Source / Reference:
1) "Strategic Alignment: Leverage Information Technology for transforming organization" by J C Henderson and N Venkartraman 1993
http://search.proquest.com/docview/26252741/134A6C8B53F19A4F606/1?accountid=16210
2) Strategic Alignment: Analysis of Perspectives
http://sais.aisnet.org/2006/Coleman-SAIS2006-paper.pdf
Subject:
In Lect 4 - Which alignment strategy in SAM model is the best? and why?
Response:
There are four alignment perspectives in SAM model which includes strategic execution, technology transformation, service level and competitive potential. These four dominant alignment perspectives emerged when both strategic fit and functional integration are being assessed simultaneously. However, there is no single alignment strategy that is universally superior. It depends on the company situation or industry nature.
Perspective one: Strategy Execution
This alignment perspective is the classic view of strategic management. Critical success factors, business system planning and enterprise modeling are the analytical methodologies that support this perspective. This perspective is formed when the business strategy is already articulated and thus it becomes the driving force of both organizational design and IT infrastructure design. The performance is assessed by the evaluation of a cost/service center.
Perspective two: Technology Transformation
This alignment perspective seeks to identify the best possible IT competencies which are not constrained by the current organization design. The development of the IT strategy is driven by the business strategy and the IT infrastructure will be the impacted domain. This perspective focuses on the performance of technology leadership to assess the position of the company in the IT market.
A typical example of this perspective is the American Express Travel Related Services Co.Inc., whose business strategy aims to provide quick approval of purchase made by charge card and return copies of receipts to the cardholder. This business strategy then become the major driving force to develop IT strategy and finally produced two IT infrastructures, i.e. Authorizer's Assistant and ECCB (Enhanced Country Club Billing) to help achieve the plan of the business strategy.
Perspective three: Service Level
This alignment strategy helps ensure the effective use of IT. An IT infrastructure will be created by the driven of IT strategy and impacted on organizational infrastructure. It focuses on customer satisfaction level as a performance criterion. This perspective is most suitable in servicing industry. For example, many cosmetic companies will issue a VIP card (supported by its IT system) to their honorable customers. The card will convert the consumption amount into points which the customers can use these points to redeem limited edition gift. Also, the VIP card allows the customers to have certain discount when they purchase again. This IT strategy can enhance the customer retention rate and increase the level of customer satisfaction.
Perspective four: Competitive Potential
This alignment perspective is formed by the emerging IT capabilities which affect the business strategy and eventually impacted on organizational infrastructure, which means the company seeks to identify a best strategy through IT. The performance criterion of this alignment perspective is the assessment of business or product leadership such as market share, growth and new product invention. The spring up of Federal Express Corp. is a result of introducing a new standard for overnight deliver through its COSMOS/PULSAR system. This example proves that an effective IT positioning helps create new and better business strategies and thus enhance business leadership.
To conclude, each alignment perspective has its own merits, no alignment strategy is the best, which perspective should be used depends on the industry nature and company situation. Nowadays, many companies will apply fusion perspectives (a combination of some perspectives) to deal with their companies weaknesses.
