Strategic Alignment

Knowledge Center

Summary, forum, best practices, expert tips and information sources.

What is Strategic Alignment? Description

Strategic Alignment may be described as an organizations ability to determine an IT Strategy that optimally and flexibly supports the business strategy whilst maximizing the value of the investment in IT.


The Strategic Alignment model of Venkatraman, Henderson and Oldach seeks to enable a clear view of the organizational drivers which affect organizational decision making with regards to the alignment between the Business and IT Strategy of an enterprise.

Venkatraman and his colleagues argue in 1993 that the difficulty experienced by firms in realizing value from IT investments is primarily caused by the difficulties inherent in achieving an optimal alignment between the business strategy and the IT strategy of the organization. Secondly it is caused by the lack of a dynamic, self corrective administrative process that ensures continuous alignment and re-alignment between the business and IT domains whilst making efficient use of finite resources.

They describe four dominant alignment perspectives relating to the organizational and political strategic drivers for IT development. These views are intended to aid the analysis of the dominant forces within the organization that potentially impact the effective alignment of Business and IT Strategy.

Strategic Alignment Aligning Business IT

Four Alignment Perspectives

  1. Strategy Execution. This perspective views the business strategy as the primary driver of both organization design choices and the logic of the IT infrastructure (the classic, hierarchical view of strategic management). Top Management formulates the strategic objectives for IT based on the business strategy; IT Management is only strategy implementer. IT Management will seek to provide IT capabilities that will support the business strategy through the achievement of key performance indicators as determined by top management and defined within the business/marketing strategy. [Arrow 1]

  2. Technology Potential. This perspective also views the business strategy as the primary 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 guide the choices pertaining to an 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 and allows strong control over the external components of IT strategy (scope, competences and governance). [Arrow 2]

  3. 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 pre-defined and fixed and a constraint for organizational transformation, this perspective allows feedback into the modification of the business strategy via emerging IT capabilities. The specific role of the top management to help this perspective succeed is that of the hybrid IT/ business visionary, who advocates how the emerging IT competences and functionality as well as changing governance patterns in the IT marketplace would impact positively the business strategy. The role of the IT manager is to act as a catalyst and advisor. 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]

  4. 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 in early stages of IT maturity, 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 succeeds within the operating guidelines issued from top management. [Arrow 4]

Strategic Alignment Special Interest Group

Special Interest Group (608 members)

Forum about Strategic Alignment  

The most recent topics about: Strategic Alignment.

🔥 NEW How to Reach Consensus among Executives on the Strategy?
Achieving alignment and agreement among the top executives of a large corporation in respect of the strategic vision and (...)
9 reactions
Can Formula 1 Be Considered a Craft Industry?
In Victor and Boynton's book 'Invented Here' (1998) it is proposed that in the strategic development of the organization (...)
0 reactions
Best Practices about Strategic Alignment

Here you will find the most valuable ideas and practical suggestions.

🥇 Aligning Project Management with the Business Strategy
What are the major alignment problems when we're trying to align project management with the business strategy of an org (...)
5 reactions

🥈 Practical Implementation of IT Strategy
The Venkatraman model for strategic alignment offers a framework for understanding the organizational drivers for techno (...)
8 reactions

🥉 New Role? Chief Marketing Technologist
According to Scott Brinker and Laura McLellan (2014), marketing is increasingly becoming a technology dependent function (...)
14 reactions

Strategic Alignment is Important
The strategic alignment concept basically throws light on how IT can be helpful for business strategy. Business is total (...)
0 reactions

Business and IT Governance Model
What high level tools do we have to communicate business - IT governance? In my humble opinion, there is still a huge g (...)
4 reactions

A Multidisciplinary Approach to Strategic Alignment
A review of the techniques and methodologies that are applied in the quest for strategic alignment reveals a recognition (...)
1 reactions

Principles for Aligning IT with Corporate Strategy
Despite of the rapid rise of information technologies in the last decades, the implementation of IT in business strategi (...)
0 reactions

How is Strategic Alignment Managed?
How should Strategic Alignment be managed within an organization? (...)
4 reactions

Apply Cynefin Framework for IT Strategy
Gartner in October 2012 released a publication entitled: . In the report Gartner forecasts: "By 2016, the will be used (...)
0 reactions

Expert Tips about Strategic Alignment

Here you will find professional advices by experts.

Realizing Strategic Alignment in your Organization

Implementation of Strategic Alignment, Best Practices (...)

Balanced Scorecard and Strategic Alignment

IT Strategy and IT Governance (...)

The Basis of the Strategic Alignment Model

Understanding the Assumptions of Strategic Alignment (...)

Characteristics of Organizations with an IT-driven Business Transformation Strategy

IT-driven Strategy, IT-led Strategy, Competitive Potential, Innovation Accelerators, Disruptive Innovation (...)

Maturity Level Model (Luftman)

Assess and Improve Strategic Alignment Effectiveness (...)

Challenges to Establish Strategic Alignment

Realizing Strategic Alignment (...)

Information Economics Method

IT Governance and Alignment (...)

Why it is So Hard to Align IT Solutions with Business Needs?

Basic Understanding of IT Alignment, IT Complexity, Misaligment Consequences, Solution Gaps, Solution Excesses (...)

How to Align Sales People with the Strategy

Strategy Execution, Employee Participation, Aligning Sales with Strategy, Strategic Alignment (...)
Information Sources about Strategic Alignment

Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

The Strategic Alignment Model (Henderson and Venkataraman)

IT Strategy, Henderson, Venkataraman, Strategy Domains, Infrastructure Domains, Information Strategy (...)

IT - Business Alignment

IT Strategy, Business Strategy Alignment, IT Service Delivery, IT Alignment (...)

Organizational Agility and the Role of Information Systems

Organizational Agility (...)

Project Management of Information Technology Projects

Project Management, Information Technology, Three Sphere Model (...)

Information Systems in Today's Organizations

Information Technology, Objectives, Information Systems, Management Information (...)

Closing the Communication Gap: The Six IT - Business Alignment Process Metrics

IT Alignment, Business Alignment, Alignment Metrics (...)

Change Management in an Information Technology / IT Context

Change Management, Information Systems Planning, Information Systems Architecture, Information Systems Implementation (...)

Strategic Alignment Diagram

Business <> Information Strategy (...)

Compare with Strategic Alignment: Strategic Thrusts  |  Twelve Principles of the Network Economy  |  7-S framework  |  Organizational Configurations  |  Impact/Value framework  |  Ashridge Mission Model

Return to Management Hub: Knowledge & Intangibles  |  Program & Project Management  |  Strategy

More Management Methods, Models and Theory

Special Interest Group Leader

Are you an expert in Strategic Alignment? Sign up for free

Link to this knowledge center

Copy this code to your web site:


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2020 12manage - The Executive Fast Track. V15.6 - Last updated: 20-10-2020. All names ™ of their owners.