The document discusses the Strategic Alignment Model (SAM) framework for aligning IT and business strategy. It describes how SAM is based on strategic fit between external and internal views, and functional integration between organizational and technology views. SAM includes four domains - business strategy, IT strategy, business infrastructure, and IT infrastructure. For alignment, three of the four domains must be aligned. The document also outlines four perspectives of SAM - strategy execution, technology potential, competitive potential, and service level. Each perspective defines different roles for top management and IS management. Case studies are provided for each perspective.

1. Strategic Alignment Model

2. • Venkatraman in 1993 argued that the reason that firms often fail to see
value from IT investment is due to
– lack of alignment between the business and IT strategy in the firm, and
furthermore
– a lack of a dynamic alignment process that ensures continuing alignment in
strategy and implementation between the business and IT organizations.
• Strategic alignment between IT and business occurs when IT is used to
dynamically create and exploit business opportunities. It can be used then to
transform business processes and also to create business dislocations in
the market place.
• Proper alignment will allow an organization to use information technology
efficiently to achieve its business objectives.

3. Strategic Alignment Model
Framework for:
– Aligning IT with business strategy
– Conceptualizing and directing strategic
role/management of IT
– Leveraging IT on a continuous basis to achieve
sustainable competitive advantage

7. SAM is based on the concept of strategic fit between
external and internal views and the functional
integration between organizational and technology
views.
Two building blocks:
Strategic fit – refers to the use of strategy to determine
the infrastructure of the business.
Functional integration – related to the information
technology and the alignment of business.

8. There are 4 domains: 2 internal and 2 external
External – business strategy and IT strategy
Internal – business infrastructure and IT infrastructure
Strategic alignment at an organizational level can only
occur when three of the four domains are in
alignment.
The implication is that change cannot happen in one
domain without impacting at least two other domains.

9. To understand the perspectives, we will define some terms.
The anchor domain is the strongest domain for the firm, and will
have the most representation at the executive level or will be
where the core of the business lies. This domain in which
changes are most often made.
The pivot domain is the weakest domain for the firm. This is a
“pointer” domain in a C programming language sense in that it
indicates which other domain will be most affected by the
change in the anchor domain.
The impacted domain is the domain which will feel the greatest
amount of impact from the change in the anchor domain.

10. Four perspectives of SAM

11. Strategy execution
Traditional perspective in which business strategy
drives organizational design, and organizational
design determines what IT infrastructure and
processes will be needed.
• Business management makes strategy, and IT
management implements it.
• This is the CIO as CTO.
• IT focus is on application development, driven by need
to support business infrastructure.

12. Case study – Wolf Organization Inc.
• A manufacturing company located in
Pennsylvania.
• As competitors threatened, Wolf built an
enterprise resource planning platform for
growth, efficiency
• Conclusion –
– reduced customer and financial fees.
– Built entry barriers to competitors.
– Enhanced customer loyalty.

13. Technology potential
Business strategy is still the driver, but it involves the
articulation of an IT strategy to support the chosen business
strategy and the corresponding specification of the required IS
infrastructure and processes.
• This is the CIO as reactive leader perspective, in some sense.
• The business executives drive technology vision and indicate
the strategy that the IT group should use to achieve it, and
• The CIO architects a solution in strategic and infrastructural
terms.
Top management – technology visionary
IS manager – technology architect

14. Case study – Seagate & Samsung
Conclusions –
– Enabled both companies to better align their
current and future product
– Accelerate time-to-product for new products
– This alignment significantly expanded Seagate’s
customer access in China and South Asia

15. Competitive Potential
The IT executives must be able to be the catalyst for
business change, identifying upcoming technology
trends and options and understanding them as
opportunities or threats/risks.
The business executives must be visionaries, able to
take the offerings that the IT exec gives and see how
to transform the business to exploit them to gain
competitive advantage.

16. Case study - Flextronics
• Producer of components, circuit boards based
in Hollyhill, Cork.
• Conclusion – more detailed overview of
production

17. Service level
Anchored on the notion that IT strategy is the driver of
the perspective and it focuses on how to build world
class IT/IS organization within a business.
Role of
Top management – prioritizer
IS management – executive leadership
The role of the CIO is to make the business succeed,
in light of operating guidelines from the business
executives. In this way, the CIO acts as the business
leader in this perspective.

18. Case study - UPS
• Conclusion –
– First postage service to provide the customer with
technology experience.
– Gain competitive advantage over rivals on basis of
the best service for best value.
– Progressive and becoming leaders in European
and Asian market.