Week4 - Which alignment perspective is best ? (SAM)

Lecture 4: The Strategic Alignment Model

Strategic Alignment Model
In early 1960s, many companies didn't understand how the IT Strategy works.Until now, some small companies still don't believe IT Strategy can help the company operates more efficient.

In this week, Helen has introduced the Strategic Alignment Model (SAM) which was first introduced by Henderson and Venkatraman in 1999. It is quite new and has become the base of Business/IT Alignment theories [1].

Strategic alignment model (Henderson and Venkatraman, 1999: 476).

There are four quadrants in the SAM, Business Strategy, IT Strategy, Business Infrastructure and IT Infrastructure. The vertical linkage is strategic fit which means determining the infrastructure by using strategy. The horizontal linkage is functional integration which is related to the alignment of business and IT. Henderson and Venkatraman said that it is difficult to realize the value from IS/IT investments due to lack of alignment between business and IT/IS strategies.

[3] SAM alignment perspectives

Strategy Execution (yellow line)
In this perspective, the anchor is business strategy. The weak area is the business infrastructure, which is what needs to be changed. The result of impact is the IT infrastructure. The IT architecture must be undergoing changes due to the changes in business processes. This perspective focuses on IT planning or transformation of the business to achieve reducing delays and errors, enhancing services and saving time. [2]

Technology Potential (red line)
This perspective is driven by business strategy with the support of IT strategy. This results the impact in the IT infrastructure. This shows the value of IT contributing to the business’ outcome. The relationship between the business and customers is important. [2]

Competitive Potential (green line)
The anchor in this perspective is IT strategy with the support of business strategy and business infrastructure is the impacted result. This focuses on how emerging new technologies can help new business strategies. This results in bringing competitive advantages to the business. [2]

Service Level (blue line)
In this perspective the anchor is IT strategy with the help of IT infrastructure, and impacting business
infrastructure. This focus on how IT can improve the products and services are delivered, and also the businesses processes. Moreover, this perspective can result in IT outsourcing. [2]


Which alignment perspective is best ?
In my opinion, there should be no the best alignment perspective. which alignment perspective is best should be in accordance with the current situation and the expected outcome. Since different perspectives have different functions. The alignment perspective chosen should be based on the requirement of the business.


                                                                                                                                         

Reference
[1] http://businessitalignment.wordpress.com/2010/12/17/the-strategic-alignment-model-of-henderson-and-venkatraman/
[2] http://sais.aisnet.org/2006/Coleman-SAIS2006-paper.pdf
[3] http://www.12manage.com/methods_venkatraman_strategic_alignment.html

                                                                                                                                         

Comment on http://chankl-2107.blogspot.com/2012/01/week-3-strategic-framework-and-bpr-for.html


"After the environmental scan, managers have to decide whether they have to work on the internal or external environment.  If for the former one, SWOT should be used; if for the later one, either PEST analysis or SWOT could be used. "

I agree with you that the SWOT analysis should be used for the internal environment. However, for the external environment, I think both PEST analysis and SWOT analysis should be used at the same time to get a better analysis result. Because PEST analyses the marco-external environment while SWOT analyses the micro-external environment. They have a little bit different in meaning. It is better to do both analysis to get all-round result.

Week3 - The Strategic Framework and implementation of BPR

Lecture 3: The Strategic Framework and BPR for e-Business

Application of BPR
In the tutorial this week, Luke has mentioned that some popular BPR tools. One example is "Ultimus BPM". The software provides the tools for modelling workflow to generate a process map and then connect the process map with IT system to automate the workflow. Also, it helps to analyze the workflow management and the efficiency and keep pace with the change of business objectives [1].

After reading the functions of BPR, I know that BPR can provide many tools to make the business process easy to go and help to achieve the business objectives. However, it may be failed.Some have estimated that there are as many as 70% BPR projects fail [2]. It means that BPR is not always good.
                                                                                                                                         

Factor to be success
Majed Al-Mashari and Mohamed Zairi have suggested that 5 dimensions of change related to BPR implementation[3].

(1) change management;
(2) management competency and support;
(3) organisational structure;
(4) project planning and management; and
(5) IT infrastructure.

I think some factors to success are very important:

• Effective Communication - It is important to have communication internally while managing the business with BPR. It is used to ensure the understanding the changes and situation.
• Training and Education - As BPR may be new to some companies, especially the staff. Therefore the staff needs the training for using BPR although it may increase the budget.
• Effective use of project management techniques - managing effectively can provide a smoothing flow of the process in redesign stages.

