Topic: Management
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Using And Validating The Strategic Alignment Model
The literature suggests that firms cannot be competitive if their business and information technology strategies are not aligned. Yet achieving strategic alignment continues to be a major concern for business executives. A number of alignment models have been offered in the literature, primary among them the strategic alignment model (SAM). However, there is little published research that attempts to validate SAM or describe its use in practice. This paper reports on the use of SAM inafinancial services firm.
Data from completed projects are applied to the model to determine whether SAM is useful as a management tool to create, assess and sustain strategic alignment between information technology and the business. The paper demonstrates that SAM has conceptual and practical value. The paper also proposesa practical framework that allows management, particularly technology management, to determine current alignment levels and to monitor and change future alignment as required. Through the use of this framework, alignment is more likely to be achieved in practice.
There is an issue regarding the unit of analysis in alignment research. This concerns whether projects, firms or processes are the appropriate item to study. For example, Tallon andKraemer (2003) examine alignment at a process rather than the firm level, employing, as a surrogate for alignment, cross-referencing in plans. They comment that some studies use executive perceptions of IT payoffs to try to understand the link between strategic alignment and IT business value. This approach has some support from Venkatramenand Ramanjam (1987) who find correlations between executives'perceptions and reality. Tallonand Kraemer introduce the notion of IT shortfall (where IT fails to support the business strategy) and IT under-utilisation (where business strategy fails touse IT). Their results show that alignment is highest in production, operations and customer relations, and lowest in sales and marketing. They further suggest that strategic alignment may lead to greater payoffs from IT, but that the relationship is only valid up to a certain critical level of alignment. However, Reich and Benbasat (1996) dismiss the use of written reports in alignment research, as they claim that reports are not used and can easily become out of date.
Source: www.sba.oakland.edu
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