1 ISM645 Strategic Information Technology Planning v1.1 .docx

1
ISM645 Strategic Information Technology Planning v1.1
ISM645 Information Technology Strategic Plan
Template
V1.8
Introduction: How to Use This Tool
This template is developed for small and mid-sized enterprises
(SMEs) that do not have the
resources to perform full IT governance to develop a complex
IT strategy. This tool provides an
outline that allows CIOs to develop a simple, yet effective IT
strategic plan.
Complete all the sections, using the instructions provided. Each
section contains an example that
can be removed once the document is complete.
[Insert Company Name] IT Strategic Plan
Author: [Insert Name]
Created on: [Insert Date]
Last Modified on: [Insert Date]
Executive Introduction (Summary) & Thesis Statement

Introduce the IT Strategic Plan. Give a summary of what is in
the document. The Execuvtive
Summary should be a 30 second read and give a clear
understanding of what is in the document.
In the last paragraph, include a thesis statement.
Example: This IT Strategic Plan lays out the one, two, and three
year plans for MarkO Ltd, with
regards to IT Areas of Applications Development, Networking,
Operating Systems, Databases,
Organization, and Hardware; and the ability for this plan to
support the business initiatives of the
company.
Strategic IT Mission, IT Vision, and Horizon Statements
Include the IT Mission and IT Vision Statement here. Also,
specify the time periods to which this
plan pertains.
Example:
“The mission of this company is to …..”
“This Company will be the ….”
“This plan is expected to cover the period from 01/Sept/2013 to
31/Aug/2015, with strategic plans
for each year noted.”
Purpose of Plan
Indicate the reason for creating this IT strategic plan. Specify
what the plan will accomplish.

2
Example:
The purpose of this plan is to help our company achieve its IT
Strategy. It is meant as a guide to
decision making in IT. Incoming tasks to IT will be prioritized
and executed (as much as possible)
using this plan as a guide. While exceptions may occur, they
should be exceptions, not the
everyday rule.
Corporate Strategy
Describe the strategy of the enterprise. Obtain this information
from the CEO or a publication
from top executives.
Example:
Our business strategy is to retain existing customers through
continuing to improve our existing
product line as well as gain new customers though aggressive
marketing campaigns. We may
also expand the spending of our existing customers by
developing other related product lines.

Business Initiatives to Support Corporate Strategy
List the business initiatives that are planned for the period that
will support the business strategy.
Example:
Strategy Name Business Initiative Target Completion
Date
Expected
Impact
Retain Existing
Customers
Loyalty Campaign Q1 +10%
Renewal
Rate
Mail Out Satisfaction Survey Q3 + 1%
Renewal
Rate
“10% Off New Purchase”
Campaign
Q3 + $1M
Expanded
Revenue
Gain New Customers Expand into Asia Q2 + $10M
3

New
Revenue
Divide Existing Sales
Territories
Q3 + $1M
New
Revenue
Expand Current
Customer Spending
Develop Related Product X Q4 + $5
Expanded
Revenue
Strategy Name Business Initiative Target
Completion Date
Expected
Impact
IT Strategy
Briefly describe your IT strategy. The IT strategy should have
the business strategy as its basis.
Spend at least a paragraph on each element below stating your
IT Strategy:
Questions to consider:

• What kind and style of Organizataion will carry out the IT
Strategy?
• What is the organization’s operational profile?
• What is the organization’s risk profile?
• Is the organization cost conscious?
• Is IT development or purchase focused?
Your strategy should address the following IT categories:
• Application development
• Hardware and infrastructure acquisition
• Data center builds and adjustments
• Security
• Compliance and governance
• Networks
• Data (Including Databases, Data Warehouses, Data sources
and Big Data)
Example:
To enable our corporate strategy, our IT Strategy is to assist our
marketing campaigns by
enhancing our toolset in order to derive insight on brand and
product performance by market
segment and geography. Additionally, we will strengthen our
product development support
structure by automating product production capabilities.

4
IT Strategic Plan to Support Business Initiatives
List the IT systems that are required to support the planned
business initiatives. Ensure to include
any necessary notes.
Example:
Business
Initiative
IT System
Required
Year(s) this
project will
take place
Ball Park Estimates
Time Resources Cost Approved
Loyalty
Campaign
E-mail
Distribution
System
2014 n/a n/a n/a Yes
Mail Out

Satisfaction
Survey
E-mail
Distribution
System
2014
(See note 1)
40
days
2 FTE $10,000 No
10% Off
“New
Purchase”
Campaign
E-mail
Distribution
System
2015
(See note 2)
20
days
1 FTE $5,000 Yes
All
Campaigns
Campaign

Reporting
System
2014-2016
(See note 3)
200
days
2 FTE $10,000 Yes
Expand into
Asia
Servers,
Workstation
s
2016 40
days
3 FTE $50,000 Yes
Develop
Related
Product X
Product X 2016 200
days
10 FTE $100,000 Yes
Related Notes:

1. Survey Capable. Our current e-mail distribution system is not
capable of handling in-line
survey questions. We will need to add support for this
capability. We are assuming we
will go with the simplest solution (link to a survey Web page)
and will create our own
survey instead of purchasing a survey package.
2. Coupon Capable. Our current e-mail distribution system is
not capable of handling
attachments or coupons. We will need to add support for this
capability. We are
assuming we will go with the simplest solution (embedding the
coupon in the e-mail).
3. The new Campaign Reporting system will consist of the
following project components:
a. Define brand/product performance metrics
b. Develop data warehouse architecture
c. Design/build data warehouse/data marts
d. Design/build ETL mechanisms
e. Design/build dashboards, queries, and reports
Business
Initiative
IT System
or
Initiative
Required
Year(s) this
project will
take place

