Explain strategic alignment and IT alignment.
Strategic Alignment:
- ‘Fit’ between a business’ strategy and its internal and external environment
IT Alignment:
- ‘Fit’ between business strategy and IT strategies?
Why align?
- Increase ROI (Business value of IT)
- Economic performance (Competition / Necessity)
- Operational performance (Efficiency)
- Alignment also with profit mechanisms.
IT is evolving from a support function to a strategic role, being able to shape new business strategies. But IT investment lacks to achieve the anticipated value.
The article argues it is caused by a lack of alignment between I/T and business strategies.
Explain the 4 methods of alignment?
- Strategy execution: A plan is formed anchored in the business, then pivots in the organizational infrastructure and processes and impacts the IT infrastructure and IT processes.
- Technology transformation: The business leads, and pivots around the it strategy helping forming the strategy which impacts the IT infrastructure. The organization follows.
- Competitive potential: Driver is IT strategy giving tech a very pronounced position, and business strategy visionary the big picture, but only after the IT strategy is made. The organizational infrastructure follows.
- Service level: building a world class service level organization. IT strategy is the driver, pivots around technological infrastructure and the business follows. Tech IS the business.
What is functional alignment?
Allow alignment to differ by BU/Functional unit or department.
Enhancing existing or building new resources differ across BU’s and IT alignment should therefore be allowed to differ/have the flexibility to choose themselves. (eg. competitive advantage)
What is structural alignment?
Adjust alignment according to org. Structure.
Align business and IT depending on BU. (eg. Information Asymmetry).
What is temporal alignment?
: Allowing alignment to be flexible to account for future developments.
Allow for forms of alignment and leaves structure deliberately incomplete to allow for structures to evolve when change arrive. (eg. Commitment Timing)
Current business strategy has to cater for future IT strategy.
IT strategy shapes future business strategies.
(Commitment Timing).
True or False?
“IT alignment describes the fit between business strategy and IT strategy”
True
Which of these is not usually considered a form of alignment?
Functional Alignment
Temporal Alignment
Structural Alignment
Political Alignment
Political Alignment
True or False?
“The perspectives on strategic alignment within a firm depends on the role, involvement, and goals of the top management.”
True
True or False?
“Alignment is an outcome, not a process.”
False
