the more mature business-IT strategic alignment of the organization becomes the better that organization performs. Actually many frameworks and models that have been given by researchers in order to help top managers to align their organizations with information technology (IT)

OBJECTIVE

The objective of this paper is basically to understand and address the concept and theory of an approach to the aligning business strategies with information technology (IT) where I try to address how can organization manage the strategic alignment between business strategy and information technology (IT) by these following question.

How aligning business strategies with information technology are will be beneficial?

How can organization manage to align business strategies with information technology (IT)

BODY OF ARTICLE

First we need to see how business strategies and information technologies (IT) can align to make the strategic alignment so that it can gain the competitive advantages to compete with the competitor. Information technology (IT) has become the key business function for an organization where we all have great expectations of investment in information technology (IT) and the future benefits to the business that will enable business to

Reduce cost

Enhance productivity

Improve workflow and communication

Implement new business strategies

Standardize processes

Furthermore now day’s information technology (IT) has become an important role for business where more and more new business opportunities and channels to market are being created thru technology development. Information technology (IT) has increasing the pro active role in developing the long term business strategy. So that we need to ensure that we can grab this opportunities by synchronized the business strategies and information technology (IT) towards common business oriented goals (Beveridge, 2005) [2] .

To be clearer on this subject we can narrow it down to ten points plan for aligning business strategies with information technology (IT) (Beveridge, 2005) [3] 

Understand the business

By identifying and document business processes, formal and informal

Acknowledge the culture

From analyze the structure, ethos and nature of your organization

Know the information technology (IT)

By indentify and document all information technology (IT), assets, applications and delivery channels

Discover the value chains

By indentify and document the relationship or touch-point between the business and the IT estate

Interpret the context

From gathering and collecting intelligence about influential factors, internal and external

Determine the change agenda

By analyzing the context of the business strategy and inflation factors, identify the impact and implications for the IT estate

Chart the technology roadmap

By priorities the time line and optimize the change agenda

Plan the work programmed

From translating the technology road map in to business unit plans

Populate the delivery framework

By resourcing the programmed

Achieve the business benefit

From implement the delivery framework

Furthermore so that when we want to be able to successful implement the business strategies with information technology (IT) we also need to understand the strategic alignment model (SAM). Where it represents the dynamic alignment between the business strategic context and the IT strategic context it also defined in terms if four fundamental domains of strategic choices that consist of business strategy, information technology strategy, organizational infrastructure and processes, and information technology infrastructure and processes. 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.

http://www.palgrave-journals.com/jit/journal/v22/n4/images/2000109f2.gif

Figure (1) [Henderson and Venkatraman, 1999]. [4] 

These components as outlined by Jerry N. Luftman in his article [Luftman, 2000] [5] are as follows:

Business Strategy

Business scope: Includes the markets, products, services, groups of customers/clients, and locations where an enterprise competes as well as the competitors and potential competitors that affect the business environment.

Distinctive competencies: The critical success factors and core competencies that provide a firm with a potential competitive edge. This includes brand (type of product made by a particular firm), research, manufacturing and product development, cost and pricing structure, and sales and distribution channels.

Business governance: How companies set the relationship between management, stockholders or shareholders, and the board of directors. Also included are how the company is affected by government regulations, and how the firm manages its relationships and alliances with strategic partners.

Orgazational infrastructure and processes

Administrative Structure: The way the firm organizes its businesses. Examples include central, decentral, matrix, horizontal, vertical, geographic, federal, and functional.

Processes: How the firm’s business activities (the work performed by employees) operate or flow. Major issues include value added activities and process improvement.

Skills: H/R considerations such as how to hire/fire, motivate, train/educate, and culture.

IT strategies

Technology Scope: The important information applications and technologies.

Systemic Competencies: Those capabilities (e.g., access to information that is important to the creation/achievement of a company’s strategies) that distinguishes the IT services.

IT Governance: How the authority for resources, risk, conflict resolution, and responsibility for IT is shared among business partners, IT management, and service providers.

IT infrastructure and processes

Architecture: The technology priorities, policies, and choices that allow applications, software, networks, hardware, and data management to be integrated into a cohesive platform.

Processes: Those practices and activities carried out to develop and maintain applications and manage IT infrastructure.

Skills: IT human-resource considerations such as how to hire/fire, motivate, train or educate and culture

4.0 DISCUSSION

Based on the Strategic Alignment Model where we can say that the power of this model was presented in terms of two fundamental characteristics of strategic management: strategic fit (the interrelationships between external and internal components) and functional integration (integration between business and functional domains) (Henderson and Venkatraman, 1999) [6] . According to Henderson and venkatraman the main indicator for the SAM which it targeting on the main goal to achieve and sustain strategic and competitive advantages for the organizations where the SAM model itself is based from the four quadrants that consist of three components each. Where all the components working together it will determine the extent of alignment of the linkage between the quadrants on the strategic fits and the vertical linkage that refer to use of strategy to determine the infrastructure of the business then the second linkage is functional integration where it is the most directly related to the aligning of business strategies and information technology (IT). So that in order to achieve the success organization need to address how that they can bridge the alignment gap between the business strategies and IT strategy so that can create mutual understanding between business and IT that will also include people, knowledge and efficient management practice.

CONCLUSION

As for the conclusion we can say that the need for aligning business strategies with IT will minimizing the risks and optimizing the use of IT is becoming priority to an organizations. Where the Strategic Alignment Model actually is a framework that can enable for achieving this alignment so that the organization can be more innovation in the attempt of using any available opportunities to be their competitive advantages where the benefits by aligning IT with business strategies the organization itself can achieve in terms of globalization for their customer, partners, supplier and competition and also can create transparency thru industry regulations, consumer pressure and competition driving openness but never to forget that it also can be differentiation and shareholder value increasingly derived from this service experience.