Summary Report: Strategic Alignment: Leveraging Information Technology for transforming Organizations :: essays research papers

Strategic Alignment Leveraging Information engine room for transforming OrganizationsBased on the paper of J.C. Henderson, N. Venkatraman (1993)byPhilipp MaderthanerA. SummaryHenderson and Venkatraman proposed a mildew for personal line of credit IT junction it was intended to support the integration of information technology (IT) into line of business outline by advocating alignment between and within four domains (see figure 1). The inter-domain alignment is pursued along two dimensions strategic fit (between the external and internal domain) and functional integration (between the business domain and the IT domain). The objective of this model was to provide a way to align information technology with business objectives in order to realise value from IT investments. The authors argued that the potential strategic impact of information technology requires two an understanding of the critical components of IT strategy and its role in supporting and shaping business strategy decisions and a process of continuous adaptation and change. Hence, they presented a model that defines the range of strategic choices facing managers.Figure 1 Strategic Alignment ModelTwo main imperatives for managers are pointed out by Venkatraman and Henderson First, similar to business strategy, IT strategy has to consider both internal as well as external aspects. Second, both internal/external alignment as well as functional integration must be taken into account. Only one of them is not sufficient.Overview about the four dominant alignment perspectives1. Strategy executionThis strategy assumes that an articulated business strategy is the driver of both organizational design choices and the design of IT infrastructure. The alignment is said to be the most common and widely dumb perspective, as it corresponds to the classic, hierarchical view of strategic management.DriverBusiness StrategyRole of Top ManagementStrategy FormulatorRole of IT Management Strategy Implementer exer tion Criteria Cost/Service Center2. Technology transformationThis alignment involves the assessment of implementing the chosen business strategy through appropriate IT strategy and the articulation of the required IT infrastructure and processes. This strategy is not constrained by the current organization design, but instead seeks to identify the best possible IT competencies through appropriate position in IT marketplaces.DriverBusiness StrategyRole of Top ManagementTechnology VisionaryRole of IT Management Technology ArchitectPerformance Criteria Technology Leadership3. Competitive PotentialThis perspective is concerned with the exploitation of emerging IT capabilities to impact impudent products and services (business scope), influence the key attributes of strategy (distinctive competencies) and develop new forms of relationships (business governance).DriverIT StrategyRole of Top ManagementBusiness VisionaryRole of IT Management CatalystPerformance Criteria Business Leadersh ip4. Service take aimThe service level alignment perspective focuses as the name shows on how to build a world-class IT service organization.