Strategy formulation results in three main components of IS strategy. Firstly an analysis of the existing and expected future business and IS/IT environments ands strategies. Secondly the requirements arising from the current business strategy and thirdly the future potential IS/IT provides by identifying opportunities to support and achieve the business strategy and increase its competitive edge. This work is driven by the business managers with support of IT managers.
In itself this process is an extremely important one simply for the fact that it increases the understanding between business and IT of the problems and opportunities the other has to solve. Henderson and Venkatraman identify the concept of strategic alignment being built on the building blocks of strategic fit and functional integration and that strategy should be articulated in terms internal and external components.Using their Strategic Alignment Model they identify two types of integration – strategic integration linking the external domains of business ands IT and operational integration linking the two internal domains of business and IT. These are very interesting observations because they fit all organisations in a general way but different organisations work in different ways depending on their business.The Strategic integration is one seen at SKF where the business managers mostly of a technical background, many are engineers by education, and thus are constantly looking for better innovative ways of solving problems some times to an extent that they are ahead of the IT experts who are caught up in the day to day operational environment.
This can be seen by studying the four alignment perspectives of Strategy execution, technology transformation, competitive potential and Service Level.In my experience an organisation that is business focussed and has little or less focus on IT will operate in the Strategy execution perspective because it is basically ‘business as usual’. The strategy is formed at a high level and then is implemented de facto by the organisation according to their roles which are of the more traditional nature. We met an example of such a company when we interviewed the CEO of a transport company which was a subsidiary of Green Cargo.Technology transformation is typically the domain of businesses dependant on excellent infrastructure to reach large numbers of customers such as banks, financial institutions where there is a great deal of both money and competition and thus the IT is a part of the business and thus business strategy and IT strategy are very closely linked and by implementing business strategy they are also implementing the IT strategy.
Competitive potential alignment perspective is used by technology companies such as healthcare or IT Hardware and software manufacturers. In this case the company cannot exist without IT and need it to provide new product and services. Thus IT has such a prominent role it is part of the business and implementation of the business strategy is totally dependent on the IT. This means the business are highly motivated to link up with their IT counterparts.
The fourth perspective I would put companies like my own, CSC, where outsourcing of IT is the major business activity and the company is entirely dependent on efficient IT services. To summarise in the last three perspectives IS/IT is a essential component of the organisation and therefore implementation of IT strategy controls the success of the company and therefore is closely linked to the business strategy and thus implementation of strategy is a natural progression of ormulation of the strategy.In the Strategy Execution perspective greater business value is perhaps generated in other ways than IT e. g. through products or services which are supported by IT solutions that are general in the industry as in the case of transport companies.
Ciborra’s article starts off with the challenging view that alignment of business and IT is dead or unnecessary but concludes finally that it is necessary but introduces the terms care, hospitality and cultivation.His main argument seems to be that strategic alignment appeared on the scene as a result of research initiated by IBM and when after a number of years the research could not find ways of quantifying the level of alignment interest from IBM waned and their funding of the research ended. Subsequent research in the area of alignment avoided using the word ‘ali8gnment’ and from this Cibbora implies the research establishment started to doubt itself.Ciborra indicates the failure of alignment of business and IT is due to the fact that both are continuously changing. “Strategy and technology are drifting apart and we cannot reconstruct the business from alignment”.
What I feel Ciborra is confusing is the implementation of technology to support the organisation with alignment of business and IT. Surely alignment of business and IT means that the IS/IT organisation is working on projects that support and develop the business in the way the business managers wish.
