Mr Mda Osobu

MDA Osobu
Student no: 212493430
M-Tech Business Information Systems
IT Projects & Services
Individual Assignment

Table Of Contents
Executive Summary ………………………………………………………………….3

1. Introduction………………………………………………………………………………………………………………….3

2.0 Cell C (Competitive Potential Alignment Perspective) ………………………..4

2.1. Financial performance …………………………………………..……………………………………..4 2.2. Customer’s perspective …………………………………………..………………………………………4 2.3 Internal processes …………………………………………..………………………………………4 2.4 Learning and Growth …………………………………………..………………………………………5

3. Strategy Execution Alignment Perspective ……………………………………….………………….5

4. Technology Transformation Alignment perspective …………………………………………………..5 5. Service Level Alignment Perspective …………………………………………..…………………6

6. Competitive Potential Alignment Perspective ……………………………………..…………………6

References ………………………………………………………………………………7

Executive Summary
Businesses that spend a considerable amount of resources on IT would try to derive maximum utility from their IT infrastructure. In order to do this a suitable Business / IT alignment model needs to be adopted. The question then is which alignment model is the most suitable? Though no single model is considered to be the best, the Business / IT alignment model adopted by businesses have their roots in the Strategic Alignment Model (SAM) . In this paper I will be analysing strategic Alignment Models adopted by 4 companies , viz a viz the 1 ) business strategy, 2 ) IT strategy ,3) Organisational and infrastructural processes 4) information systems infrastructure and processes .

1 Introduction
Traditionally information technology was relegated to the back end of business (administrative support) , but more recently businesses are beginning to realise IT can actually offer more if properly aligned with their business strategy. That by not looking at IT as just another cost or variable in business and actually knitting IT into the fabric of its strategy there are a lot of synergy benefits to be had.

For organizations to stay competitive in a dynamic business environment, they have to determine and understand how to manage their Information System in a strategic manner. This means businesses will have to do away with the traditional ascription that IT is just another “cost of doing business” and start seeing it as an integral part of the business strategy. To do this organisations have to strive for strategic alignment. “A strategy expresses an organization’s ambitions, sets out its chosen direction and describes the principal initiatives and projects necessary to achieve its mission.” (FSN & Oracle, 2008) .Hence strategic alignment is the process of connecting organisational strategy and goals with business units and its employees. According to Henderson & Venkatraman (1989:4) “Strategy – IT relationship should be conceptualized in terms of two fundamental dimensions and their alignment.” These dimensions include 1) Strategic integration 2) Functional integration and 3) Cross domain Alignment.

While strategic integration requires organizations to achieve external alignment and internal arrangement, functional integration require organizations to align their business strategy and IT strategy it also requires that organizational infrastructure and processes and I/S infrastructure and processes should also be aligned. Cross domain alignment is the fabric that connects and links them all.

2.0 Cell C (Competitive Potential Alignment Perspective) :
A good example of a I/S strategically aligned company is Cell C. Cell C is the third largest mobile communication provider in South Africa. They offer a wide range of mobile communication services to their 8.2 million and growing customer base. I would say Cell C’s strategic alignment model is the competitive potential alignment perspective .In order for Cell C to stay competitive in the mobile technology services arena it needs to offer cutting edge technology and superior service. Cell C managed to deliver better voice call quality by operating a dual band network running on both the 900 MHz and 1800 MHz frequencies thereby giving customers a stronger signal both indoors and outdoors. Cell C also has the best mobile data network infrastructure in place using the latest technology HSPA+. The technology currently covers 92 % of the country. This helped it amass over 120,000 mobile data customers. Cell C’s performance will be measured using the balanced score card model.

2.1 Financial performance: Cell C after 10 year of operation still hasn’t declared a net profit. They recently got another R1.5billion cash injection from the share holders to keep the company afloat . The company is indebted to the tune of R 8 billion and is still looking to take on more to finance the roll out of its HSPA+ network. In light of all these as of yet Cell C’s share holders are yet to receive any return on investment .

2.2 Customer’s perspective: Cell C’s customers are generally happy with their service offerings. The services offered cost significantly less when compared to other operators. A good example is the 99cent per minute call offer which allows customer\s pay only 99c for calls to any network within the country. Another in a series of products targeted at keeping customers happy is the “Mambo5” offering which replaces customers’ phones every year. The company has a world class call center with an average hold time of 25 seconds alongside customer service centers in all the major malls making access to service and support trouble free.

2.3 Internal processes: The Company plans on improving its internal process by implementing a comprehensive human resources strategy. The organisational goal is being broken down split among various departments. With each departmental goals identified they are further broken down to each individual working within a department. The company says “This ensures that there is complete alignment between individual targets and corporate strategy”. The company hopes to improve its internal process by paying closer attention to its IT infrastructure, networks and call centres finding performance issues and resolving them.

2.4 Learning and Growth: Cell C defines its corporate culture as dynamic and youthful this is true when you consider that the average age of employees is 33. They currently employ a little over 1280 staff members of which 90% are from previously disadvantaged backgrounds and over 47% of this number is female. These staff members enjoy advancement opportunities and the company’s investment in skills development exceeds minimum legislative requirement.
Cell C recently retrenched about 150 staff members citing over staffing and restructuring as a reason. I’m of the opinion that this could dampen staffs moral.

