Posts Tagged ‘Operational alignment’

I’ve adressed many models and theories regarding Business/IT Alignment. I have read lots of literature on this topic, and still, as a practitioner I did not find a single one which helped me out in daily practice. For me enough reason to see if I can reconstruct a framework which gives some practical guidance. I do not have the intention to add a new alignment model, but like to combine what I’ve seen.

Many models simplify reality. This can be useful, but oversimplified models loose their practical use. Still, I’m convinced that we can look at the real world using the proper models or frameworks. I’m not the only one who tries to bring the different views together. I have found a thesis of Vargaz Chevez (2010), who constructed the Unified Strategic Alignment Model. The following figure is from his work. Hardly readable, but it consists of many elements of the different existing theories. I regret to say, but this doesn’t help very much in (at least my) daily practice.

Figure 1 Unified Strategic Alignment Model

More usefull, is the so-called 9-cells model (Maes, 1999; Maes et al, 2000; Bon and Hoving, 2007). It offers an interesting view on the domain we’re looking at. The models divide three colomns representing business, information and technology. The three rows are in the two models a little different, but essentially they introduce an intermediairy row between the strategic and operational level.

Figure 2 Nine-Cells Model

This model can be used to  understand where we are looking at. Talking about alignment, one should try to bring all these nine cells in alignment. Many definitions see this as a static situation, where often only the strategic level is considered. But, strategies are worthless untill they are adopted by the tactical and operational level. The tactical level needs to define which projects are needed to really execute the strategy. And on an operational level, the projects need to be implemented and included in daily operations. The tactical level translates goals and preconditions of the strategic domain into concrete, realizable objectives, responsibilities, authorizations, frameworks, and guidelines for the operational domain [Bon and Hoving, 2007].

So, even if on a strategic level, business and IT appear to be aligned, this doesn’t guarentee that it will lead to success. In fact, one should be concentrating on the way the different cells are connected. And here lies the complexity of Business/IT Alignment. To make it even more realistic, we should add more cells. Most larger enterprises are organized in different units. This can be functional or divisional. This will lead to additional 9-cells connected. In the following figure, I have constructed this 3 x 3 x 3 cube, which I call the Generic Alignment Framework©.

Figure 3 Generic Alignment Framework©

This Generic Alignment Framework© is called generic, because this isn’t only applicable for Business/IT Alignment. One could replace bu 1, bu 2 and bu 3 with Sales, Marketing and Operations. Or even, put these functional departments in the place of business, information and technology. The matrix could even be larger or smaller than 3x3x3, depending on the specific organisation. Larger organisations do exist of different units which depend more or less on each other. This also depend on the operating model an organisation chooses to have [Ross, Weill and Robertson, 2006]. But, why should Business and IT be different from other entities? If this isn’t the case, we certainly could learn more on alignment by looking at alignment topics in other areas. And if the Business and IT relationship really indeed is different from the rest, how can we make these differences more explicit?

Using the framework

This framework has value in understanding the complexity of the domain of alignment. Which elements have to be taken into account when a company is looking for alignment. This model also shows the difference between the elements (whether departments or roles) and the linkages.

Many models and definitions adress the state of alignment an organisation has achieved. In fact, they take a picture of the organisation and measure if the elements are aligned at that very moment. Which, in a complex organisation, like illustrated in the framework, is a huge challenge. Anyhow, to achieve alignment, communication between the elements is required, which means that all information should pass all these linkages without any bias. That’s the process of alignment.

The most widespread theories on alignment approach this topic from a strategic point of view.  That in itself isn’t wrong, but they also restrict their theory to the strategic level. That’s wrong. Because an important problem area is excluded (or taken for granted), which is related to a proper translation of strategy into action, through the tactical level onto the operational level.

To be continued (also on page Howe To…)

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