This document describes a method called ProGoAlign for creating heat maps to analyze strategic alignment. ProGoAlign models an organization across three layers - strategy, structure, and operations. It uses heat maps to visualize dependencies and priorities between elements in the different layers, determined through top-down prioritization and bottom-up performance measurement. The heat maps can then be analyzed both ex ante for decisions and ex post for process improvement, outsourcing, and performance evaluation.
3. Outline
1. Background
2. Introduction
a.
b.
Business-IT alignment
Strategic Alignment
3. ProGoAlign
a.
b.
c.
d.
General
Top-down alignment
Bottom-up alignment
Result
4. Analysis options
a.
b.
Ex ante
Ex post
5. Discussion - Questions
4. 1. Background
• Management Information Systems @ UGent
Economics
MIS
Computer
Science
Focus: conceptual modeling of enterprises and other kinds of organizations
and actors that engage in economic interactions
Increase understanding & facilitate communication
To facilitate problem analysis & solution design
To better engineer (IT) systems that support these phenomena
5. 2. Introduction
a. Business-IT alignment
Gained importance in the ’90s as:
• Concern about gaining value from IT investments
Alignment is important to realize this
6. 2. Introduction
a. Business-IT alignment
Ensures effective communication between business and IT
professionals
– Business to IT: “What are the business needs?”
– IT to Business: “What information, communication, processing
services, etc. IT can offer?”
7.
8. 2. Introduction
a. Business-IT alignment
Amsterdam framework for Information Management (AIM)
Maes R.: On the alliance of executive education and research in information management at the University of Amsterdam.
INTERNATIONAL JOURNAL OF INFORMATION MANAGEMENT 23: 249-257 (2003).
9. 2. Introduction
• Information & Communication can bridge the gap between Business & IT
should be managed separately from the technology used to
produce it
• Structure should be managed separately from operations as it is an
important driver for the flexibility of an organization
10. 2. Introduction
a. Business-IT alignment
IT strategy is traditionally focused on the internal domain only
• Seen as an internal response to the business strategy
IT too much seen as purely a support function (i.e. automation support)
• Strategy in management literature focuses on output markets rather than
input markets
The IT marketplace is an input market where organizations acquire critical
technological functionality to support and shape business strategies
11. 2. Introduction
b. Strategic Alignment: applied on IT?
WHY
• Strategy layer: strategy formulation
Conceptual model: goal model
WHAT
• Structural layer: strategy implementation
Conceptual model: value model
WHO
• Operational layer: strategy operationalization
Conceptual model: process model
HOW
13. 3. ProGoAlign
a. General
• Development of HEATMAPS between dependent elements of the different
layers
NB: Method is not dependent on existing modelling languages
15. 3. ProGoAlign
a. General
Definitions:
•
Goal: Long-term desired result that a company wants to achieve
•
Financial Structure: Representation of the costs resulting from acquiring resources,
and the revenues in return for the offered value proposition.
•
Value Proposition: Offered set of products and/or services that provide value to
the customers and other partners, and competes in the overall value network.
•
Core Competence: Ability to coordinate flows of resources through the value chain
to realize the intended value proposition.
•
Value Chain: Overall business process architecture that describes the structured
set of activities that combine resources to created the necessary competences.
•
Process Activities: Work to be done by participants within a collaboration.
17. 3. ProGoAlign
b. Top-down: prioritization – Analytic Hierarchy Process (AHP)
• Scale:
1: equal importance
3: moderate importance of one over another
5: essential or strong importance
7: very strong importance
9: extreme importance
• Priorities:
based on the Eigenvalues of the matrix
18. 3. ProGoAlign
b. Top-down: prioritization – Analytic Hierarchy Process (AHP)
Step 3: colour code (border of the elements)
19. 3. ProGoAlign
c. Bottom-up: measures
Step 1: define appropriate measures & benchmarks for each element
avg. 1 year
avg. 5€/purchase
Step 2: measure performance in your organization
Step 3: colour code (surface of the elements)
Performance < benchmark red
Performance ≥ benchmark green
21. 4. Analysis options
a. Ex ante decisions:
•
•
•
•
•
Complete model
Pareto efficiency
Critical path
Outsourcing opportunities
…
22. 4. Analysis options
b. Ex post analysis:
• Strategic process improvement:
Determine for critical goals (red importance) which process
steps can be improved (red importance & execution)
• Outsourcing decisions:
Determine for unimportant goals (green importance),
which process step are candidate for outsourcing (green
importance, red execution)
• Performance-based evaluation
• …