Strategic alignment
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Strategic alignment is the process and the result of linking an organization's structure and resources with its strategy and business environment (regulatory, physical, etc.) Strategic alignment enables higher performance by optimizing the contributions of people, processes, and inputs to the realization of measurable objectives and, thus, minimizing waste and misdirection of effort and resources to unintended or unspecified purposes. In the modern, global business environment, strategic alignment should be viewed broadly as encompassing not only the human and other resources within any particular organization but also across organizations with complementary objectives (i.e., performance/business partners).
"Strategic alignment" can also refer to a state in which a "company's business and product development strategies are aligned with its customers, users, and marketplace," leading to economic success. This use of the term was first coined by Joanna Malaczynski, a UX design thinker and Principal Consultant at DESi. See desipotential.com [1]
Antecedents of Strategic Information Systems Alignment
Shared Understanding Between IT and Business
Frequent communication between IT personnel and its users increases IS knowledge in strategic business units and business knowledge in IT department. IT applications can meet the users’ needs, which is critical for success, and in this way, the communication of IT and business executives can be facilitated potentially . Close communication between IT functions and the business executives and other key decision makers, is a high-ranked enabler and important for practitioners. This has been described in several ways in the previous studies. The relationship could be between IT and business executives, between personnel, or an inclusive one. Communication between IT and business executives is influenced by shared knowledge , which has been known as one of the most important dimensions in social alignment. [2]
When an IT manager participates in business planning, and business executives participate in IT planning, an alignment of the business and IT goals, objectives, and plans can happen. Participation of CIO in business planning may help him to learn business strategies first hand and allow him to develop a higher level of business strategy understanding . Planning is a process, and alignment can happen if the IS planning and business processes are aligned. Therefore, an IS plan cannot be developed without implications of business ; thus IS executives encourage the comments of business executives during the IS planning . The mutual partnership leads to improvement in reflecting business objectives in IT plans and, ultimately, to successful IS planning.[3]
Top Management Support
Top management support, a top-ranked enabler, can promote strategic alignment in several ways (see Table 5). Top management support has a crucial role in gaining firm-internal abilities and shaping the firm’s environment, and it is not possible to delegate, ignore, or avoid it. Top management should play a strong leadership role, rather than a controlling one. Satisfaction with the IT department and trust in the IT department result in the top management’s commitment in participating in the alignment process, the strategic use of IT, and the financial support of IT spending. These processes can cause IT functions and spending to match environmental demands, and a better alignment of IT and business. [4]
IT Department Capabilities
IT department capabilities play a significant role in the strategic alignment process. Numerous constructs demonstrating this reality have been included in previous studies to explain how an IT department’s capabilities can promote strategic alignment and, ultimately, lead to competitive advantage. These managerial capabilities include business processes such as new technology identification, business applicability evaluation, prioritizing investments, and enhancing the managers’ knowledge of IT potential. Each of these processes depends on the IT department to have a robust understanding of technical possibilities available in the marketplace, a business orientation, and the ability to form relationships with senior managers. When the IT department is known within the organization as efficient and reliable and when the past successes of the IT department are evident, it gains credibility within the organization, aiding in the procurement of resources and providing the ability for the IT department to be an active partner in strategic planning for the business. [5]
Organizational Plan and Characteristics
Several antecedents mentioned in previous studies refer to the organizational plan and characteristics. If there are no determined and clarified business strategies, there will be the likelihood of confusing and bewildering technological choices, leading to waste of resources; thus, alignment cannot happen. Developing business goals and objectives is known as the first step in the alignment process. Through strategic planning, it is possible, “to reconfigure the organization’s resources and competencies to address changes in organizational strategy and IT strategy” (Baker & Jones, 2008, p. 19). Although it is emphasized that it should be contained in a formal and documented business plan, an informal IT plan is sufficient. Based on the results of strategic alignment studies of SME manufacturers, 66% of those manufacturers that reached strategic alignment had a documented business plan; however, only 25% had a formalized IT plan. Finally, the examination of the antecedents of strategic alignment in terms of culture is emphasized, and two more antecedents are mentioned: organizational innovative culture and normative pressure. [6]
See also
- Strategy Markup Language (StratML), whose purposes include facilitating strategic alignment through the establishment of literal linkages among performance indicators and the strategic goals and objectives they support.
- Environmental scanning
- Competition
References
- United States Office of Personnel Management's overview of strategic alignment in the context of human capital management
- ARMA International's discussion of strategic alignment in the context of records and information management, July/August 2007
- Articles on strategic alignment provided by Resource Management Systems, Inc.
- Strategy 101: It's All About Alignment, Forbes, October 16, 2012
- Strategic alignment of business processes, E. D. Morrison, A. K. Ghose, H. K. Dam, K. G. Hinge, K. Hoesch-Klohe, University of Wollongong, December 5, 2011
- The Case for Strategic Alignment, white paper by The Knowledge Compass, Inc.
- ^ Joanna, Malaczynski. "Principal". Desi Consulting. Retrieved 28 February 2018.
- ^ Abdolvand, Neda; Sepehri, Mohammad Mehdi (2016-04-02). "Antecedents of Strategic Information Systems Alignment in Iran". Journal of Global Information Technology Management. 19 (2): 80–103. doi:10.1080/1097198X.2016.1172953. ISSN 1097-198X.
- ^ Abdolvand, Neda; Sepehri, Mohammad Mehdi (2016-04-02). "Antecedents of Strategic Information Systems Alignment in Iran". Journal of Global Information Technology Management. 19 (2): 80–103. doi:10.1080/1097198X.2016.1172953. ISSN 1097-198X.
- ^ Abdolvand, Neda; Sepehri, Mohammad Mehdi (2016-04-02). "Antecedents of Strategic Information Systems Alignment in Iran". Journal of Global Information Technology Management. 19 (2): 80–103. doi:10.1080/1097198X.2016.1172953. ISSN 1097-198X.
- ^ Abdolvand, Neda; Sepehri, Mohammad Mehdi (2016-04-02). "Antecedents of Strategic Information Systems Alignment in Iran". Journal of Global Information Technology Management. 19 (2): 80–103. doi:10.1080/1097198X.2016.1172953. ISSN 1097-198X.
- ^ Abdolvand, Neda; Sepehri, Mohammad Mehdi (2016-04-02). "Antecedents of Strategic Information Systems Alignment in Iran". Journal of Global Information Technology Management. 19 (2): 80–103. doi:10.1080/1097198X.2016.1172953. ISSN 1097-198X.