As IT budget continue to rise the question of if the value it brings to the business commensurate with such cost has continuous popped up. While some business have being able to annex the potentials of IT to gain competitive advantage some others have struggled to do so, one clear reason being the role IT plays in such organisation. There have being evidence of businesses which have made it culture of making IT an important component of strategy planning this way the organisation is well placed to either take advantage of opportunities that arise with IT trend or respond to threats that come with it.
Why business must align business strategy with IS/IT strategy
A good business and IS/IT alignment practice offers ways to consistently get optimum business value from IT resources as proper alignment leads to improved business performance. Business/IT strategy alignment helps both the business domain and IT domain move in same direction as their objectives are unified. IT possess the capability to enable business growth, innovation and efficiency in an organisation but only if the strategy of application of any such technology is in harmony with the organisation’s business strategy and this strategic alignment helps achieve. A culture of business/IT alignment would help IT play a proactive role in formulating long term strategies that can help the business carve a niche by providing better services and products.
(Henderson & Venkatraman, 1989) identified four perspectives that can help address issues arising from the simultaneous assessment of cross-domain relationship during strategic fit and functional integration in the SAM model, they are:
Strategy execution perspective: In this dimension of business/IT strategic alignment perspective the business strategy is the main domain and considered the business driver for the organisation while other elements such as the organisational infrastructure, business process and IS/IT infrastructure and processes are planned in line with or constantly fine-tuned to keep up with current business realities as business strategy changes (Coleman & Papp, 2006). Strategic execution perspective is a top-down approach method of strategic alignment model which has the roles of top management and the IS/IT managers are well defined, here top management is saddled with the responsibility of formulating the contents and process of the business strategy to be adopted while the job of the IT manager is to design and implement IT infrastructure and process that can support any chosen business strategy.
Technology transformation perspective: In this perspective business strategy is still considered as the driver but the implementation of any chosen business strategy is dependent on IT strategy and IT infrastructure and processes to provide a platform to succeed, this perspective attempts to establish a strategic fit for IT where IT strategy is exploited to enable business strategy as such showing the value of IT. This perspective requires the technology vision and influence for organisational change to support any adopted business strategy to come from executive management as such a proper knowledge of the understanding of the interrelationships between the business strategy, IT strategy and IS/IT and processes is required.
Competitive potential perspective: In this perspective IT is considered as the change catalyst, here IT capabilities is exploited to formulate the organisation’s business strategy scope and competencies. This perspective requires IT managers to assess the impact of emerging technologies on the business in terms of opportunities and threats and see how such opportunities can influence or enable new business strategy and in turn create competitive advantage for the business. The executive management plays the role of business visionary and is expected to consider how best to exploit emerging technology to influence major organisational change while clearly stating the competencies, functionalities as governance pattern of such IT technology in the market place.
Service level perspective: This alignment perspective is concerned with the interrelationships between IT strategy which is the anchor domain and IS/IT infrastructure and processes which is the pivot domain. This perspective is focused on building and sustaining reputable technology product and services. This perspective is common in IT service organisations and relies on exploring the strategic fit between IT strategy and IT infrastructure and processes to stimulate customer demand for valued IT services. The role of the business domain is to control how to maintain customer demand as such the need for business managers to make available the needed resources required to support the strategy adopted and IT manager in this case play the executive role to make the IT service successful.
A sound business/IT alignment is relevant if IT is to effectively support the organisation’s business process, as (Nugent, 2004,pg 1) notes “ Business/IT alignment is no longer a “nice-to-have” it is a “must-have” since it drives bottom line benefit”.
When relying on technology to gain competitive advantage it is important that this is done in timely and efficient manner this is one way SMEs can exploit disruptive technology to their advantage. While large firms have a resource benefit, small firms are better able to respond to unexpected developments in the business environment which disruptive technologies usually come with. Rapid technological advances require prompt decision-making, quick action to changing business environment, internal flexibility, willingness to take risks on emerging technologies, lack of bureaucracy, and entrepreneurial spirit typical all of which SMEs can exploit to gain competitive advantages. At the same time, SMEs tend to be more focused on producing products for niche markets rather than a big market. While usually been considered by established businesses as an attack, disruptive innovation provide a powerful avenue for growth through new market discovery for SMEs. In every industry changed by disruption, the net effect has been total market growth. SMEs should grasp the opportunities offered by disruptive innovation to target massive low-end market and new markets especially in developing countries like African.
As development and adoption of new technologies continues to spread out from the Silicon Valley to tech hubs around the world there is sure to be an implication on our everyday activities. One topic that catches my fancy is the goal line technology the world football organization FIFA is hoping to put in place. Officiating mistakes are a sure part of the beautiful after all its a human game and humans make mistake , while some fans believe it’s a welcome development others feel it would take away something from the beautiful game. If you are an English fan I already know which side of the argument you are, just kidding.
This Video Demonstrates the communication gap between IT and the Business. IT needs to know the Business objectives and to do so it must communicate with the business.
Many times Organisations spend a great amount of time putting together a strategic plans, the focus on only important things they need to do in terms of where they go and the technology are often overlooked but if only Company can go beyond that by implementing Customer Relationship Management to achieve their Business goals.