Chapter 4
Strategic Alignment Maturity
Presented by
Dr. Mohamed Sammouda
Chapter Outline
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Importance of IT and business environment
Enablers and inhibitors to alignment
Concept/importance of alignment maturity
5 levels of Strategic Alignment Maturity
6 Criteria that characterize levels of Strategic
Alignment Model
• Assessing Strategic Alignment Maturity
• Strategic Alignment Process
Importance of Alignment
• Effectiveness
• Efficiency
• Link Technology and Business
IT Management Should:
• Be knowledgeable about how new IT
technologies can be integrated into
business
• Be privy to senior management's tactical
and strategic plans
• Be present when corporate strategies are
discussed
• Understand strengths and weaknesses of
technologies and implications
Alignment Maturity
• Process which evaluates the IT/business
alignment status of a specific organization
– It has a defined number of levels and
representations (5 levels)
– It is based on a defined set of criteria (six key
criteria)
5
Strategic Alignment Maturity Levels
1. Initial/Ad Hoc Process
 Business and IT not aligned
2. Committed Process
 Organization commits to becoming aligned
3. Established Focused Process
 Established and Focused on business objectives
4. Improved/Managed Process
 Reinforcing concept of IT as “Value Center”
5. Optimized Process
 Integrated/Co-adaptive business and IT strategic planning
Strategic Alignment Maturity
Criteria/Elements
1.
2.
3.
4.
5.
6.
Communications
Competency/value measurements
Governance
Partnerships
Scope and Architecture
Skills
1-Communications
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Ensure ongoing knowledge sharing
Use people in formal inter-unit liaison roles
Cooperation among business-IT partners
Trust and openness between units and IT
2-Competency/Value
Measurements
• Service levels that assess commitment of IT
• Tie service levels to criteria
• Take action based on measurements of
performance factors
• Understand factors that lead to missing
criteria
• Understand what can be learned to improve
the environment continuously
3-Governance
• Clearly defined decision-making authority
• Integrated enterprise-wide strategic
business plan
4-Partnership
• Relationship between business and IT
organizations
• Give IT function equal role in defining
business strategy
• Perception of contributions
• Partnership should enable and drive
change
5-Scope and Architecture
• Go beyond back office and into front office
• Assume
role
supporting
flexible
infrastructure
• Evaluate and apply emerging technologies
effectively
• Enable or drive business processes and
strategies
• Provide
solutions
customizable
to
customer needs
6-Skills
• Include all human resource considerations
for organization
• Consider cultural and social environment
Measuring alignment
Where are we in terms of Luftman’s triangle?
Complexity of 5 levels and
1. Initial ad hoc
2. Committed process
3. Established focused
4. Improved/managed
5. Optimised process
6 variables:
1. Skills
2. Scope and architecture
3. Partnership
4. Governance
5. Competency/value
6. Communications
Climbing the Strategic Alignment Maturity Model
LEVEL 5
Optimized
Process
LEVEL 4
Improved Process
Business
Strategy
LEVEL 3 Established process
LEVEL 2 Committed Process
LEVEL 1 Initial Process
Alignment Gap
IT Strategy
The structure of the CMM
OPTIMIZING (5)
Continuously
Improving
Process
These are the KPAs
associated with each level:
• DEFECT PREVENTION PROCESS
• TECHNOLOGY CHANGE MANAGEMENT
• PROCESS CHANGE MANAGEMENT
MANAGED (4)
Predictable
Process
• QUANTITATIVE PROCESS MANAGEMENT
• SOFTWARE QUALITY MANAGEMENT
DEFINED (3)
Standard,
Consistent
Process
Disciplined
Process
INITIAL (1)
• ORGANIZATION PROCESS FOCUS
• ORGANIZATION PROCESS DEFINITION
• TRAINING PROGRAM
• INTEGRATED SOFTWARE MANAGEMENT
• SOFTWARE PRODUCT ENGINEERING
• INTERGROUP COORDINATION
• PEER REVIEWS
REPEATABLE (2)
• REQUIREMENTS MANAGEMENT
• SOFTWARE PROJECT PLANNING
• SOFTWARE PROJECT TRACKING AND
OVERSIGHT
• SOFTWARE SUBCONTRACT MANAGEMENT
• SOFTWARE QUALITY ASSURANCE
• SOFTWARE CONFIGURATION
MANAGEMENT
An organization is not
considered to be at a given level
until it has satisfied the
conditions for every Key Process
Area through that level.
