Tallon PPT

7/28/2019 Tallon PPT

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COMPETING PERSPECTIVES ON THE LINK

BETWEEN STRATEGIC INFORMATION

TECHNOLOGY ALIGNMENT AND

ORGANIZATIONAL AGILITY:

INSIGHTS FROM A MEDIATION MODEL

Authors: Paul P. Tallon & Alain Pinsonneault

Prepared by:

Group 6


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INTRODUCTION

Strategic IT Alignment

Depicts the way in which a firm uses IT to achieve

improved performance and competitiveness

Alignment is the capacity to demonstrate a positive

relationship between IT and financial measures ofperformance

Organizational Agility

Ability of a firm to rapidly change or adaptin response to changes in the market

High degree of organizational agility can help a

company to react successfully to the emergence of

new competitors


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CASE FACTS

The case aims at explaining a positive and

significant link between alignment and agility and

between agility and firm performance

It also shows that:

The effect of alignment on performance is fully

mediated by agility

Environmental volatility positively moderates the

link between agility and firm performance

Agility has a greater impact on firm performance

in more volatile markets


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CONCEPTUAL MODEL


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WHATIS AGILITY?

Question 1


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AGILITY

The capability of a company to rapidly change or

adapt in response to changes in the market.

A high degree of organizational agility can help acompany to react successfully to the emergence of

new competitors, the development of new industry-

changing technologies, or sudden shifts in overall

market conditions.

Agility has emerged as a key business factor


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EXPLAINTHEPARADOX - "KEEPING IT RESOURCES

INCLOSEPROXIMITYTOACTIVITIESTHATNEEDTO

CHANGEALLOWSFORRAPIDRESPONSIVENESSTO

CHANGE"

Question 2


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The pursuit of alignment requires IT to be deeply

embedded in key business activities

Keeping IT resources in close proximity to activities

that need to change allows for rapid

responsiveness to change. So it essentially means

that alignment between IT and business strategy is

positively associated with agility.


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Through alignment the entire process gets

responsive to any changes and hence we can say

that agility is improved

On the other hand, embedding IT into business

activities can lead to extremely routine activities

that hurt agility by limiting a firms strategic choices


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So there is an attempt for a tradeoff between short-

term performance benefits from alignment and long

term benefits from agility.

It essentially means alignment is beneficial more for

short term while agility is useful more for long term.


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WHATARETHETWOMODERATINGFACTORS

DISCUSSEDINTHECONCEPTUALMODEL?

Question 3


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MODERATING FACTORS

IT flexibility positively moderates the link between

alignment and agility

Environmental volatility positively moderates the

relationship between agility and firm performance


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IT FLEXIBILITY

Firms with similar levels of alignment between their

IT and business strategy have different agility

depending on their respective IT infrastructure

flexibility.

IT flexibility can have two moderating effects

Further increase positive effect

Decrease some of the negative effect


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ENVIRONMENTALVOLATILITY

Defined as the frequency and extent of change in

critical market variables

Link between agility and firm performanceinfluenced by the rate of change in the environment.

In a stable setting , less to gain from agility or less

to lose from being slow to react.


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Firm

Performance

Environmental Turbulance AgilityEnvironmental Stability


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WHATARETHEPARALLELNOTIONSOFREACH

ANDRICHNESS?

Question 4


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EFFECTOF IT FLEXIBILITY

IT flexibility can have two moderating effects

Further increase positive effect

Decrease some of the negative effect

Two properties of flexible IT Infrastructure are

Scalability

Adaptability

These are the parallel notions of reach & richness


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SCALABILITY

Extent to which IT capacity can expand or contract

Can be achieved in two ways:

o Building or acquiring additional resources

o using more recent technologies - grid computing

Scalability enhances the response of IT to changing

competitive scenarios and helps achieve flexibility


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ADAPTABILITY

Interoperability of data structures and Portability of

applications to different OS

Can be achieved in following way

Middleware that integrates data and allow information

sharing

Adaptability makes system robust through sufficient

information sharing and helps increase its

applicability


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DOESTHERESULTSFROMTHEPAPERSUPPORT

THECLAIM "ALIGNMENTENABLES AGILITY"?

Question 5


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ALIGNMENT ENABLES AGILITY

Two Hypothesis: H2a: Alignment between IT and business strategy

is positively associated with agility H2b: Alignment between IT and business strategy

is negatively associated with agility

H2A is supported and H2B is negated

Significance levels (Beta = 0.36, p


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WHATARETHEMAINOBSERVATIONSFROM

EARLIERRESEARCHONSTRATEGIC IT

ALIGNMENT?

Question 6


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EARLIER RESEARCH

First, majority were of the view that Alignment is

positively associated with firm performance

This paper reveals that at the process level Alignment is

positively correlated with IT Business value

Also primary locus of alignment within the firm variesbased on differences in strategic foci and so alignment

is rarely the same in any two firms.

Second, significance ofmoderators has increased

in respect to study of alignment Research has found important differences in alignment

based on the type of strategy adopted by firms


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Do you see a connect between Slaughter and Tallon's

paper? Describe your view.

Common Question


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Slaughter Case

Proves that software processes should be aligned withthe company strategy

Tallon Case

Proves positive link between strategic IT alignment andorganizational agility

Yes there is a connect between both the cases

As agility is responsible for increased performanceof firm

Agility is positively correlated to IT alignmentAnd alignment itself is supported by software

processes

Thus it all forms a chain and it is as strong as theweakest link

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