March 6, 2009

Alignment 2.0

Yesterday I attended the vijfmaart symposium organized by SBIT at the University of Tilburg. There were several intersting presentations and many old friends to connect to. Interesting to see that several of my former classmates ended up in jobs which somehow relate to strategy, alignment, architecture etcetera.

One of the speakers was Eric Sluis, CIO at Achmea/Interpolis. He discussed several interesting things. What really caught on, for me, was the model that he uses for enterprise architecture. This model is called "the delta method" and is developed/used by novius. The good thing about his way of thinking is pretty much in line with what several architects have claimed in the past: the method doesn't work. Select a method, adapt it to what works for you and get to work.

Another interesting speaker was professor Venkatraman (a.k.a. Venkat) who did some groundbreaking work with Hendersson on Alignment in the 1980s and 1990s. Alignment is an important aspect of the information management curriculum at Tilburg University, which exists 25 years this year. Venkat was asked to look back on the last 25 years and present his latest insights on alignment. He started with a brief overview of the original view on alignment issues:

After explaining the basics of this way of thinking, we discussed several recent trends such as Moore's Law, Metcalfe's Law, the bandwith law, but also changes in the business context such as increased (pressure for) agility. Central to his latest insights on alignment (dubbed alignment 2.0) are two observations:
  1. IT (and business IT alignment) is a shared responsiblity by business and IT
  2. Business are increasingly focussed on balancing the need to innovate with IT on the one hand and to implement and leverage their innovations on the other.
This leads to a new 2x2 matrix and 4 new perspectives on alignment:

  • For cost centers, the focus is on creating a best class global IT infrastructure. The driver for the business case is the lowest delivered cost benchmarked against external referents; activities are not directly connected to business strategy yet it is seen that IT is necessary to run the business.
  • For profit centers, the focus is on spporting current business operations. The driver for the business case is the contribution to customer value creating and delivery by achieving current profitability levels. This is achieved by supporting all aspects of the enterprise operations.
  • For growth centers, the focus is on shaping future growth trajectories through new business model innovations. The driver for the business case is the exploration of different avenues for growth with IT, and examining the transformational changes required to rebuild the business models.
  • For invetment centers, the focus is on influencing the future rowth trajectories through selective experimentation. The driver for the business case is allowing for experimentation of how IT could create and shape new business models.

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