Week 4 - Which Alignment Perspective of SAM Analysis is the best?

Strategic Alignment Model (SAM) is focus on the four domains in the business organization which has classified into 2 sectors of “Business” and “IT”. In the business side, it had “Business Strategy” and “Business Infrastructure”. In the IT side, it had “IT Strategy” and “IT Infrastructure”. These four domains are inter-related with each other, so that a business organization can smoothly operate. The following graph shows their relationship with each other.

In my opinion, I think that “Technology Transformation” is the best alignment perspective. The path of this strategy is the following:

Business Strategy -> IT Strategy -> IT Infrastructure

The driver of this perspective is Business Strategy. The role of the top management is Technology Visionary and the role of IT Management is Technology Architect. The performance criteria are Technology Leadership.

This perspective is not limited by the current organization structure, and the strategy is to find out the best possible IT competencies. For using this strategy, business strategy is the important driver, but it also needs the support of IT strategy. IT strategy is the requirement to operate the business, and it is also the requirement of the operation in related IT infrastructure and procedure. The top level management must have the sense of IT and understand the importance of IT support in the business operation, so that they can develop some IT strategy that are helpful to the business organization. The job of the IT manager is to develop a powerful IT infrastructure that can fully adopt the business and the external environment, and responsible for the efficiency of the IT strategy.

In order to use this perspective for Business Re-engineering, we need to develop the business strategy according to the company mission and vision, and to re-engineering some or all of the business process. After that different departments in the organization will make the requirements for the IS, and they will discuss with the IT department and realize the change.

I think this alignment perspective is the best one because the people from IT department may not have a boarder view of the organization and the global business environment, so they may not have the ability to dominate the whole organization. On the other side, the people in the business side had more experience and understanding in the global market environment, so it is better to establish the strategy and IT strategy to support their direction.

For example in the bank of Standard Chartered, as their operation approach is the business manager will develop the business strategy that support the mission of their bank that is to increase the market share of personal banking. So they suggest to improve their service by provide more convenient way to the customers. Then this direction will pass to the IT department to develop a more concrete IT strategy. In order to support the business strategy, IT department proposed to develop the iPhone application for the customers to handle their transactions not only queue up in the bank or in front of the computer. They can complete their transaction at anywhere and anytime when they have the iPhone on hand. After the IT Strategy was developed, IT infrastructure will consider the hardware, software, database and the network to analysis if they can support the IT strategy.

But there are no best universal alignment perspectives that are fit to all the organization. One perspective may suitable for one organization, but may not suitable for other organizations. Because different organizations are facing different situations, and they have different mission, so the top manager of the companies need to choose their own perspectives base on their organization culture, current environment and the mission in the future.

SAM analysis bring us an important topic is that we need to alignment with the business strategy and IT strategy in order to successfully operate an organization. And we will fail in our business if we miss any one of them.

References:

J.C. Henderson and N. Ventakraman, Strategic Alignment: Leveraging Information Technology of Transforming Organizations, Vol. 32, No. 1 (1993)