Relationship Between Business and IT Strategies at PRASA

Relationship Between air and IT Strategies at PRASA1 Introduction4.1 BACKGROUND TO THE question PROBLEMFor or so three decades practitioners, academics, consultants, and question organizations have identified attaining connective in the midst of IT and contrast as a pervasive problem, Luftman and Kempaiah (2007). Gutierrez,Nawazish,Orozco,Serrano and Yazdouni (2007) add that despite the wide word marrow of strategic alignment (the strategic use of Information Technology), there is no consensus on how to achieve alignment and with few references that detail the process, there is no common agreement on the term alignment. Terminology such as linkage Henderson and Venkatraman (1993) harmony, integrated, linked, and synchronocity Luftman and Kempaiah (2007) have been suggested and used.Steiner (1979b) points out that there no consensus as to the meaning of outline in the duty world. An example of the definitions which he uses include the pursuit Steiner (1979a) outline is that what executives do they that empower the organization.Strategy is the institutionalizeion the organization takes which is line up with its purposes and missions.Strategy consists of the important activities necessary to realize these directions.Strategy dissolvents the headspring What should the organization be doing to achieve success?Strategy answers the question What atomic number 18 the means to end?Mintzberg (1994), says that people use schema in several(prenominal) contrary ways, the most common beingStrategy is a plan, a how, a means of getting from here to there.Strategy is a dominion in actions all everyplace time for example, a family that regularly markets rattling expensive products is using a high end strategy.Strategy is perspective, that is, hatful and direction.Strategy is position that is, it reflects conclusivenesss to offer fragmenticular products or work in particular markets.Porter (1998) states that strategy positioning attempts to achiev e sustain equal to(p) belligerent advantage by preserving what is distinctive about a fraternity and that strategy, is the cosmea of a unique and valuable position, involving a different set of activities, requires that trade-offs be made in competing, to chose what non to do and involves creating fit among a companys activities. Fit has to do with the ways a companys activities interact and reinforce one another.To improve the strategic management of study technology, Henderson and Venkatraman (1993), developed a poser which they called the Strategic Alignment Model (SAM). This cast was defined in terms of four fundamental domains of strategic natural selection namely transportiness strategy, t separatelying technology strategy, organizational stem and processes and information technology infrastructure and processes. The model is defined in terms of cardinal fundamental characteristics of strategic management namely the strategic fit (the interrelatedness betwixt exte rnal and internal components) and functional integration (integration between agate line and functional domains).Luftman (2001) alter on the Henderson and Venkatraman (1993) SAM model by exploitation the Strategic Alignment Maturity Model (SAMM). The model measures ITbusiness alignment maturity date. Six interrelated components for assessing alignment maturity argon identified. These be communications, value, governance, partnership, celestial orbit and architecture and skills. The scores an organization achieves for these six components of maturity be thence comp ared to a volt-level maturity model to denote the organization IT-business alignment maturity Luftman (2001).The levels range from level one to level five where level five is the highest level of maturity. A higher alignment maturity correlates with higher secure accomplishment measures Luftman (2001).Tying performance measures to strategic goals is a decisive amount Fonvielle and Carr (2001). A tool to measure performance and to align strategic goals in spite of appearance organisations is the Balanced Scorecard (BSC). The BSC was developed by Kaplan and Norton (1992) to overcome the businesss reliance on financial measures. They contend that reliance on notwithstanding financial measures does not give a complete overview of the organisations measures. The BSC renderd a framework to look at strategy, used for value creation from four different perspectives these being financial, customer, internal business process and innovation and learning Kaplan and Norton (1992).One of the principles recommended by the authors, is that for an organization to be focused on strategy, there requisites to be alignment among departments to the strategy of the organisation. The alignment sequence recommended by Kaplan and Norton (2006) starts when the corporate military headquarters articulates enterprise value proposition that allow for create synergies among operating units, sanction units and ext ernal partners. This sequence includes adjust IT strategy with the business strategy.4.1 STATEMENT OF inquiry PROBLEM telephone line and IT strategies at PRASA take in to be better aligned.4.1 What is rider take aim agency of south africa (PRASA)?Appendix A, gives a citywide overview of the historic context and the introduction of PRASA taken from the companies business plan. Following is a summary of the spot issuesPRASA was created by governing body to advance its agenda for the transformation of the