This document describes a method called ProGoAlign for creating heat maps to analyze strategic alignment. ProGoAlign models an organization across three layers - strategy, structure, and operations. It uses heat maps to visualize dependencies and priorities between elements in the different layers, determined through top-down prioritization and bottom-up performance measurement. The heat maps can then be analyzed both ex ante for decisions and ex post for process improvement, outsourcing, and performance evaluation.

1. ProGoAlign: creating heat maps
to realize strategic alignment
NESMA najaarsconferentie: 21/11/2013
Ben Roelens

2. Contact information
Ben Roelens
Universiteit Gent
Faculteit Economie en Bedrijfskunde
Tweekerkenstraat 2, 9000 Gent, België
Ben.Roelens@UGent.be
www.mis.ugent.be

3. Outline
1. Background
2. Introduction
a.
b.
Business-IT alignment
Strategic Alignment
3. ProGoAlign
a.
b.
c.
d.
General
Top-down alignment
Bottom-up alignment
Result
4. Analysis options
a.
b.
Ex ante
Ex post
5. Discussion - Questions

4. 1. Background
• Management Information Systems @ UGent
Economics
MIS
Computer
Science
Focus: conceptual modeling of enterprises and other kinds of organizations
and actors that engage in economic interactions
 Increase understanding & facilitate communication
 To facilitate problem analysis & solution design
 To better engineer (IT) systems that support these phenomena

5. 2. Introduction
a. Business-IT alignment
Gained importance in the ’90s as:
• Concern about gaining value from IT investments
 Alignment is important to realize this

6. 2. Introduction
a. Business-IT alignment
Ensures effective communication between business and IT
professionals
– Business to IT: “What are the business needs?”
– IT to Business: “What information, communication, processing
services, etc. IT can offer?”

8. 2. Introduction
a. Business-IT alignment
Amsterdam framework for Information Management (AIM)
Maes R.: On the alliance of executive education and research in information management at the University of Amsterdam.
INTERNATIONAL JOURNAL OF INFORMATION MANAGEMENT 23: 249-257 (2003).

9. 2. Introduction
• Information & Communication can bridge the gap between Business & IT
 should be managed separately from the technology used to
produce it
• Structure should be managed separately from operations as it is an
important driver for the flexibility of an organization

10. 2. Introduction
a. Business-IT alignment
IT strategy is traditionally focused on the internal domain only
• Seen as an internal response to the business strategy
IT too much seen as purely a support function (i.e. automation support)
• Strategy in management literature focuses on output markets rather than
input markets
 The IT marketplace is an input market where organizations acquire critical
technological functionality to support and shape business strategies

11. 2. Introduction
b. Strategic Alignment: applied on IT?
WHY
• Strategy layer: strategy formulation
Conceptual model: goal model
WHAT
• Structural layer: strategy implementation
Conceptual model: value model
WHO
• Operational layer: strategy operationalization
Conceptual model: process model
HOW

12. 2. Introduction
b. Strategic Alignment: traditional

13. 3. ProGoAlign
a. General
• Development of HEATMAPS between dependent elements of the different
layers
NB: Method is not dependent on existing modelling languages

14. 3. ProGoAlign
a. General: dependencies between layers

15. 3. ProGoAlign
a. General
Definitions:
•
Goal: Long-term desired result that a company wants to achieve
•
Financial Structure: Representation of the costs resulting from acquiring resources,
and the revenues in return for the offered value proposition.
•
Value Proposition: Offered set of products and/or services that provide value to
the customers and other partners, and competes in the overall value network.
•
Core Competence: Ability to coordinate flows of resources through the value chain
to realize the intended value proposition.
•
Value Chain: Overall business process architecture that describes the structured
set of activities that combine resources to created the necessary competences.
•
Process Activities: Work to be done by participants within a collaboration.

16. 3. ProGoAlign
b. Top-down: prioritization – Analytic Hierarchy Process (AHP)
Example

17. 3. ProGoAlign
b. Top-down: prioritization – Analytic Hierarchy Process (AHP)
• Scale:
1: equal importance
3: moderate importance of one over another
5: essential or strong importance
7: very strong importance
9: extreme importance
• Priorities:
based on the Eigenvalues of the matrix

18. 3. ProGoAlign
b. Top-down: prioritization – Analytic Hierarchy Process (AHP)
Step 3: colour code (border of the elements)

19. 3. ProGoAlign
c. Bottom-up: measures
Step 1: define appropriate measures & benchmarks for each element
avg. 1 year
avg. 5€/purchase
Step 2: measure performance in your organization
Step 3: colour code (surface of the elements)
Performance < benchmark  red
Performance ≥ benchmark  green

20. 3. ProGoAlign
d. Result

21. 4. Analysis options
a. Ex ante decisions:
•
•
•
•
•
Complete model
Pareto efficiency
Critical path
Outsourcing opportunities
…

22. 4. Analysis options
b. Ex post analysis:
• Strategic process improvement:
 Determine for critical goals (red importance) which process
steps can be improved (red importance & execution)
• Outsourcing decisions:
 Determine for unimportant goals (green importance),
which process step are candidate for outsourcing (green
importance, red execution)
• Performance-based evaluation
• …

23. 5. Discussion - Questions