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Chapter 3Chapter 3Strategic Alignment MaturityStrategic Alignment Maturity

Paula GouldingPaula Goulding

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Chapter OutlineChapter Outline

Importance of IT and business environmentImportance of IT and business environment Enablers and inhibitors to alignmentEnablers and inhibitors to alignment Concept/importance of alignment maturityConcept/importance of alignment maturity 5 levels of Strategic Alignment Maturity5 levels of Strategic Alignment Maturity 6 Criteria that characterize levels of Strategic 6 Criteria that characterize levels of Strategic

Alignment ModelAlignment Model Assessing Strategic Alignment MaturityAssessing Strategic Alignment Maturity Strategic Alignment ProcessStrategic Alignment Process

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Importance of AlignmentImportance of Alignment

EffectivenessEffectiveness EfficiencyEfficiency Link Technology and BusinessLink Technology and Business

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IT Management Should:IT Management Should: Be knowledgeable about how new IT Be knowledgeable about how new IT

technologies can be integrated into technologies can be integrated into businessbusiness

Be privy to senior management's tactical Be privy to senior management's tactical and strategic plansand strategic plans

Be present when corporate strategies are Be present when corporate strategies are discusseddiscussed

Understand strengths and weaknesses of Understand strengths and weaknesses of technologies and implicationstechnologies and implications

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Strategic Alignment Maturity LevelsStrategic Alignment Maturity Levels Initial/Ad Hoc ProcessInitial/Ad Hoc Process

– Business and IT not alignedBusiness and IT not aligned

Committed ProcessCommitted Process– Organization commits to becoming alignedOrganization commits to becoming aligned

Established Focused ProcessEstablished Focused Process– Established and Focused on business objectivesEstablished and Focused on business objectives

Improved/Managed ProcessImproved/Managed Process– Reinforcing concept of IT as “Value Center”Reinforcing concept of IT as “Value Center”

Optimized ProcessOptimized Process– Integrated/Co-adaptive business and IT strategic planningIntegrated/Co-adaptive business and IT strategic planning

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Strategic Alignment Maturity CriteriaStrategic Alignment Maturity Criteria

Communications Communications Competency/value measurementsCompetency/value measurements GovernanceGovernance PartnershipsPartnerships Scope and ArchitectureScope and Architecture SkillsSkills

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Primary Objective of Assessment:Primary Objective of Assessment:

Agree that criterion needs to be improvedAgree that criterion needs to be improved Agree that a criterion is good, but can be Agree that a criterion is good, but can be

betterbetter Disagree with how good/bad a criterion isDisagree with how good/bad a criterion is

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CommunicationsCommunications

Ensure ongoing knowledge sharingEnsure ongoing knowledge sharing Use people in formal inter-unit liaison rolesUse people in formal inter-unit liaison roles Cooperation among business-IT partnersCooperation among business-IT partners Trust and openness between units and ITTrust and openness between units and IT

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Competency/Value MeasurementsCompetency/Value Measurements

Service levels that assess commitment of ITService levels that assess commitment of IT Tie service levels to criteriaTie service levels to criteria Take action based on measurements of Take action based on measurements of

performance factorsperformance factors Understand factors that lead to missing Understand factors that lead to missing

criteriacriteria Understand what can be learned to improve Understand what can be learned to improve

the environment continuouslythe environment continuously

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GovernanceGovernance

Clearly defined decision-making authorityClearly defined decision-making authority Integrated enterprise-wide strategic Integrated enterprise-wide strategic

business planbusiness plan

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PartnershipPartnership

Relationship between business and IT Relationship between business and IT organizationsorganizations

Give IT function equal role in defining Give IT function equal role in defining business strategybusiness strategy

Perception of contributionsPerception of contributions Partnership should enable and drive changePartnership should enable and drive change

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Scope and ArchitectureScope and Architecture Go beyond back office and into front officeGo beyond back office and into front office Assume role supporting flexible Assume role supporting flexible

infrastructureinfrastructure Evaluate and apply emerging technologies Evaluate and apply emerging technologies

effectivelyeffectively Enable or drive business processes and Enable or drive business processes and

strategiesstrategies Provide solutions customizable to Provide solutions customizable to

customer needscustomer needs

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SkillsSkills

Include all human resource considerations Include all human resource considerations for organizationfor organization

Consider cultural and social environmentConsider cultural and social environment

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Level 1 – Initial/Ad Hoc ProcessLevel 1 – Initial/Ad Hoc Process

Lowest level of strategic alignmentLowest level of strategic alignment Understanding of IT by business is lowUnderstanding of IT by business is low Investment in IT is underleveragedInvestment in IT is underleveraged

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Level 1Level 1

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Level 1Level 1

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Level 1Level 1

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Level 2 – Committed ProcessLevel 2 – Committed Process

Committed to begin process for Strategic Committed to begin process for Strategic Alignment MaturityAlignment Maturity

View IT as an asset to the organizationView IT as an asset to the organization Directed at local situations or functional Directed at local situations or functional

organizationsorganizations Alignment at the level is difficult to achieveAlignment at the level is difficult to achieve Potential opportunities are recognizedPotential opportunities are recognized

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Level 2Level 2

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Level 2Level 2

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Level 2Level 2

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Level 3 – Established Focused ProcessLevel 3 – Established Focused Process

Concentrates on governance, processes, and Concentrates on governance, processes, and communications toward specific business communications toward specific business objectivesobjectives

Needs better governance to invest IT dollarsNeeds better governance to invest IT dollars Focus on business processes that generate Focus on business processes that generate

long-lasting competitive advantagelong-lasting competitive advantage Effectively communicate its vision and get Effectively communicate its vision and get

“buy-in” from employees and management“buy-in” from employees and management

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Level 3Level 3

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Level 3Level 3

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Level 3Level 3

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Level 4 – Improved/Managed ProcessLevel 4 – Improved/Managed Process

Leverage IT assets on an enterprise-wide Leverage IT assets on an enterprise-wide basisbasis

Focus on driving business process Focus on driving business process enhancements to gain competitive advantageenhancements to gain competitive advantage

Views IT as an innovative and imaginative Views IT as an innovative and imaginative strategic contributorstrategic contributor

Capitalize on information and knowledgeCapitalize on information and knowledge Utilize IT assets by deploying enterprise-wide Utilize IT assets by deploying enterprise-wide

architecturearchitecture

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Level 4Level 4

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Level 4Level 4

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Level 4Level 4

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Level 5Level 5

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Level 5Level 5

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Level 5Level 5

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Assessing Strategic Alignment MaturityAssessing Strategic Alignment Maturity

This does not fit the organization, or the This does not fit the organization, or the organization is not very effectiveorganization is not very effective

Low level of fit for the organizationLow level of fit for the organization Moderate fit for the organization, or the Moderate fit for the organization, or the

organization is moderately effectiveorganization is moderately effective Fits most of the organizationFits most of the organization Strong level of fit throughout the organization, Strong level of fit throughout the organization,

or the organization is effectiveor the organization is effective

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Strategic Alignment ProcessStrategic Alignment Process

Set the Goals and Establish a TeamSet the Goals and Establish a Team Understand the Business-IT LogicUnderstand the Business-IT Logic Analyze and Prioritize GapsAnalyze and Prioritize Gaps Specify the Actions (Project Management)Specify the Actions (Project Management) Choose and Evaluate Success CriteriaChoose and Evaluate Success Criteria Sustain AlignmentSustain Alignment

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