Business and I/T Strategic Alignment:New Perspectives and Assessments

Abstract

This research describes the results and findings from a two-year study of strategic alignment. Executives from over 300 firms representing 15 industries attended classes at IBM's Advanced Business Institute during 1992-1994. They asked for help in assessing strategic alignment within their companies. A computer-based tool was used to evaluate alignment within these firms. Eight new alignment perspectives were validated, along with the four original perspectives from the Strategic Alignment Model. A pre-and post-assessment comparison suggests that executives often do not correctly recognize their firm's alignment perspective and the role I/T can play in meeting business objectives. These findings emphasize the need to assess business and I/T using the alignment perspective approach to maximize the investment of I/T resources within the firm. Results also suggest that the relationship between these perspectives on title/function, industry and firm performance directly affects the firm's alignment. Analysis of title/function indicates that I/T executives are concentrating on the business side (e.g.competitive potential and organization infrastructure fusion) while non-I/T executives are focusing more on technology (e.g. business-related perspectives such as technology potential and I/T infrastructure fusion). Industry analysis indicates that firms in certain industries tend to follow specific perspectives more often. Assessment of the impact of financial performance results in 7 factors that have varying degrees of impact on alignment. The factors provide management with a vehicle to predict the likelihood of achieving positive performance regarding a given factor. The computer-based assessment tool developed by Luftman and Brier (based on work by Henderson and Thomas, 1992) is used to assess the alignment of business and I/T in firms. The purpose of the model is to help firms identify areas of strength and weakness related to alignment. Information provided by the model enable firms to evaluate, achieve, and maintain alignment.

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