Recognizing the current situation is the way for planning, therefore, we have PEST analysis and SWOT analysis. The objective of PEST is to analyze the external marco-environment for the business while the SWOT analysis is to analyze both external micro-environment and internal situation. If we have recognized the current environment and situation well, the probability of success will be increased.
                                                                                                                                         

Internal Context
Sullivan has presented a matrix that explains the effect of external strategic environmental forces. The tow axes are infusion (the degree of dependency on IS/IT to manage business) and diffusion (the degree of decentralization of IS/IT control) [4].

The systems in the backbone part of the matrix may face the serious problem when the systems fail. Because of the highly centralized control and high IS/IT dependency, the quality of the system is very important. However, it is still the most famous model.

For the opportunistic region, it requires managers having ability to satisfy the local priorities as the system is not centralized. It is not overall business or IT design, user to user cooperation may be needed when system integration.

The complex section in the matrix is the most difficult one to manage as the systems are not centralize and the business is highly depend on the systems.
                                                                                                                                         

Reference
[1] http://www.ultimus.com/BPMSoftware/

[2] Barbara J. Bashein, M. Lynne Markus & Patricia Riley, "PRECONDITIONS FOR BPR SUCCESS And How to Prevent Failures", Information Systems Management, Volume 11, Issue 2, 1994

[3] Majed Al-Mashari, Mohamed Zairi, (1999) "BPR implementation process: an analysis of key success and failure factors", Business Process Management Journal, Vol. 5 Iss: 1, pp.87 - 112

[4] http://www.docstoc.com/docs/59556013/John-Ward-and-Joe-Peppard-book-3rd-edition

                                                                                                                                         
Comment on http://chankl-2107.blogspot.com/2012/01/week-2-business-strategy-and-isit.html


"Since the business strategy is the integrated action set for long-term to get more advantage than the competitors, it is the only method to keep the company operate smoothly and survive."

I agree with you that the strategy planning is for the long term advantage of a company. But, competitor may also use BPR to plan the strategy. Therefore, it may not get more advantage than the competitor. However, it may be the only method to smooth the business process as you said.

Week2 - Business and IS/IT Strategies

Lecture 2: Business and IS/IT Strategies

Why we need Business and IS/IT Strategies?

• Organizations are not responsive enough to the changing Business environments
• Business Processes are not taking full advantage of technologies
• Too Much time and money are wasted

Therefore, the enterprise business processes need to be changed to cater to the changing business environment, for example, technologies and business objectives.

                                                                                                                                         

The Relationship among Biz, IS &IT Strategies

From the figure, we can see that business activities can be categorized into 3 levels, Strategic level, Tactical level and Operational level. In short, they can be represented by Why, What and How.

Refer to the Lecture Note P.7, 26

Business strategy is in the strategic level, it helps an organization to make business decision, find out objectives and direction, and change according the requirement of environment. Moreover, it helps to develop options for the changes.  It is necessary to recognize the need for change in development of business strategy. That is where and why the business going.

IS strategy is in the tactical level, it supports the business strategy by focusing on the applications, demand and business. It means that it helps to find out what is required in the business strategy. Actually, it is the evaluating process of the options.

IT strategy is in the operational level, it provides infrastructure and services to the tactical level and focuses on the technology, supply and activity. It is actually the implementation of the options chosen in the strategic level. That’s how it can be delivered. 

                                                                                                                                         


The execution steps of BPR

Refer to supplementary reading:  Successful Reengineering Demands IS/Business Partnership

WebCT link: Reading: Martinez-SloanMReview-1995

1.       Redefine the role of IS – identifying the needs for change.

2.       Assess current capability – planning for migrating to reengineered processes, investigating and analyzing the infrastructure of the business.

3.       Develop a strategy and architectures – developing data strategy and architecture and analyzing new technologies.

4.       Develop a master plan – preparing well-thought plan for balancing and ensuring the control of resources and critical paths.
5.       Execute and manage – ensuring IS follows the plan to achieve the objectives.For reengineering success, business leaders and IS must work together to strike a balance.

                                                                                                                                         

Reference

[1] http://www.jiscinfonet.ac.uk/InfoKits/system-selection/ss-define-1.3