Strategic Alignment
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Strategic Alignment

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Group presentation by Basheer & team. This is part of ITPM course in UTM.

Group presentation by Basheer & team. This is part of ITPM course in UTM.

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  • 1. Groups members :Basheer Mohammed Alhaimi Warya Anwar Fadhl Mohammed Hujinah Salihu Zaharaddeen Kado
  • 2. Strategic alignment refers to the degree to which the ITmission, objectives and plans support and are supported bythe business mission, objectives and plans”. And also strategicalignment refers to “Business-IT alignment refers to applyingInformation Technology (IT) in an appropriate and timelyway, in harmony with business strategies, goals and needs” For organizations to stay competitive in a dynamicbusiness environment, they have to determine andunderstand how to manage IS/IT strategy
  • 3.  Information Technology (IT) has a profound effect on an organization’s strategic position because they fundamentally change both the mechanism of adding value and driving forces of industrial competition . IT management strategy focuses on relationships between the specialist and users and between the center and divisions or business units .
  • 4. The Strategic Alignment Model (SAM) can be defined as a business-ITmanagement framework to enable successful implementation of business andInformation Technology (IT) and their corresponding infrastructurecomponents. A number of business-IT or business-strategic alignment modelshave emerged in the literature. The SAM model represents the dynamicalignment between the business strategic context and the IT strategic context.It is based on the building blocks of strategic integration and functionalintegration. The strategic alignment model is defined in terms of fourfundamental domains of strategic choices that consist of: businessstrategy, information technology strategy, organizational infrastructure andprocesses, and information technology infrastructure and processes.
  • 5. These perspectives are classified in two categories that include: 1. Business strategy as the driver: When the business strategy drives the change forces in the services as the business driver applied to the domain. It has two cross-domain relationships that represented in strategy execution perspective and technology potential perspectives. 2. IT strategy as the enabler: When the IT strategy provides the change forces in the model, it serves as the IT enabler applied to the domain to enable new or enhance business strategies with organizational implications. It has two cross-domain relationships that represented in competitive potential perspective and service level perspective.
  • 6. Each perspective consists of three components, which shows the interplayamong three key domains shaping what would appear as a triangle. Thecomponents in that triangle are anchor, pivot, and area of impact.  The anchor represents the strongest area of the business. It directs the change that business goes through based on the perspective.  The pivot represents the weak area that subjects to change through the re-alignment.  The area of impact represents the area that will be directly affected through the changes made in the pivot area through realignment
  • 7. 1. This framework is useful because it recognizes that all the sectors and thecomponents of the model should to be considered.2. The SAM is use a functional business unit has to consider the rest of theorganization before action is taken.3. There is external scanning of an organizations environment of and theexternal IT environment and internal monitoring of the relationships betweenIT and the business at strategic and infrastructure levels.4.The SAM model gives the organization reviewing its strategic alignment aclear view of the totality of what should be considered and how interactionsoccur.
  • 8. Complexity and applicability1. The approach does not address is the complexity of the model if theorganization is a decentralized business. Are all the business units going toundertake the plan separately or does that depend upon the interactionbetween them? What are the dynamics of this situation?2. The second issue is the applicability of the model, how does the use of theframework cater with the differing stages of an organizations life cycle? Areall of the phases of the SAM required for every period of growth / stability /decline? Is every organization required to get to the most optimal level ofalignment? Clearly the models do not consider these points in theirapproaches.
  • 9. European Global Manufacturing Inc. European Global Manufacturing (EGM) Inc. is a Europeanmanufacturing firm that was founded for more than 100 years ago with about40000 employees in approximately 100 manufacturing sites that span 70countries. The firm supplies bearing, seals, lubrication and lubricationsystems, maintenance products, Mechatronics products, power transmissionproducts, customer solutions and related services globally. The management of EGM noticed that the firm couldn’t control thefinancial costs and expenses of the IT services, where they preferred to have abetter control on the cost and expenses of their IT, therefore the firm decidedto outsource all its IT services to Electronic Data Systems Corporation (EDS)and settled a long term agreement. EDS is a global technology servicecompany that delivers business solutions, to provide the firm with all theinternal IT services.For better management of business-IT strategic alignment the organizationsaligned its business strategy component to the IT strategy component.
  • 10. Business strategy IT strategy OutcomesBusiness scope : IT scope : In the Finance business areaIs represented in developing That represented in different Improving business-to-business, trade-products and offering a wide information systems to fit every related, transaction-based financialrange services. business area based on their functions and processes. needs. In the Product Development Area Development of complex information assets including product design,service documentation, and regulatory submissions.Business competencies: IT competencies: Advanced softwares are implemented inAre represented in offering Are represented in the the firm such as: Masterpiece andhigh quality products, and fast characteristics of the different Windchill that support the businessdelivery on time. advanced software systems process management and guarantee high implemented quality products and fast delivery.Business governance: The IT governance Creating an IT Governance unit toIs a corporate governance that is represented in outsourcing take care of the business processadopted business policy that alliance and joint research and between the EUGM and EDS.the firm enters the market as a development for new ITsingle entity or via alliances capability, where it handles the business processes of the firm with EDS.
  • 11.  The work presented a qualitative study based on a literature review supported by an empirical study in an advanced research area, business- IT strategic alignment that is important both to business executives and IS/IT managers and professionals. It focused on the business-IT strategic alignment and aimed to investigate and identify the strategic alignment and alignment gap between business strategy and IT strategy, and to determine how can organizations manage successfully to align their business strategy with IT strategy to achieve competitive advantage and gain business.