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I. INTRODUCTION
The ITGI confirms that the effective management of The Strategic Alignment Model was proposed by Henderson
information and related technology is crucial for an and Venkatraman (1993), the most commonly used
organization to survive. framework for strategic alignment. This model is defined in
terms of 4 fundamental domains of strategic choice. 1)
Luftman (2003) defines strategic alignment as “applying IT Business strategy, 2) IT Strategy, 3) organizational
in an appropriate and timely way, in harmony with business infrastructure and processes, 4) IT infrastructure and
strategies, goals and needs.” Two key points are addressed, processes, as illustrated in Figure 2.
2
• Strategy Execution
• Technology transformation
• Competitive Potential
• Service Level
1. Develop the customer proposition and experience. V. STRATEGIC ALIGNMENT MODEL PITFALLS
2. Deliver high performance in all business units
3. Share skills and experience across the Group The SAM poses a few management challenges.
4. Build a culture of excellence
5. Simplify our structure to unlock value. The model illustrates IT strategy on the same level as the
business strategy within the external domain. This requires
The 5 Old Mutual South Africa Information Technology the organisation to view IT on the same level as business
(OMSA IT) strategic imperatives are defined as (Old Mutual, strategy, shifting the focus from the traditional thinking of IT
2010): as an internal back-office operation. It is imperative for the
organisation to understand that IT has the ability to enhance
1. Managing Unit Cost business strategies within the market place.
2. Drive cohesive and improved customer service
experience IT operations and activities were commonly linked to
3. De-risk and drive full value from IT internal business processes. According to Henderson &
4. Enable leverage of capabilities by Emerging Venkatraman (2003), management geared their objectives
Markets and LTS accordingly. The strategic alignment model requires a
5. Strengthening our leadership, culture and broader vision of the role that IT plays within the
capabilities organisation. Hence the correct perspective should be chosen
when making strategic decisions. Business conditions and
organisation objectives should be taken into account when
choosing the correct perspective.
This description of the process underway at Old Mutual fits According to Luftman (2003) strategic alignment is utilising
perspective 2, Technology Transformation, of the Strategic IT in harmony with business strategies, supporting its goals
Alignment model. In this instance executive management and needs. Strategic alignment levels are assessed and
defined the “Big 5” objectives that provide a vision for IT to determined using Maturity Models. Alignment maturity
support. Hence business strategy is the anchor domain, IT levels are evaluated, as well as ways to improve maturity
strategy the pivot, and IT infrastructure and processes the levels.
area of impact. Business executives, at the international Old
5
There are enablers and inhibitors of strategic alignment. Figure 9: Six Business Alignment Maturity Criteria (Luftman, 2007 )
Displayed in Table 2, are the six most important ones.
Each of these components are compared to a five-level
model in order to determine the maturity level of the
organization. See figure 10.
VIII. REFERENCES
Byrd, T.A., Lewis, B.R. and Bryan, R.W. 2006, “The leveraging influence of
strategic alignment on IT investment: an empirical examination”, Information
& Management, Vol. 43 No. 3, pp. 308-21.
Strategic alignment is one of the top concerns faced by IT Old Mutual, 2010. OMSA IT Business Update October 2010. Internal
and business executives, aiming to be effective and efficient presentation to Old Mutual South Africa IT Staff.
in an ever-changing environment. Effective strategic Old Mutual, 2011, About Old Mutual - Our vision and Strategy [Online]
alignment engages business and IT optimally to gain a Available: http://www.oldmutual.com/vpage.jsp?vpage_id=2265 [Accessed
competitive advantage. The strategic alignment model aims on : 01 April 2011].
to achieve strategic alignment by balancing and integrating
Ward, J. and Peppard, J. 2002. Strategic Planning for Information Systems.
business strategy, IT strategy, business infrastructure and Third Edition, England: John Wiley and Sons, Ltd.
processes, and IT infrastructure and processes, though
strategic fit and functional integration. Old Mutual has been
used as an example of the Technology Transformation
perspective of the Strategic Alignment Model. Organisations
should look to measure and assess their alignment maturity,
using the Strategic Alignment Maturity Assessment. This