strategic alignment: analysis of perspectivestbtla © 2007 raymond papp, jeff lackey strategic...
TRANSCRIPT
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Strategic Alignment: Analysis of Perspectives
Raymond Papp Jeff LackeyAssociate Professor of MIS MBA Graduate [email protected] [email protected]
John H. Sykes College of BusinessThe University of Tampa
Tampa Bay Technology Leadership AssociationTampa Bay Technology Leadership AssociationMay 10, 2007May 10, 2007
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Overview
• Reasons for undertaking this study
• Literature Review
• Methodology / Results
• Discussion
• Questions
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Strategic Alignment Overview...is an ongoing process....has remained a major issue for over a decade.…does not have a single answer or strategy for
everyone.…is a constant flux of 12 components of alignment…focuses on improving the relationships between
the business and IT functional areas...works toward mutual cooperation and
participation in strategy development
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
The Strategic Alignment ModelBusiness I/T
DistinctiveCompetencies
BusinessGovernance
BusinessScope
SystemicCompetencies
I/TGovernance
TechnologyScope
Business Strategy I/T Strategy
Processes Skills
Administrative
Processes Skills
I/T
StrategicFit
Organizational I/T Infrastructure Infrastructure
Functional Integration
Structure Architecture
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Strategic Alignment• Extent & degree to which firm’s
business & information technology strategies & infrastructures linked
• Interrelationships between the domains reflect the linkages between the four domains
– Strategic Fit (vertical)
– Functional Integration (horizontal)
• Assess both linkages simultaneously
– 12 alignment perspectives
• Model provides “roadmap” for firm
The Strategic Alignment ModelBusiness I/T
DistinctiveCompetencies
BusinessGovernance
BusinessScope
SystemicCompetencies
I/TGovernance
TechnologyScope
Business Strategy I/T Strategy
Processes Skills
Administrative
Processes Skills
I/T
StrategicFit
Organizational I/T InfrastructureInfrastructure
Functional Integration
Structure Architecture
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
BUSINESS STRATEGY
Business Scope – Includes the markets, products, services, groups of customers/clients, and locations where an enterprise competes as well as the buyers, competitors, suppliers and potential competitors that affect the competitive business environment.
Distinctive Competencies – The critical success factors and core competencies that provide a firm with a potential competitive edge. This includes brand, research, manufacturing and product development, cost and pricing structure, and sales and distribution channels.
Business Governance – How companies set the relationship between management stockholders and the board of directors. Also included are how the company is affected by government regulations, and how the firm manages their relationships and alliances with strategic partners.
ORGANIZATION INFRASTRUCTURE
Administrative Structure – The way the firm organizes its businesses. Examples include central, decentral, matrix, horizontal, vertical, geographic, and functional.
Processes - How the firm’s business activities (the work performed by employees) operate or flow. Major issues include value added activities and process improvement.
Skills – H/R considerations such as how to hire/fire, motivate, train/educate, and culture.
Business
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
IT STRATEGY
Technology Scope - The important information applications and technologies.
Systemic Competencies - Those capabilities (e.g., access to information that is important to the creation/achievement of a company’s strategies) that distinguishes the IT services.
IT Governance - How the authority for resources, risk, and responsibility for IT is shared between business partners, IT management and service providers. Project selection and prioritization issues are included here. (See IT inhibitors discussion)
IT INFRASTRUCTURE
Architecture -The technology priorities, policies, and choices that allow applications, software, networks, hardware, and data management to be integrated into a cohesive platform.
Processes - Those practices and activities carried out to develop and maintain applications and manage IT infrastructure.
