THE NEED FOR ORGANISATIONS TO ALIGN BUSINESS PROCESSES WITH STRATEGY

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Alignment perspectives in SAM

Henderson & Venkatraman (1993) classify alignment perspectives under two categories: business strategy driven perspectives, which consists of strategy execution and technological potential, and IT strategy driven perspectives, which encompasses both competitive potential and service level (figure 3). Furthermore, Coleman & Papp (2004) argue about eight perspectives instead of four, and they add Organization IT infrastructure, IT infrastructure Strategy, IT organization infrastructure and Organization infrastructure strategy, which, all emphasize on IT blocks rather than Strategy. All those perspectives are working on organizational level on SAM and they only occur when three of four domains are in alignment. Avison et al. (2002) observe that changes can’t occur just on one domain without impacting on the rest; and at least it must be shown in two domains. However they claim that those perspectives are based on simultaneous assessment and are composed of three components designing the blocks; Anchor, Pivot, and Impact (Avison et al., 2002).

Business processes as the bridge between IT and strategy

As mentioned earlier, the perspectives in SAM provide guidance for management practice in business and IT alignment. In addition, The SAM model emphasizes a clear message in business and IT alignment: “IT should support the business and this will be more successful if the IT resources are developed and organized with the business strategy and processes in mind” (Gilbert, 2007). Thus Business Processes comes to be the bridge between Strategy and IT, especially in the strategy execution perspective. Furthermore, studies have posited that nowadays business strategy is based on firstclass business processes that provide high degree of customer service (Kettinger & Teng, 1998). Importance aside, what is not clear is how to maintain harmony between business process and business strategy to achieve the best outcome. Earlier, firms have sustained this harmony between business strategy and IT (Shamekh, 2008).

The need for organisations to align business processes with strategy

Porter (1985) stresses that strategy is thoroughly linked with how companies organize their activities or processes into value chains, which are, in turn, the basis for competitive advantage. However, little attention has been given to the strategic alignment of business processes, in comparison to the attention given to business and IT alignment. And recent literatures about business process – whether Business Process Management (BPM), Business Process Improvement (BPI), Business Process Reengineering (BPR), and Business Process Redesign – advocate the linkage of business processes with strategy as crucial for company success. Most reviews of business process management projects pressure that as many as 60 to 80% of those initiatives have resulted into breakdown (Kettinger & Teng, 1998; Abdolvand, Albadvi, & Ferdowi, 2008; Karim et al., 2007; Macintosh & Maclean, 1999). But when analysing success factors of business process initiatives, it appears that keys factors for a successful process change program are the effort range in depth and more importantly, the strategic impact. In fact Trkman (2010) argues that the lack of connectivity between business strategy and business processes endeavours is the main reason for failure.

The concept of fit in business strategy

Venkatraman (1989) argue that the concept of fit and its operationalization have been widely discussed in strategic management field by scholars such as Drazin & Van de Ven (1985); Joyce, Slocum, & Von Glinow (1982); Miller (1982); Schoonhoven (1981). Fit here refers to alignment; and the latter is phrased in strategy research with words such as matched with, contingent upon, consistent with, fit, congruence, and coalignment (Venkatraman, 1989). Venkatraman (1989) classifies fit according to two criteria: the number of variables in the fit equation, and the degree of specificity of the functional form of fit-based relationship. This classification provides precise definitions of fit, useful to test and recognize whether an organization has it or not. Hence the six perspectives that derive are namely: fit as moderation, fit as mediation, fit as matching, fit as gestalts, fit as profile deviation, and fit as covariation.

Business process definition

Basically, there is no service without process. Process has been defined in every area; it’s not essential to define process just within firms. People could think of process to achieve something. So, the Process refers to a series of actions, changes, or functions bringing up a result. Thus, Process could accomplish every goal/aim anywhere, among a number of people. As soon as process goes towards organization in order to obtain something, then, it’s not just process; it becomes business process. Several researchers defined a business process term in different views. For instance Melão & Pidd (2000) used limitation of Morgan’s machine to describe business process within deterministic perspective, while Jacobson (1995) quickly described it as “the set of internal activities performed to serve a customer”.

