The Background Of A Researchers Problem Commerce Essay

For about three decennaries practicians, faculty members, advisers, and research organisations have identified “ achieving alliance between IT and concern ” as a permeant job, Luftman and Kempaiah ( 2007 ) . Gutierrez, Nawazish, Orozco, Serrano, and Yazdouni ( 2007 ) add that despite the broad credence of strategic alliance ( the strategic usage of Information Technology ) , there is no consensus on how to accomplish alliance and with few mentions that detail the procedure, there is no common understanding on the term alliance. Terminology such as linkage Henderson and Venkatraman ( 1993 ) harmoniousness, integrated, linked, and synchronocity Luftman and Kempaiah ( 2007 ) have been suggested and used.

Steiner ( 1979 ) points out that there is really small understanding as to the significance of scheme in the concern universe. Some of the definitions which he uses include the followers:

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1. Scheme is that which top direction does that is of great importance to the organisation.

2. Scheme refers to basic directional determinations, that is, to intents and missions.

3. Strategy consists of the of import actions necessary to recognize these waies.

4. Scheme answers the inquiry: What should the organisation be making?

5. Scheme answers the inquiry: What are the terminals we seek and how should we accomplish them?

Mintzberg ( 1994 ) , says that people use “ scheme ” in several different ways, the most common being:

Scheme is a program, a “ how, ” a agency of acquiring from here to at that place.

Scheme is a form in actions over clip ; for illustration, a company that on a regular basis markets really expensive merchandises is utilizing a “ high terminal ” scheme.

Scheme is perspective, that is, vision and way.

Scheme is place ; that is, it reflects determinations to offer peculiar merchandises or services in peculiar markets.

Porter ( 1998 ) states that scheme positioning efforts to accomplish sustainable competitory advantage by continuing what is typical about a company and that scheme, is the creative activity of a alone and valuable place, affecting a different set of activities, requires that tradeoffs be made in viing, to take what non to make and affect making “ fit ” among a company ‘s activities. Fit has to make with the ways a company ‘s activities interact and reenforce one another.

To better the strategic direction of information engineering, Henderson and Venkatraman ( 1993 ) , developed a model which they called the Strategic Alignment Model ( SAM ) . This theoretical account was defined in footings of four cardinal spheres of strategic pick viz. concern scheme, information engineering scheme, organisational substructure and procedures and information engineering substructure and procedures. The theoretical account is defined in footings of two cardinal features of strategic direction viz. the strategic tantrum ( the interrelatedness between external and internal constituents ) and functional integrating ( integrating between concern and functional spheres ) .

Luftman ( 2001 ) improved on the Henderson and Venkatraman ( 1993 ) SAM theoretical account by developing the Strategic Alignment Maturity Model ( SAMM ) . The theoretical account measures IT-business alignment adulthood. Six interrelated constituents for measuring alignment adulthood are identified. These are communications, value, administration, partnership, range and architecture and accomplishments. The tonss an organisation achieves for these six constituents of adulthood are so compared to a five-level adulthood theoretical account to denote the organisation IT-business alliance adulthood Luftman ( 2001 ) .The degrees range from degree one to level five where degree five is the highest degree of adulthood. A higher alignment adulthood correlatives with higher house public presentation steps Luftman ( 2001 ) .

Tiing public presentation steps to strategic ends is a critical measure Fonvielle and Carr ( 2001 ) . A tool to mensurate public presentation and to aline strategic ends within administrations is the Balanced Scorecard ( BSC ) . The BSC was developed by Kaplan and Norton ( 1992 ) to get the better of the concern ‘s trust on fiscal steps. They contend that trust on lone fiscal steps does non give a complete overview of the administrations steps. The BSC provided a model to look at scheme, used for value creative activity from four different positions these being fiscal, client, internal concern procedure and invention and acquisition Kaplan and Norton ( 1992 ) .One of the rules recommended by the writers, is that for an organisation to be focused on scheme, there needs to be alignment among sections to the scheme of the administration. The alignment sequence recommended by Kaplan and Norton ( 2006 ) starts when the corporate central office articulates enterprise value proposition that will make synergisms among runing units, support units and external spouses. This sequence includes alining IT scheme with the concern scheme.

Table 1 show a comparing of alliance jobs identified by the three theoretical accounts described above.