The result from looking at the balance score card as measure of performance of Cell C shows that while customers are happy the company as been unable to take advantage of this to make the company profitable. An overview of the result shows the company’s performance is below par and that a lot needs to be done to bring the company to profitability.

The strategic alignment model classifies companies IT alignment strategy into 1 of 4 models.

3. Strategy Execution Alignment Perspective
SMD (Salvage Management and Disposal) : A company that specializes in automotive salvage management services. They store and sell salvage cars for insurance company at the highest price possible through auction. SMD is business strategy driven because the Information system infrastructure in place is mainly used to support the business operations. Hence I would say they have a strategy execution alignment perspective in place. SMD has a database for storing information about salvage cars received from insurance companies, a IT infrastructure that supports the normal day to day business operations like email scanning, printing and fax. They operate a website that gives basic information about the company and gives customers information about their current salvage car stock and the next auction date.

4. Technology Transformation Alignment perspective
Wizzit A mobile banking product from The Bank of Athens South Africa aims at providing banking for the unbanked or under banked through mobile banking. With Wizzit most banking transactions are done on the cell phone with essential support services offered by a call centre . The founders identified that most people owned cell phones and considered it an easy way to provide banking to its target market. By letting its business strategy of banking the under banked drive it The Bank of Athens South Africa adopted the Technology transformation alignment perspective. Their IT strategy would involve investing heavily in mobile banking technologies and developing core competency in this area.

5. Competitive Potential Alignment Perspective
As stated previously Cell C operates based on the competitive potential alignment perspective. They hope that by providing consumer with the best and latest I/S infrastructure they will have some competitive advantage over rivals within the industry.

6. Service Level Alignment Perspective
A good example of a company that operates a service level alignment model
Is Zando. Zando is an online fashion retailer based in Cape Town. They deliver their services through their website at www.zando.co.za. All the products (clothes, shoes, accessories etc) demanded by customers have been provided online through website coding and databases. Users have the ability to choose from the inventory provided on the website and pay by card or cash on delivery. By doing this the business will save significantly on brick and mortar shop space, number of employees and other associated expenses.

In conclusion, the strategic alignment model helps businesses assess the alignment of its IT strategy and business strategy. In order for a business to achieve strategic fit using any of the 4 models management as to do some soul searching to ensure that the internal organizational processes are in harmony with the external strategy. Companies also have to achieve functional integration by ensuring that its IT planning and business planning are aligned.

References
(Henderson and Venkatraman 1989; J.C. and N. 1999; Brown, Cajee et al. 2003; Gebauer and Lee 2007; FSN and Oracle 2008; Assen, Berg et al. 2009; Khan 2011; C 2012; Clark 2012; Manson 2012; SMD 2012; Wizzit 2012; ZANDO 2012)

Assen, M. v., G. V. d. Berg, et al. (2009). Key Management Models: The 60+ models every manager needs to know. Harlow, Pearson Education. Brown, I., Z. Cajee, et al. (2003). "Cell phone banking: predictors of adoption in South Africa—an exploratory study." International Journal of Information Management 23: 381–394. C, C. (2012). Retrieved 28 August 2012 from http://www.cellc.co.za/.
Clark, J. (2012) Cell C to look at all alternatives before retrenching.
FSN and Oracle (2008) The Challenge of Strategic Alignment :The role of Scorecards & Dashboards in Strategy Execution.
Gebauer, J. and F. Lee (2007) Enterprise System Flexibility and Implementation
Strategies−Aligning Theory with Evidence from a Case Study.
Henderson, J. C. and N. Venkatraman (1989) Strategic Alignment:A Framework for Strategic Information Technology Management.
J.C., H. and V. N. (1999). "Strategic Alignment: Leveraging Information Technology For Transforming Organisations." IBM SYSTEMS JOURNAL 32(1): 12.
Khan, Y. (2011) Cell C announces broadband subscribers numbers and growth stats.
Manson, H. (2012) Zando rockets into SA ecommerce space.
SMD (2012). Retrieved 28 August 2012, from www.smd.co.za.
Wizzit (2012). Retrieved 29 August 2012, from www.wizzit.co.za.
ZANDO (2012). Retrieved 28 August 2012, from www.zando.co.za.

References: (Henderson and Venkatraman 1989; J.C. and N. 1999; Brown, Cajee et al. 2003; Gebauer and Lee 2007; FSN and Oracle 2008; Assen, Berg et al. 2009; Khan 2011; C 2012; Clark 2012; Manson 2012; SMD 2012; Wizzit 2012; ZANDO 2012) Assen, M Clark, J. (2012) Cell C to look at all alternatives before retrenching. FSN and Oracle (2008) The Challenge of Strategic Alignment :The role of Scorecards & Dashboards J.C., H. and V. N. (1999). "Strategic Alignment: Leveraging Information Technology For Transforming Organisations." IBM SYSTEMS JOURNAL 32(1): 12. Khan, Y. (2011) Cell C announces broadband subscribers numbers and growth stats. Manson, H SMD (2012). Retrieved 28 August 2012, from www.smd.co.za. Wizzit (2012). Retrieved 29 August 2012, from www.wizzit.co.za. ZANDO (2012). Retrieved 28 August 2012, from www.zando.co.za.