IT Alignment with Business Strategy

Introduction

     Information technology (IT) is important in businesses for many aspects like reducing costs, standardizing processes, increasing productivity and gaining a competitive advantage (Beveridge 2011). The importance of aligning IT strategies with business strategies as a means of improving performance and competing more successfully, is of firm’s concern recently (Rathnam et al. 2005); however, many companies still do not understand the alignment process (Henderson and Venkatraman 1994). As a result, full benefits of cost reduction, improved productivity and a competitive advantage was not achieved. This gap deserves further attention and evaluation given the importance of information technology in this situation (Rathnam et al. 2005). 

Competitive Advantage is Vital

     The most important aspect for the alignment is that IT alignment with business objectives can be used to create competitive advantage (Kearns & Lederer, 2001). IT by itself is no longer enough to gain a competitive advantage, and to gain that advantage, IT can no longer be considered an operational aspect. Instead, IT must be given a priority at the board table and aligned always with the overall business strategy.

Challenges

One of the challenges for the alignment is the lack of technical background. For example, when executives do not have clear ideas of what they want from IT, they will spend everywhere and there will be no wise handling of resources. Another challenge is that an ill-defined vision of a business strategy generates serious strategic blunders that, in turn, cannot be aligned with IT. Also, the lack of strategical agility explained and the necessity by the immediate revision and updates when a company to shift its priorities, which IT strategies require. Unfortunately, some executives get into the trap of doing things in a well-known way and leave the IT strategy with thinking about it (Bush et al., 2009).

Saudi Aramco

     Saudi Aramco is a company of example of IT alignment with business strategy, and studying the IT alignment associated with Saudi Aramco, I found that the leadership team should review IT strategy alongside with business strategy each quarter, to determine how technology is helping – or hinder – growth, and therefore, with the sophisticated team and CIOs, Saudi Aramco will continue growing (Aramco, 2019). 

References

Aramco. (2019). Retrieved from http://www.aramco.com.sa/en/home/about/strategy.html

Beveridge, C. (2011). Aligning IT with Business Strategy, Guidelines for IT Management number 273. The National Computing Centre Limited, Oxford Road, Manchester, United Kingdom, 1-16.

Bush, M., Lederer, A. L., Li, X., Palmisano, J., & Rao, S. (2009). The alignment of information systems with organizational objectives and strategies in health care. International journal of medical informatics, 78(7), 446-456.

Kearns, G., & Lederer, A. (2001). Strategic IT alignment: a model for competitive advantage. ICIS 2001 Proceedings, 2.

Henderson, J. C., & Venkatraman, N. (1994). Strategic alignment: a model for organizational transformation via information technology (pp. 202-220). Oxford University Press: New York.

Rathnam, R. G., Johnsen, J., & Wen, H. J. (2005). Alignment of business strategy and IT strategy: a case study of a fortune 50 financial services company. Journal of Computer Information Systems, 45(2), 1-8.