Table 1 Problems with alliance in the assorted alliance theoretical accounts


Alliance Problems


Inability to recognize value from IT investings is, in portion due to the deficiency of alliance between concern and IT schemes


Alliance is often focused merely on how IT is aligned with the concern and non frailty versa, the administration merely sought one method to better alliance and that there is no effectual tool to estimate adulthood of IT-business alliance

Balanced Scorecard

Surveies reveals that the greatest spread occurs in administration alliance when compared to other strategic direction jobs


Business and IT strategies at PRASA need to be better aligned.


Research Aim

The purpose of this research is to understand to what extent alliance between Business and IT strategies exists, at the Passenger Rail Agency of South Africa ( PRASA ) .

Research Questions

The research inquiry derived from the job statement is

What can PRASA make to better concern and IT strategies, alliance?

The sub inquiries to reply the chief inquiry are:

1. What are concern and IT strategies?

2. What is alignment between concern and IT strategies?

3. What factors contribute to an alignment spread between concern and IT strategies?

4. What factors contributes to an improved alliance between concern and IT strategies?

Aims of the research

Based on the sub inquiries the aims of the research are to

1. Analyze the Business ‘s and IT scheme

2. Transport out a literature reappraisal on the alliance between Business and IT strategies.

3. Analyze the factors that contribute towards Alignment Gap

4. a. Establish strategic alliance best pattern.

b. Formulate a methodological analysis for alining Business and IT strategies.

c. Propose recommendations to better PRASA ‘s Business and IT strategies alliance.


The literature reappraisal will be based on the research into alliance of concern and IT strategies. There is a overplus of research available on the alliance of concern and IT strategies. Chan and Reich ( 2007 ) have carried out comprehensive research on this subject.

Business and IT schemes

Business Schemes

Croteau and Bergeron ( 2001 ) define concern scheme as “ the results of determinations made to steer an administration with regard to the environment, construction and processes that influence it ‘s organizational public presentation ” . Hambrick ( 1980 ) states that concern schemes may be textual, multivariate or typological.

Henderson and Venkatraman ( 1993 ) designers of the SAM theoretical account, position scheme as affecting both scheme preparation ( determinations refering to competitory, merchandise market picks ) and scheme execution ( picks that pertain to the construction and capablenesss of the house to put to death it ‘s merchandise market picks ) .The SAM theoretical account nowadayss two concern scheme perspectives where concern scheme is the driver viz. strategic executing, and engineering transmutation. Table 3 presents the cardinal properties of these positions.

Table 2 Attributes of Business Strategy positions ( Henderson & A ; Venkatraman 1993 )



Role of top direction

Role of IS direction

Performance standards

Strategy executing

Business Scheme

Strategy Formulator

Strategic Implementer

Cost/Service Centre

Technology transmutation

Business Scheme

Technology visionary

Technology Architect

Technology leading

One of the six constituents of the SAMM Luftman and Kempaiah ( 2007 ) , is partnership which includes IT ‘s function in specifying the concern ‘s schemes. Both of these theoretical accounts ( SAM and SAMM ) are about alining concern and IT schemes and can be criticised because it does non specify what concern scheme is.

Kay ( 1996 ) says that there is much argument on the substance but that most observers agree that concern scheme is concerned with the lucifer between a companies internal capablenesss and its external environment. Harmonizing to Kaplan and Norton ( 2001a ) scheme implies the motion of an administration from it ‘s present place to a desirable but unsure future place. Because the administration has ne’er been to this future place its intended tract involves a series of coupled hypotheses. It enables the strategic hypotheses to be described as a set of cause and consequence relationships that are expressed and testable Kaplan and Norton ( 2006 ) The effectivity of the attack is derived from its ability to clearly depict scheme ( utilizing Strategy Maps ) and the ability to associate scheme to the direction system utilizing the BSC.

For the intent of this research concern scheme will be described in footings of corporate scheme intending it will be concerned with the overall intent and range of the organisation Johnson and Scholes ) . A definition of corporate scheme presented by Andrews ( 1980 ) is: “ Corporate scheme is the form of determinations in a company that determines and reveals its aims, intents, or ends, produces the chief policies and programs for accomplishing those ends, and defines the scope of concern the company is to prosecute, the sort of economic and human organisation it is or intends to be, and the nature of the economic and non-economic part it intends to do to its stockholders, employees, clients, and communities. Strategic direction which is similar to corporate scheme is defined as the set of determinations and actions that result in the preparation and execution of programs designed to accomplish a company ‘s aims Pearce and Robinson ( 1988 ) .

