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.