Strategic Business Alignment: The Impact of Project Prioritisation on Information
Author: Prince, Colin
Supervisor: Professor Pieter Steyn
Date: September 2010
Alignment continues to grow in importance today as companies strive to link technology and business (Papp:1995, Luftman:1996, Luftman & Brier:1999) to create a competitive advantage above their competitors. Alignment addresses both: doing the right things (effectiveness) and doing things right (efficiency). Information Services (IS) need to sustain this harmony in its relationship with business whilst continuously striving to mature this relationship to maximise business return-on-investment in it’s IS portfolio of services and products.
Alignment addresses both how the IS department is in harmony with the business, and how the business should, or could be in harmony with IS. Alignment maturity evolves into a relationship where the function of IS and other business functions adapt their strategies together. Achieving alignment is both evolutionary and dynamic. IS requires strong support from senior management, good working relationships, strong leadership, appropriate prioritization techniques, trust, and effective communication, whilst maintaining a thorough understanding of the business and technical environments. Achieving and sustaining alignment requires focusing on maximizing the enablers and minimizing the inhibitors that cultivate the integration of IS and business.
Continuous business process redesign and reengineering as a technology could be use to achieve competitive business advantage. This advantage can be enhanced by the appropriate application of information technology (IT) as a driver or enabler of the business strategy.
Through the review of applicable literature supported by a customer survey and practical experience, the researcher confirmed that project prioritisation can assist PetroSA to – Define portfolios of current and potential investments which characterise the particular investment alternatives relevant to that business strategy; Assign evaluation criteria, such as financial, risk-related and strategic fit, as appropriate for each individual portfolio; Allocate an appropriate portion of discretionary funds to each portfolio, and fund individual projects in each portfolio until available funds run out.
The Balanced Scorecard Programme Management (BSPM) system created by Cranefield’s Professor Pieter Steyn, pioneered the enhancement of organisational wide effectiveness and efficiency through project portfolio management. According to Professor Steyn (2003:4), ”when balanced scorecard (BS) guided formulation and strategy description as well as criteria for measuring organizational benefits are coupled with programme management (PM), a BSPM system is created – a system which enables integrated and coordinated management of the organization’s value chain processes from suppliers to external customers” (see figure 2.11).
Core to its success, IS should demonstrate their value to the business in terms that the business can understand. A balanced scorecard ‘dashboard’ that demonstrates the value of IS in terms of contribution to the business should serve this purpose. Key performance indicators should be tied to criteria that clearly define the rewards and penalties for surpassing or missing the objectives.