Exam 2: Achieving Strategic Alignment

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The IT strategy formulation process can be described as a sequence of activities that transforms the current alignment state to the envisioned future alignment state. The future alignment state has the required condition that it enables sustainable competitive advantage. In addition, the benefits obtained from this envisioned future state of strategic alignment must be amenable to measurement in business terms. The process of transforming the firm's state of strategic alignment-and the consequent formulation of IT strategy-is done through the following set of activities, which require the active commitment and participation of senior business and IT management in order to be effective:
Obtaining An Executive Champion/Sponsor: The first step in the formulation of a viable IT strategy is obtaining the sponsorship of a senior business executive for the effort.Forming the Team: IT management should form a team of senior decision -makers from the corporate IT and (if applicable) business unit IT organizations as well as senior business management from the business units. Once formed, the team and the sponsor/champion must quickly establish a joint understanding and commitment to the goals and objectives of IT strategy formulation and its outcomes.Describing the "As-Is" State: This activity describes the current state of the firm in terms of the components of the Strategic Alignment Model. The "As-Is" description of the firm needs to specify both the business strategy and organizational infrastructure and process domains as well as the domains that pertain to the IT organization (i.e., IT strategy and IT infrastructure and processes).“SWOT” Analysis: This set of activities is designed to generate a detailed analysis of the strengths, weaknesses, opportunities, and threats confronting the firm. The SWOT’s objective is to recommend strategies that ensure the best alignment between the external environment and internal situation.

Strategy Alternatives Analysis: This step involves analyzing alternative strategies derived from applying various models such as Porter’s Industry Profitability Five Forces model, SWOT analysis, and Ansoff’s pProduct-/mMarket aAnalysis and obtaining mutual agreement as to their priority and attractiveness.

IT Strategy Implementation Planning: This step involves the actual implementation of the prioritized strategies. It involves commitment and engagement of senior business management, the ability of organizations to adapt their IT and adoption of management practices which help facilitate IT-business alignment, and the adoption of effective measurement systems and criteria.

Periodic Review: All strategies need to be periodically reviewed to ensure that assumptions about external environment are still correct, that implementation plans are on schedule, that measurements are being captured and reported and that these measurements support ongoing IT-business alignment.