humankind bewitch system into a vibrant, competent one, As part of its strategy, PRASA (2009), to secure the future of its business, PRASA get out focus its resources and energies during the current medium term expenditure framework (METF) on the following three Strategic Priorities portion Excellence within Metro complain, Shosholoza Meyl and AutopaxProperty and Asset Development, andTechnology Upgrade or Modernization of its mark head systemsThe key objectives identif ied by Government in addressing the challenges of passenger civilize conveying moving forward PRASA (2009) are as followsSustainable passenger rail service speech meliorate performance of passenger rail operate in terms of the attribute and levels of services to passengers ameliorate efficacy in the delivery of servicesImproved strengthiveness of addition managementEffective targeting of wedge shapesidies to achieve desired socio-economic hug drug objectivesImproved oversight by Government andImproved account competency to the users.4.1 wherefore prasa? PASSENGER TRANSPORT CHANGE IMPERATIVES1..1 The Public Transport Challenge later many old age of neglect, the existing commuter train hug drug system, inherited from the apartheid ago, has reached strength levels and is unable to satisfy passenger demands while its infrastructure is not able to meet the requirements of a rapidly changing and modern society. The dysfunctional institutional arrangements have meant s limy accountability in the purvey of universe exile services, which were found to be largely disempowering. Governments socio-economic and transport policies could not be guarded adequately by such institutional arrangements. The boorish is seeking to move outside(a) from the current commuter- meniald transport pro mess into a more integrated humanity transport system that meets growing and changing passenger demands in an efficient, effective and sustainable manner. The twin challenges for unexclusive transport is to simultaneously transform through meaningful integration whilst at the like time enhancing capacity through upgrading and modernization to meet yearn-term destiny PRASA (2009).1..2 Inadequate Passenger Service ProvisionPassenger rail in confederation Africa faces many challenges as a result of a dogged history of inadequate investment finances in rail rolling declivity, infrastructure and trading operations as well as the loss of appropriate managerial an d technical (engineering) skills within the industry. The shortage of such critical skills has a direct negative impact on the delivery of services. In the urbanising metropolitan areas the readying of new rail corridors has not kept pace with the rapidly changing urban landscape resulting in limited coverage in key areas of urban expansion with the consequential loss of significant market share. everywhere time, commuter rail services have have-to doe withd to fail to resolve adequately to changing passenger demands PRASA (2009).1..3 Customer-Centric DeliveryA dynamic and customer-centric unexclusive transport system is required where passengers contribute to and shape the service delivery agenda. The need for a Passenger or Quality Charter and the normalation of backbreaking, vibrant structures championing both the interests of passengers and public transport transformation are life-sustaining to the growing of a public transport system that will in effect respond to the travelling needs of passengers. The past few geezerhood has seen the process of vibrant, community-based structures championing public transport transformation and demanding property services from Government and transport service put uprs. This movement seems to be growing and shows the determination of southward Africans to take part in the construction of a transport system that will effectively respond to their demands PRASA (2009).4.1 PRASA Vision, burster ValuesVisionA provider of integrated public transport solutions for alter mobilityTwo fundamental principles underpin the vision-Integration PRASA should facilitate integrating individuals and communities, enabling a better forest of life through access to socioeconomic opportunitiesMobility Solutions PRASA should connect individuals and communities through the prep of public transport solutions that are founded on an integrated ne cardinalrk of mobility routes PRASA (2009)MissionSustainable Public Transport Solu tions through Service Excellence, Innovation and normal Integration PRASA (n.d.)The mission reflects four key intentions-Service excellence superior performance that is safe, reliable and affordable, that makes a lasting impression, and builds brand loyalty both internally (employees) and externally (customers) that adds benefit to the passenger.Sustainability a focus on sustainable development in business that considers not just the financial basis line of prosperity and profit, but also the other bottom lines of environmental quality and social equity.Mobility solutions reframing the basis of business delivery, favouring innovation, integration and partnershipsIntegration safe, broadloom dignified travel experiences across all modes of public transport, PRASA (n.d.)ValuesThe set that will guide PRASA, which will underpin the performance ethos of the organization derived from and are guided by the fundamental and progressive human values of the paper of the Republic of southeastward Africa-Service Excellence, Participation, Integrity, Fairness and Innovation, PRASA (2009)4.1 OPPORTUNITY FOR Passenger work1..1 Commuter complain ServicesThe provision of efficient and affordable public passenger transport services is integral to Governments tease to create employment opportunities, stimulate economic development and reduce levels of poverty. compound mobility will facilitate greater access to socio-economic opportunities for the urban and bucolic poor whilst contributing to an efficient transport system to the benefit of all South Africans highlighting the need for a vibrant public passenger transport network to support sustainable growth and development PRASA (2009).Commuter rail has the electromotive force to be the most efficient, affordable and safe mode of travel. It plays a significant role in key Metropolitan areas such as Cape Town and has the potential to become an important public transport player in all metropolitan areas, signifi cantly contributing to an efficient and reliable public transport system in these areas. Despite the admit increase in the growth of car-ownership and usage, public transport and walking continue to dominate the mobility needs of the majority of South Africans and this is likely to continue for the following(a) decade. Metropolitan areas in South Africa are experiencing rapid urbanization. Rail is in a unique position to facilitate greater integration between land use planning and transport infrastructure provision, and providing security, to private and public sector investment, of stable unyielding-term public transport provision. This is vital to creating sustainable communities where peoples access to economic and social opportunities is improved. In this context, railway lines need to be positioned, located, aligned with evolving spatial developments and formalised within the statutory planning processes undertaken earlier by local government. The creation of PRASA and the i ntegration of rail and road-based transport services will, over time, provide the user with public transport pickaxes moving away from a market of captive users to one where dignified travel choice is a real option PRASA (2009).1..2 Inter-City / Regional Passenger ServicesHistorically, vast distance rail and road based services have not received the attention required to make them demand responsive in key market areas including migrant workers, students, tourists and occasional travellers. The Department of Transports Public Transport Strategy movemention Plan notes that There is a significant potential for the growth in migrant worker pertinacious distance public transport provision. The dominant generators of migrant movement are Gauteng and KZN The increase in tourism provides opportunities for segmenting the market that build upon the strengths of both long distance rail and coach operations. Rural areas in South Africa are undergoing a process of economic and social restr ucturing with a shift in emphasis towards rural trade and agro-processing. These constituents reinforce the need for a public transport service sector that responds to the emerging needs of these rural / regional development nodes since transport links between the rural trade areas and the rural regions (hinterlands) remains unreliable, rendering access to services and emerging economic opportunities super difficult. This lack of access will continue to trap many in the poverty cycle. Governments decision to consolidate passenger rail entities and road-based long distance bus services into a single entity, PRASA, report to the Department of Transport are underpinned by a number of key drivers. The recognition by Government that rail consolidation was required to shroud with the under-performance of rail passenger services as well as the historical under-investment in the passenger rail business. Institutional arrangements did not promote efficiency and accountability and signifi cant change was required to overcome the inherent institutional dysfunctions that had been created. Confusion existed between the contractor and regulatory functions implicitly embodied in the SARCC/Transnet relationship PRASA (2009).The critical need for sustainable living to reverse the exasperate in commuter rail levels of service being experienced by commuters has been identified. This funding profile was captured in the National Rail Plan, which was accepted by Cabinet in December 2006, where the funding and investment requirements were identified for passenger rail over the following ten years PRASA (2009).4.1 PRASA ObjectivePRASA (n.d.) primitive objective isTo moderate that at the request of the Department of Transport, rail commuter services are provided within, to and from the Republic in the public interest andTo provide, in consultation with the Department of Transport, for long haul passenger rail and bus services within, to and from the Republic in terms of the pri nciples set out in section 4 of the National Land Transport Transition Act, 2000 (Act No.22 of 2000)..4.1 Strategy of prasaPRASA (2009) objectives are supportive of the Board of Controls (BOC) key performance areas as seen in figure 2 belowFigure 2 Key Performance Area and Strategic Objectives4.1 CHALLENGES FACING PRASA1..1 Consolidation / regression / RestructuringThe sequential amalgamation, in quick succession, of the SARCC, Metrorail, Shosholoza Meyl and Autopax bring with it the normal challenges that are present when merging disparate organizations in related but different functional arenas.A key driver in