A simulation-based approach for IT and business strategy alignment and evaluation

Abstract

The use of IT solutions and services has drastically changed the effectiveness of business strategies. Although IT seems to create competitive advantage, modern enterprises often fail to gain the expected business value from it. This paper aims to cope with this problem. It first discusses the two key factors in creating IT-enabled business value, the strategic alignment of business and IT strategies and the mapping and evaluation of them by using the balanced scorecard method. It then proposes a simulation-based approach for an effective formulation, alignment and evaluation of business and IT strategies in conjunction. An extended simulation model for a computer manufacturer supply chain depicts the high applicability of the proposed integrated approach.