Ball Park Estimates
Time
(# Days)
Resources
(# FTE)
Cost
($)
Approved
(Y/N)
5
Key Performance Indicators
Insert a series of metrics on how you will measure the success
of your plan. Metrics can be
constructed in many different ways. Some things to consider
however in any metric is: Ease of
Read, Accuracy, Clarity of Terms & Meaning, and Take Aways.
Using a red, green, yellow color
indicator along with a printed percentage and name tag, can
give a lot of information in a small
space. Stay away from the use of approximations unless the
metric is for estimations in general.
Try to use acronyms only if the audience will clearly and
quickly understand them. Consider the
take away effect of the report…when the person sees this, what

will they remember when they
walk away?
Example:
Here is a sample of a monthly project update. There is a lot of
information on this one page.
However, in a 10 second time period, the viewer can determine
if the project is on track, where it
is in the schedule, whether the cost plan is on track, and who is
in charge.
IT Strategic Plan – Roadmap Chart
Insert a Roadmap Flow Chart (or some other graphical
representation of your plan) to depict the
schedule for implementing the approved IT systems. This plan
ensures that resources are
available for the projects at the time they are required.
Categorize your plan into 1, 2, and 3 year
strategy.
2Confidential Property of Schneider Electric
Project Gemini
Project Manager:
Richard Morten
Business Transformation Leader:
John Williamson
Project Sponsor:
Ted Kleem
Program:
North America IT
DMT PR Number:
PR-22051
Funded Amount:

$13M
bridge SAP conversion of US Legacy
ReSale ,Inventory Management and
Distribution Systems supporting Athens
TX and Mechanicsburg PA HVDCs.
6 Primary functions in scope : CCC,
Distribution, FiCO, Inventory
Management ReSale and Transportation
Project Objective
IT Project Schedule Segment
Go-live Date : Baseline September 1, 2015, Rescheduled to Oct
18th
Location / Functions : Athens, Dolwick, Raleigh – CCC, FICO,
Logistics Resale
Next Milestones:
Solution
Acceptance Sept 21st, CutOver Gate Review Oct 5thS
ta
tu
s
• 92 of 101 ChR developments delivered (81 of 101 Tested and

Validated),
• LQT (local qualification testing) Completed (Validated and
Closed 140 TCS), 3 week FIT (final integration testing)
campaign conducted
with 106 Scenarios run, 67% validated
• Completed Purchase Order and Sales Order Dry Run migration
tests
• Trial Conversion /TC3 Data Load completed
• Completed Train The Trainer Training Campaign
• Added Batch Management to Scope for Country of Origin
configuration and testing completed
-Completed Oct Physical inventory plan with FiCO and Athnes
to accommodate the revised Go Live date
A
c
c
o
m
p
lis
h

e
d
• Deliver and test remaining change requests– Sep 18th, 5 ChRs
to be delivered 9/14, 4 to be delivered post go live
• Fix and retest remaining 5 open FIT Defects
• Kick Off End User training – Sep 8th
• Complete FIT validation and solution acceptance (Steering
Committee Validation Sept 21st)
• Complete Business Go-Live Readiness Assessment – Site
readiness checklist and domain SIM meetings initiatedN
e
x
t
S
te
p
s
• Development delivery and quality, 114 defects vs 60 ChRs
• Outbound EDI mapping and development incomplete, hybrid

architecture and hard coded legacy logic is delaying progress,
• SAP customer data inaccuracies requires unplanned clean up
effort and to reestablish the governance/run process
• Compressed cutover schedule
• QA test environment issues and constraints (Q2C QA isnt
sized
for DC volumes, Cordys QA outages, SAP config transports)
R
is
k
s
• Working with development leads to expedite development
• Global and external experts added to team to confirm
architecture and complete mapping, dedicated GD
development capacity assisted
• Dedicated data correction team assembled, run state
governance process being reestablished in May

• Detailed planning and extensive dry run testing where possible
• Know and accepted risk, delays partially mitigated by 2
weeks
of LQT contingency
M
itig
a
tio
n
Reporting Period: 08 2015
Q2
2014
Q3
2014
Q4
2014

Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Go-live Athens
Go-live HVDC
Hypercare

CompletionAnticipation Hypercare
Foundation
Go-live MechanicsburgFoundation
HVDC
Schedule
Business Case On Cost Plan
Resources Risk
CutOver
Completion
6

Example:
Figure 1: Roadmap Chart of IT Projects in support of the
Corporate Strategic Horizon
7
IT Strategy Execution Plan
How will you communicate the new IT Strategy to the
Company? List the actions you will take
with a brief detail of how you will implement the IT Strategy.
Example:

Figure 2: Execution Plan for the IT Strategic Plan
1. Every board member and member of management should get
a copy of the plan.
2. Consider distributing all (or highlights from) the plan to
everyone in the organization. It's
amazing how even the newest staff member gains quick context,
appreciation, and meaning from
review of the strategic plan.
3. Post your mission and vision and values statements on the
walls of your main offices. Consider
giving each employee a card with the statements (or highlights
from them) on the card.
4. Publish portions of your plan in your regular newsletter, and
advertising and marketing
materials (brochures, ads, etc.).
5. Train board members and employees on portions of the plan
during scheduled orientations.
6. Include portions of the plan in policies and procedures,
including the employee manual.
7. Consider copies of the plan for major stakeholders, for
example, funders/investors, trade
associations, potential collaborators, vendors/suppliers, etc.

