Strategic IT-alignment model

Henderson and Venkatraman’s Strategic Alignment Model links business strategy, IT strategy, organisational infrastructure and IT infrastructure. It helps leaders examine whether technology choices support the business and whether emerging technology should reshape the strategy. The framework is organised around two dimensions: strategic fit and functional integration.

When to use it

Apply the model when technology is material to delivering or changing the business strategy. IT strategy should not be designed or altered in isolation; alignment must be managed across external choices and internal operating arrangements.

The framework helps an organisation:

1. make the connection between business strategy and IT strategy explicit;
2. recognise how technology and information systems can support or redirect strategic choices;
3. improve the value created from IT across the company.

Origins

John C. Henderson and N. Venkatraman developed the Strategic Alignment Model through research begun in the late 1980s. Their work responded to information technology’s evolution from administrative support toward a potential source of strategic transformation. The model connects four domains through the concepts of strategic fit and functional integration.

What it is

• Strategic fit – the consistency between external strategic positioning and the corresponding internal infrastructure and processes.
• Functional integration – the connection between business choices and IT choices at both strategic and operational levels.

Together, the dimensions test two essential outcomes:

1. IT and organisational arrangements should enable the business strategy.
2. The IT infrastructure should fit the operational processes created by strategic choices.

The framework does not assume that business strategy always acts first. It offers several directions of alignment, each assigning a different role to business leaders, technology leaders and infrastructure.