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Business And IT Alignment Theory Versus Practice Business Essay

Due to the continuing and increased capabilities of Information Technologies (IT), organisations consistently strive to be innovative in employing such capabilities to achieve their internal objectives and external strategic goals, i.e. finding ways of aligning the offered IT capabilities to their internal business requirements (functional alignment) efficiently, and to their external strategic goals (strategic alignment) effectively.

Research Rationale

For over twenty years, a number of researchers have emphasised the importance of Business and IT (BIT) alignment in organisations, in order to achieve competitive advantage (Luftman and Ben-Zvi, 2010). They have tried to find answers to the BIT alignment challenges, i.e. how to successfully align business requirements and objectives to IT capabilities – efficiently and effectively.

Hundreds of scholarly BIT alignment research papers have been published in an attempt to understand the BIT relationship in organisations (Coughlan et al., 2005), define the BIT alignment concept (Henderson and Venkatraman, 1993; Reich and Benbasat, 1996; Luftman and Brier, 1999; Earl, 1993), provide models (Luftman et al., 1993; Reich and Benbasat, 2000; Sabberwal and Chan, 2001; Avison et al., 2004), assess different organisational alignment perspectives (Bergeronet et al., 2001; Chen et al., 2008), establish BIT alignment success factors (Burn and Szeto, 2000; Gutierrez et al., 2009; Chan et al., 2006; Moreno et al., 2009) and assess BIT alignment levels (Hussin et al., 2002; Sledgianowski et al., 2006).

In fact, a simple Google search for the phrase "Business/IT alignment" results in over 89,000 hits.

However, a recent survey by Axios Systems, 50% of large organisations within North America, Europe and Asia consider BIT alignment a major area of concern. (Axios Systems, 2009) Furthermore, BIT alignment is the second most important issue facing top enterprise managers, according to a Society for Information Management survey in 2010 (Luftman and Ben-Zvi, 2010).

This raises the following question: Why is BIT alignment not successful in a large percentage of organisations? To answer this question, first we need to conduct a systematic literature review to answer the following questions.

Research Questions

What are the definitions and interpretation of BIT alignment?

What are the most cited theoretical models?

What are the most cited practical frameworks?

What are the BIT alignment influential factors (enables and inhibitors)?

Is there a unified model that addresses all the BIT alignment influential factors?

INDICATIVE LITERATURE REVIEW

An inductive approach is used initially to identify the key conceptual models and the relevant keywords (preliminary search) by searching the literature for the “Business and IT Alignment” phrase, an initial search was conducted utilising credible multiple database vendors ABI, IEEE, 360 Search, Science Direct, EBSCO, ProQuest and JSTOR. Multiple database vendors search produce a comprehensive literature review as it overcome the problem of a narrow literature background. In other words the knowledge obtained is not limited to one vendor.( Levy and Ellis, 2006)

The preliminary literature search/review identified three most cited BIT alignment models namely, (a) Henderson and Venkatraman’s (1993) Model (b) Luftman’s (2000) Model and (c) Reich and Benbasat’s (2000) Model. (Google Scholar, 2010)

Furthermore, BIT alignment has been defined academically in different ways. Henderson & Venkatraman (1993) defined it as the degree of fit and integration between four organisational domains: business strategy, IT strategy, business infrastructure and IT infrastructure. Luftman (2000) argued that BIT alignment is an evolutionary and dynamic process, which includes various management activities to achieve unified goals across IT and other functional areas in organisations, i.e. it is the application of IT in an appropriate and timely way, in harmony with business strategies, goals and needs. Avison et al. (2004) stated that BIT alignment concerns the integration of business, IS and IT strategies in organisations. Chan (2002) noted that BIT alignment has two components: (1) strategic alignment, which focuses on the fit between the priorities and activities of the IS function and those of the business, and (2) structural alignment, which is the degree of structural fit between IS and the business. Reich and Benbasat (1996) defined BIT alignment as the two-way support (linkage) between the organisation’s IT strategy (mission, objectives and plans) and business strategy (mission, objectives and plans). Furthermore, they identified and defined the social and intellectual dimensions of this linkage. (Lee et al., 2008) noted that business-IT alignment is a multidimensional concept that includes strategic, integrated, technical and social dimensions.