8
IT Strategic Plan Summary
In a one to three paragraph summary, describe what it took to
develop and write the IT Strategic
Plan. What information was helpful? What information was
missing or would have been importan
to know?
Signatures:
CIO/IT Manager: Date:
___________________________
_____________________________
CEO/President: Date:

___________________________
_____________________________
_____________________________________________________
ISM645 Information Technology Strategic Plan
TemplateIntroduction: How to Use This Tool[Insert Company
Name] IT Strategic PlanAuthor: [Insert Name]Created on:
[Insert Date]Last Modified on: [Insert Date]Executive
Introduction (Summary) & Thesis StatementStrategic IT
Mission, IT Vision, and Horizon StatementsPurpose of
PlanCorporate StrategyBusiness Initiatives to Support Corporate
StrategyIT Strategic Plan to Support Business InitiativesKey
Performance IndicatorsIT Strategic Plan – Roadmap ChartIT
Strategy Execution PlanIT Strategic Plan Summary
ISM 645 Strategic IT Planning Case Study Company Profile
V 2.2

Company Information
MarkO Ltd. is an international cloud services treasury company
headquartered in Costa Mesa,
California with offices in New York, Chicago, Atlanta, London,
Paris, Amsterdam, Minsk,
Belarus, Tokyo, Beijing, and Dubai. It provides financial
treasury services, via a cloud-based
software solution, that customer’s access via the web, without
requiring hardware or special
software. Customers pay a monthly fee for an instance (copy of
the application) of the product,
which is a representation of their treasury management system,
but hosted by MarkO Ltd. In its
data center, instead of in their own data center. Treasury
management services includes cash and
liquidity management, risk management, hub communication
services to financial clearing
houses (and transfer pricing centers for monetary exchange),
and supply chain/invoicing
services.
The company is comprised of 600 employees and 75 consultants
in various areas of the business

(although 80% of them are in information technology).
Although now headquartered in Costa
Mesa, California, the company was first managed out of Lyon,
France for over 12 years. The
company is now 15 years old and is considered to be an old
start-up or what is sometimes called
a Maturing Scale-Up.
The company is led by Jean Pierre Rochard, the CEO. He
reports to a board of directors
comprised of three French directors, four American directors,
one German director, and one
British director. He has eight direct reports that include EVP
Sales, SVP Marketing, SVP Client
Services, CFO, CIO, COO, SVP Channel Sales, and SVP
Distribution. Legal and HR report to
the CFO. Until recently, the information technology (IT)
department reported to Rochard. Two
months ago, Rochard hired a new CIO to run the IT department.
This new CIO must quickly
assess the business, specifically the IT situation, and develop a
Strategic IT Plan for the
company.

Financial Considerations of the Business
Annual revenues are 45M€ on a net operational cost of 60M€.
The rise in costs is associated with
the addition of three new product lines that have been in
development for the last two years and
are now about to be delivered. The CEO is considering
capitalization via a venture capital
insertion, which would be a second round of Venture Capital
(VC) funding for the company and
would be projected at 40M€. He also has an option of financing
the next three years using a line
of credit from his bank. He can capitalize much of his
development and R&D work, with hopeful
forecasted sales that will help him break even within the next
three years. Either choice will
allow him to splash his new products and project a positive
margin over the next five years.
Strategic Business Goals
Rochard and the executive team have completed their five-year
plan and have determined their top
business goals are as follows:

companies (companies over
3000 users), not just small to medium businesses, with the same
or faster speeds within the
next year
for the next five years while
holding operational costs to a growth of 5% each year.
ntire
company over the next two
years
system to include all financial,
HRMS, Sales, Marketing, Operations, Professional Services,
and Product Management.
disruptive to the
market, with a break-even revenue
goal within 2 years

service with a break-even revenue
goal within 3 years
Middle East within 2 years
headquarters, regional and professional
support center in mainland China
interoperable connections and the
ability to integrate new modules quickly and accurately within
the next four years
-boarding new
customers onto the closest
regional data center) into regional areas from the current 3-5
month turn around to several
weeks within the next two years
vendors for MarkO products to
easily integrate within the next two years

of the MarkO program and
to the various elements of the MarkO product offerings in the
next year
The Role of the Strategic IT Plan
The Strategic IT Plan is a serious component of the company’s
strategic decision documentation
and overall business plans for Jean Pierre and the Board. It will
help them determine the various
costs for growth of the products and services. It will also give
them a one, two, and three-year
projection of capacity, which will help them determine volume
and price point. Jean Pierre
would also like to have some simple and easy to view key
performance indicators. These should
be recognized values that tells him and the other executives that
the plan is on track and
achieving what it set out to do. These will figure strongly in the
revenue projections for the
company and determine how fast the R&D debt can be washed.
Additionally, larger, more
revenue generating companies have been asking MarkO Ltd for

an IT plan to see if the cloud
company can sustain itself and grow its services base through
its technology plans and strategy.
These larger companies want to know if MarkO Ltd. can
continue to sustain its growth in
product and service capability over the next several years. Only
then will they be willing to
hand over their treasury services to them.
The IT Environment
The IT environment is comprised of four traditional co-location
data centers located in Phoenix,
Arizona and Teaneck, New Jersey in the United States; and
Paris, France and Pantin, France in
Western Europe. The company has also contracted with a cloud
services provider, Amazon Web
Services (AWS), a franchisee of Amazon in mainland China.
Each data center (not including the
AWS Center) is comprised of eight racks of equipment
including servers, routers, switches,
mass-storage, and data replication and back-up equipment. All
centers contain an InterNap
solution (the presence of all major carriers coming into one
accessible physical presence).

MarkO Ltd. maintains a 300GB network, with internal 10GB to
the desktop. User capability
(access speed) varies based on the customer’s internet speed,
nodal population, and latency
(mostly influenced by the software instance’s point-of-presence
location relative to the
customer’s website).
Company IT Products & Services
The MarkO Ltd. Treasury Management Service (TMS) product
is a pure Software-as-a-Service
(SaaS) play in the cloud. It is a monolithic application, built
upon over the last twelve years. It
uses various versions of Java and Java scripts, including
versions dating back to v1.5 through
v7.1. Although there is a refactoring project that is done in the
background, the primary
development work has always been enhancement to products,
followed by bug or engineering
fixes to the product, followed by refactoring or core code clean
up. Ultimately, the desire is to

