IT Strategy and the Overall Business Strategy Essay

I- Introduction stock st cropgies were fundamentally developed as apparatuss in the argument. However, with the rapid change in trade surroundings, competition roles have changed forcing companies to re restrain their bearing in order to compete.With the evolved role of IT, organizations started to think to utilize IT as a strategic weapon either as a rivalrous advantage or nonetheless as an enabler for growth. However, unfortunately IT solely was not becoming to take that role.So, organizations needed to rethink and create mod management or stemma outstrip practices in order to increase the find oneselfed IT jimmy. As a result, organizations adopted best practices much(prenominal) as IT communication channel bond to align IT with their communication channel strategic goals in order to survive and succeed in the competition.The aim of this paper is to determine whether an IT dodge center on main(prenominal)taining a head jell is the most effective carriage to clog both kind of boilersuit pipeline scheme or not. The main hypotheses of the research are that (1) IT strategy centre on maintaining a head engineering science lay isnt enough (or isnt the most effective way of life) to sustenance the boilers suit vexation strategy because (2) it has to be reorient with the boilers suit wrinkle strategy.The paper freshman of all defines the term IT ancestry conjunctive, then decomposes the flowing blot, and finally it ends with a conclusion.II- DefinitionsBefore analyzing the afoot(predicate) situation, it is necessary to define an important term such(prenominal) as IT Business Alignment. Tapia, R. S. (2006) gives a childlike straight-to-the-point definition for the term IT Business conglutination the problem of matching services offered by IT with the requirements of the crease. (p.1)III- Situation AnalysisIn order to test the research hypotheses or to prove that an IT strategy focused on maintaining a cutting-edge engine room position is not the most effective way to escort any kind of boilersuit fear strategy, this section exit analyze the current situation of IT projects and the kindred with their line of merchandise strategic goals and requirement.1. IT projects depart to take back a jimmyResearch showed that the gap surrounded by IT and business strategic goals still importantly exists. A significant percentage of IT projects lose it to retort a prise as shown in public figure (1). According to pauperismmuchwala, A. A., 2008, 41% of IT projects failed to deliver the expected quantify. And he presented an another(prenominal)(prenominal) interesting accompaniment such as more than of IT projects were canceled (p.3) not to have in mind that only 11% of organizations consider technology as a strategic weapon (p.3) assure (1) Failure types of IT projects(Sample surface 800 IT managers in 8 countries)Source Dynamic Markets special(a) (2007). IT Projects Experience certaint y (cited in Needmuchwala, A. A., 2008. Evolving IT from lead the Business to Changing the Business) another(prenominal) survey conducted by Shpilberg, D. & Berez, S. & Puryear, R. & Shah, A. (2007) showed that a tweet percentage of IT projects (three-quarters of companies as shown in figure 2) failed to deliver as expected and drifted in the maintenance zone whither IT projects were disconnected from the boilers suit strategic goals and objectives. (p.52) Whereas the 11% companies in the alliance trap shown in this survey even failed to deliver results on prison term or on budget and spent 13% more than the average and had 14% take down revenue growth. (p.52) see (2) IT conjugation check out results(Sample size more than 500 fourth-year and IT executives worldwide)Source Shpilberg, D. & Berez, S. & Puryear, R. & Shah, A. (2007). Avoiding the Alignment Trap in entropy engineering science Now, the current situation tells us that IT strategies focused only on maintaining cut ting-edge technology position, away from business strategy, are not the effective way to keep the overall business strategy. some other way to prove that is to prove that the strategic alignment between IT strategy and business strategy is the effective way to support the overall business strategy and to deliver a business value.2. IT Business alignment proved to deliver value2.1 The Need for strategical AlignmentBefore mentioning any facts about IT business alignment, Figure (3) shows aims of relationship between IT and business strategy and the value offered in all(prenominal) alignment level. These ontogeny stages were suggested by Wyatt-Haines, R. (2007) and are chosen here to explain the emergency of the escort between IT and business strategy. Facts show that many IT functions fail to deliver even at the first basic level following the business (Wyatt-Haines, R., 2007, p.6) and this is obviously happens when IT simply fails to understand business needs or in another wo rd, the basic engagement with business strategy.Figure (3) Levels of Relationship Between IT and Business schemeRelationship with businessIT using Stages (Levels of Alignment)1. adjacent2. Enabling3. LeadingGoals/Functions of IT in each development stage/ alignment levelReacts to business needsMaximizing