Measuring Business-IT Alignment in a Digitally Revolutionized Economy

Measuring Business-IT Alignment in a Digitally Revolutionized Economy

Pablo Alfonso Gajardo, Ariel I. La Paz
Copyright: © 2019 |Pages: 19
DOI: 10.4018/IJITBAG.2019070101
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Abstract

Although the concept of business-IT alignment was once considered one of the most important concerns of organizations, in terms of IT administration, the attention it has received has decreased significantly over the years. This article postulates that strategic alignment initiatives still have the same relevance—in particular for non-IT companies—which means that digital transformation strategies should consider the strategic alignment as a critical issue for their success. Therefore, the persistent relevance of this concept and the need to measure it with updated instruments capable of assessing the degree of maturity reached and feeding back the results to the organizations remains a key topic in IT administration. Based on an updated instrument, adequate for a digital framework, our study surveyed a sample of mostly large Chilean companies. The results obtained reveal the importance to count with an improved model that captures the changes this new digital scenario imposes.
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Introduction

No company, no industry, no market can avoid the impact of the pervasive force of technology, changing the business models and processes, as they have traditionally been known and applied.

The digital revolution has changed the rules of business. With the constant diffusion of digital technologies, each industry faces its own challenges and threats. New players enter the market, leveraged by cutting-edge technology that shakes up the solid and recognized companies. (Herbert, 2017; Peppard & Ward, 2016; Rogers, 2016; Venkatraman, 2017).

To be successful in the digital world, companies must think of technology not only as a support function, but also as a strategic and competitive weapon, so it is not just about applying technology to the business as a commodity, but rather creating new business models and operational models, leveraged by the innovative use of technology. When raising this point, it is assumed that the concept of business-IT alignment is still valid, for non-IT companies, in the process of becoming a digital entity. And while, for a long time, the IT units have been treated as subordinate to the commercial strategy, in light of the literature surveyed, we coincide with scholars and practitioners, emphasizing the importance of the alignment between business and IT, and the value that it brings to the organizations.

Even though the number of papers published on strategic alignment between business and IT has declined markedly since the appearance of the Digital Transformation concept, some authors continue to reveal the benefits it generates for organizations, with new approaches or extensions of the traditional concept. (CIO Wiki, 2019; Horlach, Drews & Schimer, 2016; Tejada-Malaspina & Un Jan, 2019; Wan & Ge, 2018).

The need for a strategic alignment between the business and IT is vital for the functional areas and IT departments to work together and reach mutual understanding. This synergy means that both, functional and IT units must be partners in the development and execution of the organizational business strategy, recognizing that IT and business strategy are closely related, and companies are not competitive if both strategies are not strongly linked and aligned (Aversano, Grasso, & Tortorella, 2016; Avison, Jones, Powell, & Wilson, 2004; Coltman, Tallon, Sharma, & Queiroz, 2015; Johnson & Lederer, 2010; Fonstad & Robertson (2006); Luftman, Lyytinen, & Zvi, 2015; Reich & Benbasat, 2000), among others.

Having revealed the need to bring the concept of business-IT alignment to the center stage once more, especially for non-IT companies, under the current conditions, it is critical to go a step beyond simply understanding the importance of the concept and the factors that impact it. This implies the necessity of measuring the degree of alignment reached in this process, understanding that the alignment between the business and IT, is not maintained in a passive state, but a dynamic and permanent process. This requires updated tools with the capacity to capture the changes that this new scenario imposes, feeding organizations with the results of its measurements in a continuous improvement process.

Granting the importance of measuring the alignment and its implications for the success of the aforementioned organizations, now in a digital environment, the research question of this article is: What aspects need to be updated in a model whose purpose is to measure the maturity of the strategic alignment between the business and the IT function in this digital scenario? In order to answer the research question, the authors analysed seminal papers and models, and ultimately contributed an updated model for measuring the business-IT alignment maturity level, and a digital transformation strategy framework, under which the updated model operates.

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