It is commonly argued in the Information Systems literature that a major reason why organizations fail to exploit Information and Communication Technologies (ICTs) successfully is because of the lack of “alignment” between the Information Strategy, the Business Strategy and the Organizational Strategy. The provisions according to information sytem literature correspond to the real happenings in the real world. According to Campbell David, 2004, technological advancement has been embraced throughout various aspects of business, academics, finance and governance.
The paper addresses one key component of information system that is considered as a challenge by organizations and business entities in the aspect of using information technology.
The key value here is alignment between information, organization and business strategy. A major concern in this paper is to explain the term alignment in the context of information technology. The paper addresses reasons that make alignment one of the key values organizations seek to achieve. In this first issue of alignment the major concern is about transactions carried on in financial institutions.
Information technology has been adopted in the recent past as a tool for executing and reviving business strategies in financial institutions. The development of certain business strategies has been enhanced by consideration of values that correspond to alignment. Alignment is therefore, the capacity by a business such as a financial institution to demonstrate a strong positive relationship between latest information technologies and the generally accepted financial guidelines. It calls for customer satisfaction, market share and product innovations.
These measures are all essentials in value and adopting such determines the stability and the outcome of a financial institution. Before alignment financial institution needs to assemble all available information technology and carry on with feasibility study. This is because the effectiveness of a computer squarely depends on its capacity to improve or malign the organizational units. Factors to consider before alignment Planning- the original process has to be planned and agreed upon by the managers of the financial institution.
Auditors should also be involved in this exercise for audits, re-examinations and readjustments of the whole project. Relation to benefits –alignment must be of benefit to the financial institution since it is a costly exercise. It is of no use to adopt latest technology if the problem is controllable by changing some management practises. This is according Culp Christopher, 2001. For example, outputs like profits and revenue do not call for information technology rather the size and organizational structure and number of staff that dictate the demand for additional computers.
Alignment must stick to its purposes to overcome all obstacles as resistance to change may come from many sources including the employees and customers. Advantages of alignment The latest technologies such as client sever internet, data warehousing has positive implications which include first, incremental profit gains. Second, internal alignment in an organization remains a success factor in employee’s ability to perform effectively and become a cutting edge provider of value to customers. Third, alignment acts as business intelligence solutions for organization that helps in management and efficient customer satisfaction.
For example, e-banking software where customers can access their bank accounts at home without necessarily going to the banking halls. Fourth, other than saving time it is also considered a secure method than transporting money to banks. Fifth, business intelligence solutions have been important aspects in financial institutions as they help to sort out effectively volumes of transactions within a short period of time. For example, pay roll software that is able to calculate thousand of employee’s monthly dues, deductions and contributions irrespective of their earning rates within a mater of seconds.
Computers have also been used to solve complicated business calculations and at the same time update them accordingly. Take for example where a customer gets a loan from a financial institution either on a reducing interest rate. The software will auto calculate the interests based on the number of years the customer will take to clear plus the principal amount and at the same time store the information. Sixth, alignment reduces the amount of paperwork used in various departments especially in printing, faxing and laminations.
This is because nowadays office memos and other information are shared online by use of internet between departments and even branches. Seven, alignment has played a key role in marketing and advertising new products through the internet. A customer can place an order and at the same time pay by transferring funds from a financial institution to account of the seller effectively. Disadvantages Alignment is a very costly exercise to an enterprise like financial institution in terms of prices and employee training as it calls for massive training. System change over might also be rejected by both the employees and the customers.
Sometimes computers breakdown and will definitely slow the process in financial institution slowing down the entire process. This leads to a massive loss and failure to satisfy customer needs. For example, slowing or breakdown of machines in a Forex bureau dealing with foreign exchange will loose sales since currency changes value every minute. Business alignment methods Nowadays, many business transactions are relying on an efficient IT support system. It is remarkable to note the improved professionalism and responsibility in corporate and technical fields.
