Lecture 4 - The Strategic Alignment Model

Response:


Number of people suggest that there isn’t an exactly “best alignment strategies” in the Strategic Alignment Model (SAM), and optimal alignment strategy for a business depends on what the business are, which in turn depends on the scope and nature of the concerned business.  In my opinion, Service Alignment provides generally manageable bases for business operations of large businesses.


Scope or size of a company occupies a huge proportion of the deterministic factors in choosing the alignment strategy.  But assume that “most success business” are those with a higher span of business scope and higher revenue (as business usually aims at expansion and making profit), I think Service Alignment helps systematically maintain business competitiveness and management stability throughout a period of time.

Criteria and assumption of a success business:

-    International, and/or with large business scope

-    Attain a high profit when ranked globally

-    For local firms, they ranked high within local region/area (in terms of above 2 criteria)

Brief factual recall of 4 alignment models mentioned in Comp326 lectures:

Strategy Execution:

-    BS -> OI -> ITI (Business strategy is the driver)

-    Business pay to get services, thus IT infrastructure is implemented by the

Technology Transformation:

-    BS -> ITS -> ITI (Business strategy is the driver)

-    It searches for the best possible IT out-perform areas to suit the business goals

Service Level:

-    ITS -> ITI -> OI (IT strategy is the driver)

-    It promotes building of IT service organization, and use business to promote the company-based IT solution (service and/or product)

Competitive Potential:

-    ITS -> BS -> OI (IT strategy is the driver)

-    It utilizes IT to source the optimal set of strategy for the business

Why Technology Transformation alignment is the best for the above mentioned case:

From this alignment, the business strategy is align on the same level of IT Strategy [2], which means IT strategy can be developed to suit the overall business goals and decisions, followed by implementation of “right tracked” IT infrastructure.  The advantage though is the reduced chance of developing incompatible IT infrastructure during business cycles.

Another advantage though, is that business strategy usually formulates business development from currents market trends; however, Service Level alignment emphasizes the alignment of organizational infrastructure from technology strategy.  If the technology strategy is not a very updated one, which is highly diverted from development trend or used for prolonged period of time, it may start to lose it’s market niche, even providing certain business strategy to mend the situation may make no use. 

An example is Nokia, the world famous mobile manufacturer, with IT strategy “…continue the renewal of our Series 40 platform in QWERTY, touch & type, dual SIM, Nokia services” [1].  Nokia tends not out-perform other manufacturers in the recent years.  Some people expressed that Nokia should switch to develop Android system for its smartphones as their IT strategy, and reduce investing in the less popular Symbian system.  Even with an appropriate Business Strategy, such as “build great mobile products that enable billions of people worldwide to enjoy more of what life has to offer…”[1], Service Level alignment may not offer a stable growth for a big corporation as technological/IT driven does not guarantee the corporation align with market niche.

Contrary example for Nokia is another mobile manufacturer, HTC.  With Technology Transformation alignment, HTC comparatively follow the market’s needs and wants.  Its business strategy emphasizes the align of IT strategy to business (supported by market trends and reports), HTC implemented the new Android system into its smartphone production line.  Without staying with the initial Windows Mobile system direction, this company successfully maintained an ideal proportion in the smartphone market.  This is an example of using business’s decisions in formulating business strategy.  In this case, HTC archived potential growth during the recent years.  This business alignment is especially common for many Korean cellphone makers such as Samsung, bringing similar surpass against traditional mobile phone manufacturers.

Conclusion:

SAM was invented since it can be generally used by different scopes’ businesses to search of its’ best alignment model, thus smaller firms may find other quadrants beneficial to their current operation.  Business can utilize the suitable alignment model to help expanding their business into a more well-known, better reputation business as time goes on.

However, as mentioned before, SWOT has to be used to analysis the business’s need in the SAM model; what’s more is that PEST helps prevent some of the unwanted external affluence, such as expanding business in unfavorable business environment, economic downturn, culture barriers etc.

All in all, the Technology Transformation provides the generally “best alignment” for many stable and highly anchored well know business in the world.


[1] http://www.nokia.com/global/about-nokia/company/about-us/about-us/
[2] http://businessitalignment.wordpress.com/2010/12/17/the-strategic-alignment-model-of-henderson-and-venkatraman/
[3] http://www.12manage.com/methods_venkatraman_strategic_alignment.html