EXECUTIVE SUMMARY This case analysis discusses the findings in the article ‘Avoiding the Alignment Trap’, where even though most companies are aware that IT must be aligned with business strategy in terms of aligning IT expenses with revenue growth, over 11% of companies that align IT with business strategy spend more than 13% on average on IT expenses with a resulting of less than 14% average in revenue growth. The objective of this case analysis is to recommend a governance arrangement that will lead most companies that are currently have less effective IT alignment with business alignment to IT-enabled growth where the cost of IT more than compensates with the revenue growth of the company. The recommendation is to adopt a Duopoly …show more content…
Also, they must implement information technology that is less complex. In the words of Leonardo Da Vinci per the article ‘simplicity is the ultimate sophistication.’ By reducing complexity, the company builds simplified, standardized infrastructure rather than extensive customizing of information technology. With these 2 put together, it can result in effective IT governance which will enable growth in revenue in the future. Alternatives and Recommendations With respect to the article, the 85% of the companies that fall to the less effective quadrant in IT governance can start adopting a Duopoly Governance Arrangement where both the CEO and CIO work together and make decisions jointly. With Duopoly, a committee can be formed to oversee IT decisions, rate the IT leadership by the CIOs & continuous monitoring managers within the organization in their decision making & oversight. However, some organizations do not adopt a duopoly governance arrangement due to its size. Therefore, the next governance arrangement that can be adopted by the organizations is the Business Monarchy where decisions are made by senior business leader. With this model, the business leader can ask for the financial manager’s help to identify the kinds of information and system the organization needs, perform cost-benefit analysis, evaluate options based on priority setting and needs assessment and determine what’s important and upgrade as benefit.
The purpose of this article is to illuminate the need for any organization to have its IT strategy and business strategy properly aligned. While many organizations view IT and business alignment as an event – it is actually an on-going process, or continuous journey. Therefore, the main problem is that many organizations of today still hold these two principles (business mission & IT strategy) as two separate entities. However, in the Information Age – collaboration is key to capturing and retaining market penetration. To not have alignment with the IT and business strategy together is not a matter of want it is a matter of survival. This report will expand upon the need for business and IT strategic alignment as well as examine what happens in lack of a comprehensive plan. This will be done by examining the Vermont Teddy Bear company prior to and after the arrival of Bob Stetzel, the Vice President of Information Technology. This document will view it findings and make recommendations on the immediate and future operations of the company.
1.3. In order to estimate the peso discount rate, assume that the International Fisher Effect (IFE) holds. Groupe Ariel's Euro hurdle rate for a project of this type was 8%. Assume that inflation rates are expected to be 7% in Mexico and 3% in France.
"In 2014, Air Canada achieved its best full year financial performance in the Corporation 's 77-year history," said Calin Rovinescu, President and Chief Executive Officer. (Air Canada Website CIO 2015) Adjusted net income was $531 million, representing an increase of 56.2 per cent year-over-year.” The purpose of this paper is to examine how Air Canada in 2011 successfully aligned their business strategy and Information Technology (IT) by managing information resources on several levels to accomplish a competitive advantage over other airline carriers and gain the attention of their customers through innovation. Finally, this paper will address suggestions to achieve better Business-IT alignment to meet Air Canada’s goals for the future and continued success.
The major goal is to integrate Information Systems/Information Technology with the corporate strategy to use information for better governance and management. This has improved with the connectivity and networking and also the shrinking cost- performance ratios in technology. IT governance thus is a result of the complete merger of computer and communications technologies, like data processing and high advancement in networks, and integrated systems. (Bloomfield; et al, 2000) To this extent the software of the stand alone systems have to be converted to a single functional system for all requirements and the system involves the creation of a network with the following functionality:
As Shelton (1988) said strategic fit exists when two companies are able to create value that would be created if they were trying to reach the same goals separately. The IT industry is extremely competitive and companies are always searching for new ideas and new ways to evolve to be constantly one step ahead of its competitors. It also has players that are known all around the world for the quality of their products.
The mini-case starts with “IT is a pain in the neck,” which is a wrong notion that most of the business managers have in an organization. The history of IT-business relationships in most of the organizations shows that there is a huge gap between both sides which is getting better over a period of time. Today, managers know the fact that it is the people, technology and information that realizes the value of a company and everytime IT cannot be blamed for everything. The days have gone when IT was looked at as the sole responsibility for a company’s growth or downfall. IT processes along with the
Kathryn, you make an interesting point that some mergers of technology companies fail due to incompatible systems, and clearly the AOL and Time Warner merger is an excellent example, but I believe the problem extends well beyond the these types of companies (Bradt, 2015). One of the key take-aways from that disastrous experiment was that in order to meet proposed synergies, organizations must become fully integrated. This level of integration involves IT and requires that IT management be “at the table” during key decision points.
Currently their information system (IS) is not fully centralized and this is causing a lot of problem in their expansion and cross-company
In the past, the booming economy had allowed for year to year increase in their sales because people had larger discretionary incomes. But due to the recession, smaller independent retailers had to markdown their items in order to stay in business because designer outlet stores are getting more traffic; so will Harry Rosen follow in suit? Or in order to maintain the integrity of the quality products they offer, will they continue their higher pricing and settle for a lower market share?
The IT department could outsource some activities to reduce some of the workload. They could also centralize some IT decisions to better align IT with the business strategies and provide more support to the affiliates.
As most business they knew that proper investment in the Information systems and Information Technology is the best way to go but they dropped the ball when it came to proper investing, they either didn’t realize or ignored the problems
Alignment of an enterprise’s goals with its IT1 and IS1 systems has been a challenge ever since IT became a business enabler. Proposing an IT alignment requires a thorough understanding of the business goals of the enterprise and the knowledge that alignment is an iterative process which requires constant measurement and honing (Chan, 2002). Enterprises often face the problem of balance of priorities between IT and Business objectives. This report deals with one such case that faced alignment and prioritization hardships resulting in an unclear approach to achieve a corporate strategy.
The sizes of companies vary in size, the cost to upgrade and integrate cannot be incurred by smaller companies(Source?). Within J & J, most companies operated it 's IT on an individual basis, sharing the cost of changing to a central IT management seems unreasonable to a small company with a small
2. Compare this research design with a survey research design. What advantages, if any, did this research design have over a survey?
Frenzel (2004) claimed that to be successful, a firm’s IT management team must take action on the following critical areas: business management issues; strategic and competitive issues; planning and implementation concerns; and operational items. If for any reason, the organisation experiences difficulties in the above areas, the manager will need to set goals and objectives to overcome and prevent these issues.