Archive for December, 2010

Synchronized swimming

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Last month I’ve read an article on how organisations cooperate regarding IT, which contains a couple of conclusions which I recognize very much in practice. Although the article is mainly talking about cooperations between organizations, it appears also applicable for situations within large enterprises and institutions. The article is written by a couple of advisers of dutch consultancy firm TwynstraGudde (www.tg.nl).

They illustrate that most partnerships are based on trying to realize the perfect world. Managers as well as IT professionals are very capable of dreaming of the ideal organisation, proces or IT solutions. A world in which every hospital has the same process, or comparable departments are exactly the same because they produce the same results. But, in reality it’s always less perfect. Some barriers are mentioned which are in the way of the perfect world.

1. Irrational behaviour
Although partnerships seems to be based on rational arguments, in practice it’s hardly the case. Most managers and IT professionals tend to act as result of emotional or at least less rational motives, which they can cover very well in rational arguments.

2. Lack of trust
Trust is neccessary, but isn’t there from the beginning. Trust needs time to grow.

3. Shared versus individual benefits
In realizing the ideal situation, cooperating partners need to give and take. In many cases, costs and benefits won’t be for one single party. The shared goal should prevail over the individual goals.

4. Concept versus reality
In bringing different parties together, the idealized concept needs to be translated into practice. This needs to be done on an abstract level. Too much details will harm the partnership, due to the fact that people will keep on discussing details, and will not longer focus on the shared goal.

5. Organisation and ICT not in sync
After development ICT systems will be implemented in a rather short period of time. Organisational changes aren’t implemented in a split second. Once the systems are implemented, organisational changes will take off, and it will take time. Often management expectations are too high, and they expect all the benefits as soon as the systems are implemented. Often this leads to disappointed management which threathen the partnership.

6. Different backgrounds
A partnership between organisations (but in my view also within the larger organisations) requires people from different disciplines to work together. This sounds easier than it is. People tend to be biased, and it’s common that they don’t understand each other.

In the article, some recommendations are given to solve the issues herefore mentioned.

  • use former failures, learn what went wrong
  • keep your eyes on the shared goal and common stakes
  • stay away from details
  • preferably institutionalise a new entity for the partnership
  • make absolutely sure that there is full executive commitment
  • don’t approach the partnership as a project, but as a process.
  • stimulate people with guts.

For people involved in cooperating entities, whether between or within companies, these insight should be recognizable. Especially true in the field of business/IT relationships. The recommendations could inspire you as well!!

Reference

Gloudemans, Migiel, Opheij, Wilfrid, Wendel de Joode, Ruben van, Wittkampf, Michiel: Samenwerken en ict, hoe dromen toch werkelijkheid kunnen worden, TIEM 39, 2010 (Dutch).

There are numerous articles, studies and models to be found on the topic Business/IT-alignment. This makes it hard to define which model is most adequate to use. But some models are apparently much more accepted than others, although there seems to be no consensus on the best one. The basis of many models seems to be the Strategic Alignment Model (SAM) of Henderson and Venkatraman [Henderson and Venkatraman, 1999]. This model suggests that IT-business alignment can be achieved by building linkages among four strategic domains:

The dimension of strategic fit differentiates between external focus, directed towards the business environment, and internal focus, directed towards administrative structures. The other dimension of functional integration separates business and IT. According to the authors, Strategic Alignment can only occur, when three of the four domains are in alignment.

According to Leonard [Leonard, 2008] the SAM-model merely describes what needs to be aligned. In the same study, Leonard points out that there has been far less consensus regarding how alignment is to be achieved. The model which is seen by Leonard as the model which gives insight in the processs by which alignment can be improved is the model of Luftman. This is more about the question how alignment is achieved. The theory of Luftman is found in many articles as a framework for assessing Alignment within a company, and looks very useful.

Luftman developed a maturity assessment model, based on the 12 elements of Business/IT-Alignment, which can be recognized in the model of Henderson and Venkatraman. The components of this model, in concert with the earlier enables/inhibitors research [Luftman and Brier, 1999], form the building blocks for the strategic alignment maturity assessment method [Luftman, 2000].

