Strategic Alignment of Business and It

Published: 2021-06-29 06:59:24
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Category: Business

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Abstract

The transformation of organizations has been an ongoing debate for the last decades. The market context in which businesses occur has become highly dynamic and fast evolving. Information Technology is intrinsically dynamic as the technology renews in extremely short cycles, thus anticipating to the dynamism of the market context. The transformation of organizations is seen as a clear evolution towards integrating business models and Information Technology, engaging them together to respond to the dynamism in which events are happening. This paper discusses the Strategic Alignment Model and how to put it into perspective for enterprise optimization, providing several viewpoints on how to measure the readiness and maturity of such alignment inside enterprises.


MOTIVATION

Organizations are currently divided into two different domains: business and the supporting infrastructure (nowadays being Information Technology). Such division of both domains is a classic view that has been carried for several decades and it has naturally separated businesses from technology. In other words, Information Technology (IT) has been only seen as a set of tools to support business models and business strategies. [1]

Several researches point to the fact that this division hinders business processes optimizations in organizations and results in a less-efficient manner of performing actions as an enterprise. In fact, such researches analyses and study the outcomes of engaging business and IT, bringing them as close as possible, in order to deliver maximum quality results with maximum effectiveness and efficiency, while keeping competitive and strategic advantage [2].













STRATEGIC ALIGNMENT MODEL

The Strategic Alignment Model was first introduced by Henderson and Venktraman in the 1980's[2] and it proposes a balanced division inside the organization using four components: business strategy, IT strategy, organizational infrastructure and processes, and information systems (IS) infrastructure and processes. These four competences are depicted in figure 1, showing the strategic alignment model [3].







Fig. 1. Strategic Alignment Model [3]


The Strategic Alignment Model, represented in figure 1, proposes two building blocks: strategic fit and functional integration, working at the external and internal level of the organization, respectively [3]. The strategic fit is the vertical relationship of the business strategy with the IT strategy, showing the organization's performance at an external level; whereas the functional integration represents the horizontal relationships, extending the strategic fit across functional domains [2].

The Strategic Alignment model also proposes a linkage across different domains as well as an automation, where an internal balance should be found and prioritized. In classic views, either business or information technology were over-prioritised. The Strategic Alignment Model invites to find a perfect harmony across all domains and establish the balance in the middle of the diagram shown in figure 1 [3].

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