What is Strategic Alignment? Description
The Strategic Alignment model of Venkatraman, Henderson and Oldach
helps to create alignment between the Business and IT Strategy of a
company.
Venkatraman and his colleagues argue in 1993 that the difficulty
to realize value from IT investments is firstly caused by the lack of
alignment between the business strategy and the IT strategy of the organizations
that are making investments. Secondly it is caused by the lack of a
dynamic administrative process to ensure continuous alignment between
the business and IT domains.
They describe four dominant alignment perspectives regarding the
analytic alignment of Business and IT.
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Four Alignment Perspectives
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Strategy Execution. This perspective views the business strategy
as the driver of both organization design choices and the logic of the IT
infrastructure (the classic, hierarchical view of strategic management).
Top Management formulate the strategy; IT Management is only strategy implementer.
[Arrow 1]
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Technology Potential. This perspective also views the business
strategy as the driver. However it involves the formulation of an IT strategy
to support the chosen business strategy and the corresponding specification
of the required IT infrastructure and processes. The top management should
provide the technology vision to articulate the logic and choices pertaining
to IT strategy that would best support the chosen business strategy. The
role of the IT manager should be that of the technology architect. He designs
and implements efficiently and effectively the required IT infrastructure
that is consistent with the external component of IT strategy (scope, competences
and governance). [Arrow 2]
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Competitive Potential. This alignment perspective is concerned
with the exploitation of emerging IT capabilities to:
- impact new products and services (i.e. the business scope),
- influence the key attributes of strategy (i.e. distinctive competences),
as well as
- develop new forms of relationships (i.e. business governance).
Unlike the two previous perspectives, which considered business strategy
as given (or as a constraint for organizational transformation), this perspective
allows the modification of business strategy via emerging IT capabilities.
The specific role of the top management to help this perspective succeed
is that of the business visionary, who articulates how the emerging IT competences
and functionality as well as changing governance patterns in the IT marketplace
would impact the business strategy. The role of the IT manager is to act
as a catalyst. He identifies and interprets the trends in the IT environment.
In doing so he assists the business managers to understand the potential
opportunities and threats from an IT perspective. [Arrow
3]
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Service Level. This alignment perspective focuses on how to build
world class IT organization within an organization. In this perspective,
the role of business strategy is indirect. This perspective is often viewed
as being necessary, but not being sufficient, to ensure the effective use
of IT resources and to be responsive to the growing and fast-changing demands
of the end-user population. The specific role of the top management to make
this perspective succeed is that of the prioritizer. They decide how the
scarce resources should be allocated, both within the organization as well
as in the IT marketplace (in terms of joint ventures, licensing, minority
equity investments, etc.). The role of the IT manager is one of business
leadership, with the specific tasks of ensuring that the internal business
succeed within the operating guidelines from the top management. [Arrow
4]
Strategic Alignment Special Interest Group
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Recent User Comments
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- UK
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Practical Implementation of IT Strategy |
"The Venkatraman model for strategic alignment offers a framework for understanding the organizational drivers for technological development and alignment. These drivers will change over time and alter the loci of the decisions that will affect the technological strategy.
However, strategy should not change over the short term. How then does the organization resolve conflicts in the direction of organizational drivers of technology strategy? I would propose that the perspectives offered in Venkatramans framework should be viewed as being inclusive in the development of IT strategy and that the resolution of conflicts will be dependent on the technological maturity of the organisation. I.e. sunk costs will have the major influence." |
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Zibuyile - South Africa
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How is Strategic Ailignment Managed? |
"How should Strategic Ailignment be managed within an organization?" |
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Zibuyile - South Africa
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Challenges to establish Strategic Alignment? |
"What are the main challenges of achieving strategic alignment in an organisation?" |
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