STRATEGIC ALIGNMNET MODEL

Submitted by:
Yogesh Khetan
15030141062
MBA-IT (DIV B)

1. Alignment is the degree to which a state of harmony is achieved between the business and IT functional
constituents (finance, marketing, sales, etc.) within the organization (Luftman, 2003).
2. Alignment ensures IT resources, operations, and performance metrics are in harmony with the strategic
objectives of the company and its assorted business units (Hammet, 2008). The alignment between
business and IT strategies is necessary for planners to make the appropriate investments and decisions
regarding IT, as the enabler for implementation of the business strategy.
3. Competitive advantage is the lead that organizations achieve over their competitors by offering products
or services that have a lower costs or some benefit that justifies an additional cost.
4. Enterprise Architecture (EA) is defined as the activities of organizing logic for business processes and IT
infrastructure reflecting the integration and standardization requirements of the organizations operating
model (Ross, Weil, & Robertson, 2006).EA represents a set of objectives, activities, products or
architecture components, models, plans, tools, processes, metrics, principles, policies and governance to
enable the different factors that constitute elements for the strategic alignment of business and IT.
5. Strategic alignment is when an organization applies IT in a strategic and timely manner that is also linked
in harmony with business strategies, goals, and needs.
6. Venkatraman et. al. in 1993 argued that the reason that firms often fail to see value from IT investment is
due to lack of alignment between the business and IT strategy in the firm, and furthermore a lack of a
dynamic alignment process that ensures continuing alignment in strategy and implementation between
the business and IT organizations.
7. Venkatraman et. al. recognized four corporate domains in which choices can be made which affect
alignment.

The four domains can be organized into external facing domains, and internal facing

domains.
8. In the model, strategic fit describes the interrelationships between the external domain and the internal
domains, while functional integration describes the integration between the business and technology
domains.
9. Strategic alignment at an organizational level can only occur when three of the four domains are in
alignment. The implication is that change cannot happen in one domain without impacting at least two

other domains. Venkatraman et. al. identified four dominant alignment perspectives which can be used
for the analytic understanding of how business and IT can be aligned.
10. The anchor domain is the strongest domain for the firm, and will have the most representation at the
executive level or will be where the core of the business lies. This domain in which changes are most
often made.
11.The pivot domain is the weakest domain for the firm. This is a pointer domain in a C programming
language sense in that it indicates which other domain will be most affected by the change in the anchor
domain.
12. The impacted domain is the domain which will feel the greatest amount of impact from the change in
the anchor domain.
13. Venkatraman et. al. describes the four perspectives like so:
14. Strategy execution: this is the traditional perspective in which business strategy drives organizational
design, and organizational design determines what IT infrastructure and processes will be needed.
Business management makes strategy, and IT management implements it. This is the CIO as CTO
15. Technology potential: business strategy is still the driver, but it involves the articulation of an IT
strategy to support the chosen business strategy and the corresponding specification of the required IS
infrastructure and processes. This is the CIO as reactive leader perspective, in some sense. The business
executives drive technology vision and indicate the strategy that the IT group should use to achieve it,
and the CIO architects a solution in strategic and infrastructural terms.
16. Competitive potential: we want to exploit new technological opportunities to gain competitive
advantage: offer new products and services or update existing ones, change business strategy, change
organizational design and governance. The IT executives must be able to be the catalyst for business
change, identifying upcoming technology trends and options and understanding them as opportunities or
threats/risks. The business executives must be visionaries, able to take the offerings that the IT exec
gives and see how to transform the business to exploit them to gain competitive advantage.
17. Service level: In this perspective, information is our core product or service, and the IT org is the one
that provides it. This perspective is thus about IT/end-user alignment. Business strategy does not play
much or a part, or only a distant part. Business management prioritizes which IT investments should be
made with scarce resources within the organization and in terms of outsourcing and partnership
arrangements in the marketplace.

The role of the CIO is to make the business succeed, in light of

operating guidelines from the business executives. In this way, the CIO acts as the business leader in
this perspective.