W4 - Strategic Alliance Model

Source / Reference:

1)  "Strategic Alignment: Leverage Information Technology for Transforming Organizations" by J. C. Henderson and N. Venkatraman, 1993

2)  "IT-Enabled Business Transformation: From Automation to Business Scope Redefinition" by N. Venkatraman, 1994

Subject:

In Lect 4 - Which alignment perspective is best?

Response:

In my opinion, there is no 'the best' strategic alignment model (SAM). In fact, those alignment perspectives should be used according to certain situations and natures which may involve different types of business and technology. Usually, most of the alignment models are based on the organisational structure and their objectives. SAM concentrates the alignment at the core of organisations' requirements and focuses on the relationship between strategy and technology.

For instance, for Strategy Execution, it is the most common and widely understood alignment perspective with classic, hierarchical view of strategic management which may be suited to different industries or organizations. "Execution is a discipline, and integral part to strategy. ... Execution requires a comprehensive understanding of a business, its people and its environment – and the leader is only person in a position to achieve that understanding." And so, only the top management has the ability to be the leader and play the important role, that is the strategy formulator. The IT management can only be the implementer that use the professional knowledge to operate in coordination what the top management planned and proposed. In this perspective, the leading role is business strategy and the impacting role is business infrastructure. It focuses on IT planning or change of the business.

For Technology Potential, it is also driven by business strategy and the impacting role is IT strategy. This alignment perspective is not constrained by the organization structure. It shows the value of IT which is also the main contribution to the final product or service of the business. The relationship between the business and the customers is vital in this perspective.

For Competitive Potential, the leading role is IT strategy and the impacting role is business strategy and  business infrastructure. This perspective concentrates on how the emergence of new technologies can affect and derive new business strategies which can also bring a new competitive advantage to the business in the marketplace.

For Service Level, the leading role is IT strategy and IT infrastructure. For the impacting role is business infrastructure. How IT can improve the delivery of the products and services is the main focus of this perspective. Besides, it evaluates the value that the improvement of the business' processes.

Those perspectives are used to evaluate the alignment of a particular organization which indicate the performance of business processes, information technology, and cooperation inside the organization. Companies may lose the competitiveness if they are misaligned.

The SAM is only a tool that can be used to determine the alignment, such as  the strengths and  weaknesses of the company, the opportunities and threats of the business. Once the company’s alignment perspective has been indicated and identified, it should determine the future development plans and formulate the new business strategies that can lead to a long-term success. Through continuous revaluations and adjustments, company may achieve the ultimate success in the industry.