People Capability Maturity Model
5.Optimizing
Continuously improve
methods for developing
personal and organizational
Competence
Continuous Workforce Innovation
Coaching
Personal Competency Development
4.Managed
Quantitatively manage
organizational growth
in workforce capabilities
and establish
competency-based teams
Organizational Performance Alignment
Organizational Competency Management
Team-Based Practices
Team Building
Mentoring
3.Defined
Identify core competencies
and align workforce
activities with them
Participatory Culture
Competency-Based Practices
Career Development
Competency Development
Workforce Planning
Knowledge and Skills Analysis
2.Repeatable
Instill basic discipline
into workforce activities
Compensation
Training
Performance Management
Staffing
Communication
Work Environment
1.Initial
COMPETENCY/VALUE
MEASUREMENTS
COMMUNICATIONS
•Understanding of Business
by IT
•Understanding of IT
by Business
•Inter/Intra
- organizational
Learning/Education
•Protocol Rigidity
•Knowledge Sharing
•Liaison(s) effectiveness
·
•IT Metrics
•Business Metrics
•Balanced Metrics
•Service Level Agreements
•Benchmarking
•Formal Assessments/Reviews
•Continuous Improvement
GOVERNANCE
•Business Strategic Planning
•IT Strategic Planning
•Organization
Structure
Reporting/
•Budgetary Control
•IT Investment Management
•Steering Committee(s)
•Prioritization Process
IT BUSINESS ALIGNMENT MATURITY CRITERIA
PARTNERSHIP
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•Business Perception of IT Value
•Role of IT in Strategic
c Business
Planning
•Shared Goals, Risk,
Rewards/Penalties
•IT Program Management
•Relationship/Trust Style
•Business Sponsor/Champion
SCOPE &
ARCHITECTURE
•Traditional, Enabler/Driver,
External
•Standards Articulation
•Architectural Integration:
- - Functional Organization
-Enterprise
-Inter
- Inter - enterprise
•Architectural Transparency,
Agility, Flexibility
•Manage Emerging Tech.
SKILLS
•Innovation, Entrepreneurship
•Cultural Locus of Power
•Management Style
•Change Readiness
•Career cro
ssover training
•Social, Political,
Education,
Cross- Trusting
Interpersonal Environment
•Hiring and retaining
COMMUNICATIONS
• Understanding of Business by IT
• Understanding of IT by Business
-
• Inter / Intra-organizational
Learning / Education
·
COMPETENCY/VALUE
MEASUREMENTS
GOVERNANCE
•Business Strategic Planning
•IT Metrics
•IT Strategic Planning
• Protocol rigidity
•Business Metrics
•Organization Structure
• Knowledge Sharing
•Service Level Agreements
• Liaison(s) effectiveness
•Formal Assessments/Reviews
•Balanced Metrics
•Benchmarking
•Continuous Improvement
•Budgetary Control
•IT Investment Management
•Steering Committee(s)
•Prioritization Process
IT BUSINESS ALIGNMENT MATURITY CRITERIA
PARTNERSHIP
•Business Perception of IT Value
•Role of IT in Strategic
SCOPE &
ARCHITECTURE
c Business
Planning
•Shared Goals, Risk,
Rewards/Penalties
•IT Program Management
•Relationship/Trust Style
•Business Sponsor/Champion
•Traditional, Enabler/Driver,
External
•Standards Articulation
•Architectural Integration:
- Functional Organization
-Enterprise
-Inter enterprise
•Architectural Transparency,
Agility, Flexibility
•Manage Emerging Tech.