segment this monolithic application into four product areas:
cash/liquidity, risk management,
invoicing/supply chain, and hub communication. These areas
can be segmented into modular
code instead of existing in one monolithic stack. Additionally,
the code uses the Python protocol
as its communication interface. However, this will change to
Java, one feature set at a time, until
the entire hub communication interface’s Python code is
replaced with Java 7 code.
The Software Operating Environment
The application servers are virtualized using VMWare at a ratio
of @ 18:1. The environment
uses active – passive interfaces between server instance
reflections in the cluster, and between
reflections at a reflection site for disaster recovery (DR)
purposes. Return to Operation (RTO)
time is 4 hours, although most of the larger companies that are
customer candidates would like to
see this reduced to 10 minutes or less, indicating a major shift
to an active – active environment.
The operating system is Linux Red Hat. It is housed on Dell
Blade servers that are currently two

years old. There are five server slots open in two racks for each
of the four data centers. Mass
storage is rack-mounted EMC VX 600 virtual drives. There is a
mixture of storage attached
network drives, network attached storage drives, and serial
advanced technology attachment
(SATA) drives. Each center’s local mass storage houses 3TBs of
storage (raw). It also houses
500GB of solid state device storage (SSD) for maintenance
utility, logging, etc.
Data is housed in an Oracle 11G data cluster, virtualized but
segmented from the application
clusters. Currently MarkO Ltd. uses the Standard Edition (SE)
license base, but Oracle’s move to
a different licensing pattern and the shift in its licensing billing
will force MarkO Ltd. to move to
SE2 in 2017. At that time, MarkO Ltd. may need to make a
decision to move to Enterprise
Edition (EE) or stay with SE2. The difference in pricing and
capability still need to be
researched. Along with Oracle 12G, MarkO Ltd. is also
planning a business intelligence
capability, utilizing the database environment as one of the data

sources. This may mean a
movement to Oracle Business Intelligence (OBI) as a new
application. MarkO Ltd. must conduct
research to see if this is a BI tool for future use and
monetization, or if another product is more
financially and technically feasible. Some other candidates
include Pentaho, Tableau Server,
BizViz, Domo, Birst, and Qlik. The sales and marketing groups
have indicated that a BI solution
could be monetized (functionality sold to customers) in two
years. It is important to determine
what technology opportunities there may be to manage and
leverage the possible Big Data
potential at MarkO Ltd. The IT department has to research,
finance, and plan the implementation
of a solution in the coming year in order to meet that projection.
Internal IT Considerations
Internal IT has recently been moved from the finance
department to the central IT department.
The Internal IT Group responsibilities include the service and
provisioning of laptops, cell
phones, and technology peripherals including office automation
solutions, network solutions,

monitoring of wiring closets, WAPs, and facility-based
infrastructure. IT has a staff of 12 people
posted in its international offices to service company personnel.
95% of the company’s personal
computing is done on laptops. The company has not
implemented Bring Your Own Device
(BYOD) as of yet but will have to plan this for the future. The
sales force is currently pressing
the IT department for another alternative to laptops for its
highly mobile sales force. Currently,
the office automation software is Google Apps, with an Outlook
translator for those that want an
Outlook experience on the desktop. These were appropriate apps
when the company consisted of
25 people, but lately, the company executive committee has
questioned whether a strong suite
should be introduced. Recently, Microsoft Office 365 was
introduced to the company. However,
even today, there are applications running in Google Apps on
the Google (Docs) Drive. There is
currently no plan for rolling over these apps to a standard
platform.

Business Applications
Additional business apps exist in the areas of enterprise
resource programs (ERP), human
resource management systems (HRMS), and sales automation
and customer resource
management systems (SA-CRM). The ERP for MarkO Ltd. is
OpenERP. However, this was
chosen nine years ago when the company was small and there
may be a need to go to a more
robust ERP system. It is a cloud-based system, but the company
must consider whether it should
go private cloud, instead of public cloud or inside the
company’s data center (an internally
installed, or In-Premise, solution). The HRMS system is
Bamboo. However, the HR department
has taken on the job of selecting and implementing nine
additional HR solutions to supplement
Bamboo. These include everything from travel reservations,
expense reporting, personnel
management, evaluation systems, recognition systems,
budgeting and headcount management
systems, and benefits systems. There has been no
implementation of single sign-on (SSO) or of

extended active directory services.
The sales and marketing forces have taken it upon themselves to
select Salesforce.com as a sales
automation provider and as a CRM provider. Both groups have
separate instances of
Salesforce.com with a series of custom HTML5 and Force.com
applications already written for
their instances. At this time, there is no connection from
Salesforce.com to the ERP system, nor
is there a formal CRM ticketing system in place. Customer
service is handled by an outsourced
service manager (ServiceNow), which is a cloud-based customer
service provider. Visibility into
ServiceNow is somewhat limited, due to a lack of integration
into MarkO Ltd. systems, not
because of ServiceNow’s API’s, which have been provided to
MarkO Ltd.
Software Engineering
MarkO Ltd. writes its own software in Java. It has two
development centers: Lyon, France and
Minsk, Belarus (Russia). However, one of the centers is agile

methodology driven (Lyon) and
the other (Minsk) is Waterfall or SDLC oriented. The IT team is
segmented into three major
groups:
developers and testers in both
Minsk, Belarus and Lyon, France. There is a total of 82 people
(45 in Minsk and 37 in
Lyon). Each product engineering team is led by a technical team
leader. Each team is
comprised of several software engineers, quality assurance (QA)
testers, test automation
programmers, and Scrum Masters (Scrum is the Agile
methodology currently employed).
The cost of software development production in Minsk is
approximately 76% of that in
Lyon, with a majority of the cost being actual salaried labor.
MarkO Ltd. hires few
contractors and has a policy that a contractor that is projected to
be in place for more than
one year is converted (or the role is converted) to a full time
equivalent (FTE).

