STRATEGIC ALIGNMENT An Approach to the Harmonisation of Business and Information Systems ...

332 Pages·2008·12 MB·English

STRATEGIC ALIGNMENT
An Approach to the Harmonisation of Business
and Information Systems Strategies
A Thesis submitted for the Degree of Doctor of Philosophy
by
Bob Thurlby
Department of Electronics and Electrical Engineering
Brunel University
May 1998
Abstract
Information Systems are fundamental to both the day to day operations and
competitiveness of most organisations. As the rate of change in organisations
continues to increase this dependency has become more critical. However methods for
determining the Information Systems that an organisation needs have not moved
forward to reflect these increases in organisational turbulence and new capabilities
offered by Information Technology.
Strategic Alignment is proposed as a new method for Information Systems Planning
which recognises the dynamic role of Information Systems as an agent of change and
to enable organisations to model and determine how Information Systems can be
exploited to improve and transform Business Strategies. Important innovations in the
method are incorporation of feedback to ensure that analysis of the interaction of the
Information Systems and Business objects within the model is bidirectional. Also that
the development of an Information Systems Plan is a complex process which has to be
modular. This enables it to incorporate existing results and information where
applicable and to deliver its results incrementally. The Strategic Alignment Method
has been developed from extensive research which used the Electricity Supply
Industry as the source of information because it was facing immense change after its
privatisation. As a result detailed case study material is presented as well as the
Strategic Alignment Methodology.
Maintenance of an Information Systems Plan is also addressed. Once an Information
Systems Plan is produced, its implementation can take a number of years. During this
time the changes in Business Strategy and Information Systems capability will
change. Strategic Alignment proposes methods that will ensure the ongoing
harmonisation of the Strategies during the implementation of the plan.
The practical nature of the research is reflected in the Addendum which describes the
work that has been done to incorporate Strategic Alignment into ICL's services
methodology and to train ICL Consultants in its use.

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Contents
Acknowledgements
Table of Acronyms
Chapter 1. Background
1.1 The Problem to be Investigated
1.2 Historical Perspective
1.2.1 Development of I.S. Planning Methods
1.2.2 Limitations of Earlier Methods
1.3 Strategic Information Systems Planning
1.3.1 Original Ideas and Concepts
1.3.2 Recent Methods and Tools
1.4 Difficulties with the Earlier Approaches
1.4.1 Existing Methods and their Limitations
1.4.2 Process or Data Dominance
1.4.3 Time Needed to Implement the Plan
1.5 Structure of the Research and Investigations
Chapter 2. Purpose of the Work
2.1 Introduction
2.2 Management in the Nineties Research Programme
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Chapter 2., Section 2.2 (contd.)
2.2.1 Background and Purpose
2.2.2 Findings
2.2.3 Comments on the Findings
2.2.4 Concept of Strategic Alignment
2.3 Developing a Different Approach
2.3.1 Why a Different Approach is Needed
2.3.2 The Start Point and Building Blocks
2.3.3 The Domain Addressed
2.3.4 Relevance of the Strategic Alignment Concept
Chapter 3. The Requirements to be Investigated
3.1 The Business Requirement
3.1.1 The General Need
3.1.2 The Management of Change
3.1.3 Selection of a Specific Industry
3.2 The Electricity Supply Industry
3.2.1 Why the Electricity Supply Industry was Chosen
3.2.2 Change in the Electricity Supply Industry
3.2.3 The Needs of the Electricity Supply Industry
3.3 The Information Systems Requirement
3.3.1 The Lessons from Management in the Nineties
3.3.1.1 Change or Transformation
3.3.1.2 The Role of IT as an Agent of Transformation
3.3.1.3 Culture, Skills and Other Softer Issues
3.3.2 The Importance of "Process"
3.3.3 Integrating Data, Process and Technology Architectures

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Chapter 4. Development of the Method
4.1 The Approach
4.2 Specification of the Requirement
4.2.1 The Evolution of I.S. Planning Methods
4.2.2 The Basic Model on Which to Build
4.3 The Structure of the Initial Projects
4.4 Results from the Initial Projects
4.4.1 Methodology Design
4.4.2 Strategic Alignment Model Objects
4.4.3 Cultural Results
4.5 The Second Projects
4.5.1 Purpose and Objectives
4.6 Results from the Second Projects
4.6.1 Revisions and Extensions to the Methodology
4.6.2 Revisions and Extensions to the Model Objects
4.6.2.1 Business Strategy Domain Objects
4.6.2.2 Process and Organisation Domain Objects
4.6.2.3 I.S. Infrastructure Domain Objects
4.6.2.4 I.T. Capability Domain Objects
4.6.3 Further Cultural Issues
4.7 Proving the Results
4.7.1 The Final Projects
4.7.2 Final Revisions to the Methodology and the Model
4.8 Summary of the Results

