Align IT with Business Strategy

IT Alignment with Business Strategy Is A Contentious Process

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IT alignment has consistently appeared as a top concern for IT practitioners and company executives Hundreds of commentaries and cases have been published in trade publications. Many scholarly journal articles have been published. Information Technology has become a key business function for almost every organization and most have great expectations of their investment in IT for the future benefits of the business. There are certain reasons why it is very important that the IT project in these organizations should align with the business strategy of the organization (Chan, 2007). Those reasons are depicted below and it is better to mention that these reasons enables the companies to:

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  1. Reduce production cost 
  2. Standardize the process 
  3. Enhance productivity 
  4. Improve workflow and communication 
  5. Sustain repeatable service levels 
  6. Improve Risk Control mechanism 
  7. Implement new business strategies 
  8. Facilitate organic and acquisition-driven growth 
  9. Gain competitive advantage by exploiting new technology 

IT alignment has consistently appeared as a top concern for IT practitioners and company executives Hundreds of commentaries and cases have been published in trade publications. Many scholarly journal articles have been published. 

Therefore, by aligning IT properly with the corresponding business strategies of a certain organization, the organization can achieve great benefit from such alignment and since IT plays an increasingly pro-active role in developing the long-term business strategy, we need to make sure that IT and business strategies are completely synchronized towards common business-oriented goals (Chan, 2007). There are six dimensions promoting alignment. All construct dimensions contribute significantly to the level of alignment and affect the firm performance:

  1. IT-Business Communications 
  2. Use of Value Analytics 
  3. Approaches to Collaborative Governance 
  4. Nature of the affiliation/partnership 
  5. Scope of IT initiatives; 
  6. Development of IT Skills. 

The benefits of aligning IT with business strategy are manifold and essential to the long-term success of every organization that employs technology. Satisfactory alignment may take some time to achieve – but it will not happen at all, unless we approach it in a structured, methodical and planned way (Juneja). In order to align future IT projects with the business strategy of an organization, the following components of a plan should be in place:

  1. Understand the business – identify and document all of the business processes – formal and informal. 
  2. Acknowledge the culture – analyze the structure, ethos and nature of the organization in consideration. 
  3. Know the IT estate – identify and document all IT assets, applications and delivery channels. 
  4. Discover the value chains – identify and documents the relationship/ touch-points between the business and the IT estate. 
  5. Interpret the context – gather and collate intelligence about influential factors, internal and external. 
  6. Determine the change agenda – analyze the context, the business strategy and the influential factors, identify impacts and implications for the IT estate. 
  7. Chart the technology roadmap – prioritize, time-line and optimize the change agenda. 
  8. Plan the work program – translate the technology road-map into business unit plans. 
  9. Populate the delivery framework – resource the program. 
  10. Achieve the business profit – implement the delivery framework. 

The plan which is mentioned above is a continuous and iterative process rather than a simple and linear exercise. The success of such a plan depends on the review of the organization’s assumptions and plans on a regular basis, refinement of them if essential, by negotiating and communicating change with the organization’s value chain patterns and by responding to changing circumstances, in a timely and appropriate manner  (Chen, Sun, Helms, & Jih, 2008).

It is very important to mention that complete alignment between the information technology portfolio and the business strategy is usually nonsustainable because strategic context constantly changes and because information technology portfolios are assets that take a long time and significant investment and expertise to develop. Alignment is dynamic; a change in any one of the ingredients usually requires another shift elsewhere. The goal is for information technology investments and the portfolio to be heading in the right direction to maximize the value of those investments to the business (Chen, Sun, Helms, & Jih, 2008).

References

Chan, Y. E. (2007). IT alignment: What have we learned? Journal of Information Technology,22(4), 297-315. Retrieved from

Chen, R., Sun, C., Helms, M. M., & Jih, W. (. (2008). Aligning information technology and business strategy with a dynamic capabilities perspective: A longitudinal study of a Taiwanese Semiconductor Company. International Journal of Information Management,28(5), 366-378.

Juneja, P. (n.d.). MSG Management  Study  Guide. Retrieved from https://www.managementstudyguide.com/information-technology-and-business-alignment.htm

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Daniel Fortune

Daniel Fortune is a successful business professional, entrepreneur, father, and lover of travel.

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