owners for each of the four
products, and business analysts in each of the product silos.
There are four product
owners with four business analysts apiece. Currently, there is a
VP over both of these
groups as well as a product architect, who was also a co-founder
of the company. Both of
these VPs report to the CIO.
eight system administrators,
one DBA, one systems architect, three network analysts, and a
technical architect.
The Mission!
You are the new CIO faced with this environment. The CEO and
the board are looking to you
and your Strategic IT Plan to solve some of the immediate
issues as well as position the company
for long term growth and scalability. You have some clean-up to
do in many places, but there is a

severe thirst for new functionality and features in the product.
Both Sales and Marketing are
complaining that the software development is too slow and that
new features are not being
implemented soon enough. There is a product steering
committee that meets once a quarter, but
records indicate that decisions made by this committee are often
altered after the decisions have
been made by the committee, vetoed by the CEO, or ignored by
the sales staff. You, as well as
the CEO, are hoping that your Strategic IT Plan will get a grip
on this environment and control
some of the things holding the company back from its potential.
You have six weeks to produce
this plan in whatever format you chose, keeping in mind the
segments that must be addressed and
the content of your company’s internal and product/service
systems.
5/26/2020 EBSCOhost
web.a.ebscohost.com.proxy-

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9443-
8dfff5d31f0b%40sessionmgr4008&vid=1&ReturnUrl=htt… 1/17
Title:
Authors:
Source:
Document Type:
Subject Terms:
Author-Supplied Keywords:
NAICS/Industry Codes:
Abstract:
Record: 1
A Simple Instrument to Measure IT-Business Alignment
Maturity.
Khaiata, Mohammed (AUTHOR)
Zualkernan, ImranA. (AUTHOR) [email protected]

Information Systems Management. Spring2009, Vol. 26 Issue 2,
p138-
152. 15p. 1 Black and White Photograph, 14 Diagrams, 2
Charts, 2
Graphs.
Article
*Business logistics
*Standards
*Information technology management
*Business planning
*Information & communication technologies
*Strategic planning
*Information resources management
*Organizational learning
Information technology equipment
Cyberinfrastructure
IT-Business alignment
maturity model
541614 Process, Physical Distribution, and Logistics Consulting
Services
519190 All Other Information Services

The challenge of aligning Information Technology (IT) to
business has
often been cited as a key issue by IT executives. This paper
presents a
simple, flexible, and easy-to-use instrument that measures the
alignment maturity between business and IT and identifies
major gaps.
The proposed instrument is based on Luftman's "Strategy
Alignment
Maturity Model" (SAMM); it directly encodes all attributes of
SAMM
alignment areas using a unidimensional framework. The
instrument
supports multiple levels of analysis with minimum assumptions
about
data using non-parametric statistical tools. In addition, the
instrument
provides an aggregation procedure to summarize the alignment
maturity
level for high-level executives. The instrument can also be
customized
to incorporate the contextual parameters of a company. In
addition to
the development of the instrument, this paper also shows how

this
instrument was applied to assess the alignment maturity level
between
IT and business in a rapidly growing company that had recently
been
publicly listed. The instrument was successful in identifying six
major
gaps for the company across the various alignment areas. These
gaps
were benchmarking, business metrics, strategic business
planning, inter
/ intra organizational learning, architectural integration, and the
impact of
IT on business processes. [ABSTRACT FROM AUTHOR]
1
1
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American University of Sharjah, Sharjah, UAE
1058-0530
10.1080/10580530902797524
37604193
Business Source Elite
A Simple Instrument to Measure IT-Business Alignment
Maturity.
The challenge of aligning Information Technology (IT) to
business has often been cited as a key issue by IT
executives. This paper presents a simple, flexible, and easy-to-
use instrument that measures the alignment
maturity between business and IT and identifies major gaps. The
proposed instrument is based on Luftman's
"Strategy Alignment Maturity Model" (SAMM); it directly
encodes all attributes of SAMM alignment areas using
a unidimensional framework. The instrument supports multiple
levels of analysis with minimum assumptions

about data using non-parametric statistical tools. In addition,
the instrument provides an aggregation procedure
to summarize the alignment maturity level for high-level
executives. The instrument can also be customized to
incorporate the contextual parameters of a company. In addition
to the development of the instrument, this
paper also shows how this instrument was applied to assess the
alignment maturity level between IT and
business in a rapidly growing company that had recently been
publicly listed. The instrument was successful in
identifying six major gaps for the company across the various
alignment areas. These gaps were
benchmarking, business metrics, strategic business planning,
inter / intra organizational learning, architectural
integration, and the impact of IT on business processes.
Keywords: IT-Business alignment; maturity model
1. Introduction
Alignment between business and IT has often been cited as a
key issue and a challenge by IT executives
([15]; [21]). The need for such an alignment has long been
recognized ([ 3]; [ 5]; [10]; [14]; [20]). There is also
emergent evidence that IT and business alignment do have an
impact on organizational performance ([ 4];

[22]; [21]). While the concept of alignment has many
definitions such as integration, linkage, harmony, bridge
or fusion ([ 1]), one of the most commonly used models for IT-
business alignment is the Strategic Alignment
Model (SAM) ([10]).
However, alignment models have been criticized by not being
applicable in many cases where the business is
not following a systematic strategic planning process, if the
strategy is being developed on the fly, or if the
Chief Executive Officer CEO and the Chief Information Officer
CIO are developing the strategy together
(Shpliberg et al., 2007). Nevertheless, the same study also
showed that almost three quarters of the 504
respondents from 452 companies believed that their IT
capability was neither highly aligned nor effective ([20]).
1
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One key issue in IT and organizational alignment is how to
"measure" alignment. [12]) points out that matching
and moderation are two ways to measure alignment. Matching
tries to match aspects of IT strategy with
components of business strategy. The moderation view, on the
other hand, views pairs of business and IT
strategy and their impact on business performance ([ 3]).
Several studies have tried to measure alignment. [ 1])
modified the SAM model to provide a step-by-step process that
can be used to assess organizational
alignment based on executive feedback. Specifically, their
approach tries to identify various patterns and
perspectives (e.g., technology potential) to provide feedback for
executive management decision making.
Similarly, [ 9]) applied modeling of the business and IT
strategies for Small and Medium Enterprises (SMEs)
and mapping the gaps from one to the other. [ 2]) identified 29
items to measure IT strategy and structure itself.
[11]) used nine items (e.g., quality service) for measuring
business strategy and nine parallel items to measure
IT strategy. A mean alignment score was calculated by
multiplying the business strategy rating with the