This model can be used in a survey to see where a company stands regarding maturity and once this maturity is understood, it can provide the organisation with a roadmap that identifies opportunities for enhancing the harmonious relationship of business and IT [Luftman, 2000]. The model consists of 6 alignment areas. Each area has multiple attributes. For each area there are clearly defined maturity levels. All areas should be given attention to mature the alignment between business and IT.

The areas are:

Communications

How well does the technical and business staff understand each other? Do they connect easily and frequently? Does the company communicate effectively with consultants, vendors and partners? Does it disseminate organizational learning internally?

Competency/Value Measurement

How well does the company measure its own performance and the value of its projects? After projects are completed, do they evaluate what went right and what went wrong? Do they improve the internal processes so that the next project will be better?

Governance

Do the projects that are undertaken flow from an understanding of the business strategy? Do they support that strategy?

Partnership

To what extend have business and IT departments forged true partnerships based on mutual trust and sharing risks and rewards?

Scope & Architecture

To what extend has technology evolved to become more than just business support? How has it helped the business to grow, compete and profit?

Skills

Does the staff have the skills needed to be effective? How well does the technical staff understand business drivers and speak the language of the business? How well does the business staff understand relevant technology concepts?

In my experience, the assessment-method of Luftman really provides enterprises and organisations with a tool which gives insights in the business/it-relationship. It is very useful in defining improvement areas, and even more important, it facilitates an open discussion with executives from business and IT. What it doesn’t, is providing guidelines how to improve the alignment between business and IT. But, the six dimensions cover, in my experience, quite nice on which elements attention should be given. Not at one specific, but all dimensions should be in harmony. I will come back to these dimensions in following posts.

References

Henderson, J.C. and Venkatraman, N.:Strategic Alignment: Leveraging Information Technology for Transforming Organizations, IBM Systems Journal, 1999

Leonard, Jenny: What are we aligning? Implications of a Dynamic Approach to Alignment, 19th Australian Conference on Information Systems, Christchurch, 2008

Luftman, Jerry and Brier, Tom: Achieving and Sustaining Business-IT Alignment, Calirfornia Management Review, Fal 1999

Luftman, Jerry: Assessing Business-IT Alignment Maturity, Communications of AIS, Volume 4, Article 14, December 2000

Alignment is expected to improve business performance, by aligning Business and IT Strategy. But, that’s not enough. According to Boar [1994, in Grant, 2003], effective alignment is predicated on the combination of prescient planning and the effective execution of those plans. The execution of a strategy is almost always realized via the tactical and operational levels of an organization. This means, that alignment must be realized, not only horizontally, but also vertically.

One definition on these two types of organizational alignment – vertical and horizontal – is found in [Kathuria et al, 2007]. Vertical alignment refers to the configuration of strategies, objectives, action plans, and decisions throughout the various levels of the organization. Horizontal alignment refers to coordination of efforts across the organization and is primarily relevant to the lower levels in the strategy hierarchy.

Alignment on different organizational levels

While IT-business alignment at the strategic level has been extensively studied (Chan and Reich 2007), there has been little study of how IT and business can align at the tactical level.

Tactical IT-business alignment is necessary for making sure that IT projects are implemented on time and the implemented applications deliver the planned and desired business benefits. Alignment at the operational or tactical level is required for ensuring that planned applications are successfully implemented, maintained and used, that applications and systems irrelevant to the business plan are not implemented, and that implemented IT delivers envisaged business benefits [Tarafdar and Qrunfleh, 2009].

The importance of alignment on a operational level is also adressed by Guldentops in [Grembergen et al, 2004]. He makes a distinction between vertical and horizontal alignment. Vertical alignment is primarily driven by repeatedly communicating an integrated Business and IT strategy down into the organisation, and translating it at each organisational layer into the language, responsibilities, values and challenges at that level. Horizontal alignment is primarily driven by cooperation between Business and IT on integrating the strategy, on developing and agreeing on performance measures and on sharing responsibilities.

