Strategic Alignment Model presentation

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  • 1. 1
  • 2.  Role of IT has shifted beyond its traditional back office support model to provide an integral part of an organisational strategy. Organisations fail to realise the value of IT investments due to the lack of alignment between the business and IT strategies of an organisation. Strategic Alignment ensures that the operating elements of the company all work in harmony. Proper alignment will allow an organisation to use information technology efficiently to achieve its business objectives. 2
  • 3.  The Strategic Alignment Model (SAM) is based on the concept of strategic fit between external and internal views and the functional integration between organisational and technology views. One of the most popular models used in analysing and understanding strategic alignment. 3
  • 4.  There are four domains involved in the strategic alignment model. There are two internal and two external domains. External: Business Strategy and IT Strategy Internal: Business Infrastructure and IT Infrastructure 4
  • 5.  Business Strategy IT Strategy 5
  • 6.  Business Infrastructure IT Infrastructure 6
  • 7.  These linkages are necessary because the all the quadrants and components have to work as a whole unit. Strategic fit refers to the use of strategy to determine the infrastructure of the business. Functional integration is most directly related to information technology and the alignment of the business. 7
  • 8. 1) Strategy Execution2) Technology Transformation3) Competitive Potential4) Service Level 8
  • 9.  Anchored on the notion that a business strategy has been articulated and is the driver of both organisational design choices and the design of IS infrastructure. Priority is to improve business processes which places focus on changing business infrastructure. IT focus is on application development, driven by need to support business infrastructure. 9
  • 10. 10
  • 11.  The Wolf Organisation is a traditional manufacturing company located in Pennsylvania. As competitors threatened, Wolf built an enterprise resource planning platform for growth, efficiency and productivity. In ten years, Wolf doubled revenues and positioned itself for expansion. 11
  • 12.  Business Strategy Dedicated to expanding their markets. Achieving Competitive Advantage. Providing exceptional customer service to their customers. Business Infrastructure Management team is an experienced group of professionals dedicated to building better business through service to company and community. Old billing system not meeting customer requirements or keeping up with competitors. To enable business improvement initiatives Wolf implemented SAP within the company. 12
  • 13.  IT Infrastructure Relies on technological innovation. It became one of the first midsize companies to partner with SAP. Recent implementation of SAP Biller Direct has helped to strengthen existing customer relationships and lay the groundwork for building new relationships in a tighter market. Listening to its customers, Wolf integrated Web-based billing, empowering customers who want a digital relationship and stimulating real-time collaboration. 13
  • 14.  Reduced customer and Wolf financial fees. Built entry barriers to competitors. Enhanced customer loyalty and collaboration. Alignment enabled better relationships with customers by meeting customer demand and improving billing detail. Improved communications with regional partners and employees. 14
  • 15.  This perspective is anchored on the notion that a business strategy through appropriate IT strategy and the articulation of the required IS infrastructure and processes. Role of top management is that of the Technology Visionary. Role of IS manager is that of the Technology Architect.
  • 16.  Implement Chosen Business Strategy Identify the value of Information Technology. Identify the best possible IT competencies. identify the corresponding internal IS architecture. The technology transformation model is the ability to transform technology into business success.
  • 17.  Business Strategy  Deliver Creative Technology Solution  Deliver Value  Competitive Advantage IT Strategy  Commitment to a Technology Alliance  Expanding and Strengthening their Strategic Relationships
  • 18.  IS Infastructure  Samsung combined its hard disk drive operations into Seagate.  A NAND flash memory supply agreement under which Samsung will provide Seagate with its market-leading semiconductor product.  A disk supply agreement under which Seagate will supply disk drives to Samsung.
  • 19.  Conclusions  This Alignment enabled both Companies to better align their current and future product.  Accelerate time-to-market for new products.  Positioned the companies to better address rapidly evolving opportunities in the markets.  This alignment significantly expanded Seagate’s customer access in China and Southeast Asia.
  • 20.  Leveraging of existing/emerging IT capabilities. Anchor- IT strategy Pivot- Business Strategy Impacted- Business Infrastructure Needs a dynamic business model
  • 21.  Flextronics produce components, circutboards based in Hollyhill, Cork. IT strategy initiative to improve data use. Business strategy- New Quality Management approach. Infrastructure? New flow of information, improved CRM More detailed overview of production.
  • 22.  Employees: 38,100 Revenue: US$15.3 billion Plants on 5 continents IT Driven- Opportunity to integrate software, improve quality management and quality management. Business Strategy change in expectation and standards. New performance measurement tools and share knowledge worldwide
  • 23. Business Strategy IT Strategy Scope Scope Competencies Competencies Governance GovernanceBusiness Infrastructure IT Infrastructure Structure Infrastructure Processes Processes Skills Skills
  • 24. • Service level alignment is anchored on the notion that IT strategy is the driver of the perspective and it focuses on how to build world class IT/IS organisation within a business.• The role of top management is that of prioritizer.• The role of IS management is that of executive leadership.• Performance criteria is that of Customer satisfaction.
  • 25.  IT Strategy • Maintain business strategy of providing the best service for the lowest price • High levels of IT utilization. • High level of IT innovation. • Create customer loyalty through interactive customer technology and experience.
  • 26.  IS Infrastructure. • Customer ability to track package/product via GPS. • Error handling programmes. • High use of logistics benefiting business process and customer trust and satisfaction. • Online return policy with customer, UPS and the vendor. • Shipment updates via mobile apps. • Reroute abilities through IT capabilities. • Data delivery system of companies can be attached to the UPS server.
  • 27.  Business Infrastructure • Enabling employees the skill set to operate all technology and new technology innovations. • Integrating the advanced IT into the basic business process. • The provision of high levels of information to customers with the same low prices.
  • 28.  Conclusion ◦ UPS is a world leader in the postal service business. ◦ It was the first postage service to provide the customer with the technology experience. ◦ UPS’s IS infrastructure has led them to gain competitive advantage over their rivals on the basis of the best service for the best value. ◦ UPS are very progressive expansion wise and our becoming leaders in the business in the European and Asian market.
  • 29.  Example of how IT can bring harmony between strategies. Exploitation through IT.