corresponding IT strategy rating. [13]) developed an instrument
to match an IT plan with the Business Plan.
[18] compared measures of social dimensions of alignment such
as matching of current objectives or vision.
[23]) proposed using cognitive measures of alignment. [ 8])
used a survey instrument based on Luftman's
Strategy Alignment Maturity Model (SAMM) ([16]) to measure
the maturity levels of strategic alignment along
multiple key dimensions such as communications, governance,
skills, etc. A key component of this instrument
is that it divides the questions into strategic, tactical, and
operational levels.
This paper presents a simple instrument to measure the
alignment maturity based on [16] SAMM model.
However, unlike [ 8]), our instrument directly encodes the
various components of the SAMM using a
unidimensional approach and uses non-parametric statistical
methods for analysis. We have also developed
an aggregation procedure that summarizes the overall maturity
of each of the areas of SAMM. We applied this
instrument to measure and analyze the IT-Business alignment
maturity of a rapidly growing construction-
related company (DUG).

The rest of the paper is organized as follows. Section 2 presents
the Strategic Alignment Maturity Model
(SAMM). Section 3 presents the design of the instrument.
Section 4 presents a case study of applying the
instrument to DUG, and section 5 concludes the paper and
discusses the limitations and future work.
2. Strategic Alignment Maturity Model
[16]) proposed SAMM as one way to measure alignment
maturity of companies. SAMM proposes that IT-
Business alignment can be captured according to six areas of
maturity:
• _B_Communication maturity to ensure the ongoing knowledge
sharing across the organization and the
understanding of business by IT and vice versa;
• _B_Competency / Value measurement maturity to demonstrate
the value IT is contributing to the business;
• _B_Governance maturity to ensure that the appropriate
participants of business and IT are reviewing the
priorities and allocation of IT resources;
• _B_Partnership maturity to reflect the level of trust developed

among participants of IT and business in
sharing risk and rewards;
• _B_Scope and architecture maturity to signify the level of
flexibility and transparency the IT is providing to
business; and
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• _B_Skills maturity to reflect the level of innovation, change
readiness, hiring and retaining, and how they
are contributing to the overall organizational effectiveness.
For each of these areas, this maturity model classifies the
alignment between business and IT into five levels:
1. _B_Initial / Ad hoc process, where business and IT are not
harmonized or aligned;

2. _B_Committed process, where the organization has
committed to becoming aligned with IT;
3. _B_Established / Focused process, where the alignment is
established between IT and business and
focused on business objectives;
4. _B_Improved / Managed process, where the concept of IT as
a "Value Center" is reinforced; and
5. _B_Optimized process, where the strategic planning of
business and IT is integrated and reached a co-
adaptive stage.
In addition, SAMM describes the various attributes that
contribute to each of the six areas. For example, the six
attributes that contribute to the "Communication" area are: ( 1)
understanding of business by IT, ( 2)
understanding of IT by business, ( 3) inter / intra organizational
learning, ( 4) protocol rigidity, ( 5) knowledge
sharing, and ( 6) liaison breadth / effectiveness. Collectively,
the six areas have thirty-eight attributes defined.
For example, the "Competency / value measurement" and
"Governance" areas have seven attributes each.

For each attribute, SAMM defines the characteristics at various
levels of maturity. For example, the attribute
"Understanding of Business by IT" is "Minimum" at Initial( 1)
level of maturity, "Limited IT Awareness" at
Committed( 2) level, "By Senior and Mid Management" at
Established( 3) level, "Pushed Down Through the
Organization" at Managed( 4) level, and "Pervasive" at the
Optimized( 5) level ([16]).
The primary objective of this research is to build a simple,
flexible, and easy-to-use instrument to determine the
level of alignment between IT and business. The secondary
objective is to determine if the outcome yields
interesting insights into alternative remedial strategies for
better alignment.
3. Designing the Survey Instrument
The primary design criteria for the survey instrument were
simplicity, flexibility, transparency of mapping to
SAMM, and ease of deployment and analysis. In addition, we
wanted the instrument to provide a high-level
view of alignment maturity for the upper level management.
SAMM consists of six primary alignment areas. Each area has

multiple attributes. The maturity level for each
area is clearly defined ([16]). For example, Table 1 shows the
maturity levels of each attribute of the "Skills"
area.
Table 1. The Maturity of Attributes for the "Skills" Area in
SAMM
AttributesAlignment
Maturity Level
Initial (1) Committed (2) Established
(3)
Improved (4) Optimized (5)
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AttributesAlignment
Maturity Level
Initial (1) Committed (2) Established
(3)
Improved (4) Optimized (5)
A1 Innovation,
Entrepreneurship
DiscouragedDependant on
Functional
Organization
Risk Tolerant Enterprise;
Partners; & IT
Managers
The Norm
A2 Cultural Locus of
Power
In the

Business
Functional
Organization
Emerging Across
the Organization
Across the
Organization
All Executives
including CIO &
Partners
A3 Management
Style
Command &
Control
Results;
Consensus-Based
Consensus;

Results-Based
Profit / Value
Based
Relationship-Based
A4 Change
Readiness
Resistant to
Change
Dependant on
Functional
Organization
Recognized Need
for Change
Programs in Place
at Corporate Level
Proactive; Anticipate
Change

A5 Career
Crossover
None Minimum Dependant on
Functional
Organization
Across the
Functional
Organization
Across the Enterprise
A6 Education, Cross
Training
None Minimum Dependant on
Functional
Organization
At the Functional
Organization
Across the Enterprise

