Vision, Mission, and Strategy
DSM decided to use a business strategy that falls under the category: Technology Transformation. The type of strategy used was technology transformation because there was a need to develop an IT strategy that will align with the company’s vision and mission statement. At the turn of the 20th century, corporate leaders at DSM recognized the company’s need to diversify to ensure its survival. DSM’s vision statement calls for a radical shedding of the organization’s image as a petrochemical company, and through a process of complete divestiture, transforms it into a business enterprise that manufactures life sciences and performance materials products.
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DSM’s Vision 2005 calls for a commitment to reach €10 billion in sales. Also, corporate leaders were compelled to reach the said target with a mixed bag of sales, such that eighty percent of the said total revenue must come from specialties markets, while the rest must come from the sale of chemicals like caprolactam and melamine (Applegate, Watson, and Vatz 4). Newly hired CEO, Peter Elverding understood the importance of a critical strategy that calls for the development of a new Information Communication Technology in the context of DSM’s stated goals.
Thus, Elverding hired Jo van den Hanenberg to overhaul the company’s ICT, to support the said corporate strategy. In response, van den Hanenberg pointed out the challenges caused by the decision to diversify, as well as the inevitable outcome of the acquisition of new companies. As a result, van den Hanenberg developed a solution to the IT and business alignment debacle that calls for the standardization and simplification of the company’s IT infrastructure (Applegate, Watson, and Vatz 6).
The said solution’s comprised of three critical concepts:
- global standardization of ICT infrastructure and enterprise models;
- a service delivery-oriented ICT organization;
- an ICT organization that was not only business-oriented but was itself governed by the business (Applegate, Watson, and Vatz 5).
The first component calls for the acceptance of a streamlining protocol, such as the use of a common system to handle the company’s business processes (Jamil and Lopes 25).
The second component requires the creation of a communication technology infrastructure (Antonopolous 249). The final component ensures that every IT-related initiative was justified based on the business model (Wang 133). The end goal is to integrate every single profit center under one platform, while at the same time, allowing efficient communication, information sharing, and collaboration between different departments under the DSM umbrella.
Luftman’s maturity alignment framework is comprised of five levels of growth and improvement. The company must reach certain milestones to see the improvements, and this is measured through the following six elements:
- scope and architecture;
To experience growth and maturity in integration and alignment of business processes, the company must move up from Level 1: Initial Process to Level 5: Optimized Process (Verweire and Berghe 149).
After examining the information provided in the case study, one can argue that DSM reached Level 3 in terms of the alignment of the IT system with the company’s business model. Although DSM’s corporate leaders had to go through a complicated process of integrating newly acquired corporations. DSM reached this level of IT alignment maturity due to the impact of three factors.
|Communication||3||The stakeholders involved had a good understanding as to the purpose of the integration and standardization program, and they are willing to come aboard.|
|Competency||3||DSM experienced a level of cost-effectiveness. However, the company struggles to increase the organization’s level of cost-efficiency because of the redundancy caused by the acquisitions.|
|Governance||4||DSM’s CIO succeeded in establishing a relevant IT process across the whole organization. In other words, it was the appropriate system that they need to experience effective IT alignment with the company’s business model.|
|Partnership||3||The new system is seen as a process driver. At the same time, the stakeholders perceive the new IT system as an asset for the organization.|
|Scope and Architecture||4||DSM’s CIO was able to remove all impediments to integrate the new system across the whole organization.|
|Skills||3||Not everyone was convinced that the one-jump transition strategy would work. However, a significant number of players saw the importance of the new IT system. It is now seen as an emerging value service provider.|
|Ave. Score = 3.33|
Fig. 1 Measuring DSM’s Level of Maturity in Terms of IT Alignment
First, the company’s CIO decided to implement the one-jump transition strategy. For example, after acquiring Roche Vitamins, this unit was immediately disentangled from its parent company, and without delay integrated into DSM’s branded ICT infrastructure (Applegate, Watson, and Vatz 8). Secondly, the CIO of the newly revamped ICT organization was robust enough to go through the testing phase unscathed, so that there was no major disaster throughout the integration process. Finally, the workers and managers saw positive results.
DSM enjoys an established focus process. Therefore, there is a good understanding between the CIO and other corporate leaders about the need and critical importance of the new protocols. Besides, the company is in the 3rd level of alignment maturity, because the leaders can confidently say that they have experienced a certain degree of cost-effectiveness. However, there is much work to do, because they need to pare down the number of employees doing the same type of work.
The company’s CIO was able to implement a strategy that leads to an established focus process in the context of governing the ICT process. Furthermore, DSM’s CIO managed to develop a partnership between the different departments and the different stakeholders within the company. There was no longer any confusion as to the rationale for decoupling old systems. DSM’s major players are willing to go through the transition process.
As a result, the new CIO was able to establish an integrated system that works well with the company’s business model. About the skills aspect, leaders and workers appreciated how the refurbished ICT enhanced their capabilities to accomplish goals and hit production quotas. The leaders acknowledged this fact after the integration and standardization protocols revealed that multiple product codes were describing the same set of products. They also discovered overlapping processes pulling down DSM’s cost-efficiency metrics.
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DSM’s corporate leaders can enhance the alignment process by communicating the success stories described by leaders that came from different business units. After sharing positive information a new culture will be established within the organization. They need to highlight the success of the one-jump transition strategy. They need to communicate correctly the overall impact of the new ICT process. Corporate leaders and workers alike must appreciate the impact of the new system when it comes to the company’s cost-efficiency goals. They need to understand how they can become more productive using an integrated and standardized process compared to the old model that makes it difficult to accomplish collaboration and information sharing within the organization.
Antonopolous, Nick. Handbook of Research on P2P and Grid Systems for Service Oriented Computing. Hershey, PA: IGI Global, 2010. Print.
Applegate, Lynda, Edward Watson and Mara Vatz. Royal DSM N.V.: Information Technology Enabling Business Transformation. MA: Harvard University Press, 2007. Print.
Jamil, George and Sergio Lopes. Handbook of Research on Effective Project Management through the Integration of Knowledge and Innovation. Hershey, PA: IGI Global, 2015. Print.
Luftman, Jerry. Competing in the Information Age: Align in the Sand. New York: Oxford University Press, 2003. Print.
Verweire, Kurt and Lutgart Berghe. Integrated Performance Management. CA: Sage, 2004. Print.
Wang, Victor. Handbook of Research on Technologies for Improving the 21st Century. Hershey, PA: IGI Global, 2013. Print.