W4 - Strategic Alliance Model

Source / Reference:
1. http://www.valuebasedmanagement.net/methods_venkatraman_strategic_alignment.html 

2. http://www.valuebasedmanagement.net


Subject:
In Lect 4 - Which alignment strategy in SAM model is the best? and why?

Response:

In the lecture notes, lack of alignment between business and IT/IS strategies causes an institution or organization unable to recognize value from the IT/IS investment. According to the website, lack of alignment between the business and IT strategy and a dynamic administrative process lead businesses in difficulties to understand or estimate the benefit and the cost of the IT/IS investment. It is consistent to the definition from the lecture note.

In the lecture notes, the web page above and another web page, the SAM is divided into 4 parts, which is business strategy, IT strategy, business infrastructure and IT infrastructure.

Business strategy describes the relationship between business scope, distinctive competencies and business governance. They include everything that may affect the business atmosphere, make business into success and the relationship between the business and external parties. 

IT strategy describes the relationship between technology scope, systemic competencies and IT governance. They include the information technologies that fit the business strategy, the benefits that IT technologies can bring and the external factors that the business is depended on.

Business infrastructure describes the relationship between administrative structure, processes and skills. They are the business structure, operation in each business process component and the relationship between them, the management of the human resources.

IT infrastructure describes the relationship between IT infrastructure, processes and skills. They include all the technologies and knowledge in computing, activities of the IT infrastructure, the work done by human resources for IT.

Strategic execution perspective aims to avoid delay and error, improve the quality of service and reduce time cost. It is achieved by changing the information technology infrastructure.

Technology transformation only wants to find out the best IT competence that fit the business use regardless the business structure.

Service level aims to improve the delivery of business own products, services and processes by using IT. Business strategy may guide it at the back.

Competitive potential concentrate in the IT environment and find out the best business strategy when new technology is innovated.

Service level may be the best since many companies are using this approach to expand their business activities. For example, taobao is using a networking platform to gathering many sellers and buyers. It earns thousands of millions of dollars every year.

I think these four perspectives are also essential. If any one of these perspectives misses, some functionalities of the model will disappear. For example, we pick the competitive potential perspective off, and then business may not have enough updated information in order to make decision accurately.