Contents :

• 1 Introduction
  • 1.1 BACKGROUND
  • 1.2 PURPOSE/OBJECTIVES
  • 1.3 LIMITATIONS
  • 1.4 THESIS OUTLINE
• 2 Research Method
  • 2.1 STAGE 1- DEVELOPING THE APPROACH
    • 2.1.1 Literature Review
    • 2.1.2 Developing the approach
  • 2.2 STAGE 2 – CONDUCTING DATA COLLECTION
    • 2.2.1 Designing the questionnaire
    • 2.2.2 Collecting case study evidence
  • 2.3 STAGE 3 – EMPIRICAL FINDINGS
  • 2.4 STAGE 4 – ANALYSIS AND DISCUSSION
  • 2.5 VALIDITY AND GENERALIZATION
    • 2.5.1 Validity
    • 2.5.2 Generalization
  • 2.6 CLOSING REMARKS
• 3 Alignment of strategy with business processes
  • 3.1 STRATEGIC ALIGNMENT OF BUSINESS AND INFORMATION TECHNOLOGY AND THE IMPORTANCE OF BUSINESS PROCESSES
    • 3.1.1 Strategic alignment of business and Information technology
    • 3.1.2 Business processes as the bridge between IT and strategy
    • 3.1.3 Summary of section
  • 3.2 THE NEED FOR ORGANISATIONS TO ALIGN BUSINESS PROCESSES WITH STRATEGY
    • 3.2.1 Strategic alignment of business processes as a competitive advantage
    • 3.2.2 Summary of section
  • 3.3 BUSINESS STRATEGY AS BASIS FOR ALIGNMENT
    • 3.3.1 Definition of strategy
    • 3.3.2 The concept of fit in business strategy
    • 3.3.3 The fit among company’s activities as a competitive advantage: value chain
    • 3.3.4 BSC as a tool for aligning business activities with the organisation vision
    • 3.3.5 Summary of section
  • 3.4 HOW BUSINESS PROCESS THINKING ENABLES THE ALIGNMENT OF BUSINESS STRATEGY AND ORGANIZATION’S ROUTINES
    • 3.4.1 Business process definition
    • 3.4.2 Typology of business processes
    • 3.4.3 Success factors for effective business process and strategy alignment
  • 3.5 THE NEED FOR AN APPROACH FOR STRATEGIC ALIGNMENT OF BUSINESS PROCESSES
  • 3.6 CLOSING REMARKS
• 4 The approach for aligning strategy with business processes
  • 4.1 STRATEGY DIRECTION, CHOICE AND LINKAGE
  • 4.2 BUSINESS PROCESS
  • 4.3 PEOPLE
  • 4.4 MANAGEMENT COMMITMENT AND SUPPORT
  • 4.5 ORGANISATIONAL CULTURE
  • 4.6 IT/IS SUPPORT
  • 4.7 ORGANISATIONAL STRUCTURE
  • 4.8 CONTINUOUS IMPROVEMENT THROUGH PERFORMANCE MEASUREMENT
  • 4.9 CLOSING REMARKS
• 5 Empirical findings
  • 5.1 ARKITEKTKOPIA AB
    • 5.1.1 Background
    • 5.1.2 Business Process management Project in ARKITEKTKOPIA AB
    • 5.1.3 Business process and Business Strategy
    • 5.1.4 Alignment factors
  • 5.2 INTERSPORT JÖNKÖPING-AREA
    • 5.2.1 Background
    • 5.2.2 Business Process management Project in Intersport Jönköping-AREA
    • 5.2.3 Business process and Business Strategy
    • 5.2.4 Alignment factors
  • 5.3 HANDELSBANKEN JÖNKÖPING
    • 5.3.1 Background
    • 5.3.2 Business Process management Project in Handelsbanken Jönköping
    • 5.3.3 Business process and Business Strategy
    • 5.3.4 Alignment factors
  • 5.4 FLINTAB AB
    • 5.4.1 Background
    • 5.4.2 Business Process management Project in Flintab AB
    • 5.4.3 Business process and Business Strategy
    • 5.4.4 Alignment factors
  • 5.5 CLOSING REMARKS
• 6 Discussion and analysis
  • 6.1 THE NATURE OF BUSINESS PROCESS AND STRATEGY ALIGNMENT IN SMES
  • 6.2 THE IMPORTANCE OF ALIGNING BUSINESS PROCESSES WITH BUSINESS STRATEGY IN SMES
    • 6.2.1 Business Process in SMEs
    • 6.2.2 Business Strategy in alignment
  • 6.3 THE MOST IMPORTANT ALIGNMENT FACTORS IN SMES
    • 6.3.1 Human Factor
    • 6.3.2 Information technology
    • 6.3.3 Organizational Culture
    • 6.3.4 Management
  • 6.4 THE FACTORS WITH LESS IMPORTANCE IN SMES
  • 6.4.1 Organizational structure
  • 6.4.2 Performance measurement
• 7 Conclusion and recommendations
  • 7.1 SUMMARY OF THE RESULTS
    • 7.1.1 The approach for aligning strategy with business process
    • 7.1.2 Business processes and strategy alignment factors in SMEs
  • 7.2 GENERALIZATION
  • 7.3 LIMITATIONS
  • 7.4 RECOMMENDATIONS FOR FURTHER STUDIES
• 8 References
• 9 Appendix
  • 9.1 APPENDIX 1: QUESTIONNAIRE DESIGN
    • 9.1.1 The method
    • 9.2 The questionnaire content
  • 9.2 APPENDIX 2: QUESTIONNAIRE

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