Week 4 – The Strategic Alliance Model

Source / Reference:
1. J C Henderson and N Venkartraman, "Strategic Alignment: Leverage Information Technology for    transforming organization" (1993)
http://search.proquest.com/docview/26252741/134A6C8B53F19A4F606/1?accountid=16210
2. P Coleman and R Papp, “Strategic Alignment: Analysis of Perspectives” (2006)
http://sais.aisnet.org/2006/Coleman-SAIS2006-paper.pdf

Subject: 
In Lect 4 - Which alignment strategy in SAM model is the best? and why?

Response:

In my opinion, I believe that “the best perspective” will never exist. Instead, there is only what so called the most appropriate perspective given a certain situation. Different strategies have its own merits and we should carefully choose the suitable one depends on the nature of our own organization as well as the current environment.

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Background

In nowadays technological advanced world, despite the adoption of technology with significant investment, value cannot be derived for some companies. The obvious reason should be the lack of alignment between the business and the IT strategies of the organization.

The Strategic Alliance Model (SAM)

In lecture 4, the concept of Strategic Alliance Model (SAM) is introduced.

As the above diagram shown, the 4 arrows represent that 4 major particular perspective of the mode, which will be illustrated as below:

1. Strategy execution (arrow1)

This is the most commonly adopted perspective which consider IT as an extra unnecessary expense. With well-defined business strategy and the follow-up infrastructure, IT is merely an assistance supporting the strategy.

2.  Technology transformation (arrow2)

On contrast to the above one, this perspective is not limited by the existing organization design. Rather, the business strategy creates need for the IT strategy development. IS infrastructure is then a necessary tool for implementation and the company normally seek to identify the best possible IT competencies.

It will be more suitable for technological-based industry. For example, for the electronic appliance producer like the mobile phone and computer supplier (e.g. samsung, IBM, etc.), IT is an necessary element for business development and acquisition of comparative advantage. 

3.  Competitive potential (arrow3)

This strategy imply the adoption of business strategy via the emerging IT capabilities. In other words, IT enables strategic opportunities for new product and service. Business strategy and infrastructure are then determined based on the IT strategy for successful implementation.

4.  Service level (arrow4)

The perspective demonstrate the effective use of IT to satisfy the customer. Business strategy is indeed indirect for customer’s demand stimulation. 


It will be more suitable for service-based industry. For example, for most of online shopping cart like Amazon.com and online food ordering system like pizzahut, cookies, database and web server (IS infrastructure) will be used to track customer preferences and purchase history. In this way, a customized shopping environment will be provided so as to increase the satisfaction of the customers.

Conclusion

Like what Henderson and Venkartraman mentioned in the article, I share their view that there is no “one universally superior mode to formulate and implement strategy”. Apart from choosing the most suitable perspective based on the organization characteristic, given the dynamic environment, we should be responsive and prepare for any change of “the most appropriate perspective” over time.


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Comment on Kama Tsui

After reading Kama Tsui's blog for week 4, I like her practice of adding some common industry category adopting the above 4 perspectives so as to make the theory more realistic and practical. I indeed like the one for strategy execution (suitable for business which has a stable execution process and clear business strategy) and competitive potential (suitable for industry with low barrier of entry and large number of competitors) which I cannot categorize about. I suggest her to add some real company example like the Nokia example she mentioned for the technology transformation.