These tie in with the scheme position of the SAM and Balanced scorecard which both discuss scheme in footings of preparation and executing. Kaplan and Norton ( 2006 ) province that the IT scheme gets aligned to concern scheme through a portfolio of strategic IT services, which is derived from the concern scheme and negotiated with the concern units and is measured by the value adding part of IT. This is done by supplying entree to seasonably and accurate information, making and back uping concern unit partnerships and strategic support to the concern for competitory advantage.

IT Strategic Management

Gartner ( 2007 ) , define IT scheme “ as a subject that defines the concern value the IT organisation will present to the endeavor, and the way it will take to present. ” To make this they recommend that IT construct a complete, business-success-focused IT scheme dwelling of demand, control and supply. Well-crafted IT strategies show how IT will lend to the success of the endeavor relation to its cardinal concern ends. The schemes besides link major concern missions and ends to IT initiatives.

The SAM Henderson and Venkatraman ( 1993 ) theoretical account nowadayss two I/T Strategy perspectives where I/T scheme is the driver viz. competitory potency and service degree. Table 4 presents the cardinal properties of these positions

Table 3 Attributes of IT Strategy perspectives ( Henderson & A ; Venkatraman 1993 )



Role of top direction

Role of IS direction

Performance standards

Competitive potency

I/T Strategy

Business visionary


Business leading

Service degree

I/T Strategy


Executive leading

Customer Satisfaction

The latter two theoretical accounts will be used to better understand the alliance between Business and IT at PRASA.

What is an alignment spread?

Business and IT schemes may from clip be out of synchronism or may be misaligned. This misalignment is referred to as an alliance spread. No clear accepted definition of an alignment spread between Business and IT scheme is found in the literature. Luftman and Brier ( 1999 ) reference inhibitors which hinder alliance. These inhibitors include: IT/ concern deficiency close relationships, IT does non prioritise good, IT fails to run into its committednesss, IT does non understand concern, senior executives do non back up IT, and IT direction lacks leading. They besides talk of companies endeavoring to associate concern and engineering and what the impact of misalignment might be if there is no harmoniousness between concern and IT. Reich and Benbasat ( 1996b ) define linkage as “ the grade to which the IT mission, aims, and programs support and are supported by the concern mission, aims, and programs. ”

Harmonizing to Norton ( 2002 ) the grounds why a concern scheme and IT scheme spread exist are hapless scheme development, direction, communicating, deficiency of strategic focal point within organisations, and no strategic direction procedure. Rathnam, Johnsen and Wen ( 2004 ) , used a instance survey to research why alliance spreads exist, the grounds for alliance spread and the scheme for minimising the alliance spread between concern and IT. Although the writers talk extensively of alignment spreads in their research, they do non specify the term. Their consequences suggest that bettering concern scheme vision and communicating has the greatest potency for alining concern and IT strategies.

Beer and Eisenstat ( 2000 ) province that companies have long known that, to be competitory they must develop a good scheme and so suitably realign construction, systems, leading behavior, human resources policies, civilization values and direction procedures. They have identified what they call the “ the soundless slayers of scheme execution and acquisition ” . Some of them are, a top down but individualistic senior direction manner, an ill-defined scheme and conflicting precedences, an uneffective senior direction squad, besides and significantly a hapless perpendicular communicating channel, hapless coordination across maps and concerns and unequal down-the-line leading.

Further factors lending towards the misalignment can take several signifiers harmonizing to Fonvielle and Carr ( 2001 ) . This can be where persons believe its members are aligned but in fact, the persons have different sets of ends or could hold the same ends but unexpressed dissensions on how the ends should be reached. It may besides good be that warring cantonments exist within the organisation, guaranting that overall committedness to any chosen scheme is weak. A more relevant instance is where an active resistance does non be, but many group members are unconvinced of the demand for, or the likely efficaciousness of, the proposed action. In other state of affairss and instances people do n’t cognize what the ends of the organisation are.

Gartner ( 2008 ) , province that alining IT with the concern is frequently one of the more frustrating and time-consuming experiences. Alignment is frequently seen as the concern and IT runing in parallel universes, keeping a common way, but separated by distance.

What factors contributes to an improved alliance between concern and IT strategies?