Henderson and Venkatraman’s (1993) Model

Henderson and Venkatraman (1993) defined alignment as the degree of fit and integration between four sub-domains: business strategy, IT strategy, business infrastructure and IS infrastructure. These four domains are within two main domains: external (business and IT strategies) and internal (business and IS infrastructures), each of which has three components. The model has the potential to shape, enhance and support business strategy by providing a clear distinction between the IT strategy’s external and internal potential capabilities, as the IT strategy provides choices of emerging external IT capabilities that will impact on new products/services. Furthermore, it shapes the IS infrastructure and subsequently determines the internal IT service level. Therefore, this conceptual model differs from the traditional models of BIT alignment, as it calls for the IT strategy to shift from an internal fit orientation to a more strategic fit. Moreover, the model addresses the dynamic capabilities of strategy and recommends continued assessment of trends across its four domains, in order to reposition the organisation competitively in the external dynamic environment. This can be achieved by adopting the appropriate perspective (strategy execution, technology transformation and service level perspectives) according to any changes in the business environment (Henderson and Venkatraman, 1993).

The model fails, though, to address the importance of information management and the growing need to share information within the organisation and with external entities such as customers and suppliers. Furthermore, it is a theoretical model that does not provide a practical solution for managers to coordinate and assess the BIT alignment in organisations (Grant, Hackney and Edgar, 2009).

Luftman’s (2000) Model

Luftman’s (2000) model is an extension of the author’s previous strategic alignment work (Luftman, Lewis and Oldach, 1993;Luftman and Brier, 1999). It assesses BIT alignment maturity levels in organisations with reference to six assessment criteria, namely communication, competency value measurement, governance, scope, architecture and partnerships.

The five maturity levels are a reflection of the management commitment level to the BIT alignment process, as follows: (1) Initial/Ad Hoc Process (2) Committed Process (3) Established Focused Process (4) Improved/Managed Process (5) Optimised Process

Luftman’s model is comprehensive compared to the Henderson and Venkatraman (1993) model, as it addresses important factors such as change management, knowledge sharing, business/IT metrics and social interaction in organisations. Moreover, it provides a practical method for assessing the maturity level of the BIT alignment process, i.e. it can be used as a toolkit for practitioners to evaluate the organisation’s position in terms of identifying the actions necessary to ensure that IT is used as a business strategy enabler that enhances the organisation’s market position (Luftman, 2000). However, each attributes of the six criteria (factors) has the same weight; this is a flaw in the design, as surely the Business Strategic Planning attribute (Governance) contributes more to BIT alignment maturity than the Career Crossover Opportunities attribute (Skills). Finally, the model’s organisational benefits have not been determined as it needs to be empirically assessed via longitudinal case studies (Grant et al., 2009).

Another issue is that although the author suggested that a team of IT and business representatives in the organisation undertake the initial assessment, the BIT alignment accountability factor is not covered by this model. In this case, who is accountable for achieving and sustaining alignment? What is the improvement process?

Reich and Benbasat’s (2000) Model

The Reich and Benbasat’s (2000) Model is based on the authors’ earlier definition of BIT alignment’s intellectual and social dimensions. The model consists of three levels and five constructs as follows: Shared domain knowledge between BIT executives and successful IT history are antecedents and influence the current practices in organisations of communication between BIT executives and connections between BIT planning, which consequently influence the social dimension of BIT alignment.

The Reich and Benbasat’s (2000) Model has contributed to BIT alignment’s knowledge domain by emphasising the positive influence of regular communications between BIT executives as part of the social dimension of BIT alignment in organisations. This is highlighted by the fact that Reich and Benbasat (2000) found that higher levels of communication between BIT executives result in shared domain knowledge, which consequently enhances short-term BIT alignment. However, this model is not applicable to long-term BIT alignment, which is important with reference to the strategic competitive advantages achieved by the exploitation of emerging IT capabilities, in order to enhance the business’s strategic position in the marketplace (Henderson and Venkatraman, 1993).