Governments decision to consolidate these entities into a single delivery arm of the DOT was to effect operational and asset turnaround of what were admit to be declining businesses, albeit, some with the potential for growth. Linked with both these processes is the need to internally restructure the various businesses to align them with the new mandate given to PRASA thr ough the amendment to the Legal Succession Act that was promulgated on 23 December 2008 PRASA (2009).1..2 Sustainable FundingThe ability to provide the requisite level of funding (substantial) to address both the investment capital and rapidly expanding operational requirements to affect the mandate is fundamental to the undefeated performance of PRASA. The integrated passenger transport plan requirements will need to be developed. Fully motivated funding requirements, covering both operations and investment capital, in line with the 5-year financial plan requirements of the various structured Transport Plans (ITPs), will be developed to begin to align the funding requirements with statutory plan requirements. The approved funding base makes no provision for two key activities that need to be accommodatedThe incorporation of Autopax, an operating company that is currently materially dependent upon Transnet Limited for funding to re-capitalize and sustain the business going forward .The acquisition of new rolling stock. Analysis has indicated that the rolling stock refurbishment and upgrading programs are not maintaining pace with the requirements to buy time forward the inevitable purchasing of new excrete becomes unavoidable.While the profile reflects a rising trend in investment funding support, the allocation of these funds to the different asset classes ( wheeling Stock Infrastructure) will need to be reviewed. A careful balance needs to be struck to ensure that the sustainability of the asset base is not compromised PRASA (2009).1..3 Ageing Rolling Stock and InfrastructurePRASA (2009) reports that the lengthen under-investment in passenger rail of almost thirty years is evidently experienced in the deterioration of the general rail asset i.e. Rolling Stock and Infrastructure (Signalling and telecommunications, electrical systems, perway). This has resulted in a situation where services are experiencing continued decline, primarily due to poor availa bility and reliability of rolling stock and ageing infrastructure. The lack of investment in the asset base has also had a negative impact in the skills base of the passenger rail industry over a period of time. For example, the come age profile of commuter coaches is 40 years and has been left stinker by international advancements in rail technology over the past few decades. The life expectancy of railway rolling stock is of the post of 54 years. The railway industry norms are that the coaches will be upgraded at half life (27 years) and overhauled every 9 years, so as to ensure the structural and sub-systems integrity is not compromised by metal fatigue, age, wear and stock split or environmental condition. Thirty-three percent (33%) of the commuter rail fleet is already above 36 years and therefore would be inefficient to upgrade.1..4 Human Capital DevelopmentHuman capital development is by and large understated and under-rated in supporting the development of an organiza tion. It is a multi-faceted process that requires top off checking to enable human capabilities to be built that will support the key performance drivers of the business and ultimately the business results that can be expected from that performance.The key challenge for PRASA is to formulate human capital development processes that facilitate and fast-track the appropriate human capital capabilities at all levels within the organization that will enable delivery on the key drivers of which, in the case of PRASA are increased productivity (operational efficiencies),improved service quality (service excellence),customer focus andinnovation in the provision of integrated public transport solutionsThe nature of the various operational divisions, while related and providing synergetic opportunities for service co-operation and delivery, are by their very nature, different business environments, each requiring a specific set of human capabilities to perform optimally. PRASA needs to pr ovide guidance in the process framework that delivers this requirement PRASA (2009).1..5 Change oversightThe finalisation of the PRASA consolidation process, the turnaround and restructuring necessitate that a number of mate change management processes are undertaken. Numerous change management processes will be identified that are needed to combine the five organizations into a consolidated organization. The very ability of PRASA to ensure effective murder of such processes becomes critical as is the capacity of the organization (including divisions and subsidiaries) to manage them successfully PRASA (2009).1..6 leaders Skills DevelopmentThere is currently an acknowledged shortage of key skills as well as a lack of depth of skills in critical areas within the organization. For PRASA to meet the expanded mandate of supporting governments socio-economic and transport objectives in both urban and rural contexts, the organization will need a focused approach to human capital develo pment, on leadership development, talent management and the progressive training of a strong base of key skills that will lay the foundation for sustaining