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Chapter 5. The Method and the Supporting Model
5.1 The Framework of Strategic Alignment
5.2 The Method
5.2.1 Introduction
5.2.2 Definition of the Major Steps
5.2.3 The Individual Activities
5.2.3.1 Enterprise Investigation Activities
5.2.3.2 Skills and Culture Activities
5.2.3.3 Architectural Modelling Activities
5.2.3.4 Technology Investigation Activities
5.2.3.5 Model Iteration and Analysis Activities
5.2.4 Creation of Alignment
5.2.4.1 Definition of the Matrices
5.2.4.2 Populating and Scoring the Matrices
5.2.4.3 Definition of the I.S. Strategy Plan
5.2.4.4 Use of Strategic Staircases
5.3 Reporting in a Strategic Alignment Project
5.3.1 Introduction
5.3.2 Intermediate Reports
5.3.3 Final Report (I.S. Strategy Plan)
5.4 Structure and Content of the Supporting Model
5.4.1 Description of the Model
5.4.2 Definition of the Object Types
5.4.3 Linkages between the Object Types
5.5 Managing a Developed Model
5.5.1 A Strategic Alignment Dictionary
5.5.2 Reviewing Change and Progress

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Chapter 6. Discussion of the Results
6.1 The Applicability of Strategic Alignment
6.1.1 The Applicability of the Model
6.1.2 The Applicability of the Methods
6.2 The Usability of Strategic Alignment
6.2.1 The Usability of the Methods to Develop a Model
6.2.2 The Usability of the Methods to Maintain a Model
6.3 The Requirement for Software Support
6.3.1 Automating Documentation and Analysis
6.3.2 SASARS: Strategic Alignment Scoring and Ranking System
6.4 The Relevance of Strategic Alignment
6.4.1 The Scope of the Model
6.4.2 The Rigour of the Methods
6.4.3 The Support to the Business
6.4.3.1 Development of I.S.
6.4.3.2 Enablement of Radical Rethinking
6.4.3.3 Identification of Paradigm Shifts
Chapter 7. Conclusions
7.1 Further Work
7.1.1 Potential New Object Types
7.1.2 Extensions to the Methods
7.1.3 Developments to the Supporting Software
7.1.3.1 Model Simulation
7.1.3.2 Integration with Software Generation Tools

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Chapter 7 (contd.);
7.2 Strategic Alignment
7.2.1 The Model and the Methodology
7.2.2 It's Importance and Contribution
7.2.3 The Value of the Research Method
References
Addendum: The Adoption of Strategic Alignment
Appendices
Appendix 1: Description of the Research Projects
Appendix 2: Strategic Alignment Questionnaire
Appendix 3: Results of the NORWEB and YEG Projects
Appendix 4: ESKOM Strategic Alignment Model

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Acknowledgements
The research that produced this thesis would have not been possible without the
support and faith of a large number of people.
The faith in me displayed by Neil Bagshaw and David Teague, my managers in ICL,
to allow me to go to Brunel University was instrumental in starting the work. Also the
faith that my supervisor at Brunel University, Professor Gerry Musgrave, showed in
letting me decide to research exactly what I wanted was very significant. I hope that
these people feel that the results have justified their commitment.
During the research I was supported by a number of people to whom I owe a great
deal. Two are especially significant. The first is Hugh MacDonald, formerly of ICL,
who introduced me to the original ideas of Strategic Alignment and encouraged me to
take them further. The second is Gerry Musgrave who encouraged me throughout the
whole time and forced me to think very hard about what I was doing.
Finally, I must thank my wife, Liz. She supported and encouraged me throughout the
whole of the research, helped me through periods of doubt when I thought that I
would never get it done and gave me the physical and mental space to do the work.

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Table of Acronyms
BSP Business Systems Planning
CRUD Create, Read, Update, Delete
CSF Critical Success Factor
DAMS Distribution and Asset Management System
DITS Developing Information Technology Strategies
DSM Demand Side Management
ESI Electricity Supply Industry
ESKOM Electricity Supply Commission
GIS Geographical Information System
I.S. Information Systems
I.T. Information Technology
JIT Just in Time
JV Joint Venture
KPI Key Performance Indicator
LSDM Logical Systems Design Method
MIT9Os Management in the Nineties
NOR WEB North West Electricity Board
REC Regional Electricity Company
ROI Return on Investment
SAP Strategic Alignment Process
SECV State Electricity Commission of Victoria
SISP Strategic Information Systems Planning
SSADM Structured System Analysis and Design Method
UKLF U.K. Land Forces
YEG Yorkshire Electricity Group
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