Aligning business and technology strategies is nothing new and novel in management sciences. However, the outcomes of corporate alignment initiatives are mixed as many organizations have struggled to appropriately leverage and/or exploit technology to realize optimum business strategy and financial goals success. Lack of alignment (misalignment) typically results from the organization’s inability to effectively align the enterprise business model resulting from failure of business and technology professionals to successfully ‘bridge the gap’ with understanding and appreciation of the variances in objectives and goals, culture, incentives and a mutual unfamiliarity with the other group’s ‘body of practice knowledge’.
Strategic Alignment Definition
Strategic alignment is the process and the result in the successful linking an organization’s business and technology structure and resources within the enterprise strategic framework. Strategic alignment enables higher performance by optimizing the integrated contributions of people, processes, and inputs to the realization of measurable goals and objectives and, thus, minimizing waste, improving productivity, increasing profitability, and misdirection of resources to unintended or unspecified purposes.
Business Model Definition
A Business Model:
- Describes how an organization creates, delivers, and captures value, in economic, social, cultural contexts.
- Establishes corporate value proposition, value architecture, value finance and value network that verbalizes the primary constructs or dimensions of the organization’s business goals, objectives, and strategies.
“The biggest risk is not taking any risk… In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
Strategic Alignment Considerations
Important enterprise strategic alignment considerations include:
- Organizations should view technology as a value-add strategic instrument to transform the business from the ‘As-Is’ – ‘To-Be’ state with supporting performance metrics.
- Organizations should rotate business and technology professionals across different business units and role/job functions to obtain mutual understanding of all mission-critical policies and processing activities.
- Organizations should provide clear and specific policies, goals, and strategies to business and technology employees. This condition should create the holistic amalgamation of both entities to achieve a common goal.
- Organizations must create a vibrant and inclusive company culture. There must not only be informational unity, but a company as whole.
Corporate Strategic Misalignment
In most organizations when business and technology strategy are misaligned, it’s a result of common scenarios as outlined below:
- Organizations who have never included technology as a key component of strategic planning.
- Organizations with a successful strategic alignment program that gradually become disengaged and misaligned as the needs and priorities changed resulting from internal and external requirements, emerging technologies, and regulatory changes etc.
- Organizations with significant capital investment in certain technologies and infrastructure who are hesitant to abandon legacy type technology in favor of obtaining new innovative solutions because of the perceived costs and change management challenges. Market research reports that a large population of US companies operate with obsolete technology that forces them to tread water rather than push boundaries.