Strategic alignment

Strategic Alignment Model (SAM) Functional Integration Strategic fit Resource http://utweb.ut.edu/Faculty/RPapp/sam/SAMOpening.htm

Business Strategy Traditional Business Strategy area Business Scope: Type of business, the products and/or services Market segmentation (geography, diversification customers) Competition Values and mission of the organization Distinctive Competencies: Distinguishing strengths Extent to which the firm will be able to compete in the rest of the market Decisions of customers to buy from the firm Ability to differentiate its products and/or services from its competition.  Critical Success Factors that the firm needs Business Governance: Ownership and its external impact on the firm Establishment of business alliances and partnerships with other firms Government Regulations and their effects Outsourcing strategies

Information Technology Strategy Information technology counterpart to business strategy Technology Scope Key technologies and applications What specific information technology is needed What the competition uses. Systemic Competencies Information about the firm's customers and clients, accessibility, reliability and other vital characteristics and strengths of information technology Information Technology Governance Make-or-buy decisions Application prioritizations Potential for technological alliances and partnerships (including outsourcing).

Organizational Infrastructure Administrative Structure Authority structure, responsibilities and roles Levels of management Degree of centralization of decision making Geographical orientation. Processes Activities that drive the business Determining the extent to which work flows can be integrated with respect to information technology. Skills Human resources of the firm Training and experience of employees, corporate culture, outsourcing, definition of competencies, norms and values, salaries and rewards Assessment of the human resources for the achievement of business goals

Information Technology Infrastructure Information Technology Architecture Hardware, software, data, applications and communication platforms Processes Development of specific information technology practices and how they can be improved Application development, systems management and maintenance functions. Skills Experience, competence and values of the technologically oriented employees.  IT culture its associated norms, salaries and hiring and training practices

Made operational by analytical methodologies: Critical success factors PERSPECTIVE ONE: STRATEGIC EXECUTION Made operational by analytical methodologies: Critical success factors Business system planning Enterprise modeling Performance criterion for assessing the IS function: Financial parameters reflecting the cost centre focus. Business Strategy IT Strategy Business Infrastructure IT Infrastructure

PERSPECTIVE TWO: TECHNOLOGY TRANSFORMATION Example 1: USAA, Insurance Company Business Strategy: Low cost insurance delivery via tele-marketing Action: Superior document handling system based on state of art electronics Imaging software IT Strategy: Technology scope and associated competencies and committing to alliance/JV with IBM IS Infrastructure: migrate technology architecture and invest in development of data architecture Example 2: American Express Travel Services Business Strategy: Quick approval off purchases made by charge card and providing copies of charge slips to customer Action: Systemic competence expert system (authorizer assistant), Enhanced country club billing system IT strategy: Delivery of same level of service more efficiently IS Infrastructure: Backed by changes in organization for developing/controlling/maintaining plus investment in scanning, storing and laser printing system Business Strategy IT Strategy IT Infrastructure Business Infrastructure

PERSPECTIVE TWO: TECHNOLOGY TRANSFORMATION Example 1: USAA, Insurance Company Business Strategy: Low cost insurance delivery via tele-marketing Action: Superior document handling system based on state of art electronics Imaging software IT Strategy: Technology scope and associated competencies and committing to alliance/JV with IBM IS Infrastructure: migrate technology architecture and invest in development of data architecture Example 2: American Express Travel Services Business Strategy: Quick approval off purchases made by charge card and providing copies of charge slips to customer Action: Systemic competence expert system (authorizer assistant), Enhanced country club billing system IT strategy: Delivery of same level of service more efficiently IS Infrastructure: Backed by changes in organization for developing/controlling/maintaining plus investment in scanning, storing and laser printing system Business Strategy IT Strategy IT Infrastructure Business Infrastructure

PERSPECTIVE THREE: COMPETITIVE POTENTIAL Example 1: Baxter Healthcare IT Strategy: Exploitation of IT position business Business Strategy: Providing superior value added services to its hospital customers (healthcare marketplace) Organizational Infra: Spectrum JV with IBM, redesigning the internal organizational processes Example 2: Federal Express Corp. IT Strategy: New Cosmos/Pulsar system Business Strategy: Developing new standard of overnight delivery Organizational Infra: Redesigning the internal processes Business Strategy IT Strategy IT Infrastructure Business Infrastructure

PERSPECTIVE FOUR: SERVICE LEVEL Analytic methods includes: End user need survey Service level contracting Architectural planning Performance criterion Customer satisfaction obtained by quant/Qual. measurements obtained by internal and external benchmarking Business Strategy IT Strategy IT Infrastructure Business Infrastructure