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IT – Business Alignment. Last Lesson Highlight Purpose & Role Type of IT Strategies.  Efficiency (Profitability). Analysing Strategies. Defending Strategies. IT Strategic Purpose/s. Flexibility ( Bus Agility ). Comprehensiveness (Info Capacity building). Prospecting

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last lesson highlight purpose role type of it strategies
Last Lesson HighlightPurpose & Role Type of IT Strategies

 Efficiency(Profitability)

Analysing

Strategies

Defending

Strategies

IT

Strategic

Purpose/s

  • Flexibility
  • (Bus Agility)
  • Comprehensiveness
  • (Info Capacity building)

Prospecting

Strategies

it business strategy alignment
IT – Business Strategy Alignment

Process, contents and contexts of Linking IT objectives to Enterprise objectives & strategic capability requirements

IT Strategic Plan Contents

Enterprise Objectives

IT Objectives = Cost-Benefit Measures

IT Systems

 

IT Service levels

Corporate Level

Objectives

Corporate Level

Strategies

Business Level

Objectives

Business Level

Strategies

Function Level

Objectives

Function Level

Strategies

Different Levels of Enterprise Objectives

Different Levels of Enterprise Strategies

(often grouped by org project groupings)

it business strategy alignment1
IT – Business Strategy Alignment

Reasons for High Alignment

High

High

High

Degrees of alignment

Integrated

Business value

Top Mgt Support

Bus Performance

Limited

Nil

low

low

low

alignment gaps
Alignment Gaps

Key Causes

  • Strategy Practice ignores IT value
  • Tactics regards IT as an expense
  • Communications - nerds language
  • Education – lack of business understanding
  • (Rathnam et al, 2005)
  • Business strategists exclude IT strategies in planning
  • Business strategies change while IT strategy plan is in execution
    • Business strategists change minds
    • Competitive markets dynamics

Design solutions to address these causes

it bus alignment models
IT-Bus Alignment Models

IT Alignment as a staged Capability Maturity Managementcapacity

(Luftman, 2007; King & Teo, 1997))

IT Alignment as a Process:A means to a bus end

(Henderson & Vankatraman, 1993)

Org Focus

Env Focus

Comms

Governance

Measurable IT Capabilities

Operations

Alignment

Infrastructure & Functionality Improvements

IT increases functional & infra efficacies

Strategic

Alignment

StrategicValue Creation

IT created business value add

Value

Skills

Collaboration

(Partnership)

(Enterprise)Architecture

capability maturity levels
Capability Maturity Levels

High

Optimised

Process

Control

IT-Business Alignment

Managed

Process Management

Defined

Process Definition

Committed

(Repeatable)

Low

Initial

(Ad hoc)

Basic management control

what is culture
What is Culture ?

Strategy thinking Styles

Communication

Styles

Problem Solving Styles

Management Styles

Leadership Styles

Family, education, belief & expectation systems, experiences.....

 People attitudes in different situations

 Shape behaviours at home/work/etc

 Situation Outcomes

it strategy work culture
IT Strategy & Work Culture

Country Cultural Dimensions

Organisational Cultural Dimensions

Many Theories/Models

One is Wallach (1983) org culture model:

Innovative culture

Supportive culture

Bureaucratic culture

Group Cultural Dimensions

Personal Cultural Dimensions

Communication Abilities

Values & Beliefs

Other Demo Differences

influences

Thinking & Decision Making

  • IT investment decisions
  • IT implement practices
  • Tech adoption practices
  • IT usage practices
it strategy work culture1
IT Strategy & Work Culture

Many Theories/Models:

One is Kanungo model that extends the Wallace model:

Innovative culture

Supportive culture

Bureaucratic culture

influences

IT strategy planning orientation

Centralised

IT

Necessary Evil

(Little IT support)

Scarce

Resource

(Tight Budgets)

Leading

Edge

(R&D)

Free Market

(users decide)

Monopolising

it strategy work culture2
IT Strategy & Work Culture
  • An organisation is structure along 3 views:
  • Strategic
  • Managerial
  • Technical
  • IT strategies can be designed to align with one, a mix or all these levels’ purpose and hence functional support.
  • However, the work values and behaviours of people in these 3 levels may not be consistent and their behavioural influences will contribute to orienting the IT strategy to :
  • Be centralised or decentralised
  • Adopt leading edge ICT & accomodate high learning risks
  • Controlled by users
  • Controlled by the IT dept
  • An administrative function and least funding priority
  • Irrelevant & be prevented from use if and where possible.
the real practice alignment issues
The Real Practice Alignment Issues

The new IT: Aligning Business & IT – Part 1 : Power Struggles 3.03 min

The new IT: Aligning Business & IT – Part 2: Mapping Analytics 2.26 min

The new IT: Aligning Business & IT – Part 3 : the small controlled projects 1.46 min

Additional Videos for home review

Aligning IT solutions with Business Needs 5.43 min

Cola Cola on Technology & Business Alignment 4.18 min

class study 1 it strategy misalignment problem at an australian company
Class Study 1IT strategy misalignment problem at an Australian company

Part B – Mini Case

What is the type of business strategu & It strategy adopted by the Australian coy in both stages of growth. Use the taxonomy of IT strategy suggested by Sabherwal and Chan (2001).

Is there an alignment between IS/IT strategy and business strategy at both stages of growth of this company? Explain

Present both answers in a table

Look at roles & structure

slide14
Class Study 2the actions undertaken by a large chemicals company to improve its IT alignment maturity

C2a) Identify the key IT management practices, IT systems, and IT decisions that the company made to improve its overall IT maturity level. Present your views in a tabular format taking into consideration of the 6 criteria or dimensions of IT alignment maturity included in the Luftman’s (2007) model.

C2b) Which dimension of IT alignment maturity experienced little improvement? What advice would you offer to the company to increase the maturity level of that particular dimension?