Benbya and McKelvey came up with a model which highlights the relevance of analysing the relationship between Business and IT (Horizontal Alignment) but also the need to reconcile the views at different levels of analysis (Vertical Alignment). This model is shown in the enclosed.  Further, they redefine alignment as follows: “Alignment is a continous coevulutionary process that reconciles top-down ‘rational designs’ and bottom-up ‘emergent processes’ of consiously and coherently interrelating all components of Business/IS relationships at three levels of analysis (strategic, operational and individual) in order to contribute to an organisation’s performance over time”. [Benbya and McKelvey, 2006].

 

Coevolutionary IS Alignment [Benbya and McKelvey, 2006]

Gutierrez et al [2008] confirm the need for expanding research to the tactical and operational level. Based on findings from their literature review they state:

  1. Business-IS alignment and assessment approaches are mainly focused on the strategic level
  2. There is a lack of connection between strategies and IT projects implementation.

References

Benbya, Hind, and McKelvey, Bill: Using coevolutionary and complexity theories to improve IS alignment: a multi-level approach, Journal of Information Technology, No 21, 2006

Chan, Yolande E and Reich, Blaize Horner: IT Alignment: what have we learned, Journal of Information Technology (2007) 22, 2007

Grembergen, Wim van, and Haes, Steven de, and Guldentops, Erik: Structures, Processes and Relational Mechanisms for IT Governance, Idea Group, 2004.

Grant. Gerarld G.: Strategic Alignment and Enterprise Systems Implementation: the case of Metalco, Journal of Information Technology, No 18, September 2003

Gutierrez, Anabel, and Orozco, Jorge, and Mylonadis, Charalampos, and Serrano, Alan: Business-IS alignment: assessment process to align IT projects with business strategy, AMCIS 2008 Proceedings, 2008.

Kathuria, Ravi, and Joshi, Makeshkumar, P., and Porth, Stephen J.: Organizational alignment and performance: past, present and future, Management Decision, Vol. 45 No 3, 2007.

Tarafdar, Monideepa, and Qrunfleh, Sufian: IT-Business Aligment: A Two-Level Analysis, Information Systems Management, No 26, 2009

Business IT Fusion (book)

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Critics of Business/IT-Alignment research argue that in the world of work, alignment does not succeed because strategy is not a clear concept due to various turbulent, unpredictable circumstances that leave managers muddling through, betting and tinkering with their corporate strategies. [Chan and Reich, 2007]. One of the challenges Chan and Reich see, is that Corporate Strategy is unknown, unclear or difficult to adapt. This poses a significant challenge, because most models of alignment presuppose an existing business strategy to which an IT organization can align itself. Managers may face ambiguity surrounding the differences between espoused strategies, strategies in use, and managerial actions, many of which may be in conflict with one another [Chan and Reich, 2007]. Critics of Strategic planning and alignment maintain that the implicit dominance of a structured strategy process is questionable in an era where uncertainty and flexibility predominate and the articulation of the strategic intent is difficult (Ciborra,1997 in Avison et al, 2004).

A warning on alignment is mentioned in a study of Bain & Company [Shpilberg et al, 2007]. They come up with the conclusion that, contrary to conventional wisdom, the path to IT-powered growth lies first in building high effectiveness and only then ensuring that IT projects are highly aligned to the business. Good alignment alone is not enough, and even worse, can distract the IT department from a high IT performance. This is called the Alignment Trap.

Another interesting view can be found in the work of Hinssen [Hinssen, 2009]. He sees Alignment as a model to optimize existing relationships, but it will not help in establishing an optimal relationship between business and IT. He introduces Business/IT Fusion as the next step in this area. Where Alignment implicitly calls for a two-party system to collaberate, Fusion is about a strong convergence.

References

Avison, David, and Jones, Jill, and Powell, Philip, and Wilson, David: Using and validating the strategic Alignment model, Journal of Strategic Information Systems 13, 2004.

