Is IS Strategic Alignment Still Important to Organisations or Passé?

4 Nov

In the past authors such as Henderson and Venkatraman in 1993 stated that it was important to organisations and that the CEO must be committed to the implementation of IT or in this case an information system if it is to be successful. They also emphasised the importance of supporting and communicating IT throughout the organisation as mentioned by blogger cob12 https://sopinion8ed.wordpress.com/2012/10/27/strategic-alignment-challenges-communication/ and as seen in the article “Information Ecology as Competitive Advantage: The Role of Human, Business and Technology Resources” by Powell and Dent-Mica.

In this post I propose that IS strategic alignment is still important to organisations. I will use a recent paper “Strategic Information Systems Alignment: Alignment of IS/IT with Business Strategy” by Issa-Salwe, Ahmed, Aloufi and Kabir which was published in 2009 to show how it is still important to organisations.

In this paper it again states the importance of IS strategic alignment, “to integrate into a smoothly working business system and improve productivity, managers ought to align their Information Systems with the business strategy.”  They state it is important as integration helps coordinating workflows, assists in making decisions and solving problems. It may also create a competitive advantage based on either a cost leadership or product differentiation. These are the potential benefits from a successfully implemented information system, and as stated, for it to achieve success the information system should be in line with the business strategy. This shows that it is still an important issue for organisations today and is still seen as a challenge which must be over come as if it is not aligned, these benefits will not be achieved.

This article also states that there is “growing interdependence between organisational business strategy, rules, and procedures and the organisation’s information systems”. Therefore it may not just a case that it is still important to organisations but that in fact it is becoming more and more important to organisations. This could be perhaps due to the higher reliance on technology in general and the importance that is being placed on it for a successful competitive advantage. The authors show the importance of understanding both the business strategy and information system when stating “a manager must understand the broader organisation, management, and information systems dimensions of systems and their power to provide solutions to challenges and problems in the business environment”. The things that the manger must understand can no longer stand alone, showing again the already mentioned growing interdependence. 

This growing interdependence is seen in the model developed by Henderson and Venkatraman back in 1993. This model below shows both internal and external aspects and the interdependence of these aspects with the business strategy. This model also shows the alignment as being vital to a successful company. Henderson and Venkatraman proposed this model as a solution to misalignment of the IS and business strategy and as a means to be able to create and sustain a competitive advantage.

 

 

Here is a video which describes the above model in a clear and easy to understand way. It was made by several students( Ngo, Adolfsson and Abraham) from the University of Houston . It also provides a real life example by using American Express http://www.youtube.com/watch?v=6SsfjBAjNX8- .

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4 Responses to “Is IS Strategic Alignment Still Important to Organisations or Passé?”

Trackbacks/Pingbacks

  1. Strategic Alignment Challenges: Complexity « So Opinionated … - November 5, 2012

    […] the strategic alignment front. I would like to tie this argument in with a previous post written by d12221671 that discusses an interdependence within IS and IT. Managers can no longer look simply at their own […]

  2. Economic Challenges Facing Strategic Alignment. « So Opinionated … - November 11, 2012

    […] This could make this issue even more relevant and pressing for organisations. In my last blog (https://sopinion8ed.wordpress.com/2012/11/04/is-is-strategic-alignment-still-important-to-organisatio…) I suggested that this alignment is still relevant and may be a growing issue for organisations. In […]

  3. The Generic Strategies of Cost Leadership, Differentiation and Niche and IT. « So Opinionated … - November 17, 2012

    […] In this blog I have found that the generic strategies of cost leadership, differentiation and niche products can be used successfully in combination with IT. This is important as most companies will use some variation of one of these three strategies. In order for a company to achieve the required fit as necessary which was mentioned in my previous post (https://sopinion8ed.wordpress.com/2012/10/17/an-introduction-to-business-is-alignment/) it is necessary that IT can successfully be used in combination with one or a combination of these three generic strategies- cost leadership, differentiation and niche. This is important as I previously suggested that the business-IS strategic alignment is still a challenge for organisations (https://sopinion8ed.wordpress.com/2012/11/04/is-is-strategic-alignment-still-important-to-organisatio…). […]

  4. Recap on the Business IS Strategic Alignment. « So Opinionated … - November 26, 2012

    […] I then posted about how this issue is still relevant to organisations today (https://sopinion8ed.wordpress.com/2012/11/04/is-is-strategic-alignment-still-important-to-organisatio…) including the ever discussed current economic climate […]

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