Pin Me

Why Aligning Your Business Strategy and IT Strategy is Critical in the Information Age

written by: Finn Orfano • edited by: Michele McDonough • updated: 7/28/2008

The strategic use of information technology (IT) is now and has been a fundamental issue for every business. New methods and approaches are now available to help organizations form this alignment.

  • slide 1 of 2

    Changes driving business transformation such as business alliances, globalization, a shifting work force, customer needs the expedited rate of technology advancements, and the Internet are challenges and opportunities that organizations must address.  These forces along with a rapidly changing economic landscape require organizations that are flexible and adaptable.  A closer alignment of information technology (IT) and business strategy allows you to control these challenges and take advantages of the numerous opportunities available.

    Information technology is a term that includes the rapidly expanding range of equipment, applications, and services used by organizations to deliver data, information, and knowledge.  Used strategically IT can dramatically impact and transform a business. IBM developed the Strategic Alignment Model (SAM) as a means of help executives evaluates the state of their IT and business strategy and relationships.  This business model is taught in courses offered by IBM at it's Business Executive Institute.  According to the Model business success depends on the harmony of:

    • Business Strategy
    • Information Technology Strategy
    • Organizational Infrastructure and Processes
    • IT Infrastructure and Processes


    Companies should be focused on building its organizational structure and business processes that embody the mutual reliance of enterprise strategy with IT.   Research has identified that the strategic alignment of business and IT is a key ingredient in obtaining greater value from IT.

    Its easy to see just how much IT has transformed many industries.  We see the effects almost daily, a few examples of them are:

    Education: Online classes, webinars, and e-books
    Financial Services: Online Banking, electronic funds transfer and, automatic teller machines
    Retail: Internet-only retailers and touch-screen point of sale terminals,

    These examples represent the sharing of information and knowledge within and between organizations to alter the methods and speed of communications.  To be successful you must ensure that your organization is utilizing it's IT resources effectively and efficiently.

    Another important aspect of the successful alignment is communication. Constant communication between the IT department and the business units is mandatory.  This is a commonly stated factor contributed to a good relationship between the business strategy and IT.  Effective communication between project team members helps to reinforce the alignment.  A collaboration software application can be used to facilitate communication.  Basecamp and GanttProject are two examples of applications available on the market.

    Once you have made the decision to transform your organization to one that is flexible, adaptable and ready for change, there are a few important questions that must be answered:

    1. What are the central value that drives your organization's business processes?
    2. Are these processes supported by effective and efficient IT?
    3. Does your organization recognize and capitalize on it's IT resources?

    Applying information technology to these processes can transform the way you do business.  It is up to you to make IT and essential part of your business  and the processes that support the business. The effects of and uncertain economy is a troubling issue to many organizations, but they can be minimized, if not overcome, if a healthy relationship between business strategy and IT exist.

  • slide 2 of 2

    A Strategic Alignment Model

    Strategic Aligment Model