Many companies and especially in the financial sector have invested massively in business IT and corporate ICT. This is a very important development in creation of personal responsibility in terms of accountability, capability and commitment. However, with the changing technology certain changes are felt through continuous exercise which cannot be exploited. New machines have to be budgeted or the old ones have to be upgraded from time to time. To achieve this objective the following steps must be put into consideration. First, planning which calls for implementation of traditional IT alignment techniques seen by many as the CEO’s work.
A successful IT/business alignment calls for a more interactive approach or dialogue between the IT managers. They need to clarify what the business expects, what it delivers and how to allocate (Watson Gregory, 2005). This is achieved through prioritization and putting into considerations the rules that empower and govern the IT department. A second plan or consideration used to bring about alignment is that IT should track, adapt and modify business level services. At the same time the use of information technology in financial institutions or any other entities should be done with a purpose of supporting appropriate support of services.
Another method is proper management of technological systems which helps to achieve the desired results through a consolidated service support by IT staff. A system need to be put in place to monitor and manage urgent or critical business services. The system should prioritize service requests to enable service delivery at promised levels and also track business processes at certain levels. It is important to note that worth methods are usually required to effectively manage the IT infrastructure and implement changes.
The chief executive officer and his or her managers need also to ensure that the set organization standards and expectations are met through proper implementation processes. Certain considerations such as model should be considered for purpose of implementing alignment and information technologies (Selznick Philip, 1952). This involves mapping of IT assets and planning for resources that support services at critical times. It identifies the resources needed to be assembled to deliver IT services. This is done at agreeable service while at the same time reducing costs.
A second consideration is measurement whereby the IT department should come up with methods of data collection and operational procedures all based on areas of functionality. According to Chester Arthur, 1994, the measurement methods should correspond with technology and be business oriented. In addition, the measures should ensure a more real time resource allocation decision. The consideration of various measurement principles gives an entity or enterprise the capacity to execute its duties fast. The methods applied by different entities in business alignment are deemed to measure up to set standards and cut down on costs.
Alignment of costs and deliver of services through technological application gives entities the capacity to run their operations in a more efficient manner. Validity of alignment as a goal The role played by ICTs is paramount and evident in real life applications in business and organizations. As a goal, alignment is seen to support productivity and new innovation across the entire world. ICT play a very important role on trade development. Application of information technology is also seen as a tool for infrastructure development.
Recently, the world economic performance has improved leading to global growth as a result of embracing information systems. The economic growth is seen to have an impact in both developed and developing countries with some developing countries recording a remarkable growth (Danis Wade, 2006). Most countries have recorded a positive growth of the gross domestic product. In addition international markets trade and industrial production has been boosted through alignment. Economic development has led to a smooth global supply chains that broaden the market.
A number of advantages arise as evidence that alignment is a valid consideration in the scope of information technology. First, ICT is used for research to provide an organization with basic information about how to improve on performance. Organizations consider putting in place certain measures necessary to acquire information from competitors (Daghfous Abdelkader, 2006). The acquired information is essential as it helps entities to achieve their goals. Second, in the current world of changes, it is important for every organization to consider evaluating measures that support alignment to out perform their competitors.
Application of ICT by entities thus promotes a common understanding of how transactions are carried within organizations at low cost. It is a future consideration that all entities should develop measures to fight threats of new entrants, threat exposed by bargaining powers of buyers, sellers, threat of substitute products and barrier to entry. According to Herman James, 2000, embracing information and communication technology will help to do away with threats imposed by five forces.
A third consideration is the fact of e-commerce which is a component of electronic business. The use of information systems in carrying on with business transactions online is a true reflection about the validity of alignment. The future of using information technology in the world especially in business transactions is very certain. The concept of globalization is playing a very big role in creation of favourable environment for trading. Creation of strong communication networks enables countries from different regions to carry on with business transactions online.
This is one major development of information technology embraced by both developed and developing states. Every state has the mandate to promote the application of information technology through application of the necessary measures. A fourth consideration that needs to be put in place is thorough training of individuals on how to use internet. This should be done in schools and other institutions that promote learning. Children at young age need to know how to apply technological information for purpose of establishing proper measures in business and other aspects of life.