Furthermore, the study did not investigate the alignment between corporate IT and business executives (strategic-level management), since the participants were IT groups within the business units (tactical-level management) and business unit executives.

Outcome

Considering the definitions found in the literature, and the above models, we initially define BIT alignment as a multidimensional, continuous and dynamic process of establishing and maintaining a two-way sustainable working relationship between the business and IT domains in organisations, in order to increase their internal efficiency and subsequently achieve a sustainable external competitive advantage.

The following factors that influence the alignment of the business/IT domains in organisations have been identified: communications, knowledge management, planning partnership, IT governance, IT value measurement, skills, IT characteristics and organisational culture.

However, accountability is not addressed in the literature as a factor that influences BIT alignment, i.e. who is responsible for BIT alignment management? Establishing alignment is a lengthy and complex process that needs continual management; therefore, accountability is added to the proposed model, see Figure 1.

This model will guide the systematic literature review to identify previous influential studies investigating its components and consequently identify the literature gaps that needs to be addressed with reference to assessing the alignment in organisations.

Figure BIT Alignment Components

METHODOLOGY

Data Needs Matrix

Research Question

Question’s Rationale

Data Required

Data Sources

Collection Method

Practical Collection Issues

Method of Analysis

Analysis Concerns

1. What are the definitions and interpretation of BIT alignment?

To understand how previous studies defined and interpreted BIT alignment.

Definitions and equivalent terms

Empirical research Papers from peer-reviewed journals

Systematic search of online databases and books (IEEE, 360 Search, Science Direct, ProQuest and JSTOR)

Authentication problems as the Kingston university’s system is not stable

Thematic analysis

Qualitative analysis is subjective and can be bias.

2. What are the most cited theoretical models?

To identify and understand the theoretical background of the BIT alignment

Most cited theoretical models

as question 1

as question 1

as question 1

as question 1

as question 1

3. What are the most cited practical frameworks?

To identify and assess the available BIT alignment assessment tools

Most cited practical models

as question 1

as question 1

as question 1

as question 1

as question 1

4. What are the alignment influential factors (enables and inhibitors)?

To identify the BIT alignment enables and inhibitors

Influential factors

as question 1

as question 1

as question 1

as question 1

as question 1

5. Is there a unified model that addresses all the alignment influential factors

To identify the available unified BIT alignment model

Models that include all the identified influential factors

as question 1

as question 1

as question 1

as question 1

as question 1

Research Philosophy

Researcher’ philosophy influences the way knowledge is gathered, studied and interpreted. It sets down the research design, methodology, and methods. The three main paradigms discussed in the literature are: positivism, interpretivism and pragmatism. (Saunders et al., 2009)

Positivism was developed originally in the natural sciences and has been transferred to social studies. The positivist approach states that only observable and measurable data should be considered in a research. It is objective as the researcher is detached from the entities that are subject to study. (Bryman & Bell, 2007)

Interpretivism is more common in business and management studies as they involve people. It is an attempt to see the world thought the people eyes i.e. it relies upon a deep understanding of the participants’ views of the phenomena understudy. (Bryman & Bell, 2007)

Pragmatism is not committed to any one philosophy. It provides mixed paradigms framework for mixed-methods research. The pragmatic paradigm considers the research problem as the guide to apply all the necessary approaches to understand the problem. (Saunders et al., 2009)

It is difficult to underpin the research philosophy of a systematic literature review research, as it is not addressed in the literature. However, a pragmatic paradigm is assumed since a systematic literature review consists of: (1) a systematic literature search (data collection) according to a search profile. This search is conducted objectively according to the criteria of a search profile; therefore, we can assume that it is a positivist approach and it is based on scientific principles. (2) The analysis of the gathered articles (data analysis) to write the literature review adopt an interpretivist approach as we rely upon the participants’ views ( articles’ authors) of the topic being studied.

