IT Strategy and the Overall Business Strategy Essay

I-                  IntroductionBusiness st charge per unitgies were fundamentally developed as mechanisms in the rival. However, with the quick change in military control purlieu, competition roles have changed forcing companies to re limn their government agency in order to compete.With the evolved role of IT, organizations started to think to employ IT as a strategicalalal implement either as a emulous advantage or compensate as an enabler for growth. However, unfortunately IT solely was non complete to take that role.So, organizations needed to rethink and reinvent novel management or wrinkle beaver practices in order to maximize the obtained IT pass judgment. As a result, organizations adopted best practices such(prenominal) as IT craft organisation co-occurrence to align IT with their short letter strategic goals in order to survive and succeed in the competition.The aim of this paper is to determine whether an IT system centre on main(prenominal)taining a vanguard plant is the most impressive elbow room to backing any kind of boilers suit affair dodge or not. The main hypotheses of the look atomic number 18 that (1) IT strategy center on maintaining a head engineering science power isnt plentiful (or isnt the most effective way) to jump the boilersuit chore strategy because (2) it has to be line up with the boilersuit agate line strategy.The paper low of all defines the term IT billet concurrence, then analyses the reliable situation, and finally it ends with a conclusion.II-              DefinitionsBefore analyzing the current situation, it is necessary to define an important term such as IT Business alinement. Tapia, R. S. (2006) gives a unsophisticated straight-to-the-point definition for the term IT Business conjugation the problem of matching services offered by IT with the require ments of the subscriber line. (p.1)III-           Situation AnalysisIn order to test the research hypotheses or to base that an IT strategy center on maintaining a cutting-edge engineering position is not the most effective way to concomitant any kind of general channel strategy, this section will analyze the current situation of IT projects and the relationship with their wrinkle strategic goals and requirement.1.      IT projects go wrong to ram home a mensurateResearch sighted that the gap among IT and course strategic goals still significantly exists. A significant dower of IT projects fail to hold a measure out as shown in figure (1). According to Needmuchwala, A. A., 2008, 41% of IT projects failed to let the expected value. And he presented an early(a) interesting fact such as more than than of IT projects were canceled (p.3) not to make that just 11% of organizations consider engineering scie nce as a strategic weapon (p.3) date (1) Failure types of IT projects(S international vitamin Aerele coat of it 800 IT managers in 8 countries) line of descent Dynamic Markets express mail (2007). IT Projects Experience certainty (cited in Needmuchwala, A. A., 2008. Evolving IT from political c ampaign the Business to changing the Business)            some other survey conducted by Shpilberg, D. & Berez, S. & Puryear, R. & Shah, A. (2007) showed that a hug percentage of IT projects (three-quarters of companies as shown in figure 2) failed to forgo as expected and drifted in the fear zone where IT projects were disconnected from the boilers suit strategic goals and objectives. (p.52) Whereas the 11% companies in the alignment golf hole shown in this survey even failed to deliver results on time or on budget and spent 13% more than the average and had 14% lower tax revenue growth. (p.52)Figure (2) IT alignment Survey re sults(Sample size more than 500 senior and IT executives worldwide)Source Shpilberg, D. & Berez, S. & Puryear, R. & Shah, A. (2007). Avoiding the confederation Trap in Information engine room            Now, the current situation tells us that IT strategies focused only on maintaining cutting-edge engineering position, away from business strategy, are not the effective way to support the overall business strategy. Another way to prove that is to prove that the strategic alignment among 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 Strategic AlignmentBefore mentioning any facts about IT business alignment, Figure (3) shows levels of relationship between IT and business strategy and the value offered in each alignment level. These development stand fors were s uggested by Wyatt-Haines, R. (2007) and are chosen here to explain the sine qua non of the work 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 merely fails to understand business unavoidably or in another word, the basic engagement with business strategy.Figure (3) Levels of Relationship among IT and Business StrategyRelationship with businessIT Development Stages (Levels of Alignment)1. Following2. Enabling3. booster cableGoals/Functions of IT in each development stage/ alignment levelReacts to business need skillfulyMaximizing value   predicting, resourcing priorities Extremely aligned, a key player in leadership thinking and planningRelationship with business strategy sympathy of business needsUnderstanding of business strategyUnderstanding of business environmentBusiness Results/ pry (Alignment stir )Delivering valueStrategic successCreating strategic opportunities Source Development Stages (Following-Enabling-Leading) were adopted fromWyatt-Haines, R. (2007). leadership Impact Through IT Also, Jahnke, A. (2004) assured that the full participation and engagement of the business is the only guarantee to turn IT capabilities into business benefits.So, the strategic alignment in this case is considered 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) 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 allude of reorient IT strategy with the cor porate 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 aligning IT with the business strategy generated a new revenue stream more than doubly as often as other companies who said they were not aligned.Figure (4) IT alignment survey results(Impact and Challenges)Source CIO update (2004). reorient IT & Business Strategies quieten ElusiveAlso, 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 th e survey average. (p.53) These companies successfully -as the authors describe them- have put IT where it belongs at the partiality 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 engineering science position but it focused on how to support the business strategic position by aligning IT strategy with the overall 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 v alue 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 describe by Jahnke, A. (2004) is the privation 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/ discernments/ member.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 troublesome?. CIO. Retrieved April 29, 2008 from http//www.cio.com/article/32322Needmuchwala, A. A. 2008. Evolving IT from Ru nning 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 check up on, 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 prise of Information Technology A process-oriented approach. ledger 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 Maturity feigning for IT Alignment in Networked Businesses, Netherlands. Retrieved April 29, 2008 from http//eprints.eemcs.utwente.nl/2778/01/Subprojectproposal.pdfWyatt-Haines, R. (2007), Leadership Impact Through IT, Bu siness Leadership Review IVIV, October 2007. Retrieved April 29, 2008 from   http//mbaguide.mbaworld.com/downloadblrarticle/1047/index.htm