Table of contents:
1. Strategic alignment: Leveraging information technology for transforming organizations
(Henderson, Venkatraman, 1999)
2. The dynamics of alignment: Insights from a punctuated equilibrium model (Sabherwal,
Hirschheim, Goles, 2001)
3. The importance of the CobiT framework IT processes for effective internal control over
financial reporting in organizations: An international survey (Kerr, Murthy, 2013)
4. Using IT governance and COBIT to deliver value with IT and respond to legal, regulatory and
compliance challenges (Hardy, 2006)
5. Security and control in the cloud (Julish & Hall, 2010)
6. Blockchain and its coming impact on financial services (Fanning, Centers, 2016)
7. Innovation and practice of continuous auditing (Chan, Vasarhelyi, 2011)
8. The production and use of semantically rich accounting reports on the Internet: XML and
XBRL (Debreceny, Gray, 2001)
,1. Strategic alignment: Leveraging information technology for transforming organizations
(Henderson, Venkatraman, 1999)
The role and impact of IT changed in time from back office to strategic roles, potentially not only
supporting strategies, but shaping them. There are increasing concerns that the anticipated values of
IT investments are not achieved how to reconcile the increase in IT roles? Inability to realize value
from IT investments is due to lack of alignment between business and IT strategy strategy
involving both formulation and implementation. Two assumptions;
- Economic performance is directly related to ability of management to create strategic fit
between position and design of structure.
- Strategic fit is inherently dynamic choices will lead to imitation and responses process
of continuous adaption and change.
Critical lever for attaining dynamic capability not a specific set of sophisticated technological
functionality, but capabilities to leverage technology to differentiate no single IT app could deliver
sustainable competitive advantages, but it’s obtained through capability of organizations to exploit IT
continuously.
Strategic alignment is about two building blocks; strategic fit and functional integration first
recognizes need for strategy to address external and internal domains. Fit between external
positioning and internal arrangement is critical for maximizing economic performance, adopted by
paper: equally relevant within IT domain. IT strategy should be articulated in terms of an external
domain (how firm positions in IT marketplace) and internal domain (how IT infrastructure is
configured and managed). Businesses find it more easy to position within business than IT
marketplaces strategy has been applied to output, rather than input markets and IT is viewed as
functional, internal response to business strategy.
Proposition about position of organization in IT marketplace (external IT domain) , involves 3 choices;
1. Information technology scope – specific IT supporting current business strategy initiatives or
could shape new business strategy initiatives for firm (electronic imaging, local networks,
expert systems, robotics)
2. Systemic competencies – attributes of IT strategy that could contribute positively to creation
of new business strategies or better support existing ones (system reliability, cost-
performance levels, interconnectivity, flexibility)
3. IT governance – selection and use of mechanisms for obtaining required competencies (joint
R&D, joint ventures with vendors, strategic alliances)
Internal IS domain must address 3 components;
1. IT architecture – choices that define portfolio of applications, configuration of hardware,
software, and communication, and data architecture that collectively define technical
infrastructure.
2. IT processes – choices that define work processes central to operations of IT infrastructure
(systems development, maintenance, monitoring and control systems)
3. IT skills – choices pertaining to acquisition, training and development of knowledge and
capabilities of individuals required to effectively manage and operate the IT infrastructure.
Managers think of IT strategy as the latter 3 components, as historically IT is a support function. As IT
is a critical enabler of business transformation with capabilities to deliver firm-level advantages, firms
also need to see the former 3 components. Articulating IT strategy in terms of external domain,
doesn’t imply internal is secondary there is an inadequate fit between internal and external
reason for failure to derive benefits from IT investments only scan would find out IT strategy fails
due to poor supporting IS infrastructure. Second dimension; functional integration; need to integrate
IT strategy and business strategy considers how choices made in IT domain impact those made in
, business domain. Much now focused on integrating internal information systems strategies with
internal organizational requirements as response to business strategies.
Strategic alignment model identifies need to specify two types of integration between business and
IT domains;
- Strategic integration; link business strategy and IT strategy, reflecting external components.
Deals with the capability of IT functionality to shape and support business strategy.
- Operational integration; deals with internal domains; link between organizational
infrastructure and processes and information systems infrastructure and processes
highlights criticality of ensuring internal coherence between organizational requirements and
expectations and delivery capability within IS function.
Third premise of the model is effective management of IT requires balance among choices across
four domains. Simplest approach combinations of two domains bivariate-fit perspective. If
organizational and IS infrastructure can be reconfigured easily strategic perspective focused only
on strategic integration bivariate fit between business and IT strategies could suffice. But, big
inconsistencies will occur underestimation of difficulties dysfunctional.
Better would be multivariate relationships, with four dominant types;
- Strategy execution; anchored on notion that business strategy is articulated and is driver of
organizational and IS infrastructure design choices. Most common and widely understood
perspective corresponds to classic, hierarchical view of strategic management,
operationality by: critical success factors, business systems planning and enterprise
modelling. Important to identify specific role of management to succeed;
o Top management; strategy formulator articulate logic/choices business strategy
o IS manager; strategy implementor efficiently and effectively designs and
implements require IS infrastructure supporting the chosen business strategy.
Technology transformation; involves assessment of implementing chosen business strategy
through IT strategy and articulation of require IS infrastructure. Performance criteria;
benchmarking approach and based on technology leadership. This one is not constrained by
current organizational design and seeks best IT competencies for appropriate positioning in
IT marketplace and responding to internal architecture.
o Top management; technology vision provision that supports business strategy best
o IS manager; technology architect efficiently and effectively designing and
implementing requires IS infrastructure consistent with IT vision