Skills - IT human resource considerations (e.g. hire/fire, motivate, train/educate, culture)
Information Technology
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
BusinessStrategy
OrganizationInfrastructure I/T Infrastructure
I/T Strategy
BusinessStrategy
OrganizationInfrastructure I/T Infrastructure
I/T Strategy
Strategy Execution PerspectiveBusiness Strategy - The domain anchorOrganization Infrastructure - The pivot domainI/T Infrastructure - The impact domain
Technology Potential PerspectiveBusiness Strategy - The domain anchorI/T Strategy - The pivot domainI/T Infrastructure - The impact domain
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
I/T Strategy
I/T Infrastructure
BusinessStrategy
OrganizationInfrastructure
BusinessStrategy
OrganizationInfrastructure I/T Infrastructure
I/T StrategyCompetitive Potential PerspectiveI/T Strategy - The domain anchorBusiness Strategy - The pivot domainOrganization Infrastructure - The impact domain
Service Level PerspectiveI/T Strategy - The domain anchorI/T Infrastructure - The pivot domainOrg. Infrastructure - The impact domain
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
TechnologicalVisionary
Enable Value-Add to
Business
I/T Value to Product/Service
I/TStrategy
TechnologyArchitect
Nature ofDomainRelationships
Role of TopManagement
Role of I/TManagement
I/T Focus
I/TPerformanceCriteria
Strategic Planning Method
BusinessVisionary
BusinessArchitect
Drive Value-Addto Business
I/TStrategy
Prioritizer
Businesswithin a
Business
CustomerSatisfaction
I/TPlanningI/T BPR
or Functional
Service Manager
Leader
Reactive/Responsive
Financial
BusinessTransformationor I/T Planning
FunctionalManager
Product/ServiceValue from I/T
CompetitivePotential
ServiceLevel
Strategic Execution
TechnologyPotential
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
BusinessStrategy
OrganizationInfrastructure I/T Infrastructure
I/T StrategyI/T Organization InfrastructureI/T Infrastructure - The anchor domainOrganization Infrastructure - The pivot domainBusiness Strategy - The impact domain
BusinessStrategy
OrganizationInfrastructure I/T Infrastructure
I/T Strategy
Organization Infrastructure StrategyOrganization Infrastructure - The anchor domainBusiness Strategy - The pivot domainI/T Strategy - The impact domain
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
BusinessStrategy
OrganizationInfrastructure I/T Infrastructure
I/T Strategy
I/T Infrastructure StrategyI/T Infrastructure - The domain anchorI/T Strategy - The domain pivotBusiness Strategy - The impact domain
BusinessStrategy
OrganizationInfrastructure I/T Infrastructure
I/T StrategyOrganization I/T InfrastructureOrganization Infrastructure - The domain anchorI/T Infrastructure - The pivot domainI/T Strategy - The impact domain
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
System Support
CustomerSatisfaction
Functional Manager
Nature ofDomainRelationships
Role of TopManagement
Role of I/TManagement
I/T Focus
I/TPerformanceCriteria
Strategic Planning Method
BPR Enabler
Enable Value toBusiness Process
Deploy Value toBusiness Process
Project Manager
Catalyze Value toBusiness Process
ProcessImprovement
from I/T
BPR
Business ProcessArchitect
I/T Organization Infrastructure
Organization Infrastructure
Strategy
OrganizationI/T
Infrastructure
I/T Infrastructure
Strategy
Leader/Sponsor PrioritizerBusiness Process
VisionarySponsor
BusinessStrategy
I/T Strategyor Execute
I/T Planning,I/T BPR
I/T Value toProduct/ServiceI/T Value to BPR
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
BusinessStrategy
Business
Infrastructure
Information Technology
Infrastructure
Information Technology
Strategy
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
I/T Strategy
I/T Infrastructure
Business
Strategy
OrganizationInfrastructure
Combination of: I/T Infrastructure Strategy Perspective I/T Organizational Infrastructure Perspective
Organization Strategy Fusion
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Combination of: Competitive Potential Perspective Service Level Perspective
Organization Infrastructure Fusion
I/T Strategy
I/T Infrastructure
Business
Strategy
Infrastructure
Organization
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
I/T Strategy
I/T Infrastructure
BusinessStrategy
Organization
Infrastructure
Combination of: Organizational Infrastructure Strategy Perspective Organizational I/T Infrastructure Perspective
I/T Strategy Fusion
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Combination of: Strategy Execution Perspective Technology Potential Perspective
I/T Infrastructure Fusion
I/T Strategy
I/T Infrastructure
BusinessStrategy
Organization
Infrastructure
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
IT Strategy
IT Infrastructure
Business
Strategy
OrganizationInfrastructure
Combination of:
IT Infrastructure Strategy Perspective
IT Organizational Infrastructure Perspective
Organization Strategy Fusion
Combination of:
Organizational Infrastructure Strategy Perspective
Organizational IT Infrastructure Perspective
IT Strategy Fusion
Competitive Potential Perspective
Service Level Perspective
Organization Infrastructure Fusion
Strategy Execution Perspective
Technology Potential Perspective
IT Infrastructure Fusion
IT StrategyBusinessStrategy
IT InfrastructureOrganizationInfrastructure
Combination of: Combination of:
IT InfrastructureIT Infrastructure
OrganizationInfrastructure
OrganizationInfrastructure
IT StrategyIT Strategy
Business StrategyBusiness Strategy
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Nature ofDomainRelationships
Role of TopManagement
Role of I/TManagement
I/T Focus
I/TPerformanceCriteria
Strategic Planning Method
I/TStrategy Fusion
I/T Infrastructure
Fusion
Organization Strategy Fusion
Organization Infrastructure
Fusion
Lead Change Accept Change Focused on the Future
Opportunity Seeker
Problem Solver
I/T as a Solution
Catalyze Valueto the Business
ProcessEnabler
New I/TArchitecture
Product/ServiceValue
Cost of Success
Technology Manager
Support Change
Develop I/T
ProcessImprovement
ProcessImprovement
CombinationApproach
CombinationApproach
CombinationApproach
CombinationApproach
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Web-Enabled Assessment ModelThree options:
• Background on the Model
• First-time assessment
• Repeat visit
Features of the website:
In order to enable data gathering & return visits we also needed to have
Ways to uniquely identify users
E-mail addresses and a password
Background information about the users and their organizations
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Overview of the Model
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
ASP Routings
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Alignment Perspective Percentage
Strategy Execution 20%
Technology Potential 16%
Competitive Potential 5%
Service Level 6%
Organization IT Infrastructure 7%
Organization Infrastructure Strategy 3%
IT Organization Infrastructure 8%
IT Infrastructure Strategy 6%
Organization Strategy Fusion 5%
Organization Infrastructure Fusion 6%
IT Strategy Fusion 5%
IT Infrastructure Fusion 14%
Alignment Perspectives
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Perspectives by Industry
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Agriculture Commerce Consulting Education Finance/BankingHealthcare Insurance Government Manufacturing Misc. ServicesPharmaceuticals Transportation Utilities
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Using the Website Practitioner version (www.strategic-alignment.com):
• Aid practitioners in assessing degree of alignment in their firm
• Data used to build anonymous information database by industry
• Enables firm to benchmark itself against its industry, across all industries
• Enable managers to determine how their firm compares to competition
• Use model to assess alignment perspective, then determine steps needed to facilitate alignment between business & IT strategies
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Comparison of Enablers & Inhibitors to Strategic Alignment
Business I/T All ExecutivesSenior executives support
I/TSenior executives support
I/TSenior executives support
I/T
Enablers Strategy developed in conjunction with I/T
Strategy developed in conjunction with I/T
Achievement of strategic goals
Leadership shownby I/T
Leadership shown by I/T
Understanding of competitors/customers
Poor prioritization by I/T
No close relationship between business & I/T
No close working relationship between
I/T & business
Inhibitors No close relationship between business & I/T
Poor prioritization by I/T
Poor prioritizationby I/T
No understanding of its competitors/customers
&Commitments not met
No support for I/T from business executives
Commitments are not met
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Enablers to AlignmentBusiness vs. IT
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Pe
rce
nta
ge
Business Execs.
I T Execs.
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Inhibitors to AlignmentBusiness vs. IT
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Pe
rcen
tag
e
Business Execs.
I T Execs.
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Executive’s Role• Executives should work toward minimizing those activities
that inhibit alignment and maximize those activities that bolster it.
• IT executives can be successful business leaders & keep their organizations in constant harmony by continuous focus on the enablers & inhibitors.
• Patience is also important. Alignment is a dynamic, complex process that takes time to develop and even more effort to maintain.