SKILLS
•Innovation, Entrepreneurship
•Cultural Locus of Power
•Management Style
•Change Readiness
Education,
Cross•Career cro
ssover training
•Social, Political, Trusting
Interpersonal Environment
•Hiring and retaining
COMPETENCY / VALUE
MEASUREMENTS
• IT Metrics
• Business Metrics
COMMUNICATIONS
•Understanding of Business
by IT
•Understanding of IT
by Business
•Inter/Intra
organizational
Learning/Education
•Protocol Rigidity
•Knowledge Sharing
effectiveness
•Liaison(s)
• Balanced Metrics
GOVERNANCE
• Service
Level Agreements
·
•Business Strategic Planning
• Benchmarking
•Organization Structure
• Formal Assessments / Reviews
• Continuous Improvement
•IT Strategic Planning
•Budgetary Control
•IT Investment Management
•Steering Committee(s)
•Prioritization Process
IT BUSINESS ALIGNMENT MATURITY CRITERIA
PARTNERSHIP
•Business Perception of IT Value
•Role of IT in Strategic
SCOPE &
ARCHITECTURE
c Business
Planning
•Shared Goals, Risk,
Rewards/Penalties
•IT Program Management
•Relationship/Trust Style
•Business Sponsor/Champion
•Traditional, Enabler/Driver,
External
•Standards Articulation
•Architectural Integration:
- Functional Organization
-Enterprise
-Inter enterprise
•Architectural Transparency,
Agility, Flexibility
•Manage Emerging Tech.
SKILLS
•Innovation, Entrepreneurship
•Cultural Locus of Power
•Management Style
•Change Readiness
Education,
Cross•Career cro
ssover training
•Social, Political, Trusting
Interpersonal Environment
•Hiring and retaining
GOVERNANCE
• Business Strategic Planning
• IT Strategic Planning
COMMUNICATIONS
•Understanding of Business
by IT
•Understanding of IT
by Business
•Inter/Intra
organizational
Learning/Education
•Protocol Rigidity
•Knowledge Sharing
effectiveness
•Liaison(s)
COMPETENCY/VALUE
MEASUREMENTS
•IT Metrics
•Business Metrics
•Balanced Metrics
•Service Level Agreements
•Benchmarking
•Formal Assessments/Reviews
• Organization Structure
• Budgetary Control
• IT Investment Management
• Steering Committee(s)
• Prioritization Process
•Continuous Improvement
IT BUSINESS ALIGNMENT MATURITY CRITERIA
PARTNERSHIP
•Business Perception of IT Value
•Role of IT in Strategic
c Business
Planning
•Shared Goals, Risk,
Rewards/Penalties
•IT Program Management
•Relationship/Trust Style
•Business Sponsor/Champion
SCOPE &
ARCHITECTURE
•Traditional, Enabler/Driver,
External
•Standards Articulation
•Architectural Integration:
- Functional Organization
-Enterprise
-Inter enterprise
•Architectural Transparency,
Agility, Flexibility
•Manage Emerging Tech.
SKILLS
•Innovation, Entrepreneurship
•Cultural Locus of Power
•Management Style
•Change Readiness
Education,
Cross•Career cro
ssover training
•Social, Political, Trusting
Interpersonal Environment
•Hiring and retaining
COMMUNICATIONS
•Understanding of Business
by IT
•Understanding of IT
by Business
•Inter/Intra
organizational
Learning/Education
•Protocol Rigidity
•Knowledge Sharing
effectiveness
•Liaison(s)
COMPETENCY/VALUE
MEASUREMENTS
GOVERNANCE
•Business Strategic Planning
•IT Metrics
•IT Strategic Planning
•Business Metrics
•Organization Structure
•Balanced Metrics
•Service Level Agreements
•Benchmarking
•Formal Assessments/Reviews
•Budgetary Control
•IT Investment Management
•Steering Committee(s)
•Prioritization Process
•Continuous Improvement
IT BUSINESS ALIGNMENT MATURITY CRITERIA
PARTNERSHIP
• Business Perception of IT Value
• Role of IT in Strategic Business
Planning
• Shared Goals, Risk,
Rewards/Penalties
• IT Program Management
• Relationship / Trust Style
• Business Sponsor / Champion
SCOPE &
ARCHITECTURE
•Traditional, Enabler/Driver,
External
•Standards Articulation
•Architectural Integration:
- Functional Organization
-Enterprise
-Inter enterprise
•Architectural Transparency,
Agility, Flexibility
•Manage Emerging Tech.