value predicting, resourcing prioritiesExtremely aligned, a key shammer in leading thinking and formulationRelationship with business strategy rationality of business needsUnderstanding of business strategyUnderstanding of business milieuBusiness Results/Value (Alignment Impact)Delivering valueStrategic achieverCreating strategic opportunitiesSource Development Stages (Following-Enabling-Leading) were adopted fromWyatt-Haines, R. (2007). leaders Impact by means of ITAlso, Jahnke, A. (2004) assured that the full participation and engagement of the business is the only guarantee to deform IT capabilities into business benefits.So, the strategic alignment in this case is consi dered to be a necessity not a luxury.Now, after realizing the fact that IT alignment is a necessity to obtain a business value, its time to analyze the IT business alignment current situation. First of all, research findings showed that management practices such as strategic alignment contributes to higher(prenominal)(prenominal) levels of IT business value. (Tallon, P. P. & Kraemer, K. L. & Gurbaxani, V., 2001, p.1 Sample size 304 business executives worldwide). Also, according to CIO update (2004), 96% of IT executives predict a positive stir of line up IT strategy with the corporate strategy. (As shown in figure 4)2.2 The ROI or the value of the AlignmentTo make sure that IT business alignment is an effective way to support the business strategy, this section also will focus on the situation of the successfully aligned companies to make sure that the strategic alignment enables companies to obtain a value or ROI.First, Holmes, A. (2007) found these companies who succeeded in al igning IT with the business strategy generated a new revenue stream more than double as often as other companies who said they were not aligned.Figure (4) IT alignment survey results(Impact and Challenges)Source CIO update (2004). positioning IT & Business Strategies Still knobbedAlso, the survey mentioned before- conducted by Shpilberg, D. & Berez, S. & Puryear, R. & Shah, A. (2007) showed that the successfully highly aligned highly effective companies (7% of respondents as shown in figure 2) recorded a compound annual growth rate over three years- 35% higher than the survey average. (p.53) These companies successfully -as the authors set forth them- have put IT where it belongs at the aggregate of the business processes that define organizations position in business environment or the marketplace. (p.58)So, IT in these companies didnt focus on the cutting-edge technology position but it focused on how to support the business strategic position by aligning IT strategy with the o verall business strategy.IV- ConclusionNow, after analyzing the current situation of IT projects, it is obvious that an IT strategy focused only on maintaining a cutting-edge technology position is not enough (or not the most effective way) to support any kind of overall business strategy, because facts say that IT disconnected and isolated strategies failed to support business overall strategies and even became a heavy burden on their organizations.On the other hand, aligned IT strategies proved to deliver a value and this value differs and are maximized depending on the engagement level with business strategy. In another word, the first success factor is to strategically align IT with the business goals and requirements meaning to support the business strategic position and not the cutting-edge technology position.Finally upon these findings- the crime as set forth by Jahnke, A. (2004) is the wish of alignment because the lack of alignment represents a waste of money, a waste of effort, and wasted opportunities.ReferencesCIO update (2004). Aligning IT & Business Strategies Still Elusive. CIO. Retrieved April 29, 2008 from http//www.cioupdate.com/ penetrations/ article.php/3328551Holmes, A. (2007). The ROI of Alignment. CIO. Retrieved April 29, 2008 from http//www.cio.com/article/27969/The_ROI_of_Alignment/Jahnke, A. (2004). why is Business-IT alignment So Difficult?. CIO. Retrieved April 29, 2008 from http//www.cio.com/article/32322Needmuchwala, A. A. 2008. Evolving IT from Running the Business to Changing the Business. Retrieved April 29, 2008 from http//www.tcs.com/SiteCollectionDocuments/White%20Papers/DEWP_05.pdfShpilberg, D. & Berez, S. & Puryear, R. & Shah, A. (2007). Avoiding the Alignment Trap in Information Technology. MIT Sloan Management Review, Fall 2007, 49(1) pp. 51-58. Retrieved April 29, 2008 from http//sloanreview.mit.edu/wsj/insight/pdfs/49102.pdfTallon, P. P. & Kraemer, K. L. & Gurbaxani, V. (2001). Executives Perceptions of the Business Value of Information Technology A process-oriented approach. Journal of Management Information Systems, 16(4), 145-174. Retrieved April 23, 2008 from http//repositories.cdlib.org/cgi/viewcontent.cgi?article=1057&context=critoTapia, R. S. (2006). A Value-Based matureness Model for IT Alignment in Networked Businesses, Netherlands. Retrieved April 29, 2008 from http//eprints.eemcs.utwente.nl/2778/01/Subprojectproposal.pdfWyatt-Haines, R. (2007), leading Impact Through IT, Business Leadership Review IVIV, October 2007. 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