Week 4 - Strategic Alignment Model

Sources / References:

1) "Strategic Alignment: Leverage Information Technology for Transforming Organization" by J. C. Henderson and N. Venkartraman 1993

http://search.proquest.com/docview/26252741/134A6C8B53F19A4F606/1?accountid=16210

2) "Strategic Alignment: A Model for Organizational Transformation via Information Technology" by J. C. Henderson and N. Venkartraman 1990

http://dspace.mit.edu/bitstream/handle/1721.1/49184/strategicalignme90hend.pdf

 

 

Subject:

Which alignment strategy in SAM model is the best? Why?

=====================================================================

Response:

The Strategic Alignment Model (SAM) is the conceptual framework that an organisation adopts which describes the inter-connections between the business and IT aspects of the organisation. It is the operational formula that a company or enterprise chooses to follow with regards to both the quality and extent of IT integration and support it has within the bounds of its business activities.

The diagram above is the SAM depicted in graphical form. As can be seen, there are four inter-related elements (domains), which constitute the structure of the model. These four domains are Business Strategy, Organisation Infrastructure, IT Strategy, and IT Infrastructure respectively. The "perspective" of the model refers to the relative amount of importance the model places on each domain.

Broadly speaking, depending on whether Business Strategy or IT Strategy is the focus, or common domain anchor, there are four dominant perspectives:

Business Strategy -> Organisation Infrastructure -> IT Infrastructure

This popular perspective places Business Strategy as the focus, and uses it to dictate Organisation Infrastructure, which in turn is used to dictate IT Infrastructure. This is the traditional approach of hierarchical strategic management and implies that IT is an expense which comes after both Business Strategy and Organisation Infrastructure. Thus, IT Infrastructure is designed so that it facilitates business decisions.

Business Strategy -> IT Strategy -> IT Infrastructure

This perspective, unlike the one above, is not limited by Organisation Infrastructure and it seeks to identify the best IT competencies. This takes advantage of the emerging IT and utilises IT as a means to assist business operations by having a strategic plan specifically for IT.

IT Strategy -> IT Infrastructure -> Organisation Infrastructure

This perspective is related to the strategic fit between IT Strategy and IT Infrastructure with corresponding impact on Organisation Infrastructure. Here, the role of Business Strategy is very small and indirect. This ensures that the use of IT resources is effective and responsive to the fast-changing customer demands.

IT Strategy -> Business Strategy -> Organisation Infrastructure

This perspective puts IT Strategy as the focus and adjusts Business Strategy to cater for the new emerging IT. This allows the growth of business scope and identifies the best set of strategic options for Business Strategy and the resulting Organisation Infrastructure.

It can be seen that every perspective mentioned above has its own virtues. In my opinion, while they are vastly different concepts, there is really no optimum perspective here. I believe that different perspectives will suit different organisations, or different leadership styles, or different customers. Timing may also be critical to the effectiveness of a perspective as the economic climate changes with time. One may have to find out the most suitable perspective for a specific business by experience and the method of trial and error.