A7 Social, Political,
Trusting
Interpersonal Minimum Primarily
Transactional
Environment
Emerging Among IT
& Business
Achieved Among
IT & Business
Extended to External
Customers &
Partners
Environment Minimum Primarily
Transactional
Environment
Emerging Valued
Service Provider

Valued Service
Provider
Valued Partnership
A8 Hiring and
Retaining Best
Talent
No Program Technology
Focused
Tech./Business
Focus; Retention
Program
Formal Program
for Hiring &
Retaining
Effective Program for
Hiring & Retaining
For example, as Table 1 shows, the maturity of the "Innovation
and Entrepreneurship" attribute ranges all the

way from "Discouraged" at the Initial( 1) level to "Norm" at the
Optimized( 5) level. Similarly, the value of
"Career Crossover" attribute ranges from "None" at the Initial(
1) level to "Across the Enterprise" at the
Optimized( 5) level.
We used a unidimensional framework to construct questions for
the survey; one question was developed for
each attribute of each area for thirty-seven questions for the 38
attributes; two attributes were merged into one
question. Table 2 shows the various questions developed for the
"Skills" area as shown in Table 1. As Table 2
shows, we developed one question for each attribute. For
example, in order to measure the maturity level of
the "Innovation and Entrepreneurship" attribute, the respondent
is asked about what they would do if they
came up with an innovative idea. The question allows them to
select one of five possible options, where each
option corresponds to a maturity level for that particular
attribute. For example, selecting the option of 'entering
innovative ideas into a system to be shared' would correspond to
a maturity level of Improved ( 4). The two
attributes of "Career Crossover" and "Education Cross Training"
were encoded into one question that reads 'In
our company, staff has the flexibility to change their career path

and get the needed training''
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Table 2. Uni-Dimensional Questions for each Attribute of
"Skills" Area in SAMM
AttributeQuestion Sample Respondent
Group
A1 When you come up with innovative ideas that you believe
may enhance the business
1. I don't share such ideas with anyone
2. I share them, but they get evaluated in a conservative manner
3. I share them if they don't imply any risk to the current
business
4. I enter them into a system where everybody can comment on
them

5. I convey them hoping that the management will adopt them
like they did for other
staff
IT Management
Staff
IT Staff
A2 The power / influence in our company is
1. In the hands of business executives at head office
2. Extended to the managers of subsidiaries / sites
3. Extended to lower management (commercial manager, site
manager, design
manager, etc)
4. Dependant on the personality of staff
5. Extended to all staff including IT
IT Management
IT Staff
A3 My manager cares most about
1. Executing his / her instructions
2. Results
3. Consensus among our team
4. Profit / value creation

5. Maintaining our relationships internally and externally
IT Management
IT Staff
A4 How easy is it to do your daily tasks in a new way if you get
the proper training?
1. Very difficult
2. Difficult
3. Neutral
4. Easy
5. Very easy
IT Management
Staff
IT Staff
A5,6 In our company, staff has the flexibility to change their
career path and get the needed
training
1. Never
2. Yes, To a certain level
3. It varies among sites / subsidiaries
4. Yes, within the same site / subsidiary
5. Yes, across sites / subsidiaries

IT Management
IT Staff
A7 Trust in our company
1. Varies from one staff to another
2. Varies from one situation to another
3. Is being established among sites / subsidiaries
4. Is everywhere among all staff across sites and subsidiaries
5. Is extended to subcontractors and suppliers
IT Management
IT Staff
A8 Hiring and retaining talented people in our company
1. Does not follow a predefined program
2. Is done according to their skills neglecting the position
requirements
3. Is done according to the position requirements
4. Has defined program of hiring and retention
5. Is following an effective program
Dropped

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Since SAMM categorizes maturity into five distinct levels, we
decided to use a 1 to 5 Likert scale to measure
the response to each question. The responses are considered
discrete and mutually exclusive. Consequently,
each response to a question is represented by an ordinal number.
Since the equidistance assumption does not
hold for such Likert scale values, rather than using mean and
standard deviation, we decided to use the central
tendency given by the median and the dispersion as measured by
inter-quartile range or non-parametric
statistics such as 1-Sample Sign Test as the primary analysis
instrument for each question ([ 6]).
We also wanted the instrument to be able to incorporate
divergent views of the various roles being played by
respondents in an organization. The instrument classifies
organizational roles in accordance with SAM model.

As Figure 1 shows, from an alignment perspective, SAM divides
organizational roles into four different areas;
business strategy, IT strategy, organizational infrastructure and
processes (business operations), and IT
infrastructure and processes (IT operations) (
Graph: Figure 1. Roles for IT-business alignment.
[10]).
Accordingly, the instrument explicitly addresses four different
groups. Business management group is the most
appropriate to address business strategy issues. IT management
group, on the other hand, can best address
IT strategy issues. Business staff group is most familiar with
business operations. Finally, IT staff group is the
most competent in addressing IT operational issues.
Table 2 shows an example of how the instrument incorporates
divergent views for a particular company. As
Table 2 shows, for this company it may not be appropriate to
ask upper management about the power locus
(A2 in Table 2). However, an answer to these questions from IT
Management and IT Staff may be informative.
In addition, since multiple attributes are used to measure a

particular alignment area (like "Skills," for example),
the instrument allows the flexibility of dropping some questions
altogether. For example, A8 attribute in Table 2
has been dropped to account for political realities.
Another key objective of the survey design was to provide a
high-level aggregated summary of IT and business
alignment to upper management. To achieve this, we developed
an aggregation procedure for calculating an
overall "maturity level" for each area depending on the maturity
ratings from each of the attributes. For
example, from the responses for the eight attributes in the
governance alignment area, we want to derive an
ordinal number from 1 to 5 to indicate the overall maturity level
of governance as a whole. In addition, following
Luftman, we want to identify maturity levels that are between
the ordinal numbers. For example, 1+ to indicate
that the maturity level is between levels 1 and 2 but is nearer to
level 1. The aggregation procedure also needs
to consider the following constraints:
1. The number of respondents for each attribute might be
different.
2. The median and confidence intervals of the median for each

attribute may be different.
3. The median might not be an ordinal number that corresponds
exactly to an alignment level.
The aggregation procedure is a heuristic that looks at the
relationship between the overall modes of each
alignment area against the central tendency of each attribute
given by its median. If most of the medians are
less than the mode, then the alignment maturity level is
considered(mode-). On the other hand, if most of the
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medians are more than the mode, then the maturity level is
counted as (mode+). The overall procedure for
applying this heuristic is described below.