Research Method

Levy and Ellis, 2006 systematic literature review process is proposed. This process follows three sequential stages: Inputs, Processing and Outputs.

A systematic literature review process is very important for any credible academic research in any field and it is particularly crucial in the Information Systems (IS) field due to its multidisciplinary approach. All relative sub disciplines should be considered to have a holistic understanding of the BIT alignment concept and to justify that the study’s outcome will add something new to the field’s body of knowledge (Levy and Ellis, 2006).

This process follows three sequential stages: inputs, processing and outputs.

Input (Data Collection)

This preliminary search produced research papers that contained the following keywords: IT and business alignment, business and IT alignment, strategic alignment, IT alignment, IT governance, business and IT relationship, IT and business fusion, alignment models, alignment measurement, business and IT planning, business and IT linkage, business and IT alignment dynamic process, business and IT alignment factors, business and IT alignment dimensions and contemporary organisation structure. The keywords will be used to expand the literature search systematically and comprehensively by using Webster & Watson (2002) backward and forward search technique. Backward references search entails reviewing all the references articles of an article. Backward authors search entails reviewing the previous work of the identified authors. Forward reference search locates all the new articles that cited an article and forward authors search locates all the new articles of the identified author. The following search profile criteria will be used, see Table 1.

Table Literature Search Profile

Criteria

Boundaries

Rationale

Time Span

Since the late 1980s.

The IT impact era. Achieving a competitive advantage via aligning IT to business objectives debate escalated (Grant, Hackney and Edgar, 2009).

Geographic Restrictions

No restrictions.

BIT alignment is a universal concept.

Language

English.

This is a universal academic language.

Keywords

Business and IT alignment, Business and IT alignment models, Business and IT alignment measurement, business and IT alignment factors and business and IT alignment dimensions.

The scope of this assignment is to identify BIT alignment components and models.

Sources

Books.

Peer-reviewed journal articles in reputable business journals.

Conference proceedings referenced in quality articles.

To produce quality input.

BIT alignment is a multidisciplinary area (Levy and Ellis, 2006).

At this stage, it is vital to gather only quality papers, as they are the foundation to the study; in any system, a poor quality input results in an ineffective output. Conference proceedings are used, but limited to those referenced in quality articles.

Due to the time and space limitations a non-probability criterion-based sampling will be used to select research papers that will be reviewed. The criteria are (1) most cited articles (2) those with concrete that can be used to assess the BIT alignment in organisations and (3) published in peer-reviewed journals.

Processing (Data Analysis)

This stage involves transforming the collected information into an effective literature review i.e. converting the gathered information to applicable knowledge. Bloom’s Taxonomy sequential steps will be adopted: know the literature, comprehend, apply, analyze, synthesise, and evaluate the identified research articles. (Krathwohl, 2002)

Knowing the literature entails reading the articles and extracting meaningful information from them. This will be achieved via thematic analysis which will be used to identify major themes in the BIT alignment literature with the aim to achieve a cumulative understanding of what is known about it with particular reference to BIT alignment assessment in organisations. A coding framework (see Table 2) was developed during the preliminary literature review stage; it is based on the proposed BIT alignment model in Figure 1. The constructed coding framework will be applied systematically to all the research papers by going through each passage, deciding on its meaning, and then assigning the relevant code to it (Bryman & Bell, 2007).

