IT – Business Alignment

Last Lesson Highlight Purpose & Role Type of IT Strategies ITStrategicPurpose/sITStrategicPurpose/s Analysing Strategies Analysing Strategies Defending Strategies Defending Strategies Prospecting Strategies Prospecting Strategies

IT – Business Strategy Alignment Corporate Level Objectives Objectives Business Level Objectives Objectives Function Level Objectives Objectives Corporate Level Strategies Corporate Level Strategies Business Level Strategies Business Level Strategies Function Level Strategies Function Level Strategies IT Strategic Plan Contents Enterprise Objectives  IT Objectives = Cost-Benefit Measures  IT Systems   IT Service levels IT Strategic Plan Contents Enterprise Objectives  IT Objectives = Cost-Benefit Measures  IT Systems   IT Service levels Process, contents and contexts of Linking IT objectives to Enterprise objectives & strategic capability requirements Different Levels of Enterprise Objectives Different Levels of Enterprise Strategies (often grouped by org project groupings)

IT – Business Strategy Alignment Degrees of alignment Nil Limited Integrated low High Reasons for High Alignment

Alignment Gaps 1.Strategy Practice ignores IT value 2.Tactics regards IT as an expense 3.Communications - nerds language 4.Education – lack of business understanding (Rathnam et al, 2005) 5.Business strategists exclude IT strategies in planning 6.Business strategies change while IT strategy plan is in execution Business strategists change minds Competitive markets dynamics Key Causes Design solutions to address these causes

IT-Bus Alignment Models Process IT Alignment as a Process: A means to a bus end (Henderson & Vankatraman, 1993) Capability Maturity Management IT Alignment as a staged Capability Maturity Management capacity (Luftman, 2007; King & Teo, 1997)) Env Focus Org Focus Strategic Alignment  Strategic Value Creation  IT created business value add Operations Alignment  Infrastructure & Functionality Improvements  IT increases functional & infra efficacies Measurable IT Capabilities Comms Value Governance (Enterprise) Architecture Skills Collaboration (Partnership)

Capability Maturity Levels Initial (Ad hoc) Initial (Ad hoc) Committed (Repeatable) Committed (Repeatable) Defined Managed Optimised Basic management control Process Definition Process Management Process Control Low High

What is Culture ? Family, education, belief & expectation systems, experiences.....  People attitudes in different situations  Shape behaviours at home/work/etc  Situation Outcomes

IT Strategy & Work Culture Country Cultural Dimensions Organisational Cultural Dimensions Group Cultural Dimensions Personal Cultural Dimensions Communication Abilities Other Demo Differences Values & Beliefs Thinking & Decision Making Many Theories/Models One is Wallach (1983) org culture model: 1.Innovative culture 2.Supportive culture 3.Bureaucratic culture Many Theories/Models One is Wallach (1983) org culture model: 1.Innovative culture 2.Supportive culture 3.Bureaucratic culture IT investment decisions IT implement practices Tech adoption practices IT usage practices influences

IT Strategy & Work Culture Many Theories/Models: One is Kanungo model that extends the Wallace model: 1.Innovative culture 2.Supportive culture 3.Bureaucratic culture Many Theories/Models: One is Kanungo model that extends the Wallace model: 1.Innovative culture 2.Supportive culture 3.Bureaucratic culture IT strategy planning orientation Centralised IT Leading Edge (R&D) Free Market (users decide) Monopolising Scarce Resource (Tight Budgets) Necessary Evil (Little IT support) influences

IT Strategy & Work Culture An organisation is structure along 3 views: Strategic Managerial Technical IT strategies can be designed to align with one, a mix or all these levels’ purpose and hence functional support. However, the work values and behaviours of people in these 3 levels may not be consistent and their behavioural influences will contribute to orienting the IT strategy to : Be centralised or decentralised Adopt leading edge ICT & accomodate high learning risks Controlled by users Controlled by the IT dept An administrative function and least funding priority Irrelevant & be prevented from use if and where possible.

The Real Practice Alignment Issues The new IT: Aligning Business & IT – Part 1 : Power Struggles The new IT: Aligning Business & IT – Part 1 : Power Struggles 3.03 min The new IT: Aligning Business & IT – Part 2: Mapping Analytics The new IT: Aligning Business & IT – Part 2: Mapping Analytics 2.26 min The new IT: Aligning Business & IT – Part 3 : the small controlled projects The new IT: Aligning Business & IT – Part 3 : the small controlled projects 1.46 min Additional Videos for home review Aligning IT solutions with Business NeedsAligning IT solutions with Business Needs 5.43 min Cola Cola on Technology & Business AlignmentCola Cola on Technology & Business Alignment 4.18 min

Class Study 1 IT strategy misalignment problem at an Australian company Part B – Mini Case 1.What is the type of business strategu & It strategy adopted by the Australian coy in both stages of growth. Use the taxonomy of IT strategy suggested by Sabherwal and Chan (2001). 2.Is there an alignment between IS/IT strategy and business strategy at both stages of growth of this company? Explain Growth Phase Business Strategy IT strategyBusiness/IT Alignment Evaluation Present both answers in a table Look at roles & structure

Class Study 2 the actions undertaken by a large chemicals company to improve its IT alignment maturity C2a) Identify the key IT management practices, IT systems, and IT decisions that the company made to improve its overall IT maturity level. Present your views in a tabular format taking into consideration of the 6 criteria or dimensions of IT alignment maturity included in the Luftman’s (2007) model. C2b) Which dimension of IT alignment maturity experienced little improvement? What advice would you offer to the company to increase the maturity level of that particular dimension? IT Alignment Maturing Dimension Key IT Mgt & Project Activities IT Decisions