ICT Strategy Alignment for Business
Strategic alignment refers to the process of bringing the actions of an organization’s business divisions and staff members into line with the organization’s planned objectives. The ability of most businesses to achieve their strategic goals will benefit from performing a comprehensive strategic alignment to help assure that its divisions and employees are jointly working toward the company’s stated goals.
Many businesses do not view IT as a strategic partner and hence many CIOs are not invited to participate in any of the organization-wide strategic planning and decision-making. This signals a business that is not interested in strategic IT planning.
The IT function may also lack the expertise or capacity to develop an effective strategic plan for IT. IT strategy management requires a highly specialized skill set and resource commitment. It is rarely successful if approached as a side activity.
IT strategies tend to focus mainly on technology and fail to cover other areas. IT strategies are often ‘too technical’ and written in a language the business cannot understand.
A business strategy generally contains a number of key elements:
- The mission of an organization states what the organization does and the reason for its existence.
- A company’s vision sets out what the company wants to achieve.
- The objectives of an organization state the direction in which the firm is heading.
The market strategy of a company describes the market segments and products or services the company wants to focus on.
A company’s value proposition is the unique set of benefits it offers to customers. This set of benefits is different from those offered by the company’s competitors.
The value configuration of an organization describes how the company can establish an advantage over competitors to create value for its customers. One value configuration is the value chain, where value is created by efficiently conducting a chain of activities. Value can also be created in a value shop, where value is created by solving client problems. A third value configuration is the value network, where companies create value by connecting interdependent customers.
An IT strategy also contains a number of key elements
The first element in an IT strategy is information about any new applications that are required by the company – for example knowledge management systems. Details such as whether the applications are to be developed or purchased, and how they meet user requirements, should be contained in the IT strategy.
A second necessary element of an IT strategy is a plan that ensures the future effectiveness of the people who work in the IT division. Such a plan typically includes the types of human resources needed – for example IT professionals, managers, and developers. It should also include the specific skills required and the salary levels that are forecast to be paid.
The third key element is a description of how IT will be organized and controlled. This part of the strategy defines the various tasks and roles within the IT division – for example managing data, installing applications, and designing and maintaining networks. It also establishes the IT division’s management structure. This section should also include details about any IT services, including whether they are to be provided internally or outsourced.
A fourth important element of an IT strategy is choosing the future technical infrastructure. This includes selecting hardware, software, and network configuration; deciding how the various components will interact with one another; and determining how security is to be implemented.
Aligning business and IT strategies
Aligning an organization’s business strategy with its IT strategy generally improves the company’s overall performance. It can lead to more efficient processes, the development of better products and services, cost reductions, faster response times, and more efficient supply chain management. To achieve strategic alignment, the IT strategy should be developed at the same time as the business strategy, and integrated into it.
Because aligning business strategy with IT strategy tends to have a positive impact on organizations, strategic alignment should be a top priority for senior managers. They should regard IT as a way of meeting business goals and providing value.
To align IT strategy with business strategy, every aspect of the IT strategy should support the business goals of the organization. In other words, all IT systems, applications, processes, and budgets should agree with the overall corporate strategy and objectives. When a company’s business strategy is properly aligned with its IT strategy – that is, when it’s IT-enabled – it can prove valuable in different ways.
An IT-enabled business strategy is more than just the combination of an IT strategy and a business strategy in a single document. It’s the alignment of the two strategies in order to meet key business objectives and goals. As such, it lays out several key aspects.
An IT-enabled business strategy contains the organization’s business strategy. This generally includes the mission, vision, and objectives of the organization, along with its market strategy, value proposition, and value configuration.
The business expectations a company has of IT should be included in an IT-enabled business strategy.
An IT-enabled business strategy should incorporate the company’s IT strategy. The IT strategy contains information on IT applications and the future competence of human resources. It also describes how IT is to be organized and controlled within the company, as well as the technical infrastructure itself.
An IT assessment is a comprehensive review of a company’s technology systems and the environment. The assessment should reveal how technology helps or hinders the business, and should recommend how to use technology to meet the business goals.
An IT-enabled business strategy contains the company’s long-term IT plans. IT plans are concerned with how IT should be deployed, managed, and implemented in the future.
Many companies struggle to maintain a tight relationship between their business and IT functions. But creating an IT-enabled business strategy is worth the effort. By integrating their business and IT strategies, organizations tend to perform better, increase revenues and gain a competitive edge.
A business strategy contains the mission, vision, and objectives of an organization. It also contains the organization’s market strategy, unique value proposition, and distinctive value configuration.
An IT strategy contains information on applications and human resources. Details about the way IT is to be organized and the technical infrastructure itself are also included.
By aligning their business and IT strategies, organizations can achieve the best return on their IT investment.
An IT-enabled business strategy contains the business expectations the company has of IT. It also includes the company’s future IT plans.
Closely related to ownership and responsibility issues are issues that stem from the diversity of local ICT environments and resources. Multiple ownership and guidance may confuse individual users as to who is responsible for the different parts of the complex systems they rely on, but central owners and maintainers of those systems face the equally confusing task of understanding and managing a complex system of systems that spans significantly different functional and geographical environments.