Table BIT Alignment Coding Framework

Alignment Interpretation

Alignment Planning

Alignment as a State

Alignment as a Dynamic Process

Alignment Influential Factors

Communications

Knowledge management

Planning partnership

IT governance

Value measurement

Skills, IT characteristics

Organisational culture

Organisation Size

Alignment Levels

Strategic

Functional

Methodology

Qualitative

Quantitative

Data Collection Method

Structured Interviews

Focused Group

Unstructured Interviews

Organisational Documents

Data Analysis Method

Validating a Model

Analysis of the Alignment Perspectives

Scoring the Importance of Alignment’s Mediating Factors

Outcome

New Alignment Definition

Alignment Understanding

Measurement Tool

Theoretical Model

In order to build up a picture of the data as a whole, 8 charts will be created according to the main heading of the coding framework. The charts’ format will be thematic, i.e. themes across all research papers (Bryman & Bell, 2007). The cut and paste method will be used to move the data to the individual charts according to its relevant concept allowing “for data reduction without the danger of too much abstraction” (Ritchie & Lewis, 2009, p.233). This will be followed by a mental mapping, comprehending and interpretation processes. It involves reviewing the charts to summarise the data and find associations/patterns related to the research. Concept cards will be produced to assist in the discussion of the results. Each concept card represents one of the themes e.g. “Alignment Levels” and will be evaluated, synthesised and mapped to a concept matrix to identify the gaps in the literature, see Table 3.

Table Concept Matrix

Study’s Underlying Constructor

Criteria

Paper1

Paper2

Paper…..

Alignment Interpretation

Alignment Planning

Alignment as a State

Alignment as a Dynamic Process

Alignment Influential Factors

Communications

Knowledge management

Planning partnership

IT governance

Value measurement

Skills, IT characteristics

Organisational culture

Organisation Size

Strategic

Alignment Levels

Functional

Methodology

Qualitative

Quantitative

Data Collection Method

Structured Interviews

Focused Group

Unstructured Interviews

Organisational Documents

Data Analysis Method

Validating a Model

Analysis of the Alignment Perspectives

Scoring the Importance of Alignment’s Mediating Factors

Outcome

New Alignment Definition

Alignment Understanding

Measurement Tool

Theoretical Model

Perceived Research Outcomes

It is anticipated that this research will contribute to the BIT alignment’s Body of Knowledge since the purpose of this systematic literature review is to have an in-depth understanding of the BIT alignment concept, identify the current theoretical models and the practical frameworks to provide a rigorous academic foundation for the proposed BIT alignment model in Figure 1 which will be used as the basis for an empirical investigation for my doctoral research.

Research Related Issues and Limitations

Ethical and Legal Concerns

All the research articles are in the public domain hence there are no ethical concerns. However, legal issues will be taken care of by making sure that all the sources of information used in this research will be fully identified and properly cited.

Research Limitations

Due to the time (six weeks) and space limitations (fifteen thousands words), the scope of this research will be limited as we may not be able to cover all the available arguments in the literature, see the Gantt chart in Appendix A.

Summary

The purpose of this research is to conduct a systematic literature review of the Business and IT (BIT) alignment topic to identify previous influential studies investigating this topic and consequently identify the literature gaps that needs to be addressed with reference to assessing the alignment in organisations. This will be achieved via conducting a systematic literature review to answer the stated research questions.

The preliminary literature review proposed model will guide the systematic literature review to identify previous influential studies investigating its components and consequently identify the literature gaps that needs to be addressed with reference to assessing the alignment in organisations.

Levy and Ellis, 2006 systematic literature review process is proposed. This process follows three sequential stages: Inputs, Processing and Outputs.

The search scope will be bound to the criteria set in the outlined search profile in the input stage. Due to the time and space limitations a non-probability criterion-based sampling will be used to select research papers that will be reviewed.

Bloom’s Taxonomy sequential steps will be adopted in the processing stage: know the literature, comprehend, apply, analyze, synthesise, and evaluate the identified research articles. (Krathwohl, 2002) Thematic analysis ( according to the constructed framework) will be used to identify major themes in the BIT alignment literature with the aim to achieve a cumulative understanding of what is known about it with particular reference to BIT alignment assessment in organisations.

Concept cards will be produced as a result of coding process to assist in the discussion of the results. Each concept card represents one of the themes e.g. “Alignment Levels” and will be evaluated, synthesised and mapped to a concept matrix to identify the gaps in the literature with reference to the BIT alignment proposed model.

It is anticipated that this research will contribute to the BIT alignment’s Body of Knowledge and provide a rigorous academic foundation for the proposed BIT alignment model which will be used as a basis for an empirical investigation for my doctoral research.

Finally, there are no ethical issues in this research but special attention will be give to citing all information sources to avoid legal issues.

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