SKILLS
•Innovation, Entrepreneurship
•Cultural Locus of Power
•Management Style
•Change Readiness
•Career cro
ssover training
•Social, Political, Trusting
Interpersonal Environment
•Hiring and retaining
COMMUNICATIONS
•Understanding of Business
by IT
•Understanding of IT
by Business
•Inter/Intra
organizational
Learning/Education
•Protocol Rigidity
•Knowledge Sharing
effectiveness
•Liaison(s)
COMPETENCY/VALUE
MEASUREMENTS
GOVERNANCE
•Business Strategic Planning
•IT Metrics
•IT Strategic Planning
•Business Metrics
•Organization Structure
•Balanced Metrics
•Service Level Agreements
•Benchmarking
•Formal Assessments/Reviews
•Budgetary Control
•IT Investment Management
•Steering Committee(s)
•Prioritization Process
•Continuous Improvement
IT BUSINESS ALIGNMENT MATURITY CRITERIA
PARTNERSHIP
•Business Perception of IT Value
•Role of IT in Strategic
c Business
Planning
•Shared Goals, Risk,
Rewards/Penalties
•IT Program Management
•Relationship/Trust Style
•Business Sponsor/Champion
SCOPE &
ARCHITECTURE
• Traditional, Enabler / Driver, External
• Standards Articulation
• Architectural Integration:
• Functional Organization
• Enterprise
• Inter enterprise
• Architectural Transparency, Agility,
Flexibility
• Manage Emerging Tech.
SKILLS
•Innovation, Entrepreneurship
•Cultural Locus of Power
•Management Style
•Change Readiness
•Career cro
ssover training
•Social, Political, Trusting
Interpersonal Environment
•Hiring and retaining
COMMUNICATIONS
•Understanding of Business
by IT
•Understanding of IT
by Business
•Inter/Intra
organizational
Learning/Education
•Protocol Rigidity
•Knowledge Sharing
effectiveness
•Liaison(s)
COMPETENCY/VALUE
MEASUREMENTS
GOVERNANCE
•Business Strategic Planning
•IT Metrics
•IT Strategic Planning
•Business Metrics
•Organization Structure
•Balanced Metrics
•Service Level Agreements
•Benchmarking
•Formal Assessments/Reviews
•Budgetary Control
•IT Investment Management
•Steering Committee(s)
•Prioritization Process
•Continuous Improvement
IT BUSINESS ALIGNMENT MATURITY CRITERIA
PARTNERSHIP
•Business Perception of IT Value
•Role of IT in Strategic
c Business
Planning
•Shared Goals, Risk,
Rewards/Penalties
•IT Program Management
•Relationship/Trust Style
•Business Sponsor/Champion
SCOPE &
ARCHITECTURE
•Traditional, Enabler/Driver,
External
•Standards Articulation
•Architectural Integration:
- Functional Organization
-Enterprise
-Inter enterprise
•Architectural Transparency,
Agility, Flexibility
•Manage Emerging Tech.
SKILLS
• Innovation Entrepreneurship
• Cultural Locus of Power
• Management Style
• Change Readiness
• Career crossover training
• Social, Political, Trusting
Interpersonal Environment
• Hiring and retaining
COMPETENCY/VALUE
MEASUREMENTS
COMMUNICATIONS
•Understanding of Business
by IT
•Understanding of IT
by Business
•Inter/Intra
- organizational
Learning/Education
•Protocol Rigidity
•Knowledge Sharing
•Liaison(s) effectiveness
·
•IT Metrics
•Business Metrics
•Balanced Metrics
•Service Level Agreements
•Benchmarking
•Formal Assessments/Reviews
•Continuous Improvement
GOVERNANCE
•Business Strategic Planning
•IT Strategic Planning
•Organization
Structure
Reporting/
•Budgetary Control
•IT Investment Management
•Steering Committee(s)
•Prioritization Process
IT BUSINESS ALIGNMENT MATURITY CRITERIA
PARTNERSHIP
·
·
·
·
·
·
•Business Perception of IT Value
•Role of IT in Strategic
c Business
Planning
•Shared Goals, Risk,
Rewards/Penalties
•IT Program Management
•Relationship/Trust Style
•Business Sponsor/Champion
SCOPE &
ARCHITECTURE
•Traditional, Enabler/Driver,
External
•Standards Articulation
•Architectural Integration:
- - Functional Organization
-Enterprise
-Inter
- Inter - enterprise
•Architectural Transparency,
Agility, Flexibility
•Manage Emerging Tech.
