IT Solutions and Business Goals: What Exactly is Alignment?

Why Aligning IT With Business Strategy is Important | An Example

If you’ve been an employee of any business, even for a short period of time, you’ve likely heard about the importance of alignment between an organization and its goals, and the perils of failing to get this right. 

In today’s digital economy, it’s imperative that the technology supporting a business’s goals is not only aligned but integrated into the strategy. It’s vital that the technology provides a solid yet flexible foundation for enabling attainment of the business goals. And, if you are charged with developing your organization’s technology to support its business goals, you need to be at the top of your game in strategic thinking.

As you might imagine, this isn’t as easy or as straightforward as it sounds. It takes skill in making the appropriate strategic decisions. It also takes insight into technology and a comprehensive understanding of the business goals.

In this blog, we examine how one major entertainment firm went from a powerhouse to a memory of the past because it did not align these key elements and how a Master of Information Systems Management can equip you with the skills you need to help a business avoid a similar fate.
 

The Blockbuster Saga 

Blockbuster’s rise and fall illustrates a classic example of misalignment between an organization and its goals. The entertainment company was a force to be reckoned with in the 1990s, with a controlling share of the market for home video rentals. The company provided movie rentals via VHS and BetaMax media to customers who came to their stores. Even though customers were often disappointed when the popular movie they had come in to rent was out of stock, Blockbuster essentially owned the home entertainment market. 

In the early 2000s, competition from Netflix’s DVD subscription-via-postal-mail model started to erode Blockbuster’s video onsite rental market share. Netflix was about convenience – it didn’t require customers to go get the movies they wanted to rent, and the popular movies they wanted to see were never out of stock. Customers identified the movies they wanted to watch through a website portal, which were then sent out in a serial fashion according to the customer’s list. 

At the same time, the Internet was experiencing rapid improvements on a number of technology fronts, which increased video transfer speed and improved website content delivery. Netflix made a strategic decision to pursue digital content streaming alongside the DVD subscription model. The company heavily invested in Internet technology that aligned with the business’s goal of becoming a fully digital media delivery provider. This was a harbinger for the demise of the physical media business model. 

Blockbuster, however, ignored the burgeoning interest in the Internet and in digital content delivery. Instead, its response to the demand for streaming digital home entertainment was to make a strategic decision to shelve the idea of digital delivery for later consideration, misaligning the business goals with the direction of the market. The company continued to focus on physical media for content delivery, doubling-down on this technology. 

In spite of the company’s customer demands for streaming media, Blockbuster failed to strategically align its technology with the market and the needs of the customers. The company focused on the customer in-store experience, and along with large ‘Movie Night’ snack sections in stores filled with classic theater food items, Blockbuster further invested in additional physical inventory of movies on VHS, DVD, Blu-Ray, and other entertainment storage media. 

In a world that had gone digital and no longer wanted physical media, Blockbuster became the largest location-based physical media content provider. And, just like the iconic buggy whip maker in a market clamoring for Ford automobiles, Blockbuster died a slow death as a result of misaligned strategic decisions. 

Back to the importance of alignment. In today’s digital economy, it’s imperative that the technology supporting the business goals is not only aligned, but integrated into the strategy. It’s vital that the technology provides a solid, yet flexible, foundation for enabling attainment of the business goals.

Is a Degree Right for Me?

Experience, combined with education, can help provide the tools you need to facilitate alignment between technology and business goals to achieve success. If you are a mid-career IT professional with experience in technical management roles, the right education can help you develop skills in strategic thinking. Education that focuses on business and technology alignment can help you develop understanding of the elements that make up strategy, IT strategic planning, tactics, and execution. Expanding your abilities in strategic thinking increases the value of your skill set the higher up the ladder you go. 

If you’re interested in knowing more about these important aspects for the next step in your IT leadership career, consider a Master of Information Systems Management from the Forbes School of Business and Technology at Ashford University. The program is rich with insightful material that makes up these essential skills and is taught by faculty who have real-world industry experience in strategic decision-making and IT strategic planning. Combined with real world projects and examples of these elements in action will help you develop your own skills in strategic thinking. 

To learn more, contact an academic advisor today.

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Written by Dr. Steph YoungGonzaga, assistant professor in the Forbes School of Business & Technology® at Ashford University.

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