Assume that a maturity area A (e.g., Communications) is
measured through questions q ,.. q corresponding
to attributes a ,.. a . Note that the number of responses for each
question will be different because not all
respondents may answer all the questions.
1. Based on respective responses, calculate and truncate the
median for responses (Likert scale 1 to 5) to
each question q
2. Calculate the overall mode of truncated medians across all
questions {q }.
3. If there is a single mode then:
a. If values of all truncated medians for each question (q ,.. q )
are equal to the mode from Step 2, the
alignment maturity level of the concerned area is "mode."
b. If not, then calculate α, the number of truncated medians
greater than the mode, and β; the number of
truncated medians smaller than the mode.
i. If α > β, the alignment maturity level of the concerned area is
"mode+"

ii. If α < β, the alignment maturity level of the concerned area is
"mode-"
iii. If α = β, then the alignment maturity level of the concerned
area is "mode."
4. If there are more than one mode, the alignment maturity level
of the concerned area is the "lowest
mode+".
The next section describes an application of the survey
instrument in the context of a fast growing
construction-related company.
4. Validation
In order to validate the instrument, we selected a company
where one would expect IT and business
misalignment caused by organic and acquisition-based rapid
growth; the company grew five times its size in
three years. DEF United Group (DUG) is one of the top three
interiors specialty contractors in the world. DUG's
primary business can be divided into two main sectors;
manufacturing, where the company produces interior
fittings, joinery, upholstery, etc. and contracting, where the

company executes contracts of fit-out,
refurbishment, furniture and fixtures. The company employs
over 8,000 individuals representing over 30
nationalities and has more than 21 branches / subsidiaries
(business units) around the world. DUG was
recently listed on multiple stock exchanges. The organizational
structure of DUG is heavily project-centric.
Every branch (organic growth) / subsidiary (acquired company)
has multiple projects, and each project is an
autonomous unit including many departments. Due to the
project-centric culture, each project follows its own
governance mechanisms within overall corporate governance
guidelines.
i 0 m
0 m
i.
i
0 m

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The IT department of DUG supports the entire group including
all sites and subsidiaries around the world. The
IT department is centralized and reports to Strategy Managing
Director. Until 2005, the IT department was
composed of four people. The primary activities of the IT
department in 2005 were a rudimentary help desk
function and technical support of a simple IT infrastructure. In
January 2007, a new IT Director was hired to
head the IT department. The new IT Director found that basic IT
needs of the company were not being fulfilled;
the massive growth in business had apparently happened with
little consideration of IT. As of December, 2008,
the IT department had grown to 42 individuals.
Subsequent paragraphs will explain the methodology we
followed to apply this survey instrument, data
collection, data analysis, and detailed discussion of findings.

4.1 Methodology
The methodology followed in applying the survey instrument to
DUG adheres to the guidelines recommended
by [25]) as described below.
Each generic question used in the survey was modified to
minimize subjective judgment or interpretation of the
question. In addition, some questions were rephrased while
addressing them to different groups. As the
instrument postulates, we also solicited feedback from various
stakeholders in the organization. The IT Director
(IT Management group) indicated that the generic questions
were not adequately tailored to the context of the
company. For example, an option in the question about
"Cultural Locus of Power" in the "Skills" area that reads
'Emerging across the Enterprise' was changed to 'Extended to
lower management (commercial manager, site
manager, design manager, etc.)'' A first-line manager (Business
Operations group) also provided constructive
feedback about number of questions. The feedback from one
General Manager (GM) (Business Management
group) was generally negative. Her view reflected the maturity
level of DUG and the perception of IT by the
management in DUG. For example, this particular GM did not

understand why questions related to strategy,
governance, value measurement, and skills were relevant to IT.
Based on collective feedback from various
stakeholders, several questions were rephrased (5 questions),
paraphrased (3 questions), dropped (1
question), and were addressed to different groups (6 questions).
It should be noted that this was an iterative
process that eventually resulted in a survey that was consistent
with the views of all stakeholders. The final
revised survey was shown to the IT Director again to ensure its
validity and suitability for DUG.
The survey was made completely anonymous by hosting it on a
third party survey engine. One survey for each
of the four groups of Management, Staff, IT management, and
IT staff was created and the questions were
shuffled within each survey so that questions about the same
alignment area do not fall next to each other. A
"Test Collector" (test link) was created for each survey initially,
and all the four links were tested before rolling
them out to DUG employees, and then additional 23 different
collectors were created for a staff survey to
determine their site / subsidiary. Four different collectors for
management were created. Another link was
created for IT Management and another one for IT staff. After

collecting the responses and analyzing the
results, a qualitative analysis was conducted with the IT
Director through a set of post-survey interviews.
Construct validity of the survey was established by using the
unidimensional framework and by incorporating
feedback from various key informants such as the IT Director.
Addressing the same questions to multiple
groups like staff, IT Management, and / or Management can also
be considered as multiple sources of
evidence.
The internal validity was achieved through two mechanisms; the
use of the well-known strategic alignment
maturity model (SAMM) and the multiple reviews that were
done to make sure that survey questions did not
contain any internal contradictions.
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10/17
Since this case study was carried out in a single company, the
results are not intended to be generalized ([25]).
However, from an external validity perspective, the logic
underlying this study can be replicated at another
company.
Finally, three mechanisms were used to address reliability; the
use of well-defined and documented protocol,
developing a case study database, and crosschecking the final …

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