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Business-ICT alignment is a dynamic state in which a business organization is able to use information and communication technology effectively to achieve business objectives - typically improved financial performance or marketplace competitiveness. Some definitions focus more on outcomes (the ability of ICT to produce business value) than means (the harmony between ICT and business decision-makers within the organizations); for example:
Alignment is the capacity to demonstrate a positive relationship between information technologies and the accepted financial measures of performance (Strassmann, 1998).
Aligning ICT and business strategy is instrumental to the firm's success as it provides a link between competitive strategy, information technology and performance (Weiss & Anderson, 2004). Strategic alignment of information and communication technology (ICT) and business strategy is one of the significant issues facing corporations and has been identified as one of the top five management concerns (Avison, Jones, Powell & Wilson, 2004) (Luftman, 2005). In order for an organization to remain competitive, it needs to develop in response to changes in the external environment, this means that achieving alignment is a dynamic process. ICT needs to be designed so that it has the flexibility to develop in new directions alongside business strategy (Galliers, 2006) (Sabherwal, Hirschheim & Goles, 2001). Although the literature provides background information on strategic alignment, it doesn't clearly identify how strategic alignment could be achieved and maintained or what the effects of misalignment for organizations might be (Avison, et al., 2004). The purpose of this study is to provide an insight into the achievement of alignment between ICT and business objectives by researching how organizations approach Information Technology Service Management (ITSM). ITSM enables organizations to transform into service providers, which are strategically aligned with business realities (Hewlet-Packard, 2003). One recent development in ITSM is the widespread adoption of ITIL in order to provide the best possible delivery of IT services (Davies, 2004). ITIL provides a comprehensive set of guidelines for IT service management processes (Hewlet-Packard, 2003). The two processes at the heart of ITIL are service support and service delivery.
ITIL is the most widely-accepted de facto global approach to IT Services Management, ITIL provides a welcome challenge to the chaos that often thrives in modern data centres. Started in the mid-1980s by the United Kingdom's Office of Government Commerce (OGC), formerly known as the Central Computer and Telecommunications Agency (CCTA), ITIL is now a mature, non-proprietary IT process framework that is industry and technology-independent. ITIL is not prescriptive, but a collection of industry best practices organized as a set of books (a library) that provides an integrated framework.
To achieve Business ICT Alignment, organizations must make better decisions that take into account both business and IT disciplines. Establishing processes for decision-making and control is essentially what is meant by the term "governance" so Business ICT Alignment is closely related to Information technology governance.
A commonly cited definition by IT Governance Institute is:
IT governance is the responsibility of the board of directors and executive management. It is an integral part of enterprise governance and consists of the leadership and organizational structures and processes that ensure that the organization's IT sustains and extends the organization's strategies and objectives.
Henderson & Venkatraman can be seen as the founding fathers of Business/IT alignment and published an article called Strategic Alignment (Handerson & Venkatraman, 1999).
A study of three different organizations found that alignment evolved by both evolutionary and revolutionary means (Sabherwal et al., 2001). These two terms refer to the degree of change to the organizations "deep structures". The term "deep structures" refers to the organization's choice in terms of strategies and structural arrangements between IS and business. The evolutionary stage is characterized by little change, and despite the fact that alignment could be low there is often resistance to change. Revolutionary change may come about as a result of new leadership, or changes in the external environment this will result in changes in the pattern of alignment. The changes can be negative as well as positive, and post revolutionary changes may required to address any alignment gaps (Sabherwal et al., 2001).
This alignment is in contrast to what is often experienced in organizations: ICT and business professionals unable to bridge the gap between themselves because of differences in objectives, culture, and incentives and a mutual ignorance for the other group's body of knowledge. This rift generally results in expensive IT systems that do not provide adequate return on investment. For this reason, the search for Business / ICT Alignment is closely associated with attempts to improve the business value of ICT investments.
The intention of this research is to identify how effective ITIL can be in aligning ICT and business objectives using the SAM developed by (Handerson et al., 1999). This model identifies four dominant alignment perspectives. By placing ITIL in the internal domain of the model, its impact on the other three parts of the model can be investigated. It will be shown how ITIL achieves alignment between IT and business objectives in general. It does not concentrate on any specific part of the model. By positioning ITIL in this part of the model it identifies how it impacts on business strategy, IT strategy and organizational infrastructure and processes. It will also enable the organization to investigate how the two core processes of service support and service delivery can respond to business needs.
Research Question and Objectives
Based on the purpose of this research project, where I try to address how can organizations
manage the strategic alignment between business strategy and IT strategy based on ITIL, the following research question is formulated:
How can ITIL improve the aligning of ICT with business objectives?
This question could be elaborate by the following sub questions.
How to share knowledge within the organization?
What is the main ability of ITIL and what does it provide to the organization?
How is the Business ICT alignment achieved?
What are the benefits of implementing ITIL?
The results of this exploratory research indicated that ITIL is an effective approach in making alignment in organizations.
The choice of research approach is one of most important aspect that influences the whole research procedure. Induction and deduction are two approaches that help researchers draw a conclusion and form a theory. Inductive approach is used when empirical data is gathered and analyzed to give a theory about the research questions. Deductive approach is the opposite, which means that the thesis test a hypothesis against the empirical data gathered (Saunders, Lewis & Thornhill, 2007).
Deductive approach, known as theory testing approach, tries to test an existing theory through collecting empirical data and generate a theory. The deductive approach also involves the researcher to explain relationship between variables. On the other hand, inductive approach follows an opposite approach to produce a valid and reliable theory. In inductive approach, researcher first collects and analyzes empirical data, outcome of analysis will be generalize and forms a new theory.
To carry out this thesis, the authors first started a comprehensive literature review to get familiar with concept of ITIL and Business ICT alignment. From this information and data, a research question was developed. After this, empirical data will be collected through interviews with practitioners in the IT sector and by reviewing more secondary literature. From an analysis and categorization of the empirical findings led to conclusions that answer the research question, and lead to the development of a theory. Thus the outline of this thesis work is using an inductive approach. The points which will be followed for answering the research questions are:
Strategic alignment is achieved by enhancing the communication between ICT and business, as well as improving service delivery to business.
It improves quality of services as well as availability of services, which results in having more satisfied customers and gaining competitive advantage.
ITIL breaks down barriers and enables people in an organization to share knowledge.
ITIL has the ability to support business strategy, improve IT strategy and competency and impact significantly on organizational infrastructure.
It provides consistency in the way things can be done throughout the organization.
In this research, due to the ITIL's features of promptly changing and developing, official websites will be one of the major resources for the data. For instances, there are updated information and introductions on the OGC Official ITIL website (OGC ITIL), OGC Best Management Practice website (ITIL UK) and ITIL / ITSM world website (ITIL/ ITSM world). In addition, books available in hard copies, online document and published journals are referred to for the purpose of formulating the theory framework. This original framework is functioned as the benchmark and basis for the empirical observations and developed theory.
The work of this thesis runs between October 2012 and the beginning of April 2013, a limited time frame to achieve results. The last month of this thesis work will be mainly focused on the analysis of the data gathered, and the conclusion of this thesis.