Chan, Yolande E and Reich, Blaize Horner: IT Alignment: what have we learned, Journal of Information Technology (2007) 22, 2007

Hinssen, Peter: Business/IT Fusion, How to move Beyond Alignment and Transform IT in your Organization, Mach Media, 2009

Shpilberg, David, Berez, Steve, Puryear, Rudy, and Shah, Sachin: Avoiding the alignment trap in IT, MIT Sloan Management Review, 2007

The next model, I like to introduce is the Amsterdam Information Model (AIM), also known as the so-called 9-cells-framework (in dutch: negenvlaksmodel). This model was developed by Maes, Truijens and Abcouwer. They extended the original SAM model with an extra row and an extra column. By splitting the internal domain, in a structural and operational level, they introduced a central role where the design and managing of a company is adressed. The extra column is introduced to split the use of information from the technology side. In later work Maes extended this model to a so-called Unified Framework [Maes et al, 2000]. This is called an attempt to transform the concept of alignment into a practical method, incorporating both management and design components. This model can help in understanding the complex world of business and IT, and more specific, to understand the role of informationmanagement. According to a recent publication of Abcouwer and Goense, this model is often used in a different and wrong way. In a descriptive way, where it’s not meant for. This model enables discussions on the topic of business and IT alignment, but it doesn’t provide information on how organisations can actually improve the way they cooperate.

References

Abcouwer, A.W., Maes, R., Truijens, J.: Contouren van een generiek model voor informatiemanagement, Primavera Working Paper 97-07, 1997.

Abcouwer, A.W., Gels, H., Truijens, J.: Informatiemanagement en Informatiebeleid, SDU, 2006.

Maes, R.: A Generic Framework for Information Management, PrimaVera Working Paper 99-02, 1999.

Maes, Rik, Rijsenbrij, Daan, Truijens, Otto, Goedvolk, Hans: Redefining business-IT alignment through a unified framework, PrimaVera Working Paper 200-19, 2000.

The Strategic Alignment Model (SAM) of Henderson and Venkatraman [1999] is widely used as the base of Business/IT Alignment theories. The key message of this model, as well as that of many other studies, is that to become a successfull company, one should make sure that the IT strategy is fully aligned with business strategy.

Figure: Strategic Alignment Model [Henderson and Venkatraman, 1999]

The Strategic Alignment Model is composed of four quadrants that consist of three components each. All of the components working together determine the extent of alignment. At least as important are the linkages between the quadrants. The first linkage is that of strategic fit. This is the vertical linkage and refers to the use of strategy to determine the infrastructure of the business. The second linkage is functional integration. This (horizontal) linkage is most directly related to the alignment of business and IT.

Based on this model different perspectives are mentioned, which are shown in the next figure. These perspectives are constructed in a type of triangular format, and can be used to assess the alignment within a company.

Figure: Eight Strategic Alignment Perspectives [Coleman and Papp, 2006]

In addition to these eight perspectives, there are also four fusion perspectives described, that are formed from the combination of two of the individual perspectives. [Luftman, 1996; Coleman and Papp, 2006].

Figure: Fusion Perspectives

Although these different perspectives can be used to gain insights in the way the business and IT are aligned, they provide little guidance on the question how companies can achieve good alignment.

References

Coleman, Preston and Papp, Raymond: Strategic Alignment: Analysis of Perspectives, Proceedings of the 2006 Southern Association for Information Systems Conference, 2006.

Henderson, J.C. and Venkatraman, N.: Strategic Alignment: Leveraging Information Technology for Transforming Organizations, IBM Systems Journal, 1999

More definitions

Posted: December 17, 2010 in Alignment

This table was found in a paper of Santana Tapia, et al, and provides a nice overview of some of the most common definitions.

Reference

Santana Tapia, Roberto, van Eck, Pascal, Daneva, Maya: Validating the Domains of an Inter-Organizational Business-IT Alignment Assessment Instrument: A Case Study, University of Twente, 2008.