W4 - Strategic Alignment Model (SAM)

Source / Reference:
1)  "Strategic Alignment: Leverage Information Technology for transforming organization" by J C Henderson and N Venkartraman 1993
http://search.proquest.com/docview/26252741/134A6C8B53F19A4F606/1?accountid=16210
2) "Improving Business and Information Strategy Alignment: Learning from the Banking Industry" by M. Broadbent And P. Weill 1993
http://scholar.google.com/scholar_url?hl=zh-TW&q=http://citeseerx.ist.psu.edu/viewdoc/download%3Fdoi%3D10.1.1.87.5585%26rep%3Drep1%26type%3Dpdf&sa=X&scisig=AAGBfm0WSi_OnfpZZQwI4f-8e8Eqb6GQlQ&oi=scholarr.

Subject:
In Lecture 4 - Which alignment strategy in SAM model is the best? and why?
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Response:
In my opinion, no alignment strategy is the best or the worst as it depends on many aspects of a business such as the industry nature, company size and technology support. As the market varies time to time, instead of saying the best strategic alignment model (SAM), it is better to describe it as the most suitable and adaptive model at a given stage or situation.

In lecture 4, Henderson and Venkataraman's strategic alignment model has been introduced.SAM consists of the following four components:

• Business strategy
• Information technology strategy
• Organizational infrastructures and process
• IT infrastructure and processes

It suggests four alignment strategies in SAM model. Here are the brief description and comments of the four perspectives.

Perspective One: Strategy execution 

 This perspective is anchored on the notion that a business strategy has been articulated and is the driver of both organizational design choices and the design of IS infrastructure. 

Comment:  

This is the most common and widely understood perspective of SAM. It proposed that the top management should be the strategy formulator while the IT management should be the strategy implementer. This perspective requires a stable business strategy first and then develops the organizational infrastructure and IT infrastructure to achieve the goals in business strategy. It helps the business to operate smoothly according to the business strategy. IT is the tool to implement business strategy instead of determining it like "Service Level". It is more suitable for business which has a stable execution process and clear business strategy.

Perspective Two: Technology transformation

 

This alignment perspective involves the assessment of implementing the chosen business strategy through appropriate IT strategy and the articulation of the required IS infrastructure and processes.

Comment: 

Unlike Strategy Execution, this perspective is not constrained by the current organization design. Thus is more suitable for business without a stable and solid organization design. Besides, it seeks to identify the best possible IT competencies, thus it is more suitable for technology-based industry, in which the business strategy is driven by technology leadership.  Mobile phone manufacturer like Nokia is one of the typical examples. Once its competitors launch a new mobile phone model, Nokia has to adjust the strategy to produce a more advanced one. 

 

Perspective Three: Competitive potential

This alignment perspective is concerned with the exploitation of emerging IT capabilities to impact new products and services, influence the key attributes of strategy, and develop new forms of relationships. 

Comment: 
One distinguish feature of this perspective is that it allows the adaptation of business strategy via emerging IT capabilities. That is, business strategy will change according to the IT strategy. It is thus more suitable to industry with low barrier of entry and large number of competitors, in which the business strategy is driven by business leadership such as food industry.

Perspective Four: Service level

This alignment perspective focuses on how to build a world-class IS service organization.

Comment:  

This perspective ensures the effective use of IT. It is mainly focuses on maximizing customer satisfaction. Thus it is more suitable to the servicing industry, in which the business strategy is driven by customers' feedback such as tourism industry. They can use information system to record and analyze the preference of customers and provide what they want. 

 

Conclusion:

There is no best strategic alignment perspective as  Henderson and Venkataraman said, "We do not believe that there is one universally superior mode to formulate and implement strategy". All four perspectives have its own merit. To choose the most suitable one, it is necessary to clearly analyze the business nature, industry environment and, technology required and its strength and weakness as well. In order words, choose the one which fits your business situation most.