SKILLS
•Innovation, Entrepreneurship
•Cultural Locus of Power
•Management Style
•Change Readiness
•Career cro
ssover training
•Social, Political,
Education,
Cross- Trusting
Interpersonal Environment
•Hiring and retaining
Level 5
Strategic
Alignment
Maturity
Summary
Level 3
Level 4
•Optimized process
•COMMUNICATIONS: Informal, pervasive
•COMPETENCY/VALUE: Extended to external partners
•GOVERNANCE: Integrated across the org & partners
•PARTNERSHIP: IT-business co-adaptive/improvisational
•SCOPE & ARCHITECTURE: Evolve with partners
•SKILLS: Education/careers/rewards across the organization
•Improved/ managed process
•COMMUNICATIONS: Bonding, unified
•COMPETENCY/VALUE: Cost effective;Some partner value;Dashboard managed
•GOVERNANCE: Managed across the organization
•PARTNERSHIP: IT enables/drives business strategy
•SCOPE & ARCHITECTURE: Integrated with partners
•SKILLS: Shared risk & rewards
•Established focused process
•COMMUNICATIONS: Good understanding; Emerging relaxed
•COMPETENCY/VALUE: Some cost effectiveness; Dashboard established
•GOVERNANCE: Relevant process across the organization
•PARTNERSHIP: IT seen as an asset; Process driver;Conflict seen as creative
•SCOPE & ARCHITECTURE: Integrated across the organization
•SKILLS: Emerging value service provider;Balanced tech & business hiring
Level 2
Level 1
•Committed process
•COMMUNICATIONS: Limited business/IT understanding
•COMPETENCY/VALUE: Functional cost efficiency
•GOVERNANCE: Tactical at Functional level,occasional responsive
•PARTNERSHIP: IT emerging as an asset; Process enabler
•SCOPE & ARCHITECTURE: Transaction (e.g., ESS, DSS)
•SKILLS: Differs across functional organizations
•Initial/Ad-Hoc process
•COMMUNICATIONS: Business/IT lack understanding
•COMPETENCY/VALUE: Some technical measurements
•GOVERNANCE: No formal process,cost center, reactive priorities
•PARTNERSHIP: Conflict; IT a cost of doing business
•SCOPE & ARCHITECTURE: Traditional (e.g., acctng, email)
•SKILLS: IT takes risk, little reward; Technical training
Strategic Level 5 •Optimized process
Alignment •COMMUNICATIONS: Informal, pervasive
•COMPETENCY/VALUE: Extended to external partners
Maturity
•GOVERNANCE: Integrated across the org & partners
Summary •PARTNERSHIP: IT-business co-adaptive/improvisational
•SCOPE & ARCHITECTURE: Evolve with partners
•SKILLS: Education/careers/rewards across the organization
Level 1
•Initial/Ad-Hoc process
•COMMUNICATIONS: Business/IT lack understanding
•COMPETENCY/VALUE: Some technical measurements
•GOVERNANCE: No formal process,cost center, reactive priorities
•PARTNERSHIP: Conflict; IT a cost of doing business
•SCOPE & ARCHITECTURE: Traditional (e.g., acctng, email)
•SKILLS: IT takes risk, little reward; Technical training
Primary Objective of Assessment:
• Agree that criterion needs to be improved
• Agree that a criterion is good, but can be
better
• Disagree with how good/bad a criterion is
Level 1 – Initial/Ad Hoc Process
• Lowest level of strategic alignment
• Understanding of IT by business is low
• Investment in IT is underleveraged
Level 2 – Committed Process
• Committed to begin process for Strategic
Alignment Maturity
• View IT as an asset to the organization
• Directed at local situations or functional
organizations
• Alignment at the level is difficult to achieve
• Potential opportunities are recognized
Level 3 – Established Focused Process
• Concentrates on governance, processes, and
communications toward specific business
objectives
• Needs better governance to invest IT dollars
• Focus on business processes that generate
long-lasting competitive advantage
• Effectively communicate its vision and get
“buy-in” from employees and management
Level 4 – Improved/Managed Process
• Leverage IT assets on an enterprise-wide
basis
• Focus on driving business process
enhancements to gain competitive advantage
• Views IT as an innovative and imaginative
strategic contributor
• Capitalize on information and knowledge
• Utilize IT assets by deploying enterprise-wide
architecture
Assessing Strategic Alignment Maturity
• This does not fit the organization, or the
organization is not very effective
• Low level of fit for the organization
• Moderate fit for the organization, or the
organization is moderately effective
• Fits most of the organization
• Strong level of fit throughout the organization,
or the organization is effective
Strategic Alignment Process
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Set the Goals and Establish a Team
Understand the Business-IT Logic
Analyze and Prioritize Gaps
Specify the Actions (Project Management)
Choose and Evaluate Success Criteria
Sustain Alignment