Strategic Alignment

Groups members :

Basheer Mohammed Alhaimi
Warya Anwar
Fadhl Mohammed Hujinah
Salihu Zaharaddeen Kado

Strategic alignment refers to the degree to which the IT
mission, objectives and plans support and are supported by
the business mission, objectives and plans”. And also strategic
alignment refers to “Business-IT alignment refers to applying
Information Technology (IT) in an appropriate and timely
way, in harmony with business strategies, goals and needs”
For organizations to stay competitive in a dynamic
business environment, they have to determine and
understand how to manage IS/IT strategy

 Information Technology (IT) has a profound effect on an
organization’s strategic position because they
fundamentally change both the mechanism of adding
value and driving forces of industrial competition .

 IT management strategy focuses on relationships between
the specialist and users and between the center and
divisions or business units .

The Strategic Alignment Model (SAM) can be defined as a business-IT
management framework to enable successful implementation of business and
Information Technology (IT) and their corresponding infrastructure
components. A number of business-IT or business-strategic alignment models
have emerged in the literature. The SAM model represents the dynamic
alignment between the business strategic context and the IT strategic context.
It is based on the building blocks of strategic integration and functional
integration. The strategic alignment model is defined in terms of four
fundamental domains of strategic choices that consist of: business
strategy, information technology strategy, organizational infrastructure and
processes, and information technology infrastructure and processes.

These perspectives are classified in two categories that include:

 1. Business strategy as the driver: When the business strategy drives
the change forces in the services as the business driver applied to the
domain. It has two cross-domain relationships that represented in
strategy execution perspective and technology potential perspectives.

 2. IT strategy as the enabler: When the IT strategy provides the change
forces in the model, it serves as the IT enabler applied to the domain to
enable new or enhance business strategies with organizational
implications. It has two cross-domain relationships that represented in
competitive potential perspective and service level perspective.

Each perspective consists of three components, which shows the interplay
among three key domains shaping what would appear as a triangle. The
components in that triangle are anchor, pivot, and area of impact.

  The anchor represents the strongest area of the business. It directs the
change that business goes through based on the perspective.

  The pivot represents the weak area that subjects to change through
the re-alignment.

  The area of impact represents the area that will be directly affected
through the changes made in the pivot area through realignment

1. This framework is useful because it recognizes that all the sectors and the

components of the model should to be considered.

2. The SAM is use a functional business unit has to consider the rest of the

organization before action is taken.

3. There is external scanning of an organizations environment of and the

external IT environment and internal monitoring of the relationships between

IT and the business at strategic and infrastructure levels.

4.The SAM model gives the organization reviewing its strategic alignment a

clear view of the totality of what should be considered and how interactions

occur.

Complexity and applicability

1. The approach does not address is the complexity of the model if the
organization is a decentralized business. Are all the business units going to
undertake the plan separately or does that depend upon the interaction
between them? What are the dynamics of this situation?

2. The second issue is the applicability of the model, how does the use of the
framework cater with the differing stages of an organization's life cycle? Are
all of the phases of the SAM required for every period of growth / stability /
decline? Is every organization required to get to the most optimal level of
alignment? Clearly the models do not consider these points in their
approaches.

European Global Manufacturing Inc.

European Global Manufacturing (EGM) Inc. is a European
manufacturing firm that was founded for more than 100 years ago with about
40000 employees in approximately 100 manufacturing sites that span 70
countries. The firm supplies bearing, seals, lubrication and lubrication
systems, maintenance products, Mechatronics products, power transmission
products, customer solutions and related services globally.

The management of EGM noticed that the firm couldn’t control the
financial costs and expenses of the IT services, where they preferred to have a
better control on the cost and expenses of their IT, therefore the firm decided
to outsource all its IT services to Electronic Data Systems Corporation (EDS)
and settled a long term agreement. EDS is a global technology service
company that delivers business solutions, to provide the firm with all the
internal IT services.

For better management of business-IT strategic alignment the organizations
aligned its business strategy component to the IT strategy component.

Business strategy IT strategy Outcomes
Business scope : IT scope : In the Finance business area
Is represented in developing That represented in different Improving business-to-business, trade-
products and offering a wide information systems to fit every related, transaction-based financial
range services. business area based on their functions and processes.
needs. In the Product Development Area
Development of complex information
assets including product design,service
documentation, and regulatory
submissions.
Business competencies: IT competencies: Advanced softwares are implemented in
Are represented in offering Are represented in the the firm such as: Masterpiece and
high quality products, and fast characteristics of the different Windchill that support the business
delivery on time. advanced software systems process management and guarantee high
implemented quality products and fast delivery.
Business governance: The IT governance Creating an IT Governance unit to
Is a corporate governance that is represented in outsourcing take care of the business process
adopted business policy that alliance and joint research and between the EUGM and EDS.
the firm enters the market as a development for new IT
single entity or via alliances capability, where it handles the
business processes
of the firm with EDS.

 The work presented a qualitative study based on a literature review
supported by an empirical study in an advanced research area, business-
IT strategic alignment that is important both to business executives and
IS/IT managers and professionals. It focused on the business-IT strategic
alignment and aimed to investigate and identify the strategic alignment
and alignment gap between business strategy and IT strategy, and to
determine how can organizations manage successfully to align their
business strategy with IT strategy to achieve competitive advantage and
gain business.

Strategic Alignment

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