rail passenger transport sector PRASA (2009).1..7 Rail Technology DevelopmentPRASA, of necessity, will need to become a technology based organization that blends best course session policies with intelligent asset management philosophies to leverage organisational productivity and efficiency gains to provide shareholder value. PRASA recognises that technology upgrade is critical to the modernisation of South Africas railways and is well aware that the capacity for technology upgrade may not be immediately available in South Africa or the African Continent as a whole. Technological obsolescence is a major factor that will inhibit PRASA from delivering on its mandate. A rail technical strategy that guides proficient renewal, upgrading, replacement and development over the next 30 years is a critical requirement. The average age o f the metropolitan rail commuter networks/system in South Africa ranges between 60 80 years and still supports 1940/50s technology. The system in SA is showing sombre age related condition decline with increasing systemic risks and technological obsolescence. Railway systems are designed for an extended economic life, but it is acknowledged that the current ad hoc investment flows into the ageing system in South Africa are not productive in terms of future demand, operational performance requirements and escalating maintenance hails. Global technology advancement in rail has moved beyond the limited application of heavy rail, regional and long distance passenger rail. Various new rail based technologies of alternate(a) applications have evolved globally to ensure the competitiveness and attractiveness of rail solutions. If South Africa is serious about ensuring environmentally friendly and energy efficient transportation for its cities to counter growth in private vehicle trave l, congestion and spiralling cost of fossil fuels, a selective conversion of appropriate new and improved rail based and mass transit technologies needs to be evaluated, introduced, and schematic in South Africa ensuring that these take their place in the hierarchy of public transport service provision. The technological needs of PRASA over the next 30 years need to be clearly articulated and incorporated into PRASAs long-term planning if passenger rail is to be sustained over the longer-term. The development of a rail technology strategy, together with the appropriate migration requirements over this period will assist in guiding decision-making in oft critical technology upgrade or replacement areas within the organisation. The phased implementation of the strategy will be captured in each of the blood Plans roll-outs over time PRASA (2009).4.1 RESEARCH AIM, QUESTION, SUB-QUESTIONS AND OBJECTIVESResearch AimThe aim of this research is to understand to what extent alignment betw een Business and IT strategies exists, at the Passenger Rail Agency of South Africa (PRASA).Research QuestionsThe research question derived from the problem line of reasoning isWhat can PRASA do to improve business and IT strategies, alignment?The sub questions to answer the main question areWhat are business and IT strategies?What is alignment between business and IT strategies?What factors contribute to an alignment gap between business and IT strategies?What factors contributes to an improved alignment between business and IT strategies?Objectives of the researchBased on the sub questions the objectives of the research are to1. Analyse the Businesss and IT strategy2. exact out a literature review on the alignment between Business and IT strategies.3. Analyse the factors that contribute towards Alignment Gap4. a. Establish strategic alignment best practice.b. Formulate a methodology for aligning Business and IT strategies.c. Propose recommendations to improve PRASAs Business and IT strategies alignment.4.1 CURRENT STATUS OF THE RESEARCH AREAThe literature review will be based on the research into alignment of business and IT strategies. There is a plethora of research available on the alignment of business and IT strategies. Chan and Reich (2007) have carried out comprehensive research on this topic.4.1 Business and IT strategies1..1 Business StrategiesCroteau and Bergeron (2001) define business strategy as the outcomes of decisions made to guide an organisation with respect to the environment, structure and processes that define its organisational performance. Hambrick (1980) states that business strategies may be textual, multivariate or typological.Henderson and Venkatraman (1993) architects of the SAM model, view strategy as involving both strategy verbalism (decisions pertaining to competitive, product market choices) and strategy implementation (choices that pertain to the structure and capabilities of the firm to execute its product market choice s).The SAM model presents two business strategy perspectives where business strategy is the driver namely strategic execution, and technology transformation. figure 3 presents the key attributes of these perspectives.Figure 3 Attributes of Business Strategy perspectives (Henderson Venkatraman 1993)One of the six components of the SAMM Luftman and Kempaiah (2007), is partnership which includes ITs role in defining the businesss strategies. Both of these models (SAM and SAMM) are about aligning business and IT strategies and can be criticised because it does not define what business strategy is.Kay (1996) says that there is much debate on the substance but that