STRATEGIC ALIGNMENT IT

Strategic Alignment between IT and the Business Process

Strategic Alignment between It and the Business Process

Introduction

As information technology becomes more ubiquitous in both life and business activities, it becomes increasingly difficult to separate out the role of information technology in business activities from a description of the business activities themselves (Papp, R. 2001)

Today, most of the companies can no longer ignore the importance of Information Technology in their organization to get competitive benefit. The firms can be said that they are heavily relying on IT for processing their work because IT has a power to change the entire organization such as size, net-profit, competitively, productivity, human activity efficiency and customer satisfaction. Companies always have to search for new ideas, processes, and methods that will make their company more effective and efficient (Molka, J and Isen, D. 1999).

Investing right technology, which makes a company unique and effective, is not that easy to be decided due to measuring the process of IT is invisible in some manner. Also, it is hard to figure out its effects and future benefit to an organization. Because the use and knowledge of IT cannot be seen at once but decision of choosing a new technology must be faster than knowing well about the technology itself to be an winner among competitors who also seek a new and unique technology. However, even if investing a new technology would have pretty much risk one the other hand it also would be able to result in a sustainable advantage. To gain competitive and sustainable advantage, it would not possible to avoid the risk of investing a new technology.

Developing Business strategies with IT

Information technology has often a strategic role to gain competitive advantage. Beyond the gaining simple competitive advantage, the strategic benefit of deploying information Technology to support business functions is often seen as the basis for competitive advantage that is sustainable (Papp, R. 2001).

Executive must state at critical success factors such as the industry their firm operates in, the company itself, the environment, and time dependent organizational area (Chang V. 2004). Also, CIO/CEO should be able to cover Management Issue for Business, Strategic and Competitive Issue, Planning and Implementing Consideration and Operational Items (Chang V. 2004)

To see the critical success factor for an investment a new technology, three types of strategic models mainly have been attracted to these days, business Porter's competitive force, Wiseman's strategic trust, and Strassman's model.

Porter's competitive model and Wiseman's strategic trust

Porter's competitive model is able to use in the individual organization to judge future influence of IT on the competitive position for the firm.

This model present that to gain a competitive edge within the existing industry, competitors must take strategic actions to diminish customer or supplier power, Lower the possibility of substitute products entering the marketplace, and discourage new entrants (Frenzel, C. W. and Frenzel, J. C. 2004).

Some ideas of Wiseman's strategic trust (1988)'s elements are overlapped with porter's model. He developed five thrusts strategy such as Differentiation, Cost, Innovation, Growth and ...