Luftman ( 1999 ) and ( Rathman et al. , 2004 ) suggest the followers to better alliance between Business and IT strategies. This is shown in tabular array

Table 4 Business and IT schemes are improved by alliance between the two


Rathman et Al

aˆ? Senior executive support for IT

aˆ? IT involved in scheme development

aˆ? IT understands the concern

aˆ? Business partnership

aˆ? Well-prioritized IT undertakings

aˆ? IT demonstrates leading

Improve concern scheme development procedure

More collaborative scheme development between IT and Business sections

Define when and how new engineering is introduced into scheme development treatments

Restructure the organisation to guarantee focal point on endeavor demands ( e.g. construction the organisation around concern procedures )

Construct a concern architecture

Use a centralised IT organisation

Include a CIO at the executive council degree

The Balanced Scorecard will be used to mensurate the public presentation of the administration to guarantee alliance between Business and IT schemes

Users of the Balanced Scorecard started utilizing the scorecard as a direction system, used to pull off scheme, Kaplan and Norton ( 1996a ) . From this they introduced five rules of Strategy-Focused Administrations to help with aligning and focusing resources on scheme, viz.

1. Translate the scheme to Operational Footings

2. Align the administration to the Strategy

3. Make Strategy everyone ‘s mundane Job

4. Make Strategy a Continual procedure

5. Mobilise Change through Executive leading

This conceptual theoretical account will be used to better understand the alliance of Business and IT scheme at PRASA and is depicted in Figure 1.

Business Scheme

1. What are concern and IT strategies?

2. What is an alignment spread between concern and IT strategies?

3. What factors contribute to alignment spread between concern and IT strategies?

4. What factors contributes to an improved alliance between concern and IT strategies?

IT Strategy

Action PRASA takes to better organizational capableness

Figure 1 Achieving alliance between Business and IT scheme at PRASA


The research design will utilize the interpretative instance survey attack. The interpretative attack involves the research worker following an empirical attacks which focus on human readings and significances Walsham ( 1995 ) . Interpretative research involves non or anti positivism in which facts and values are intertwined and difficult to extricate, and both are involved in scientific cognition and nomatism which takes the position that scientific cognition is ideological and necessarily contributing to peculiar sets of societal terminals. Either of the latter two places is unfastened for the interpretative research worker to follow

A instance survey which is defined by Robson ( 2002 ) as “ a scheme for making research which involves an empirical probe of a peculiar coeval phenomenon within existent life context utilizing multiple beginnings of grounds. ” Case Study is besides known as a triangulated research scheme ( Tellis, 1997 ) .The demand for triangulation arises from the ethical demand to corroborate the cogency of the procedures. In instance surveies, this could be done by utilizing multiple beginnings of informations ( Yin, 2003 ) . The principle for utilizing multiple beginnings of information is the triangulation of grounds. Triangulation increases the dependability of the informations and the procedure of garnering it. In the context of informations aggregation, triangulation serves to confirm the informations gathered from other beginnings. Yin ( 2003 ) identified six primary beginnings of grounds for instance survey research. These are certification, archival records, interviews, direct observation, participant observation and physical artifacts. The research will utilize the undermentioned beginnings of informations: certification, archival records and consequences of study inquiries

Word picture OF THE RESEARCH

The survey will research to what extent ( if any ) an alignment spread between Business and IT strategies exists, at PRASA. The population would include IT directors and concern directors from other sections within the PRASA group.

Contribution OF THE RESEARCH

Alignment between Business and IT strategies has been debatable ( Luftman, 2007 ) . This survey will supply a better apprehension of the alignment issue in order to make farther research into possible models. Surveies have shown that better public presentation can be attained if administrations are tightly aligned. The research will get down with placing the strategic pick of the administration, based on the work of ( Henderson & A ; Venkatraman, 1993 ) . This will be followed by a strategic alliance adulthood appraisal developed by Luftman ( 2001 ) . Finally public presentation steps described by the BSC will be used to supervise advancement in alining Business and IT strategies. The part of this research would be to better understand the alliance between Business and IT at PRASA.

Structure of the research

Chapter one is an debut to the research.

Chapter two is an in depth literature research on the topic.

Chapter three provides comprehensive background on the three theoretical theoretical accounts used, SAM, SAMM and BSC.

Chapter four introduces the research design and research methodological analysis followed.

Chapter provides the consequences of the unstructured interviews and

Chapter six is the decision and recommendations the administration could utilize


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