Strategy Maps and Aligning IT with Strategy.

21 Nov

In this blog I want to introduce the concept of the IT strategy map.  I’m primarily drawing this map from a paper written by Craig Symons titled ‘IT Strategy maps: A tool for Strategic Alignment’ the link to which can be found here: http://www.cmocioalign.org/resources/pdf/WP-Strategic-Alignment.pdf

The concept of aligning IT with Strategy has been discussed at great length on this blog already. In my opinion it is one of the biggest issues that business executives and CIO’s have to struggle with every day. In order for organisations to maximise their returns on IT investments they must align and link their objectives back to these investments.

A strategy map is a diagram that is used to document and direct the primary strategic goals being pursued by an organisation or management team. They are derived from Robert Kaplan’s David Norton’s work on the balanced scorecard. The strategy map shows the cause and effect linkages between four perspectives. These being:

  1. Financial.
  2. Customer.
  3. Learning and Growth.
  4. Internal Business Processes.

What the strategy map does well is force an organisation to think about its strategy from these four perspectives and to develop links between them.

The IT strategy map serves the same purpose as a generic strategy map except that its function is to ensure that business objectives and IT are aligned successfully. The first major difference between the general strategy map and the IT strategy map is the four perspectives through which it is viewed. Here the four are

  1. IT Value.
  2. User Perspective.
  3. Operational Excellence Perspective.
  4. Future Orientation Perspective.

The role of IT in a business is simply to create value, be it in cost saving measures, increased productivity/ innovation and the automation of an everyday business task.  IT also naturally has users which it must satisfy. These users can be staff members who get gratification from their increased productivity through the use of an IT system. Process or Operational excellence is a central requirement of any IT strategy if users are to remain satisfied with a system. Finally future orientation capabilities requires that the right staff members be in place to get the most gains from the system, this could be measured by conducting a competency test of current staff members to see where extra training is needed to fully utilise an IT system and then as the graph shows either attract or retain the right people with the skills needed.

The main advantage of a model like this one is the visual aspect of it. If all staff members within an organisation are able to view the company’s IT strategy in a visual form then it greatly increases their ability to come to a common understanding.

 

Where I think this models strengths lie is the fact that it allows a company to draw up their IT and strategy framework themselves. This seems to be the norm for organisations today as the graph below shows.  This shows that almost 50% of the surveyed companies developed their own template or framework in-house. This is where the IT strategy map could be of great use and create value for an organisation attempting to align their IT with strategic objectives.

This is the second model for Strategic Alignment and IT which I have examined so far. The Venkataraman model which I examined previously(https://sopinion8ed.wordpress.com/2012/11/06/it-and-strategic-alignment/) is different to this one in the way that it shows the differences between sections or departments within the organisation. I think that this model is somewhat lacking in this area. I do think however that it is a very useful tool for self evaluation by CIO’s or other top executives. Does anyone else agree or disagree?

 

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One Response to “Strategy Maps and Aligning IT with Strategy.”

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  1. Achieving Strategic Alignment. « So Opinionated … - November 21, 2012

    […] exact layout of the scorecard is usually user definable but as stated by pm1083 (https://sopinion8ed.wordpress.com/2012/11/21/strategy-maps-and-aligning-it-with-strategy/ ) scorecards are usually made up of the following headings: financial, customer, learning and […]

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