• Companies that have achieved alignment can facilitate building a strategic competitive advantage that will provide them with increased visibility, efficiency, and profitability to compete in today’s changing markets.
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Executive’s Role
• Ensure cooperation between business & IT to maximize investment in tech.
• IT plays an increasing role in defining corporate strategies, its correct application will facilitate a more competitive and profitable organization.
• Careful assessment of a firm's alignment is important to ensure IT is being used to appropriately enable or drive the business strategy.
• Executives should concentrate on those things that keep their companies aligned and reset the height of the performance standard to a new level.
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
ReferencesBrancheau, J., & Wetherbe, J. (1987). “Issues In Information Systems Management,” MIS Quarterly, 11(1), 23-45.Chan, Y., & Huff, S. (1993). “Strategic Information Systems Alignment,” Business Quarterly, 58(1), 51-56.Dixon, P., & John, D. (1989). “Technology Issues Facing Corporate Management in the 1990s,” MIS Quarterly, 13(3), 247-55.Henderson, J., & Venkatraman, N. (1990). “Strategic Alignment: A model For Organizational Transformation Via Information
Technology,” Working Paper 3223-90, Sloan School of Management, Massachusetts Institute of Technology.Henderson, J., & Venkatraman, N. (1996). “Aligning Business and IT Strategies,” Competing in the Information Age, Luftman, New
York, Oxford University Press. IBM (1981). Business Systems Planning, Planning Guide, GE20-0527, IBM Corporation, 1133 Westchester Ave, White Plains, New
York.Ives, B., Jarvenpaa, S., & Mason, R. (1993). “Global Business Drivers: Aligning Information Technology to Global Business Strategy,”
IBM Systems Journal, 32(1), 143-161.Liebs, S. (1992). “We’re All In This Together,” Information Week, (October 26), 8.Luftman, J., Lewis, P., & Oldach, S. (1993). “Transforming the Enterprise: The Alignment of Business and Information Technology
Strategies,” IBM Systems Journal, 32(1), 198-221.Luftman, J., Papp, R., & Brier. T. (1995). “ The Strategic Alignment Model: Assessment and Validation,” In Proceedings of the
Information Technology Management Group of the Association of Management (AoM) 13th Annual International Conference, Vancouver, British Columbia, Canada, August 2-5, 1995, 57-66.
McLean, E., & Soden, J., (1977). Strategic Planning for MIS, New York, John Wiley & Sons.Mills, P., (1986), Managing Service Industries, New York Ballinger.Niederman, F., Brancheau, J., & Wetherbe, J. (1991). “Information Systems Management Issues For the 1990s,” MIS Quarterly, 15(4),
475-95.Papp, R. (2004). “Assessing Strategic Alignment in Real Time” Journal of Informatics Education Research, (6, 1).Papp, R. (2001). Strategic Information Technology: Opportunities for Competitive Advantage, Hershey, PA: Idea Group Publishing.Papp, R. (1995). Determinants of Strategically Aligned Organizations: A Multi-industry, Multi-perspective Analysis , (Dissertation),
Stevens Institute of Technology, Hoboken, New Jersey.Papp, R., & Luftman, J. (1995). “Business and IT Strategic Alignment: New Perspectives and Assessments,” In Proceedings of the
Association for Information Systems, Inaugural Americas Conference on Information Systems, Pittsburgh, PA, August 25-27, 1995.Parker, M., & Benson, R., (1988). Information Economics, Englewood Cliffs, New Jersey, Prentice-Hall.Robson, W. (1994). Strategic Management and Information Systems: An Integrated Approach, London: Pitman Publishing.Rogers, L. (1997). Alignment Revisited. CIO Magazine, May 15, 1997.Watson, R., & Brancheau, J. (1991). “Key Issues In Information Systems Management: An International Perspective,” Information &
Management, 20, 213-23.
Strategic Alignment: Analysis of Perspectives
TBTLATBTLA© 2007 Raymond Papp, Jeff Lackey
Questions/Comments?
Raymond Papp Jeff LackeyAssociate Professor of MIS MBA Graduate [email protected] [email protected]
John H. Sykes College of BusinessThe University of Tampa